A Challenger, Gray & Christmas survey found that 2011 marked the lowest start-up rate in the 11 years since their study began. The waning state of entrepreneurship demonstrates why the U.S. Senate needs to get off the dime and pass H.R. 2930, the "Entrepreneurs Access to Capital Act" -- otherwise known as the crowdfunding bill.
GOP Senators are having a press event today to urge passage of four capital access bills that swept through the House with huge bipartisan majorities. For example, the vote for H.R. 2930 was 407-17. President Obama supports these bills, so what is the hold up in the Senate? Entrepreneurs need access to capital – the environment is getting steadily worse.
Call your U.S. Senators at 202-224-3121 and demand that they act on the bipartisan, Obama-supported crowdfunding bill – H.R. 2930!
Karen Kerrigan, President & CEO
Showing posts with label Obama. Show all posts
Showing posts with label Obama. Show all posts
Thursday, February 16, 2012
Thursday, December 01, 2011
FCC Steps Out-of-Bounds...Again
Do the FCC and DoJ Know Better?
What’s up with President Obama’s Department of Justice and Federal Communications Commission? Why are they trying to deny consumers, businesses and the economy the potential benefits from a merger between AT&T and T-Mobile?
The quick answer is: political appointees think they know better than consumers. But there’s even more at work here.
In a free, competitive marketplace, businesses work to come up with the best business models, and goods and services at the best prices, in order to better serve customers and thereby earn profits. Consumers – including, of course, small businesses in the case of telecommunications services – decide what works and what does not in the end.
From the perspective of entrepreneurs, small businesses and their employees, since the proposed $39 billion purchase of T-Mobile USA by AT&T offers potential gains in efficiencies and costs for AT&T, that in turn would likely result in improved service, expanded offerings, and lower prices. In addition, small firms would have opportunities to play roles in expanding broadband investment and innovation, as well as from the resulting services and products given the expanded reach of broadband wireless among consumers.
Overall, if the merger works, the potential efficiencies and investment would be a plus for economic growth and job creation.
Meanwhile, concerns over the size of AT&T’s market share – a traditional worry in antitrust circles – should be alleviated given the dynamic nature and vastly expanded choices available to consumers in the telecommunications universe. Never before have individuals, families and businesses had so many options in terms of their telecommunications services, nor have such services developed so rapidly before.
Yet, for those who favor government, and view private markets and businesses with skepticism, or even hostility, letting go of old, bankrupt notions of how markets work is not easy. As a result, we’ve seen the Obama DoJ and the Obama FCC trying to impose bureaucratic thinking on the fast-moving, dynamic marketplace of the twenty-first century.
In August, the DoJ announced its decision to sue to block the deal between AT&T and T-Mobile. The DoJ assesses such deals on antitrust grounds, and believes that this would substantially reduce competition, thereby limiting choices and raising prices for consumers. That’s a bewildering conclusion if one understands the gains in service and reduction in prices experienced over the past two decades, and the innovative nature of these markets.
Meanwhile, the FCC also assesses the merger, and could oppose it if the commission deems it to be against the “public interest.” That, of course, is very vague.
But even worse, the FCC’s actions in this case have gone far beyond precedent, pointing to an aggressive, biased hostility, as opposed to at least some attempt at a more objective analysis.
For example, in late November, the FCC announced that it would seek a lengthy, unusual trial-like hearing on the merger. Such an inquiry is extremely rare.
Subsequently, AT&T announced it decisions to withdraw its FCC application pending the outcome of its court case with the DoJ. In response, the FCC surprisingly tried to assert that AT&T could only do so with FCC permission.
The FCC then came around to following its own rules and dismissing the withdrawn merger application without prejudice. However, it also decided to publicly release a draft staff report attacking the merger. This analysis was not voted on or approved by the commissioners, and it has no force in terms of the law. And as The Wall Street Journal reported: “Such documents typically don't become public until the FCC's board approves them.”
