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None of Us is an Island: Why Small Business Owners Like Me Want a Credit Rescue Plan
Anita Campbell of Small Business Trends | October 1st, 2008 - 07:33 AM
(22) found this useful. Do you? 
I don’t know about you, but my initial thoughts about this “bailout plan” to deal with the current credit-market crisis were overshadowed with skepticism. You see, I’ve rarely met a new tax or regulation I like. I value free markets and tend to distrust intervention by government. So my immediate reaction was, “Here we go, another government program filled with pork that eventually has to be paid for out of OUR pockets.”
Initial Skepticism Turns to Frustration
That skepticism soon turned to frustration. We kept hearing and reading about the “bailout plan” with increasing frequency — and urgency. Big screen TVs are great for all sorts of things, and one thing they show with alarming granularity is fear in the eyes of financial executives and regulators. Yes, the fear was coming through. Unfortunately, the public was getting few details about the solution.
The mere fact that it initially was called a “bailout plan” made it suspect. It sounded like we — small business owners like me and the people on my small team — would be the ones paying for take-your-breath-away bonus packages for overpaid Wall Street executives laughing all the way to the Caymans.
This has to be one of the worst jobs explaining to the American people why we need a $700 Billion package that I’ve ever lived through. Being in the final throws of a presidential election has not helped — it degenerated into partisan football.
But I am not interested in hearing about partisan politics right now — it’s a pointless exercise. We need decisive action, not blame. Leaders, are you listening?
Frustration Gives Way to Urgency
After 2 weeks of seeing historic events on Wall Street (Lehman Brothers going bankrupt and the end of investment banks) and seeing it spread across the world (the London Interbank, or LIBOR, rate hitting an all time high), I have concluded we need this intervention.
We need a rescue plan as fast as we can get it. Like …. what are we waiting for?
Markets, the Economy and our Businesses are Interrelated
Here’s the bottom line: our financial system and our markets and our businesses are interrelated. No man (or woman) is an island.
We need the economy as a whole operating well, if we expect our businesses to do well.
Markets and economies are funny things. We may not feel the effects right now, but market forces and fallout tend to trickle down. It takes a while to trickle. Most small businesses haven’t felt the effects or are just beginning to feel the effects of this crisis situation unfolding. Here are 3 ways this can hurt us unless decisive action is taken:
1. Frozen credit — Frozen credit at banks does not help my small business in any way. If credit dries up among banks and other financial institutions, there won’t be credit extended to small businesses like mine. I don’t know about you, but I use credit cards as a line of credit, and I need those open lines of credit to keep the cash flowing. It’s as simple as that. Startups especially, that haven’t gotten their sea legs yet, are at risk. If your revenue sources are not solid because you’re still in the startup stage (it’s not that long since my business was in that stage), you know what I’m talking about.
2. Risk of losing investments and savings – Look we are not anywhere close to a major panic setting in, but spooked investors can set in motion forces that reduce the value of our savings and investments. FDIC and SPIC insurance will protect us to a huge degree, so I am not worried about bank runs or institutional failures (I used to work in a bank, so none of that scares me). But government insurance aside, I don’t want to see the value of my retirement investments shrivel and take 5 years to rebound, because the stock markets tank. I also don’t want to see it happen for anyone on my team.
3. Unhealthy markets create customers unwilling or unable to buy – In the final analysis we need healthy customers. Our businesses are nothing without customers, and if our customers are not fiscally healthy and able to buy from us, our own businesses suffer. As this situation spreads worldwide, it is beginning to be clear that it will touch people and businesses all over the world. It’s not just a Wall Street crisis hitting a few arrogant institutions pushing electronic signals around. This has the potential to spread and touch all of us directly in ways that are not always apparent, because economic forces and financial systems are so interrelated. Whether your customers are consumers or businesses, you need them fiscally healthy.
I don’t mean to sound like Chicken Little shouting, “The Sky is Falling.” But, I don’t take it lightly when smart experienced people come out in droves and impress upon us the urgency of the situation. Too many voices are saying we need a rescue plan to get and stay on track, for us to ignore it.
And if we watch networks like CNBC, which has some of the best coverage on this crisis (despite an obvious Wall Street bias), the signs of what can happen unless decisive action is taken, are becoming clear with each passing day.
Just because it isn’t some startling event like planes flying into tall buildings, doesn’t mean it is any less of a crisis.
