In Small Business We Trust

Between the war in Iraq and recent government scandals, the nation's faith in its major institutions has been unquestionably shaken. Yet most citizens still trust small businesses.

That was the surprising result of a recent survey by Harris Interactive, which has conducted the survey annually since 1966 to find out where Americans place their trust. And, for the first time, more people said they place their trust in the corner grocery store owner than in any other public or private institution.

Of those polled, 96 percent expressed either a "great deal" of trust (54 percent) or some trust (46 percent) in small businesses. That was higher than the military (79 percent total), the news media (61 percent), and lawmakers in Washington (60 percent). It's the first time the military fell out of first place since 1988.

Overall, public institutions such as Congress, the Supreme Court, and organized religion lost trust, while business — even Wall Street and major corporations — gained trust. The study attributed the shift to a year of scandals in Washington and the fading from memory of corporate scandals earlier in the decade.

The truth is, we've long had an idealized vision of the small business owner in America. That's probably because they symbolize many of our national ideals: freedom, enterprise, ingenuity, and our pioneering spirit. Through his paintings and illustrations, Norman Rockwell helped to create this idealized vision of small-town America, and it still resonates today.

In an age when we are haunted by our seeming inability to deal effectively with terrorism, the failings of our government and military in Iraq, and our huge federal deficit, it makes sense that small businesses would get a vote of confidence. It suggests to me that people are looking inward, to their own communities, for a sense of security.

They're finding solace in the fact that the neighborhood drugstore, grocery store, or car dealer is open every day for business without fail. They probably even know the owners, who want nothing more than an honest dollar for an honest day's work.

That's a solid bedrock quality that people can latch onto, and small business owners should feel very good about it. Normally, that would be the end of the story. But the survey got me thinking.

If the public holds small businesses in such high esteem, why do they fair so poorly in Washington? Of course, lawmakers pay lip service to the virtues of small business. But in the past 10 years, Congress has consistently failed to deliver on a number of issues important to small business owners.

Then I came across another recent survey. This one, also conducted by Harris, asked Americans who they thought wielded power and influence in Washington. Guess what? Small business barely registered. In fact, 90 percent of those polled believe that small businesses have too little power and influence in Washington.

In the eyes of the public, major corporations and political action committees (PACs) wield the real power and influence in Washington. Corporations, labor unions, and other special interest groups typically create PACs to raise and spend money on political campaigns.

As the saying goes, "money is the mother's milk of politics," and nowhere is that truer than in the hard calculus of Washington politics. Simply put, money talks.

I decided to check out federal election records to see just who is doing the talking in the nation's capital these days. As it turns out, the National Federation of Independent Business (NFIB) spent about $3.3 million during the 2005-2006 election cycle. The NFIB is the nation's largest small business trade group with about 600,000 members.

While that sounds like a lot of money, it's about equal to the campaign contributions of one Wall Street firm — Goldman Sachs, which gave $3.4 million. I think you get the picture. The real power brokers dwarf small business influence as measured by what really matters in Washington — cold cash.

In fact, the combined contributions of just five major corporations — General Electric, Lockheed Martin, Boeing Inc., Microsoft, and Wal-Mart — totaled slightly less than $9 million, or three times what the NFIB spent. Not surprisingly, some of these companies have repeatedly turned up on lists of major corporations that have won government contracts earmarked for small businesses. Could this be why neither Congress nor the Bush administration takes this problem very seriously?

Your guess is as good as mine.