Two of the five are for community banks…
President Obama recently ‘invited’ the ‘Big Bankers’ to the White House to admonish them…Start lending to small businesses! Sam Thacker in his blog at Allbusiness.com has a better idea. Invite 2 small business owners (those with 50 or fewer employees) from each congressional district to a White House Summit on Small Business.
Here is Sam Thacker’s prediction for what they might come up with:
- Provide $50,000 of
stimulus money to any small business for each new job it creates and
keeps for a year. That is about a years worth of salary and benefits
for an average manufacturing employee. That will save $270,000 that the government is spending per job
now with the stimulus plan. I promise the nation’s small business
owners will spend their $50,000 per job more wisely than the government
is spending its $270,000 per job.
- Keep the SBA loan
guarantee enhancements on the books for two more years that were
provided for in the original stimulus plan. That would give banks a 90%
loan guarantee and borrowers no high loan guarantee fees. That has been
a program that has worked. Actually, that has been about the only
source of loans for small businesses.
- Instead of taking
the big bank bankers to the woodshed and flogging them for not making
small business loans, offer community banks (those banks with less than
$1 billion in assets) tax incentives for making business loans to small
businesses. Community bankers think in terms of “net interest margin”
which is the spread between the cost of funds for a loan and the
borrower’s rate of interest. Bankers think a big net interest margin is
3%. With tax incentives raise the net interest margin to 5%. Community
bankers won’t become fat cats but they will have big grins on their
faces. While you can’t herd cats, you can bribe them with a little
piece of cheese. Give small businesses fair access to capital and they
will take you out of this recession and create jobs doing it.
- Commit $500 billion to helping small businesses that manufacture and sell consumer goods to
Hasn’t Mr. Obama talked to his people at the U.S. Census Bureau? Baby
boomers are growing old and won’t be buying consumer products like they
have in the past. There are far fewer generation X and Y folks out
there to take their places, so it makes since to sell overseas. We will
achieve an added bonus of reducing the staggering trade deficit.
- Immediately stop
spending all stimulus money that isn’t in the above four parts of the
plan. Take whatever is left and provide it to job training programs at
accredited community colleges. A trained worker is a productive
efficient worker. Many workers are going to have to be retrained
because their jobs are simply disappearing. Completely. Give these
people direct help by training them to do something that is needed now.
I wonder if Sam is running for election. This makes a lot of sense!
What would you add?