For good measure, the assertions served up in the report – such as that the largest U.S. markets would be left without competition, AT&T and its competitors would be able to hike prices without concern, and jobs necessarily would be lost – point to this being a political report, as opposed to a serious economic assessment.
The President and the FCC say they want to see mobile broadband deployed throughout the nation. Mr. Obama certainly needs the jobs that come with broadband investment for his re-election effort. Yet, the administration works to stop a merger that would help to achieve these goals.
Such anti-business, pro-regulation thinking and action is not unique in this administration. To the contrary, as exhibited in other areas like health care and energy, this is the default position of the Obama administration. The assumption is that politicians and their appointees – including at the DoJ and the FCC – supposedly know better than and can be trusted over investors, businesses and consumers in the private marketplace. The results of such an ideological bent, predictably but unfortunately, include diminished entrepreneurship, investment, growth and jobs.
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.
What’s up with President Obama’s Department of Justice and Federal Communications Commission? Why are they trying to deny consumers, businesses and the economy the potential benefits from a merger between AT&T and T-Mobile?
The quick answer is: political appointees think they know better than consumers. But there’s even more at work here.
In a free, competitive marketplace, businesses work to come up with the best business models, and goods and services at the best prices, in order to better serve customers and thereby earn profits. Consumers – including, of course, small businesses in the case of telecommunications services – decide what works and what does not in the end.
From the perspective of entrepreneurs, small businesses and their employees, since the proposed $39 billion purchase of T-Mobile USA by AT&T offers potential gains in efficiencies and costs for AT&T, that in turn would likely result in improved service, expanded offerings, and lower prices. In addition, small firms would have opportunities to play roles in expanding broadband investment and innovation, as well as from the resulting services and products given the expanded reach of broadband wireless among consumers.
Overall, if the merger works, the potential efficiencies and investment would be a plus for economic growth and job creation.
Meanwhile, concerns over the size of AT&T’s market share – a traditional worry in antitrust circles – should be alleviated given the dynamic nature and vastly expanded choices available to consumers in the telecommunications universe. Never before have individuals, families and businesses had so many options in terms of their telecommunications services, nor have such services developed so rapidly before.
Yet, for those who favor government, and view private markets and businesses with skepticism, or even hostility, letting go of old, bankrupt notions of how markets work is not easy. As a result, we’ve seen the Obama DoJ and the Obama FCC trying to impose bureaucratic thinking on the fast-moving, dynamic marketplace of the twenty-first century.
In August, the DoJ announced its decision to sue to block the deal between AT&T and T-Mobile. The DoJ assesses such deals on antitrust grounds, and believes that this would substantially reduce competition, thereby limiting choices and raising prices for consumers. That’s a bewildering conclusion if one understands the gains in service and reduction in prices experienced over the past two decades, and the innovative nature of these markets.
Meanwhile, the FCC also assesses the merger, and could oppose it if the commission deems it to be against the “public interest.” That, of course, is very vague.
But even worse, the FCC’s actions in this case have gone far beyond precedent, pointing to an aggressive, biased hostility, as opposed to at least some attempt at a more objective analysis.
For example, in late November, the FCC announced that it would seek a lengthy, unusual trial-like hearing on the merger. Such an inquiry is extremely rare.
Subsequently, AT&T announced it decisions to withdraw its FCC application pending the outcome of its court case with the DoJ. In response, the FCC surprisingly tried to assert that AT&T could only do so with FCC permission.
The FCC then came around to following its own rules and dismissing the withdrawn merger application without prejudice. However, it also decided to publicly release a draft staff report attacking the merger. This analysis was not voted on or approved by the commissioners, and it has no force in terms of the law. And as The Wall Street Journal reported: “Such documents typically don't become public until the FCC's board approves them.”
For good measure, the assertions served up in the report – such as that the largest U.S. markets would be left without competition, AT&T and its competitors would be able to hike prices without concern, and jobs necessarily would be lost – point to this being a political report, as opposed to a serious economic assessment.
