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Measuring Clout

If small business can help Boeing, why can't it help itself?
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If Washington had an official indoor sport it would probably be called "Measuring Clout." Clout is, of course, influence in the making of federal policy, or in the distribution of federal jobs, goodies, and burdens.

One of the unwritten but iron rules of the game is that the perception of clout by the players is at least as important as the reality. You have clout, to some extent, because people think you have it. And if people (especially about 10,000 officeholders and lobbyists) think you have clout, they'll act like you do.

One of our favorite pieces of "clout perception" is an annual survey which U.S. News and World Report has conducted on the subject for the past eight years. Each year the magazine asks some 1,400 opinion leaders to rank a list of institutions for "influence," on a scale of one to seven. Four years ago, small business, quite sensibly, was added to the annual list of some 30 competitors for clout. Some of the results are shown in the chart on this page, which we print here courtesy of USNWR.

1,400 OPINION LEADERS RANK INSTITUTIONS BY INFLUENCE*

Most Influential 1981 1980 1979 1978

White House 1 1 1 1

Large business 2 3 2 2

U.S. Senate 3 6 3 6

Television 4 2 5 4

Oil industry 5 4

Supreme Court 6 5 4 3

Banks 7 7 9 9

U.S. House 8 11 7 7

Cabinet 9 14 13 13

Federal

bureaucracy 10 8 6 8

Medical profession 28 25 25 25

Small business 29 29 28 27

Cinema 30 30 29 27

*U.S. News and World Report

Small business has come in next-to-last (or tied for that spot) in each of the four years. The result hasn't changed, despite the unprecedented passage of five important small business bills in Congress last year, and well-publicized (but not yet fully honored) commitments of both major parties to carry out the recommendations of the 1980 White House Conference on Small Business.

Large business came in second for three years and third in the fourth.

Now let's get a little perspective on these perceptions from a Washington Post item of May 19. The Reagan Administration wanted to cut the budget for the Export-Import Bank's direct loans by $752 million (down to $5.1 billion) and its loan guarantees by $1 billion (down to $7.5 billion). Two more facts: The average interest rate on those direct loans was 8 1/2% last year (small business at home was paying at least between 15% and 19%). And according to this same news item, two-thirds of those direct loans went to seven U.S. companies: Boeing, GE, Westinghouse, McDonnell Douglas, Lockheed, Western Electric, and Combuston Engineering. Some clout, eh?

Well, guess what Boeing (part of No. 2) did to defeat the White House (No. 1) when the House of Representatives (No. 8) voted to support the White House (No. 1) against the House Appropriations Committee (part of No. 8) and the Senate Budget Committee (part of No. 3)?

It sent for good old No. 29!

Yep, way down there next to last, right next to the water boy at the end of the bench. "We just made clear what this meant to us and our suppliers in 44 states, and it got a fantastic reversal," said a Boeing spokesman... "Boeing's home-state [Washington] delegation of five Democrats and two Republicans agreed to spread the word, stressing the trickle-down benefits of Export-Import loans on smaller companies throughout the country."

We'd just as soon stay out of evaluating the merits of this one for right now. Suffice it to say, the Export-Import Bank (part of No. 10 -- the Federal Bureaucracy) won this round. Its money was not cut.

We will watch with great interest, however, the fact of two other proposals before the Senate (No. 3) and the House (No. 8). One is give small business (No. 29) 25% of the federal tax cut this year or 50% of the cut in business taxes (see May, page 184). The other is S. 881 (see The Buck Stops Here, page 116). Both of those will permit the Republican Party (No. 15) and the Democratic Party (No. 24) to fulfill some more of that promise their leaders made during 1980 -- to carry out the recommendations of the White House Conference.

We hope to see and hear No. 1, No. 2 (especially all seven large companies and their trade associations), No. 3, No. 8, No. 15, and No. 24 all in there pitching for good old No. 29. Only fair, eh? Are you listening No. 2? When does No. 29's turn come? On issues where it needs you? We'll be watching -- and reporting. And we expect to be talking a good deal about this subject of who needs whom and when during the next year or two.

Some people look and sound like they have clout; others rally do. We know small business is doing better both ways today than it did five years ago.(Its rating in the USNWR poll has gone up from 2.09 to 3.18 of a possible 7.) We won't be satisfied, however, until it's in the top 10. For the employer of 60% of the private sector's labor force in well over 10 million enterprises, nothing less will do.

The Capitol's professional clout measurers would do well to keep in mind the home-town position of small business people, which is the same in big city neighborhoods, suburbs, or villages. Small business men and women are community opinion leaders. They are pretty big fish in many thousands of small ponds. Big enough, as Boeing demonstrated it knows, so that when they pull together they have the power of a good-sized whale. They're just not yet in the habit of pulling together for themselves. That's one of the things INC. hopes to help with.

Maybe USNWR could add a footnote with an asterisk next to No. 29 (or wherever small business is next year): "Has been known to overcome others -- even No. 1 -- when roused or called upon, for example, by No. 2 or others. Still needs to demonstrate ability to do so continuously on its own account, with or without reciprocal help from others."

Last updated: Jul 1, 1981




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