Now that the street cleaners have finally swept up the signs, flags, confetti and other debris left by the millions who came for the inaugural last week, we can finally return to the critical issues of policy. I'm pleased to report that the Obama Transition Team asked us to join their teams working on sustainable business and socially responsible investment. What will become of our recommendations, I don't know, but the fact we were invited to share our view – and that key policymakers in the administration were listening – represented a huge sea-change.Below is the memo we submitted, incorporating many of the points you've seen on this blog over the past six months. We welcome your input. Let us know what you think, and what else you would add to this wish list.
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A credible "jolt" for the U.S. economy requires, first and foremost, boosting small businesses. Small businesses make up roughly half the private economy and create 60-80 percent of all new jobs.
Moreover, the locally owned character of nearly all small businesses makes them better contributors to community and economic development than most large businesses are. Because locally owned businesses spend substantially more money locally, they typically generate two to four times the economic multiplier benefit for their communities as do nonlocal businesses. A growing literature shows that local businesses are also more reliable promoters of tourism, social equality, entrepreneurship, carbon-dioxide reductions, political participation, and "creative economy" benefits.
Given this, we recommend that the Obama Administration appoint a blue ribbon commission charged with identifying public policy obstacles to the expansion of local and small business, and laying out new, low-cost opportunities for the federal government to expand local business. Here are some of the low-hanging-fruit possibilities we believe such a commission would highlight.
* Balance Federal Support for Small Business – We believe there is a need to overhaul a wide range of programs giving grants, loans, loan guarantees, tax breaks, and other special benefits to business, since nearly all these programs are tilted toward larger business, and thereby place small business at a competitive disadvantage. It should be a high priority of the Obama Administration to end federal subsidies that favor centralized electrical generation stations over micropower and efficiency, centralized fossil fuels over decentralized renewables, factory over family farms, large-scale manufacturing over microbusiness. The tilt of the current and proposed stimulus programs, including those labeled "Green," ought to be reset accordingly. For example, at least half of all funds given to troubled financial institutions should go to small community banks and credit unions.
* Revise Subsidy Procedures – For business subsidies that remain, uniform procedures should be developed to make these programs more accountable and ensure local businesses have a fair shot at competing for them. These rules should also include: a) uniform, web-based public disclosure requirements that indicate how much beneficiary companies received, how many jobs were produced for how many years, and b) clawback provisions for companies that fail to fulfill their promises. (A full elaboration of these ideas is at the Good Jobs First website.)
* Enact Securities Reform – While there is a clear need for greater regulatory oversight of large-scale financial institutions, there is actually a need for less oversight of smaller ones. For these smaller institutions, the existing regulatory regime has essentially wiped out small-business stock issues. We recommend the Securities and Exchange Commission (SEC) consider excluding from regulation all small securities (<$100) that link unaccredited investors with microbusinesses and all intrastate stock exchanges that trade such securities. This would enormously boost the availability of local capital to start and expand local businesses with the greatest economic development potential. It will also free up SEC resources to focus on bigger institutions like hedge funds that have been under regulated. Additional reforms should make it easier for cooperatives, mutual funds, and retirement funds to invest in microbusiness. To speed these reforms, one home-run policy to implement is a tax credit for any individual investment in microbusiness. Your campaign policy papers argued for a 20 percent credit for investments up to $50,000 in rural microbusinesses, and we encourage you to extend this credit to all microbusinesses, rural and urban...
http://www.small-mart.org/obama-policy-recommendations
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