Linking Health Care Reform To Small Business Growth

It's been argued President Obama doesn't understand business. With this comment, he only adds to this suspicion:

“Many entrepreneurs can’t get financing to start a small business in the first place. And many more are discouraged from even trying because of the crushing costs of healthcare – costs that have forced too many small businesses to cut benefits, shed jobs, or shut their doors for good,” Obama said.

His right on the first part. The same problem exists in Canada. Banks and other lenders of interests (excluding mobsters) have type cast industries and only lend to certain business projects. Years ago I went to the Business Development of Canada (BDC) which apparently has less rigid rules than the banks, to discuss a grocery store idea I had (it still remains a relevant concept). The girl in front of me couldn't have been more blunt, if not arrogant. "We don't lend out to grocery stores" was her response. She wasn't interested in the idea. I tried to engage her but to no avail. It left a sour taste in my mouth that's for sure. I know the risks involved but I had two mean with over 75 years of experience in the business ready to help out. The idea was shelved and forgotten.

Obama's comment, to me, is a cynical political ploy. In addition, it's a specious assertion. When people enter business two things are paramount: salaries (if you employ workers) and paying off debt for a business loan (assuming there is one). Generally, it takes three to five years before a business sees a profit. A person or persons entering an entrepreneurial endeavor aren't looking at health care plans and their costs. It's far down the ladder. Once their business reaches a stable maturation period only then will they begin to entertain health care plans.

Health care costs are a viable expenditure, Obama is right, however, reforming it (under the premise that it's all the fault of insurance companies) won't spur small-business growth. People don't say, "Gee, health care costs are down, let's get into the widget business, honey!" To even remotely suggest this shows lack of business knowledge.

In any event, he's absolutely correct to demand banks begin to lend to small businesses; to "stand by creditworthy businesses" as he put.

It's asinine that a small, profitable business ready to expand and hire has to beg for money.Especially to those banks who received a bail out funded by taxpayers. Meanwhile, the government and banks keep doling out cash for loser companies in losing industries. That's the corrosive-ness of believing in protecting big businesses at the expense of everything else.

Start at the bottom. Start small. Think big.

Small business enterprises come from the will and gut of the people. From its talent and creativeness. It magically happens. You don't need government bureaucracies to "create" it. People are their own motivators. Just get out of the way.