Always enjoy Mark Cuban’s kick-butt prescriptions for economic success. Sure he oversimplifies, but like most successful entrepreneurial folks Cuban understands what a remarkable number of people do NOT understand – innovation drives our economy forward in powerful ways and our current bureaucratic-heavy approaches to the economy too often stifle innovation in business while failing to inspire innovation in Government (which is almost an oxymoron).
I was especially interested in this comment, something I’ve believed for many years:
There are exceptions, but more often than not, the stupidest thing a business of this size can do is borrow money.
Like the administration before it, the current administration seems to have no concept of what it takes to start, run and grow a small business. None. Here is a hint. If you want to see more jobs created by Small Businesses and entrepreneurs REDUCE the amount of paperwork required. Dramatically simplify the tax code. In other words, if you REDUCE THE OVERHEAD of small business, you effectively create capital for them through reduced costs.
Not only do you improve their financial position, but you reduce that great big time suck known as dealing with your accountants and lawyers. The more time wasted with “professional services”, the less time spent doing your job. This seems to be a concept lost on government. One last thing. It appears to be a goal of the administration to free up loans to small businesses. For the sake of this comment, let me re-define Small Business as those companies with fewer than 20 employees. There are exceptions, but more often than not, the stupidest thing a business of this size can do is borrow money. Its stressful enough for a small business in these times to be profitable. Add to that stress the need to repay a loan and success becomes far more difficult. If we want to accelerate the formation and growth of these small businesses we need to first reduce the costs imposed on them by the government (at all levels) and then simplify and reduce the costs of raising capital. Forget government loan guarantees. Make capital gains on investments up to $1mm in small companies tax free. Make this process paperwork free for the small business and a 1 page form for the investor. Thats how we will see economic and job growth in this country..
I’m not convinced paperwork is the key thing to focus on but it is certainly a valid concern. One of the great ironies of our “pretty successful” American experience is the failure of so many to insist on better government accountability with respect to the massive spending. People very correctly are outraged when big business screws up, but often businesses often pay the penalty they should pay for major mistakes: the death penalty. Bailout issues aside for now one of the reasons for the vibrancy of the American economy over some 300+ years has been our somewhat ruthless reliance on the survival of the fittest businesses.
As we move into a new era of much great Government involvement in business, I sure hope we find ways to limit the damage to American’s engines of innovation – small businesseses.