In Political Debate, Small Manufacturers Are Ignored

Personally, I have been very disappointed at the quality of this season’s debate as it relates to small business in general, and small manufacturers in particular. And I think the media needs to share some of the blame.

A recent article in a prominent Arizona newspaper is a case in point. The article purported to compare the positions of McCain vs. Obama on  the general theme of small business. And guess what the paper focused on?

Taxes and healthcare.

This implicit characterization of what’s important to small businesses is short-sighted and narrow-minded in the extreme. If you’re running a business and you think that everything would be fine and America would suddenly be competitive if only the tax and healthcare burdens were lighter, you need a shot of reality.

Let’s focus on taxes. I’m not arguing that paying taxes isn’t aggravating. I, for one, often feel I don’t get anywhere near my money’s worth, whether the Democrats or the Republicans are in power. And, if I owned a factory and taxes were lower, I might invest more of my profits in advanced capital equipment or workforce training, which would make my company more productive. Or, then again, I might take a trip to Hawaii.

If the government is going to play a role in bolstering small businesses, the way to do it is through support for increased productivity. Yes, this is intervention, and pretty heavy-handed intervention at that. But productivity is what will save us as a manufacturing power (which we still are), and if we’re not willing to invest in it on our own, we need some incentives. Left to our own devices, our record over the last couple of decades hasn’t been so hot.

My point: The debate should not be about who’s going to lower taxes the most, but who’s going to nourish the small business community – the source of the most new jobs and the most innovation. Yes, lower taxes, but in exchange for behavior that makes us strong.

Neither candidate is talking about this.

There’s another problem with the debate, and that’s the failure to make the distinction between small businesses and multinational corporations. What’s good for one is not necessarily good for the other. To give one example, the tax break that “rewards businesses for shipping jobs overseas,” a favorite Obama line, really is a good deal for multinationals, and it’s a bad deal for small U.S. manufacturers because it puts them at a competitive disadvantage.

There’s another way the government could boost productivity that isn’t part of the debate: reduce the red tape. Instead of a tax exemption for small businesses, how about an exemption from government forms? Simply raising the limits for which companies have to report which data could improve productivity dramatically.

Well, enough ranting for now. Since so many of the media sources seem to be into over-simplification, I’ll indulge myself. So far, it looks like the Republicans are for “big business,” the Democrats are for “the people,” and nobody’s even talking about the problems of small manufacturing.