The President and the FCC say they want to see mobile broadband deployed throughout the nation. Mr. Obama certainly needs the jobs that come with broadband investment for his re-election effort. Yet, the administration works to stop a merger that would help to achieve these goals.
Such anti-business, pro-regulation thinking and action is not unique in this administration. To the contrary, as exhibited in other areas like health care and energy, this is the default position of the Obama administration. The assumption is that politicians and their appointees – including at the DoJ and the FCC – supposedly know better than and can be trusted over investors, businesses and consumers in the private marketplace. The results of such an ideological bent, predictably but unfortunately, include diminished entrepreneurship, investment, growth and jobs.
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.
Friday, September 09, 2011
Kerrigan Responds to President's Jobs Plan and Speech
SBE Council President & CEO Karen Kerrigan issued the following statement on President Obama's speech and the "American Jobs Act" that he outlined before a joint session of Congress last evening:
"We are pleased small business was featured prominently in the President's speech, and we look forward to reviewing the details of the American Jobs Act. Specifically, as it relates to the payroll tax cut for employers and various hiring credits aimed to boost hiring, we hope these provisions are not unduly complex or have conditions attached that may prevent small firms from fully utilizing these incentives.
"The extension of 100 percent business expensing through 2012 is a welcome move, however the short-term nature of this provision does not align with the longer-term approach that entrepreneurs take toward business planning. Short term extensions and incentives in general, especially during challenging economic periods, are less effective at stimulating investment.
"How these provisions and the other elements of the plan are paid for will also determine the proposal's overall impact on job creation and economic growth. If the plan is offset by tax increases on entrepreneurs, businesses or investors this will diminish the effectiveness of the President's plan. Sucking private capital out of a gasping, fragile economy is not a sound strategy for growth.
"Entrepreneurs we work with are happy to see the President supporting a proposal that SBE Council has been helping to advance through regulatory and legislative channels. The Administration has indicated it supports a 'crowdfunding' exemption from SEC registration requirements for firms raising less than $1 million. President Obama has also expressed interest in exploring Sarbanes-Oxley barriers that are preventing small firms from accessing the public markets, as well as raising the cap on mini-offerings from $5 million to $50 million. Entrepreneurs need access to growth capital, and modernizing SEC laws and regulations is imperative to helping small firms identify new sources of capital. (For more information about the crowdfunding exemption, you can review a recent media release on the issue by visiting: (http://www.sbecouncil.org/news/display.cfm?ID=4357)
"Unfortunately, the President did not broach the subject of fixing his health care law. The burdens and higher costs associated with ObamaCare are keeping small firms from hiring. The new law is driving health coverage costs higher for small businesses, and the unknowns relative to various provisions currently in the rulemaking or implementation stage continue to drive uncertainty. In addition, the President did not directly address the issue of new regulations in the pipeline and whether his Administration will take a more thoughtful approach to a system that is currently out of control. In fact, he seemed to defend the existing approach, which is a source of anxiety and concern for small business owners.
"I hope the President is open to ideas that will add value to his proposal. He needs to embrace a more collaborative approach with Congress - Republicans and Democrats alike - and consider their ideas to improve his plan. The President may get the 'jolt' desired if he includes legislative ideas that stem the tide of regulation, make permanent key tax provisions and fix the parts of the health care law that impose higher costs, taxes and new burdens on small businesses. Entrepreneurs and millions of Americans are hurting right now. This is a time for leadership, and we hope President Obama steps up to the challenge."
SBE Council Staff Post
"We are pleased small business was featured prominently in the President's speech, and we look forward to reviewing the details of the American Jobs Act. Specifically, as it relates to the payroll tax cut for employers and various hiring credits aimed to boost hiring, we hope these provisions are not unduly complex or have conditions attached that may prevent small firms from fully utilizing these incentives.
"The extension of 100 percent business expensing through 2012 is a welcome move, however the short-term nature of this provision does not align with the longer-term approach that entrepreneurs take toward business planning. Short term extensions and incentives in general, especially during challenging economic periods, are less effective at stimulating investment.
