It has been a while since Treasury Secretary Paulson and Federal Reserve Chair Ben Bernanke came up with their $700 billion Wall Street bailout, and even with the generous $110 billion in pork that Congress added, we all know what that has accomplished: many of the stronger banks bought up weaker ones, several non-banks changed into bank holding companies to snatch a piece of the action, AIG funded high-level corporate getaways, a number of astronomical bonuses were paid—just about anything except for the purpose that the money was given for in the first place, to loosen the credit situation and get money flowing again to the good folks on Main Street. That is not to say that all of the institutions receiving bailout funds used that money wrongly, but enough did to make one question why they were ever given the funds in the first place.
In fact, under the heading of That Says It All, the underlying obscenity of this whole federal bailout business was made crystal clear when Larry Flynt of Hustler magazine fame and Joe Francis, creator of Girls Gone Wild, speaking in Las Vegas at this week’s AVN Adult Expo, asked Congress for their own $5 billion bailout for the porn industry, “just to see us through hard times,” according to Francis; but that is a story for another day.
No, the crux of the matter today is that there are, in fact, those in government that actually understand the basic rule that throwing good money after bad is wrong and that bailing out misbehaving institutions and then expecting them to do the right thing on their own initiative is, simply put, insane.
Pity that the folks in Washington have yet to realize this. Thankfully, however, there are some people at the State level who do understand it, and Florida Governor Charlie Crist is putting that understanding into action.
Bailout Epiphany in the SunshineState
Knowing where jobs are created in our economy—the small business sector—and that importance of keeping that engine of prosperity humming along, Crist has proposed a small business stimulus package for Florida that seems to have all the ingredients of a successful plan in that it is designed to give companies both incentives and the resources they need to expand and to create new jobs in spite the economic downturn. The plan will
provide up to $250,000 in 2% interest, 5-year loans to companies with 10 to 99 employees from a $8.5 million. The remaining $1.5 million of the program’s $10 million pricetag would be available in technical assistance money to help growing companies. In an article in the Miami Herald:
Dave Arjoon, president of Miami-based Zap Courier & Messenger Services, said he could use the extra money to diversify his business and hire more sales people.
''We're looking to penetrate more markets: pharmaceutical distribution and transporting lab samples -- as a medical courier,'' said Arjoon, whose company has 54 employees. ``Those areas are not subject to the downturn in the economy.''
What we have here is a government (the State of Florida) intent on helping Main Street businesses, rather than Wall Street industries or whole economic sectors, and doing so in a way that encourages growth, employment and prosperity—something you cannot say about the federal bailout programs. They recognize the realities of the banks and their overall failure to loosen credit; as well as the uselessness of the federal bailouts, the benefits of which never seem to trickle down to the people; and have chosen to bypass all of that and go directly to those who really need help because of the foolish decisions of politicians, power-brokers and the business elite; directly to those who create jobs and prosperity in our society: Small business.
The Bottom Line
Prosperity does not come from the top. It is grown up from the bottom, from small businesses creating jobs. Crist’s approach recognizes this and so should be adopted in Washington. If it were, then this recession could end this year. However, as long as the real engine of the US economy is being ignored, as long as all the attention is focused on big business and the celebrity CEOs that helped bring us to this pitiable state, the bad times will drag on and on. Obama’s tax cut proposals for business are a good start, but that is all they are—a start.