It appears the magic number for American small businesses is 10, as in the sudden urgency to help smaller companies after the U.S. unemployment rate jumped over 10 percent last month for the first time in a quarter century. After a year with Wall Street at the top of everyone’s agenda, Main Street is now taking center stage.
Suddenly new lending programs are being announced, town halls are hastily being arranged and political heavyweights from across the financial and ideological spectrums are falling over themselves to propose their plans for how to get small businesses back on track and hiring.
Over the past month, everyone from President Obama, to House Speaker Nancy Pelosi, to Federal Reserve Chairman Ben Bernanke and to billionaire investor Warren Buffett have addressed the issue. Yesterday was Treasury Secretary Tim Geithner’s kick at the can (watch the video of his speech here), when he chaired a forum on small business financing with FDIC head Sheila Bair and SBA chief Karen Mills.
Geithner said the first part of the recovery was to stabilize Wall Street in order to prop up sagging earnings so investment portfolios stop taking such a beating and hard-hit firms stop laying off employees. “That rise in earnings is not simply because banks are particularly smart or clever,” insisted Geithner in front of an audience of small business owners and lenders.
Geithner added that now that the banking sector has been stabilized, the next step is to get banks lending again to small businesses, which he called “the engines of job growth” and which have historically led the country out of recessions. “It’s because the taxpayers of the United States and their elected representatives decided that to save the economy we had to act to stabilize the financial system. All banks – strong and weak – benefited from those actions and banks bear some responsibility for the extent of the damage caused by this crisis and they carry a substantial obligation to help our communities get back on their feet.”