Small businesses a
mystery to Washington
By AUSTIN
CUNNINGHAM Guest
columnist
What is so special about the small-business man?
Politicians love to talk about small-business men; they hug them
to their breasts and are eager to help them. As an ancient former
small-business man, my reaction to all this is to say: “Please
don’t. You have helped us enough. Stop! Leave us alone to do our
thing.”
Few presidents know anything about us. This is especially true of
Democrats, of whom it has been said, “They love employees; it’s the
employers they can’t stand.”
In the United States, there are roughly 14 million small
businesses, as defined by the Small Business Administration. In
South Carolina, there are 79,321 small businesses with up to 500
employees and a startling 189,000 self-employed people (no
employees); these two groups combine to be a giant engine in our
economy.
Nationally, hundreds of them went out of business yesterday, and
hundreds started up today. No one has more incentive to succeed than
an owner. As a person who spent most of his life working in big
business and then 11 years owning and running two small enterprises,
I might be uniquely able to help explain what small-business owners
want, and why they are so important.
I started the first business in 1975, added another and sold both
advantageously in 1986. At any given time, they had 70 employees,
including the fine man who managed them for me. One was a national
hamburger franchise with the initials BK, the other a sit-down
seafood restaurant.
We calculated that during the 11 years, we had more than 5,000
employees. Even the best of them come and go with the school year
and seasons. We always paid more than the minimum and rewarded those
with tenure with small but steady raises.
It’s hard to exaggerate the impact on a community of each locally
owned, healthy enterprise. Because of my fondness for statistics, we
kept track of how many automobiles our employees bought. It totaled
at least 325, divided among the auto dealers in a small town. Think
of the groceries my young people bought, the clothes, the TVs! Think
of the sales and other taxes they paid.
When presidential candidates bloviate about the jobs they’re
going to create if elected, they’re blowing smoke. Presidents only
create government jobs. All government at all levels can do is
create a climate of benevolence. If each small-business person hired
just one more employee — just one — they’d scoop up most unemployed
and help solve racial tensions. Think — 14 million new jobs, many
more sophisticated than in my little eateries.
The small-business person is a total mystery in Washington. Only
in the Far East do some governments leave him unfettered to do his
thing. Here, government hinders his freedom to hire, fire,
discipline, sometimes even to reward. He’s at risk of being sued at
every step, and even if he prevails in court, it can still cost tens
of thousands of dollars. Government doesn’t need to train him: He
could teach government. As Lord Keynes would say, “Government
suppresses his animal spirits.”
Jimmy Cash Penney went from one store to 1,680; Sam Walton from
one to 5,000 and counting. Individually, he or she is unimportant in
the vast scheme of things. If he fails, he can sink without a trace.
Often he pays his business taxes as an individual, which can make
him seem rich — sometimes rich for just one year. He thinks
government help comes with a curse.
He strives for simplification and doesn’t welcome complexity —
tax schemes with wild swings, that stop and start; weird workers’
compensation; constantly escalating health and other add-ons that
make it impossible to give raises to especially deserving
employees.
In Europe, with its devotion to socialism, the successful people
live in genteel poverty and the others in abject poverty. Some of
those in big government (as George Gilder says) “want capitalism
without capital gains, wealth without the rich and an investment
boom led by Democrats.”
The small-business man believes his job is to take risks and
government’s is to be predictable. Millions of small-business people
making tens of thousands of decisions each day constitute a mighty
engine for healthy growth. Their wants are simple. They want (and
must earn) loyal, happy, effective employees no matter the sex, race
or other complexities. They want peace so they can get on with what
they do best — grow and serve. They are, at their best, free
spirits. Government officials can hurt, but are limited in their
ability to help.
Mr. Cunningham lives in Orangeburg and has been president and CEO
of five
corporations. |