- The Washington Times - Thursday, September 15, 2011

ANALYSIS/OPINION:

Americans, normally a confident people, are understand- ably anxious not only about the economy but about their own financial well-being. While there is no shortage of economists predicting an imminent recession, too few are talking about America’s tremendous underlying strengths and resilience. To be sure, we face economic challenges and need fiscal reform, but I have confidence in the American people and the economy.

The sources of my confidence in America are the small businesses that employ more than half of the nation’s private-sector work force and have generated about 75 percent of all new jobs in the past decade. When asked in a recent Gallup Poll how much confidence Americans have in U.S. institutions, organizations and businesses, 64 percent said they have a “great deal” or “quite a lot” of confidence in small businesses. Only the military ranked higher.

As chairman and CEO of the Hartford, a leading provider of insurance and wealth-management services for more than 1 million small businesses, I see a wide variety of entrepreneurs in action - dry cleaners, software companies, print shops, restaurants and more. What strikes me about these business owners is the clarity of their goals, the intensity of their focus on customers and their resolve to perform no matter what obstacles emerge. Their passion is their profession, and they treat their employees and customers like extended family. They are full of dreams and determined to build better lives. It is hard not to be inspired by their self-confidence and their long history of contributing to our country’s economic growth.

To be sure, it is a challenging time for many small businesses. A recent survey by the National Federation of Independent Business found that 1 in 4 small-business owners report weak sales as their top problem, followed by taxes, regulatory intensity, credit and loan restrictions, and red tape. Given how important small businesses and entrepreneurs are to America’s recovery and future prosperity, what can we do to make it easier for them to invest, hire, innovate and grow?

The United States needs to foster an environment that is more hospitable to entrepreneurship and small businesses. Washington should learn more about the special needs of small businesses and not view them simply as big businesses in miniature. Unlike large companies that have access to equity markets, small businesses often rely on personal savings, credit cards or collateral such as their homes to apply for a loan. As a result, their access to credit hinges on creating a more stable housing market, as well as removing regulatory hurdles and compliance burdens that remain for banks that want to make loans to small businesses.

We can also help small businesses by ending the one-size-fits-all approach to regulatory policy. Back in May, when the White House released “The Small Business Agenda,” one of the provisions called for “ensuring flexibility with regulations that disproportionately affect small businesses.” All of our federal agencies should be looking for ways to reduce regulatory millstones on small businesses. We should be liberating, not burdening, entrepreneurs.

We also should provide small-business owners with incentives that encourage hiring, investing in plants and equipment, and expansion. As studies from the Small Business Association’s Office of Advocacy show, increasing taxes on small businesses does not make economic sense. The SBA concluded that higher taxes on individual income, higher sales tax rates, and state-level estate and inheritance taxes above the federal level all tend to reduce a state’s share of the national entrepreneurial stock. States have a substantial role to play, whether by providing incentives to those businesses that bring new full-time jobs to the state, subsidizing wages for new hires, running business-plan competitions, providing grants to help small firms regain their footing or other creative approaches.

Avoiding risk is certainly not how our country began. America was founded and settled by confident, self-reliant, resilient people - explorers, risk takers and innovators. We need to return to those roots and become more comfortable with sensible risk-taking and more knowledgeable about managing risk. Risk management is fundamental to many activities in life and business.

America is also a nation of immigrants, who are risk-takers by virtue of having uprooted from the familiar to restart life in a new country. Demographic studies show that America’s destiny is tied to immigrants, who already constitute a third of the population and are likely to become the primary source of entrepreneurial growth. But it remains much too difficult for immigrant entrepreneurs who come to the United States to attend our great universities and then want to build companies and create jobs here.

Immigrants who once wanted to pursue the American Dream are now returning to their native country to launch careers. Who can blame them? According to the U.S. Citizenship and Immigration Services, immigrants from India with advanced university degrees can wind up waiting between four and 15 years for a green card. We should be doing everything we can to attract more immigrant entrepreneurs and keep here the highly educated international students who graduate from our universities.

Today’s entrepreneurs and small businesses are a powerful force, not just economically but also behaviorally. They carry on the tradition of the driven, confident, creative men and women who built America - individuals who believed in themselves, imagined a future worth striving for, and worked hard and took risks to achieve their vision of prosperity. At this fragile time in the nation’s recovery, it is imperative that we do everything possible to help our entrepreneurs succeed. They are the path out of the slow economy and toward renewal. They are the vital engine of the economy. They make our country great.

Liam E. McGee is president of The Hartford.


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