Tuesday, August 10, 2010

Small Business Love-in?

Crain's is reporting that the Bloombergistas are looking to end their war against the city's small businesses: "Although there are plenty of great reasons to run a small business in New York City, let's face it: A business-friendly government is not one of them. The city's reputation for creating a Kafka-esque regulatory environment for small businesses dates to the World War II era. In regulation, as in most things, the city is over the top: The Official Rules of the City of New York is 14 volumes, and that seems positively lightweight when compared with the 21-volume city law. It was a welcome sign when Mayor Michael Bloomberg and the City Council took up the issue this year, promising to transform the way city government deals with small businesses."

Does anyone really believe this will happen-and let's not forget that, whatever these folks do to streamline the bureaucracy, we still are living in a confiscatory tax environment. And that fact is in addition to the Bloomberg policy of malling the neighborhoods-as is the case with Willets Point and Flushing Commons. It's hard to see how the rapprochement with small business will survive if the mayor continues his mega store mania.

But we shouldn't get carried away with the rhetoric here-after all, the entire edifice of PlaNYC 2030 has been debunked by the reality of the mayor's policies. Crain's continues: "Under Commissioner Robert Walsh, the Department of Small Business Services is chipping away at the enormous burden of paperwork with a system to speed startups. But there's been little from City Hall about implementing more ambitious reforms, such as eliminating needless rules that hamper small business."

And then there's the fact that there is an intimate correlation between an agency's budget and the fines it is able to collect: "Meanwhile, the scope and difficulty of changing agencies' fine-first, ask-questions-later approach has become clearer (see story, Page 16). One telling sign that more “business as usual” is in the offing: The agencies' budgets for revenue from fines continue to increase." (emphasis added)

Which gets us to the real core of the Bloomberg dilemma. To really help the city's small businesses-and all of the other firms as well-the mayor needs to abandon, not only this piecemeal approach, but his entire big government philosophy. After all, as the prior quote underscores, he's using the fines to pay for his Leviathan and, as the song goes, "you can't have one, you can't have one, you can't have one without the other."

You know, for a business guy, Mike Bloomberg remains remarkably clueless about the correlation between large government-taxes and mandates-and retarded economic growth. Yesterday's article by a small business owner in the WSJ dramatizes the point-but Bloomberg lives in such an unrealistic rarefied air, that this probably goes right passed him: "As much as I might want to hire new salespeople, engineers and marketing staff in an effort to grow, I would be increasing my company's vulnerability to government decisions to raise taxes, to policies that make health insurance more expensive, and to the difficulties of this economic environment. A life in business is filled with uncertainties, but I can be quite sure that every time I hire someone my obligations to the government go up. From where I sit, the government's message is unmistakable: Creating a new job carries a punishing price."

But, even though the real chance of a change of heart is rather slim, we think that all of our disbelief can be suspended by the following possibility: "Perhaps most significantly, no leader has emerged to implement the mayor's vision. Creating a lasting change of this magnitude almost certainly requires someone along the lines of schools Chancellor Joel Klein, who has been both in the public spotlight and the bureaucratic fray."

Fantastic, the man who has manged to create an educational miracle, can now replicate his yeoman-like job in the small business vineyard.And all he will need to do to accomplish this Herculean task is to be able to utilize the same test measures that he glommed on to for his educational miracle. We simply can't wait.