Just when I thought President Obama couldn’t be any more out of touch with small business, his weekly radio address last weekend made me wish Ronald Reagan was around to say “there you go again” with a chuckle. The president’s misunderstanding of America’s entrepreneurs, from what makes them tick to what would really work for them on health care, is laughably profound.
It’s hard to laugh, however, at something so serious. Small businesses do need help when it comes to health insurance, and they are the most important job-creating sector of our economy. And the president paid lip service to these facts in his recent radio address, but his ideas about how his proposals might help small business and the economy are like public policy on acid — from mildly distorted to downright hallucinogenic.
President Obama says he hears from would-be entrepreneurs that losing the health insurance they get through their current jobs is a significant disincentive for them when they think about starting a business. And that some kind of guarantee on health care would encourage all of these people to start companies and create jobs! As a self-employed person who grew up in a small business family, this theory had me literally spit out my coffee. Although obtaining my own health insurance was a serious matter, it was about number 99 on my list of pros and cons surrounding my decision to leave my job and start my own enterprise. I called my father, another entrepreneur, for his reaction to the president’s claim. Dad started his land-surveying business 25 years ago when he was laid off from his job (a fairly common story among real small-business owners). He and his partners all took out second mortgages on their homes to start their business. Was it a struggle to start a business and buy health insurance for themselves and their families? Sure. Was it enough to sway their decision? No.
My father and I both had the same one-word reaction to the president’s perception of entrepreneurial motivation: bull.
If someone wants to be an entrepreneur, if they have that hunger for being their own boss and a passion for doing things their way, they will do it. If the issue of giving up their cushy employer-provided health insurance holds an individual back, then I’m sorry — that person is not entrepreneur material.
The president also mentioned other “small business owners” who apparently tell him that the cost of health insurance is an impediment to growth and to their “research and development” budgets. In the same breath, he said, “these businesses are the mom and pop stores and restaurants, beauty shops, and construction companies that support families and sustain communities.” Adding to the confusion, he said that these business owners are “the small startups with big ideas, hoping to be the next Google, or Apple, or HP.”
Research and development is the stuff of high-tech firms, and only five percent of the nearly 30 million small businesses in the country fall into that category. Maybe some of these firms are hoping to be the next Google, Apple, or HP, but they only represent a few threads in the small business quilt. Retail shops, restaurants, and beauty shops — these types of business certainly do not conduct research and development, and they rarely are able to provide health benefits because their cash flow goes toward giving people jobs, period.
American entrepreneurs are nearly fearless risk-takers. They have big hearts, callused hands, and dark circles under their eyes — and that’s the way they like it. They are realists who almost never dream of being “the next Google.” That statement would make them laugh. Would American entrepreneurs like to be able to get health insurance at a more affordable price? You bet, but health insurance didn’t have a darned thing to do with why they stand where they are today.
Please, Mr. President. Go out and meet some real small business owners.