Expert Opinion: Who's to Blame?


Expert Opinion: Who's to Blame?

By Scott Gingold

U.S. Business Review

September 27, 1600

John (not his real name) is a hard-working guy. He held his first job as a paperboy at the age of 11. As he grew older, he held many other jobs until he found what he calls his “ultimate destiny” at 15 years old. At that time, John secured an after-school and weekend job at a truck repair shop. The wage was low, but John was never happier.

John marveled at everything regarding trucking. He loved hearing the stories of the road offered by drivers waiting for their rigs to be serviced. John used some of his earnings to buy a CB radio for his house so he could listen to the truckers while he was not in school or at work. As soon as it was legally possible, John enrolled in driving school, successfully graduated, and got his endorsement to drive the big rigs that he dreamed of.

John quickly learned that the grand stories of the road that he heard as a teenager represented the best of the situation vs. the day-to-day grind of over-the-road trucking. None­theless, John was happy, making money, and driving for a firm that valued him. Sadly for John, the relationship did not last as the firm was sold and the new owners held totally different philosophies regarding drivers.

Unfortunately, due to the many consolidations and shutdowns in the trucking industry, John found himself switching companies fairly often. While he still loved driving, he loathed the constant uncertainty that his employers offered. Fed up with this, John decided that it was time to become an independent trucker.

He started with one truck, and was able to secure loads with little trouble. However, he still felt a void, and held bigger dreams. Soon, John added a second truck to his business, and before long had 11 trucks in his burgeoning fleet.

Although business was good and his relationships were solid, John and his wife were facing some significant health issues. Their insurance premiums kept rising, non-covered medical bills mounted and their family needs were starting to outpace the personal revenue he was able to generate.

Compounding all of his problems, John’s trucks were older and in constant need of repair. Coupled with a string of unusual and unexpected mishaps, John was constantly under siege.

When the economy collapsed in 2008 and 2009, business was at an all-time low. John’s lenders were nowhere to be found, and he needed more working capital for his business. Because John used so much of his personal credit to take care of his family’s medical issues, plus sustain his business, lenders turned him away empty-handed despite a long and mutually beneficial relationship.

Today, John is almost out of business and confused. As he watches all of the bailout money being doled out to banks, insurance companies, automakers and others, he is especially mystified that Yellow/­Roadway Cos. (YRC) is poised to receive bailout taxpayer money. He has turned to the Small Business Admin­istration (SBA) for assistance and been given short shrift after attempting to contact them no less than 17 different times.

Tuning the Engine

President Obama and Congress continue to say that small business is the engine that powers America. While we all know that this is true, and that small business creates nearly every new job in the United States of America, unfortunately for John and millions of other small businesses, their words do not meet their actions.

The SBA was due to announce small business emergency loans of up to $35,000 during National Small Business Week, but as of this writing, this has now been pushed to mid-June. Why is it that when American Express, Chrysler, Bank of America, General Motors, Chase and other big businesses pick up the phone to Washington, the Treasury runs right over with a blank check and armored cars full of cash, yet John and many others must wait till at least mid-June for possible assistance?

The SBA is an outdated and utterly useless organization. Large businesses are receiving contract awards that had been designated for small businesses. The Senate has shelved a bill (S.2300) that would have corrected this, and Congress followed suit with a similar bill (HR 3867) that also withered away in an unceremonious death.

According to the American Small Business League, billions of dollars designated for small business contracts have been funneled to large corporate behemoths. The SBA’s own Inspector General has confirmed these findings.

Remember when we were told that Chrysler and its ilk were too big to fail? Yet even after giving them so much of our money, they declared bankruptcy and put thousands of our family members, friends and neighbors out of work. Why aren’t our political leaders honest with us? Attempting to save the domestic auto industry has nothing to do with current autoworker jobs; it has everything to do with auto industry retirees who will be courted for their vote during the upcoming elections in 2010 and 2012.

Lest anyone think that I am a partisan on this issue, sadly, neither President Bush nor the 110th session of Congress lifted a finger at the onset of the current financial catastrophe to help small businesses, either.

Regrettably for John, as well as un­told other small business owners, they lack the very powerful and influential lobby that Wall Street, banks, the auto industry and other multinational mega-corporations possess over the White House and Congress.

Truly Irresponsible?

There is a knee-jerk reaction from some people in this country not to bail out people like John for irresponsible behavior. Was John irresponsible? I don’t think so. True, he may have found better ways to access the capital that he needed, but ultimately, he used his funds to hire people, take care of his family and build a business. Unlike others, he didn’t purchase a second home, a boat, a fancy car or some other extravagant items; he chased what many who fight to come to the United States for every day – to start a business.

Over the next few months, you will likely see record numbers of small businesses shutting their doors. Of those that survive, we anticipate seeing large-scale cancellation of employee health plans and other benefits.

In case anyone thinks that I am against mid-sized or large companies, please let me set the record straight. I support businesses of all sizes equally and emphatically. What I do not support is selective bailouts. What is happening today is wrong morally and ethically. This is not the American way that our forefathers envisioned for its citizens.

Is the American dream dead? If you are starting a new business today, I don’t think so. In fact, this is a great time to start a new venture. However, if you are a current small business owner like John who has played by the rules, done the right things and worked hard, sadly, your days are numbered and you will soon be a forgotten statistic.

I wish John and all the other small independent businesses my best wishes and prayers, as they will need all of this and much more in this current economic and political climate.




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