"How these provisions and the other elements of the plan are paid for will also determine the proposal's overall impact on job creation and economic growth. If the plan is offset by tax increases on entrepreneurs, businesses or investors this will diminish the effectiveness of the President's plan. Sucking private capital out of a gasping, fragile economy is not a sound strategy for growth.
"Entrepreneurs we work with are happy to see the President supporting a proposal that SBE Council has been helping to advance through regulatory and legislative channels. The Administration has indicated it supports a 'crowdfunding' exemption from SEC registration requirements for firms raising less than $1 million. President Obama has also expressed interest in exploring Sarbanes-Oxley barriers that are preventing small firms from accessing the public markets, as well as raising the cap on mini-offerings from $5 million to $50 million. Entrepreneurs need access to growth capital, and modernizing SEC laws and regulations is imperative to helping small firms identify new sources of capital. (For more information about the crowdfunding exemption, you can review a recent media release on the issue by visiting: (http://www.sbecouncil.org/news/display.cfm?ID=4357)
"Unfortunately, the President did not broach the subject of fixing his health care law. The burdens and higher costs associated with ObamaCare are keeping small firms from hiring. The new law is driving health coverage costs higher for small businesses, and the unknowns relative to various provisions currently in the rulemaking or implementation stage continue to drive uncertainty. In addition, the President did not directly address the issue of new regulations in the pipeline and whether his Administration will take a more thoughtful approach to a system that is currently out of control. In fact, he seemed to defend the existing approach, which is a source of anxiety and concern for small business owners.
"I hope the President is open to ideas that will add value to his proposal. He needs to embrace a more collaborative approach with Congress - Republicans and Democrats alike - and consider their ideas to improve his plan. The President may get the 'jolt' desired if he includes legislative ideas that stem the tide of regulation, make permanent key tax provisions and fix the parts of the health care law that impose higher costs, taxes and new burdens on small businesses. Entrepreneurs and millions of Americans are hurting right now. This is a time for leadership, and we hope President Obama steps up to the challenge."
SBE Council Staff Post
Thursday, July 30, 2009
Support for ObamaCare?
The Wall Street Journal just reported that the latest Wall Street Journal/NBC poll shows that more people oppose than support the health care agenda being pushed by the President and Democratic leaders in Congress.
The Journal noted:
People have good reason to be skeptical of what would be, in effect, a government takeover of health care in this nation, with an accompanying rise in costs and decline in quality of care.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
The Journal noted:
Support for President Barack Obama's health-care effort has declined over the past five weeks, particularly among those who already have insurance, a Wall Street Journal/NBC News poll found, amid prolonged debate over costs and quality of care.
In mid-June, respondents were evenly divided when asked whether they thought Mr. Obama's health plan was a good or bad idea. In the new poll, conducted July 24-27, 42% called it a bad idea while 36% said it was a good idea.
Among those with private insurance, the proportion calling the plan a bad idea rose to 47% from 37%.
People have good reason to be skeptical of what would be, in effect, a government takeover of health care in this nation, with an accompanying rise in costs and decline in quality of care.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
Thursday, May 07, 2009
Obama and Competition in Education
Talk to small business owners about the state of education in this nation, and you’re bound to get an earful from many about how hard it is to find employees with basic reading, writing and math skills. It speaks volumes to the failure of our public education system.
If one understands economics, consumer control and competition, then it becomes clear that control over education must be taken away from the politicians and government bureaucrats running a public school monopoly, and handed over to parents, allowing them to choose the best education for their children.
A small, but important school voucher program helps students in the District of Columbia. But it has been placed in peril since the Democrats took over Congress and the White House.
The May 7 Washington Post noted that President Obama has offered a small compromise that would allow current voucher students to remain in private schools, but the overall program would be sentenced to a gradual death as no new students would be added.
The Post noted:
As for the actions by the President and Congress, the Post reported:
While continued funding for existing vouchers would be good news for students already benefiting from them, it would be bad news for all other children in the District receiving a poor education stuck in government schools.
