Are you better off now than you were four years ago? Don't smirk. The Trivial Pursuit phenomenon (see "Big Game," page 101) not withstanding, this must be the single most pervasive question of 1984. And the answer, unfortunately can't be found on the back of a card. But answer it you will -- we all will -- come November 6.
In the meantime -- who knows? -- maybe it helps to Trivialize the question. Supporters of President Reagan, for example, could break it down into three of the game's categories: Science & Nature (Do those giant deficits boost or threaten the recovery?); Arts & Literature (Is Jerry Falwell our idea of an important social visionary?); and Geography (How close is Grenada to El Salvador?). Mondalites hunkered over the same table might look for answers elsewhere: History (Has a Democrat ever cut inflation?); Sports & Leisure (Are the Japanese on their way to beating us at baseball, too?); and Entertainment (How come the Great Communicator makes everybody feel better -- whether or not he or she is?).
Oh, well. Put away the die and get serious. Is 1984 significantly better than 1980? Probably. Is that because of, despite, or unrelated to the policies of the Reagan Administration? Hard call. Does Reagan vs. Mondale offer a clear choice for the entrepreneurial agenda of the '80s? Yes, but it is not clear what.
One thing, however, is clear: A new generation of leadership is charging up Capitol Hill with the fresh perspective of baby boomers everywhere. Political children of the '6Os and '70s, they come to government unencumbered by assumptions that big business or big labor is the last, best hope of the free enterprise system. The focus of Joel Kotkin's election essay (see "The Making of the President: 1988," page 68), a handful of these legislators joined us in Washington last June for a special INC. Congressional Roundtable on small-company issues and Election '84.
Participating in the luncheon discussion were four House members. The two Democrats were Charles E. Schumer of New York, co-sponsor of the National Entrepreneurship Act; and Parren J. Mitchell of Maryland, chairman of the Small Business Committee. Republicans Ed Zschau of California, former president of the American Electronics Association; and Jack Kemp of New York, onetime Buffalo Bills quarterback and much-touted entrant in the 1988 Presidential sweepstakes, were also present, as was Bill Nourse, political activist (Republican-turned-Democrat) and owner of a hardware supply company in West Nashville, Tenn. Sitting in on behalf of the magazine were, in addition to myself, senior writers Tom Richman and Joseph P. Kahn.
Although both sides of the congressional aisle were ably represented, party lines proved to be not all that meaningful. Zschau and Kemp, for example, split sharply over the issue of the federal deficit and how (or even if) to attack it; Nourse and Schumer took profoundly different stances on the issue of legislative leadership versus following the dictates of a political constituency. Zschau and Schumer, on the other hand, agreed that government sensitivity to smaller companies had declined since 1980. Nourse complained loudly about Reagan's appointment of Martha Seger, a Republican banker, to a Federal Reserve Board slot designated by the Senate for a private-sector player, possibly a small businessperson ("Her credentials are absolutely bad. It's this kind of insensitivity on the part of Republicans that rattles us. ). Kemp downplayed its significance. Those same two found fertile ground, however, in discussing tax breaks for the investment small growth companies make in human resources.
Kemp arrived late at the meeting (through no fault of his own -- a hot school-prayer debate was underway on the floor of the House) and was not heard on all points, but nobody else voiced the strong opinion that the Reagan-Mondale choice was an historic one for the owners of small companies -- particularly the fast-growth companies that are defining the American economy of the '80s. There was, if anything, a tone of quiet resignation to the vocal support of each participant's respective standard-bearer.
We began the two-hour session by asking each participant for his working definition of "small business" as a political entity. What follows are some highlights.
Zschau: When I think about small business, I think in two categories. One is the small business that plans to remain small, which is often a family business. The aspirations of the entrepreneur are to keep it at about that size. [The other] is the small business that looks at "small" as just a phase you have to go through to become big. I think that when we talk about small business, we really have to be thinking about both those categories.
Mitchell: There is always a problem in Congress when it comes to federal effort. on behalf of small business. It seems to me that Congress, properly, is focused on the second category, the small business that wants to be big. If we make that distinction, then we are pretty clear what role [we] should be playing.
Zschau: Another way of thinking about small business is like you think about a small child versus an adult. A small child is more fragile. The kinds of things that can hurt an adult may kill a child. High interest rates, for example, may hurt a large business and reduce its profits substantially; a small business could go out of business.
Small business set-asides, an issue often buried in ideology or ennui, sparked this reasoned exchange:
Zschau: I have a philosophical problem with government intervention generally, but with set-aside programs in particular. It stems from the fact that I believe small business has an advantage, as opposed to disadvantages to make up for. We talk about the capabilities of small companies to expand and grow, to be flexible and to know where the opportunities are. So it seems to be contradictory to say we want to give them special treatment. The ones that couldn't make it otherwise art the ones that take advantage of the set-asides
Nourse: From my perspective as an activist, I don't particularly like set-asides. But once you reach a point where Congress has no other way to get an agency--the Ex-Im [Export-Import Bank of the United States], for one -- to respond to small business, isn't a set-aside a legttimate tool?
Zschau: Maybe. That is, if the agency's mission is served best by using small business yet refuses to do so, then it seems you have to get them to focus their objectives better. Sometimes, however, you give the agency two objectives. You say, "I want you to achieve your main objective, but I want you to do it within certain categories of resources." Then they have to make trade-offs between the two.
Nourse: In the real world, where we operate, at some point action has to happen. Let's go back to the Ex-Im bank. We have on the one hand the Commerce Department promoting the idea of expanding exports through small business to reduce trade deficits; on the other hand you have the bank giving 80% of its funding to the top exporters in the country. The only clout Congress has in this case is set-asides.
