Government is and should be in the business of stimulating the economy to help its citizens achieve national goals like putting people back to work. When Ike Eisenhower returned from Germany after World War II, he said we need an interstate highway system to move our people and goods coast to coast like Germany’s rail system. The same could be said today about rebuilding our crumbling infrastructures.
Some say government should not be in the business of creating jobs. They are wrong. The government is the custodian of the public land and buildings. All improvements thereto benefit the people. President Roosevelt put people to work improving the public lands with roads and structures when the U.S. had 25 percent unemployment. In 2008, economists warned the government that we could suffer that again if we did not bail out Wall Street. Well, now, Main Street needs a hand.
Nationally, over the last 15 years, small businesses have generated 64 percent of the jobs created in the U.S. and need help to maintain or start up their business in this economy. Under the president’s recently proposed plan, for every new employee hired in 2010, employers will get a tax credit of up to $5,000.
Under the president’s plan, small business owners also have a tax break incentive to increase employees’ wages faster than inflation. Small businesses help build the local economy from the ground up. When employees earn, their income enters the stream of commerce, and in turn is spent in restaurants, at car dealers and other businesses.
Another proposal temporarily eliminates capital gains on small businesses and allots $30 billion in TARP funds for community banks to lend to small-businesses. Lending has dried up for small businesses. While pundits say we don't need money now, the funds help stabilize small companies that need loans. Many small businesses are cyclic like real estate, construction companies and retail stores. They survive on their business line of credit until the next escrow closes, the project is complete or until their “busy” season.
But we must do more this year to help out Main Street. Our financial meltdown was the natural consequence of the Wall Street driven global economy together with the extraordinary burden of paying for two wars. At the same time, American jobs were shipped overseas. Middle class workers and small business owners with pensions or 401k plans, those who could least afford it, took the hardest financial hits in recent years.
For all the finger pointing, the financial crisis was set up by congressional vote on Gramm-Leach-Bliley in November 1999 with bipartisan support. Now, businesses must stand up and ask Congress when it intends to address the deregulation problem to ensure that phantom wealth Wall-Street driven bubbles are prevented. Even now, while AIG still owes taxpayers $182 billion, it announced a $100 million bonus plan.
President Obama was left with a mess caused by the “global” banking system and loosely regulated financial practices. Wall Street swallowed up the heart and soul of America’s income and businesses. Now, its time to help rebuild Main Street.
Tracy Emblem is an attorney and a Democratic candidate for U.S. Congress, California 's 50th District.