If we want the best education possible for our children, and for a productive, educated workforce, then politicians need to stop empowering the teachers unions and the government education establishment, and start empowering parents. The answer is not to keep feeding more resources to a government monopoly, but instead to spur choice and competition – and therefore excellence – in education.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
If one understands economics, consumer control and competition, then it becomes clear that control over education must be taken away from the politicians and government bureaucrats running a public school monopoly, and handed over to parents, allowing them to choose the best education for their children.
A small, but important school voucher program helps students in the District of Columbia. But it has been placed in peril since the Democrats took over Congress and the White House.
The May 7 Washington Post noted that President Obama has offered a small compromise that would allow current voucher students to remain in private schools, but the overall program would be sentenced to a gradual death as no new students would be added.
The Post noted:
More than 8,000 District students have applied for scholarships since the program's inception, and about 3,000 have received the grants of as much as $7,500 a year for private or parochial schools. Of the 1,716 current scholarship recipients, about 1,400 are in pre-kindergarten through eighth grade. The largest cohort, 211 students, is in second grade, according to figures provided by the Washington Scholarship Fund, which administers the voucher program.
As for the actions by the President and Congress, the Post reported:
President Obama will propose setting aside enough money for all 1,716 students in the District's voucher program to continue receiving grants for private school tuition until they graduate from high school, but he would allow no new students to join the program, administration officials said yesterday…
Congress voted in March to cut off funding after the 2009-10 academic year unless the entire program is reauthorized by lawmakers, a dim prospect in the Democrat-led body. The White House proposal would revise the law and secure grants for the coming school year, but Obama has to persuade Democratic lawmakers to support a gradual phaseout by continuing to include grant funding in future appropriation bills.
While continued funding for existing vouchers would be good news for students already benefiting from them, it would be bad news for all other children in the District receiving a poor education stuck in government schools.
If we want the best education possible for our children, and for a productive, educated workforce, then politicians need to stop empowering the teachers unions and the government education establishment, and start empowering parents. The answer is not to keep feeding more resources to a government monopoly, but instead to spur choice and competition – and therefore excellence – in education.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
Friday, April 10, 2009
A Critical Reminder on the Economy
An important Investor’s Business Daily editorial is titled “Reagan’s Legacy: Our 25-Year Boom.”
The piece provides a crucial reminder of where our economy was when President Reagan arrived in office, and how his pro-market policies launched the U.S. economy on a quarter-century period of robust growth. IBD observed:
But what about now? IBD warns:
IBD closing questions:
Read the entire editorial, and then ask yourself: Are Obama and Company taking us in the right direction or the wrong direction?
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
The piece provides a crucial reminder of where our economy was when President Reagan arrived in office, and how his pro-market policies launched the U.S. economy on a quarter-century period of robust growth. IBD observed:
It was Reagan who brought America's capitalist economy roaring back to life, ending energy price controls, slashing income tax rates by 25% and dramatically reducing tax rates on capital gains. Americans had been told for years — as they're now being told again — to expect diminished standards of living. Then they watched as the Reagan years set in place one of the most durable and remarkable booms in incomes and wealth in history.
But what about now? IBD warns:
Today the question is: Can Reagan's free-market miracle survive? Or was it just a brief interlude of history? President Obama has presided over the greatest expansion of government in history. Spending on the various bailouts and stimulus programs now totals $4 trillion — about a third of our total national output. And it looks to grow even bigger. He has proposed new taxes and new rules that will put the government's hand into our lives as never before. Expanding government spending from the 50-year average of 20% of GDP or so to as much as 25% will require sweeping new taxes — and not just on the rich.
IBD closing questions:
So is Reagan's dream of free-market capitalism dead? Or is it just sleeping, as in the 1970s, waiting for a new champion to emerge?
Read the entire editorial, and then ask yourself: Are Obama and Company taking us in the right direction or the wrong direction?
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
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