Small - Mart Revolution: Smart Economics

Many of you were probably dancing in the streets on election night. I was – even though I identify myself as an independent. That the country will finally enjoy a leader who actually cares about ideas, who speaks grammatical English, who believes in science more than ideology, who doesn't see ecological or women's rights as liberal conspiracies, who exudes discipline, confidence, and charisma, who sincerely cares about the have-nots in society, and who won’t always resort to war as the answer to every national security problem is a huge relief.

But beware. Or, more precisely, be wary. Two weeks before the election, a Sunday talk show featured a debate between representatives of each campaign: Senator Evan Bayh (D-Indiana) representing Barack Obama versus Senator John Kyl (R-Arizona) representing John McCain. When the debate turned to which candidate would improve the nation's economic competitiveness, the two senators agreed that the goal was to attract more global corporations and spent the rest of their time quibbling over the best means of doing so. The role of small business was relegated to Joe the Plumber.

President-elect Obama has surrounded himself with the visionary captains of global capitalism – those who believe that "kinder, gentler" free trade and free finance, qualified with corporate responsibility, will save our fast-sinking economy. Obama's chief economic advisor during the campaign, Jason Furman, is best known for a paper arguing that Wal-Mart, because it provides cheap goods for all, is one of the most progressive corporations in America. Robert Reich made his career in a series of arguments in early issues of The American Prospect suggesting (against Laura Tyson, another Obama advisor) that ownership of business generally – let alone local ownership – no longer mattered. And as John McCain fairly observed, candidate Obama has surrounded himself with experts who made awful calls over the past decade about relaxing standards for low-income housing loans and deregulating Fannie Mae and Freddie Mac, all of which contributed to the current financial mess.

What's most worrisome is that no one on the Obama A-Team understands that the key to revitalizing the economy and to fixing the financial crisis is nurturing and expanding locally owned business. But at the B- and C-Team levels there is enormous sympathy for the views of us locavores. So what should they be doing?

In my previous blog entry I suggested several policies the Obama Administration could implement to address the financial crisis that would cost little or nothing, including:
A series of reforms of archaic securities statutes that presently ensure that American’s savings, especially their retirement accounts, wind up almost exclusively in Fortune 500 corporations.
New exemptions for microbusinesses to issue local stock, for internet entrepreneurs to create virtual stock markets, and for mutual fund managers to begin assembling portfolios with these securities.

Through such reforms, Americans could start rechanneling their savings into locally owned small businesses, simultaneously boosting their local economy and bringing down the risks of a financial failure.

How might this reform process begin? Buried in the mountain of policy papers issued by the Obama campaign is this intriguing proposal: "Barack Obama and Joe Biden will support entrepreneurship and spur job growth by establishing a small business and micro-enterprise initiative for rural America. The program will provide training and technical assistance for rural small business, and provide a 20 percent tax credit on up to $50,000 of investment in small owner-operated businesses. This initiative will put the full support of the nation’s economic policies behind rural entrepreneurship." (See "Barack Obama and Joe Biden’s Plan for Small Business.")

Please see Michael Shuman's web-site and blog for the Full Article:

http://www.small-mart.org/obamanomics