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Message to Obama: Send loans fast


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By Stacy Cowley

What could jump-start the economy? Affordable loans for small business.id="size4">

With bank lending almost frozen and consumer spending down sharply, entrepreneurs foresee a Main Street wipeout if Washington doesn't take action soon to shore up the nation's small businesses.

"It's killing us right now. We can't expand, we can't buy inventory; we've had to do everything on credit cards because the banks won't even look at us," said Amy Rhodes, owner of A-2-Z Scuba in Puyallup, Wash.

To read the entire article at CNNMoney.com, click here.

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Shouldn't that read "Message to Bush: Send loans fast"? I know I'm a "ferriner" and all that, but I'm fairly certain that the President Elect can't actually make any funds available to anyone until January 20th.

On Amy Rhodes...as the owner of a Scuba store myself, in a previous life, I can feel for her. Folks are worrying about their jobs and savings and the available "discretionary" dollars become fewer and fewer. It's tough enough running a normal business in these times. A Scuba store starts out with a very limited potential clientele base and I can only see that shrinking until confidence in the economy (national AND global) returns. I'm hoping for the best but that is going to take some time even if, somehow, all the right strings get pulled and, in reality, when has that ever happened?

I do have to say that originally financing her business on her personal credit cards does not sound like the smartest move. I also have to question her wanting to finance an expansion into a bigger space when sales are down and she's having trouble paying her mortgage. I imagine any banker would have the same questions.

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Hi Rich,

Well, since none of the $700B allocated for this fiasco is going to go to any small companies like you and I, I think the message has to be to Obama 'cuz that's what he promised, not Bush. They gave billions to banks that got into trouble for allowing their high-priced managers to run amok. As they've gotten the money, some of those banks have continued to run amok while the fallout from their lousy business decisions continues to cause corporations to fold and put people out of work. Now the friggin auto industry wants a handout. Jeez. Watch, if they do that, the Japanese auto manufacturers with plants in this country will have their hands out too.

When 9-11 hit, thousands of businesses cashed in on the post 9-11 relief because their bottom line was supposedly affected - how many small businesses on our scale were helped by that? Probably not many; now we've got this mess. The mortgage bubble bursting had a direct impact on the bottom line of every real estate person, appraiser, and home inspector in the country but I doubt that anyone on our level will see any government relief; that's for the fat cats and for the homeowners who blame the fat cats for their woes - small business, real small business, will be left out in the cold as usual. About all that most of us can be thankful for is that if Obama keeps his pledge we won't see our taxes increased. Fat lot of good that'll do all of the H.I.'s that'll be pitching tents under overpasses by then.

This morning's news had a story about how some community college presidents across the country are paid around $800K a year; what kind of malfeasance allows a state-owned school to pay that kind of salary to a school administrator and why is it necessary for any school administrator, let alone some corporate CEO, to be paid that kind of money? Think about when the world was in the post WWII boom; corporate heads were making maybe 20 to 25 times what their average employees made and were all lining their nests just fine - none of them were being paid 200 to 300 times what their average employee was being paid. The only millionaires back then were the folks from old money, the really talented entrepreneurs and the crooks. Nowadays it seems like there's this air of entitlement in the corporate world that says that even if you're mediocre at best you have to be paid many millions of dollars if you're at the top of the company pyramid and if they fire you they have to pay you a huge chunk of money for having done a really bad job. I don't get it; the guy that headed AIG probably has the same degree that some schmo running a little machine shop somewhere has - where's all this friggin insanity come from?

Though it would be nice; I don't see us little guys getting much help through this mess. FWIW, as I've been typing this, the TV is on in the corner of my office and I just saw on CNN that the muckety-muck in charge of the bailout has said that $350B of the bailout money - exactly half - is going to be held in reserve until Obama takes over so that the republicans won't take the heat if it's all spent unwisely. Not a bad idea, let's see if he follows up on any of that sunshine he was pumping up our butts on the runup to the election.



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Well said Mike!

When does it stop? What is so bad about allowing a company to take care of itself or fold? Its not up to us taxpayers to keep business afloat. People say "What about all the jobs". All I know, as more inspectors close their doors here, I have become busier. So if a manufacturer shuts down, the business will be shifted elsewhere, hence creating more jobs for the other company. Its the law of supply and demand, as long as there is a demand (population). A big factor is Labor; Toyota's costs hovers around $45 per hour when GM's labor costs are about $78 per hour. It is only a matter of time, even if they get their bandaid money, before it is facing bankruptcy again.

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I don't think the auto industry should be treated any different from any other company, large or small when it comes to seeking a loan...NOT a "bail-out". There is a difference in the amount of money of course, and the places that it can come from. I just read that GM, for instance, loses something like $1200 on each vehicle it makes, that laid off workers continue to receive 96% of pay and benefits for up to two years while they produce nothing, and then, as Mike points out, there are the outrageous corporate salaries and "parachutes" for the execs while they run the companies into the ground.

I say let them have the money but only if, like anyone seeking a loan, they can produce a believable and enforcable business plan that makes sense. One that clearly shows how they intend to cut costs, how they will make a product that will sell, and sell for a profit, how they will be able pay us back. That will require a good deal of sacrifice by the unions as well as some much smarter and less greedy management. Frankly, I just don't see that happening.

It's a mess, and I suspect it will get worse before it finally turns around. The left and the right used to be close and reasonable enough to recognize and appreciate each others arguments. It seems no longer. Working compromise is a lost art. I am, probably naively, optimistic that the new admimistration will eventually build a solid middle ground as a foundation to regrow the economy (and my retirement funds). I hope he's given the chance to do that, but I know there will be chest-thumping resistance from both sides of the aisle, the country "fringes" and especially the media.

Buckle up. There's a long rocky road ahead and we are all going to have to submit to a few more bruises before it smoothes out.

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