I recently attended a luncheon at The Union League of Philadelphia as part of The Committee To Unleash Prosperity featuring hosts Dr. Arthur Laffer, Steve Forbes, Larry Kudlow and Steve Moore. Among the bipartisan audience was Pennsylvania’s Republican leader Bob Asher and George Norcross, Democratic Party leader in New Jersey.
At the conclusion of the event, I spoke with American economist and author Dr. Arthur Laffer and Steve Forbes, Editor-in-Chief of Forbes Media. Predictably, I went in with burning questions related to the intersection of politics, business and finance. Specifically, I wanted to examine the disconnect between this year’s presidential candidates and America’s small business community.
The small business owner in America has been touted time and again as the heart and soul of our economy. Remember John McCain’s 2008 presidential campaign providing voters with the story of the red-blooded Ohioan, “Joe the Plumber”, who represented a political dialogue about the struggles of the “little guy”? 99.7 percent of all employers nationally are small business owners and 95 percent of those owners are reported to vote regularly, so it would make sense for current presidential candidates to make this sizable demographic a crucial talking point, right?
Unfortunately, common sense and politics tend to be mutually exclusive.
A TriNet 2016 Presidential Election survey shows that 90 percent of small business owners believe that candidates are not making industry problems a top priority. This is not surprising—over the past eight years the small business owner has been left behind in our economy, with cronyism in play and the deep pockets of Fortune 500 companies forking over millions of dollars to influence the electoral process and improve big business policies.
This brings me to another question: What is behind the favoritism of big companies over small businesses? According to Dr. Laffer, “It’s the system—how do you make money if you’re a big company? You lobby politicians; you don’t do it by making better products.”
“When you have a government that’s taking over all areas of business, of course you’re going to have a huge government focus for these companies,” said Laffer. “Big corporations can afford all those lawyers, accountants, lobbyists and all of that—that’s how they make their money.”
The issue at hand is a heated topic about the nation’s largest population of employers, so what classifies a small business? The number of employees that deem a business as “small” varies by industry, with size standards created by the U.S. Small Business Administration (SBA). In line with these industry standards, the SBA’s general requirements for a small business designation include being independently owned and operated while lacking dominance in its field on a national basis.
Running a small business is becoming a vulnerable process in a technology-driven economy. Major corporations like Amazon are capitalizing on the demand for online retail and delivery—making it difficult for small shops to compete. With a “too big to fail” adage that has been proven true, it seems impossible to hope for any type of tax incentives to help small businesses.
“They’ve been very hurt by what has happened in recent years,” said Forbes. “With healthcare reforms, a horrific tax code and unstable money regulations flowing in like a tsunami—all these are things affect small businesses.”
If presidential candidates want to engage the community and win the votes of an important group of constituents, these issues need to be addressed sooner rather than later. In a National Small Business Association poll, 40 percent of small business owners believe traditional politicians aren’t aware of their problems– or worse, don’t even understand who they are.
This is a group that is frustrated, and feels that the mainstream representatives of both parties are more interested in power politics and self-promotion on the campaign tour than listening to the concerns of the hard-working Americans whose votes they are after.
“Ronald Reagan was right,” said Forbes. “He said you ‘don’t change minds on Capitol Hill through sweet reason, you do it through the heat of public opinion.’”
Let’s hope the fire ignited by these small business owners is enough to make a change.
This article was written by Steve Cordasco and originally published by Philadelphia Business Journal.
View the original article by clicking this link: http://www.bizjournals.com/philadelphia/blog/guest-comment/2016/03/the-wall-between-presidential-candidates-and-small.html