We need this credit rescue plan. Let’s do it now. And get our markets back on track, so we can keep growing our businesses.
On the Credit Crisis and Rescue Plans | Small Business Trends | October 1st, 2008 at 8:24 am
[…] Read: None of Us is an Island: Why Small Business Owners Like Me Want a Credit Rescue Plan. […]
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scott | October 1st, 2008 at 9:26 am
I am with you all the way Anita. My main client is a major Home Builder. If their operations are hampered by lack of credit, it is most assuredly going to trickle down to my sales. The problem as I see it is to actually know which rescue plan is going to work. The financial market complexities are so wild and expert opinions so varied that getting your head around the situation is next to impossible. The only thing I know to do is rise above the emotional fray and go back to basic principles (capitalism vs socialism). Government is the last folks I want in control.
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Martin Lindeskog | October 1st, 2008 at 9:40 am
The financial crisis is the top news here in Sweden and one big bank here, Swedbank, has lent out plenty of money to “trouble” banks in America.
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Brent Leary | October 1st, 2008 at 10:05 am
Anita my thoughts are perfectly captured by your words here. Thank you! Now if only the DC gang would put the partisan stuff to the side and work for us and not against each other.
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Jay | October 1st, 2008 at 10:13 am
I have to agree with your statements too, Anita. The situation is grim and the ripple effects are just now starting to come to shore. Soon, the waves are going to start to break. The current state of our nation is in a sad state and it doesn’t seem that those in charge know really what they’re doing. As you said, they are fear driven right now and that gets you nowhere. Let’s all keep our fingers crossed. . .
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Amanda | October 1st, 2008 at 10:19 am
I too feel the same way you do Anita. It seems like we’re teetering on the top of the slippery slope now and we need action BEFORE we fall down it. I only hope a solution comes quickly.
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Anita Campbell | October 1st, 2008 at 10:23 am
Hi Jay,
I hope I didn’t come off as too negative. I don’t think the country is going to h*ll in a hand basket irretrievably. I just want to see our leaders take decisive action. Being the optimist I am, I feel the situation can be brought around. But, it’s true, we need action.
– Anita
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Dennis Howlett | October 1st, 2008 at 11:06 am
But who exactly is the government trying to ‘rescue?’ If I’ve read it right that would be JP Morgan and Goldman Sachs. There are PLENTY of banks out there that are well run and adequately financed. The problem is Wall St trying to hold the investment community to ransom, aided and abetted by political lobbyists on Capitol Hill. Let them bleed to death if that’s what it takes to get a system of governance that works.
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Joann Sondy | October 1st, 2008 at 11:22 am
Anita, I agree with your thesis to justify the “bailout” and I, like many, are a small business. I do believe that something should be done.
However, this ‘perfect storm’ has been building for a long time and very little was done… the free market will take care of itself. I’ve heard everything from blaming the guy down the street who bought a house and didn’t pay his mortgage (probably lost his job) to the top Wall St tycoons.
When I was in trouble earlier this year; who came to my rescue? NO ONE. I had to work it out on my own to keep my house from going into foreclosure because I wasn’t working due to illness.
I’m tuned into the financial markets because my work depends on it. The tone/language being used in media regarding that the “rescue plan” wasn’t sold to the general public and the condescending remarks that we don’t understand how the financial system works frankly is INSULTING.
I understand completely. We are being asked to support a $700+ BILLION tax-payer funded plan and being told that we’re the one’s who will be affected the most if the systems doesn’t get the money. Yes, that’s true. My sister and her husband are facing this right now with their business.
How can the CEOs of Fannie and Freddie walk away with huge salaries/bonuses while the companies? What are other solutions? A lot of people got (super) rich off tax cuts, contracts, bonuses and more during this administration’s reign; why more?
And, some of the add-ons in the second bill include more tax cuts! Where is the money coming from? If you can’t afford to pay for it…. don’t buy it.
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Vlad | October 1st, 2008 at 11:22 am
Not sure what kind of decisive action everyone is looking for here. The only action I see that can happen is a bailout of large Wall Street players, and that’s very remote to my needs as small business operator. Kinda sick of seeing guys taking gazillions of dollars for nothing, and it’s sad to know that my tax money will finance that further along.
