President Obama probably didn’t intend for the spat with Newark, N.J., Mayor Cory Booker to come at the start of National Small Business Week. The White House is now in a sticky spot, trying to explain that they believe in free enterprise … just as long as it’s not too big?
The fact is Democrats have tried to make Romney out to be a Wall Street barracuda, preying on working Americans. It’s true, the act of buying up failing companies, with the understanding that many employees with be laid off, as Bain Capital does, might sound “unfair.” (Jonathan Haidt might have some thoughts on why that is.) But this is an incomplete picture. While Bain Capital has “destructive” qualities, it also plays a constructive role, creating and expanding new jobs and opportunities.
But the president has been criticizing big, bad Bain — not small mom-and-pop shops, right? Well, one has to imagine that the dream for most small-business owners is that their businesses will eventually become large businesses. Or at least bring in large profits. Which is why a president who is critical of free enterprise and wealth creation should concern all business leaders.
As the president reminded reporters at a press conference on Monday, as president, “your job is not simply to maximize profits. Your job is to make sure everyone has a fair shot." Well, maybe the president should tell the small businesses of America what “a fair shot” really means: The policies advanced in an effort to rein in “big” business almost always end up hurting smaller outlets, which are far less nimble.
Large corporations have staff lawyers and human resource departments to make sense of complex tax laws, regulations and mandates. They have the muscle it takes to adapt when new costs hit and can endure longer wait times when regulations prevent a company from getting a product to market or make it more difficult to secure financing.
This is often most apparent in regulations the Obama administration supports in the name of “protecting” women, like the Lilly Ledbetter Fair Pay Act and the Paycheck Fairness Act. Even though many large companies like Bain Capital offer family-friendly work accommodations — flextime, telecommuting, shared jobs — Washington insists that we need more regulations to help make the workplace better for women. While big companies can absorb the costs of more creative work arrangements, the same might not be the case for smaller businesses.
It doesn’t mean smaller businesses don’t value their female employees; it simply means that they might not be able to afford the same generous benefit packages as their larger competitors. In fact, that’s why big companies sometimes stand on the sidelines during debates about streamlining government: Already on top, they don’t mind more government red tape that strangles upstart competitors.
Small businesses dominate the U.S. economy. According to the Small Business Administration, there are 28 million small businesses in the United States, and they employ 60 million Americans — half the private-sector workforce. And small businesses are of particular interest to women, who own nearly a third of all non-farm, privately held small businesses and employ well over 7 million workers.
The Obama administration’s view of Bain Capital and free markets is class warfare at its worst. And it should be a cue to all Americans interested in building a business that this is not an administration that fundamentally supports you.