Our weekly roundup of small business news and advice follows. Enjoy!
How Small Businesses Fit Into Economic Growth
This is a subject near and dear to my heart. I’ve worked for small businesses for much of my professional career, and I firmly believe they are the pistons that drive the engine of economic prosperity in the United States.
So I listened and read with interest this recent NPR piece about a summit with input from President Barack Obama’s staff and the Cato Institute think tank. There’s a fair amount of back-and-forth on the issue of whether or not government intervention is helping or hindering growth, but there’s more here if you’re willing to drill down a little bit.
I think Dan Mitchell of the Cato Institute has an interesting perspective on how growth can happen:
But I want to address the point about the Small Business Administration. Under Bill Clinton, when the economy was really doing well, that was a time when the Small Business Administration had less money to deal with. Now, that’s not a knock on the SBA. It’s simply saying that what we need most for the small businesses in the country is fast economic growth. And that’s not going to happen when taxes are going up, regulations are going up, government is taking over sectors of the economy and government spending is increasing.
Whether you agree with that or not, it’s telling that many experts like Mitchell will tell us how important fast economic growth is, and link it to small business. Let’s hope we’ve got a handle on how to marry the two sooner than later.
Dealing With High Oil Prices
From the amusingly named Treehugger comes this brief report of small businesses dealing with peak oil costs:
Looking forward, there is little or no chance of enough reasonably low-cost oil being found and developed to alter the pattern of tightening supply and rising prices, interspersed with periodic busts as high oil prices undermine economic growth. All the indications are that by around 2013 there will be no Opec spare capacity to turn on, insufficient new flows to meet demand and prices will be soaring.
How can you plan for something like that, particularly because oil prices are unpredictable no matter what Treehugger writes? Start stockpiling a little extra money, consider investing in more fuel-efficient or alternative vehicles and heating systems, and plan to stay on top of prices. I’m sure you can think of more, too.
China Loosening Access To Credit
It’s interesting to see how other countries’ lenders deal with their own looming credit crunches. Some respond by turtling and refusing to hand out money, lest they incur losses. Others choose to free up access to credit to try to stave off a larger economic problem.
China appears to be rolling with the latter option. The burgeoning economic giant is sensitive about its reputation as such on the world stage, so it makes sense that the China Banking Regulatory Commission would announce that it’s easing regulations to improve credit access to small and medium-sized businesses:
As pointed out yesterday, we are indeed seeing the situation deteriorated quite markedly, and many small businesses in China are now hung by a thread. This caught the Chinese policy makers in the middle as to what to do with this tight monetary situation, especially as inflation remains pretty high.Dong Tao, in his note, said that the easing to the small- and medium- sized businesses is at best a fine-tuning, not downright monetary easing.
It’s a good move. The global economy is increasingly interconnected and small businesses are increasingly appreciated for their ability to drive economic growth, so it’s good to keep an eye on what’s going on in places like China, Japan, India and Europe. Let’s see if China’s efforts pay off.