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Joel Libava | October 1st, 2008 at 1:12 pm
Anita and my fellow Americans,
Non partisan. Ok. I really don’t trust D.C. with that kind of money. I have a huge problem helping the greedy bankers that helped cause this craziness. How can we make this so that they {The greedy lenders} have some major skin in the game, too?
How can we make sure there are enough speed bumps put in place to slow stuff like this down, when something similar happens again. Power and greed will continue to put all of us in this situation every few years. Maybe it won’t be mortgage related, but it will be “our wallet related.”
Joel Libava
Cleveland
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Diane | October 1st, 2008 at 5:14 pm
Part of the problem with the ‘bail-out’ is that is another program on top of broken programs. I understand the need to stabilize the credit situation because that will (and is) have a tremendously bad impact on small business owners.
However, I would feel better if there was real leadership in DC. If they would stop sniping at each other and take a helicopter look at the entire situation. If the bailout is supposed to be a solution, then take a couple extra days and REALLY solve the problem. Address all of the issues related to the causes of the meltdown. That is how you truly keep it from happening again.
And then, once the bailout is put into action, they should start reviewing all other regulations or lack thereof. I would bet there are more inadequate regulations and legislation on the books.
My fear is that this will end up being a band-aid and the paralysis we are trying to prevent will simply be delayed.
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On the Credit Crisis and Rescue Plans | Business | October 1st, 2008 at 10:19 pm
[…] Read: None of Us is an Island: Why Small Business Owners Like Me Want a Credit Rescue Plan. […]
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Arthur Bland | October 2nd, 2008 at 1:51 am
Hi Joel,
Simple yet precise: “our wallet related” - and that’s it.
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Jennifer Salley Ruland | October 2nd, 2008 at 5:34 am
The economy is flat on it’s back… more irresponsibility is not the answer. The bill contains more than 112 billion in PORK, including tax breaks to movie producersm, NOT small business owners or families. However, it will be small businesses and families that will have to ultimately pay the bill. Unbelievable.
Over the last 3 months our government has bailed out companies to the tune of Trillions. It will not be our philosophical politicians or our gated CEO’s that will ultimately pay up, it will be you and I. It sounds like it will be helpful in the short term but who’s desk do you think the final bill will end up on? This debt will not go away. We’re just doing the Steal from Peter to Pay Paul routine. Did this ever work for any of us? Not for long. What seems like it feels good right now, will come back to roost as disaster. This plan will not positively effect small businesses like mine. Eventually it will come back to bite and weaken our country, our small businesses and our homes.
A long-time Russian activist said last night on the Glen Beck show that America is looking more and more like Russia in it’s “appearances”.
We are in trouble folks.
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Anita Campbell | October 2nd, 2008 at 9:39 am
I’m just as angry as everyone else about the situation we find ourselves in.
I just think we need to take action, and nothing will get better by not taking action. Things could get much worse.
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Diane | October 2nd, 2008 at 10:27 am
One of my favorite things to say is: ‘Action Alleviates Anxiety.’ So I’m with you Anita.
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chaitanya (www.p2w2.com) | October 2nd, 2008 at 2:21 pm
This is a wonderful post. I like clarity in your thinking and how you articulated it.
All of us have to be financially healthy. We have to earn, work, and grow. No doubt.
But what are the causes of this crisis? Does the bailout plan help in removing the causes of the crisis?
I don’t think so. We somehow believe that this bailout plan is good because it prevents us from falling into a deeper crisis. I am sure I will be benefited by the plan too. But I have a feeling that with the bailout, we will merely be postponing the problem because those causes will recur. If I were to truly wish good for all of us, I would expect, along with the temporary bailout plan, concrete action to improve the institutional oversight to take corrective action *prior* to such issues snowballing into such crises.
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Six Ways You Can Survive and Even Thrive During Wall Street Meltdown | p2w2 blog | October 6th, 2008 at 8:21 am
[…] has passed a rescue plan bill to help the economy. Anita Campbell wrote a wonderful piece on why small business owners want a credit rescue plan. We will wait and watch if the bailout […]
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Business Credit On Credit Speak » Blog Archive » None of Us is an Island: Why Small Business Owners Like Me Want a | October 22nd, 2008 at 3:00 am
[…] None of Us is an Island: Why Small Business Owners Like Me Want a No man (or woman) is an island. … 1. Frozen credit — Frozen credit at banks does not help my small business in any way. If credit dries up […]
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