Last month, Inc.com celebrated the icons of entrepreneurship and rightly so. Successful entrepreneurs are inspiring as role models and have a great deal to teach us about life and business.
However, if you keep your eyes focused on the horizon, you can miss what's happening right in front of your feet. And what's happening is that the U.S. government, with the aid of both political parties, is strangling small businesses to death.
Gallup CEO Jim Clifton explains:
"The U.S. now ranks not first, not second, not third, but 12th among developed nations in terms of business startup activity. This is our single most serious economic problem. Yet it seems like a secret. You never see it mentioned in the media, nor hear from a politician that, for the first time in 35 years, American business deaths now outnumber business births."
Put another way, even we celebrate our entrepreneur heroes, it's becoming increasingly difficult to join their ranks.
The root cause is no secret. Huge companies get massive tax breaks that are unavailable to small businesses and most new regulations are now written so that they enforce the status quo and lock out competition from the bottom.
It wasn't always like this. Small businesses once had clout. Local politicians, especially congressmen, couldn't get elected or stay in office without the active support of, and campaign contributions from, local small businesspeople.
Today, only 9% and 12% of campaign contributions respectively to Democratic and Republican congressional candidates now come from small individual donors. A huge influx of big corporate money has ejected small business from the bargaining table.
Rather than fundamental reform to help small business, both parties squabble about trivialities. A case in point is the current controversy about "religious freedom" vs. "discrimination against gay couples."
I realize that those are huge issues for many people, but the entire premise is absurd, because:
- Any small company in the wedding industry dumb enough to turn down a gay wedding ($$$$$!) won't be in business for long anyway. I have relatives in the wedding business. The competition is beyond brutal.
- Any gay couple that hires a business owned by people who hate gays is asking for a disaster on their big day, like a wedding album with only a single blurry, long-distance photo of the happy couple.
I make light of the controversy not because the issues aren't serious but because they're a distraction from big picture, which is a wedding industry increasingly dominated by huge private equity firms like Clayton, Dubilier & Rice, which in 2012 purchased David's Bridal chain.
It took me 30 seconds on Google to find a $28,000 campaign contribution in 2008 from CD&R founder Joseph L. Rice III. And that was before the Citizens United ruling that opened the floodgates and made corporate contributions secret.
That same pattern is repeating itself in every industry--huge corporate donations followed by legislation and regulation that favoring big business. While big firm and their political stooges are fat and happy, this is long term economic suicide for the country.
Small business is the engine on which the U.S. economy runs. Making it more difficult for people to start and successfully run small businesses is insanely stupid. It is killing the proverbial goose that laid the golden egg.
I'm usually upbeat about life and business and I still believe that it's best to ignore problems that are outside your control. But this is one problem that requires the immediately attention of everyone in entrepreneur community.
Here's where I think we should start: let's demand legislation that creates 100% transparency in campaign contributions. If we're going to be strangled, at least we deserve know whose hands are around our necks.