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By Frank Knapp
Posted on: May 31, 2012
At last week’s annual Small Business Administration’s conference for National Small Business Week, SBA Chief Karen Mills took some questions.  One small business owner said that she received “invaluable support” from one of the SBA’s Small Business Development Centers, which operate in every state.The lack of credit from banks was a complaint of two small business owners.  The Federal Deposit Insurance Group reports that loan balances to small businesses fell in the first quarter of this year (while loans to big businesses increased).  But it’s even worse for small businesses in other... read more
By David Brodwin
Posted on: May 30, 2012
This month's $2 billion trading loss at J.P. Morgan Chase dashes any hope that we've resolved the instability of our banking system. How can we get banks to trade responsibly? When "too big to fail" banks generate huge losses, we all suffer. Legitimate businesses can't get credit. Taxpayers foot the bill for bailouts. Working Americans get laid off as scarce credit hobbles the economy. Some experts clamor for more regulation. Better rules are definitely needed, but rules are not enough. We can make more progress, more quickly, by changing the incentives that motivate traders and senior bank... read more
By David Brodwin
Posted on: May 24, 2012
Stanford Social Innovation Review just released the first large scale quantitative study of hybrid businesses and the challenges they face.  The study, conducted by researchers at Harvard Business School and Echoing Green, canvassed a random sample of 3500 business.  The report identifies four challenges:  Legal structure, Financing, the tension between Customers and Beneficiaries, and Organizational Culture.    The report predicts a convergence, with corporations and non-profits moving toward hybrid models and principles: The researchers conclude that hybrid models are profoundly important... read more
By David Brodwin
Posted on: May 17, 2012
Skip Schwarzman and Lynn Buono, co-owners of Feast Your Eyes Catering in Philadelphia, nearly came to grief when expanding their business in their hip, newly-renovated building. The expansion consolidated several real estate parcels, each with a different address. But the computers in the city's revenue department couldn't handle the change. The business was double-billed for taxes for more than two years, and then cited for delinquency."It nearly put the kibosh on our plan," says Skip. "With a citation outstanding, it's all-but-impossible to borrow money." Ultimately it took intense... read more
By David Brodwin
Posted on: May 11, 2012
Low tax states can’t post strong incomes without energy or tourism. In the ongoing debate over tax cuts, both sides make arguments that sound plausible. Progressives and liberals claim that a state with low taxes can't invest in schools, roads, and other improvements that boost productivity. Conservatives claim that high taxes discourage entrepreneurs and push businesses to flee the state. Both arguments are logical—but both cannot be true. This argument reminds of a sign I once saw a sign in a client's office which read, "In God we Trust. All Others Must Bring Data." What does the data tell... read more
By David Brodwin
Posted on: May 4, 2012
Interest rates just part of the affordability problem.Congress and the presidential candidates are debating whether to let the rates on student loans double to 6.8%.  Although this argument has grabbed the headlines, it’s little more than a sideshow.  Even if rates are kept down, the student loan program falls far short of meeting rising college costs.  It doesn’t come close to enabling America’s youth to acquire the skills they need to compete in a tough global marketplace.Education is the path to progress, both for individuals and for the nation. America has invested in education for more... read more
By Frank Knapp
Posted on: May 1, 2012
One of the provisions of the Affordable Care Act--Obamacare--is the requirement that 80% to 85% of health insurance premiums go toward actual medical costs and not to overhead and profit of the insurers.  Otherwise the policy holder is due a refund at the end of the year. This medical loss ratio went into effect in 2011.  Now we our learning exactly how beneficial this part of Obamacare is for the American public. Healthcare Reform The Kaiser Family Foundation has estimated that small businesses are due about $377 million in health insurance rebates thanks to President Obama's healthcare... read more
By David Brodwin
Posted on: April 26, 2012
Last week, the "Rebuild America Act" was introduced by Sen. Tom Harkin. This comprehensive bill aims to help American manufacturers compete and help young people get the education they need.  It calls for rebuilding roads and bridges, improving schools and job training, and protecting U.S. companies from predatory trade practices.Bills like these raise the question of what role (if any) the government ought to play in making the American economy stronger. According to many, government should play no role. It should simply stand aside. Those who hold this view believe that when government... read more
By David Brodwin
Posted on: April 20, 2012
This week Congress dodged debate on the "Buffett Rule" which would require Americans earning more than a million dollars per year to pay tax rates of at least 30 percent. Opponents claim that any tax increase undermines economic growth. Supporters stress equity and the impact on the federal deficit. Truth again lies buried under the polarized rhetoric. Far from discouraging investment, the Buffett Rule—and similar measures—will boost productivity and strengthen the economy. The Buffett Rule is a first step toward reversing a growing income gap that corrodes economic growth and productivity.... read more
By Frank Knapp
Posted on: April 16, 2012
Today the U.S. Senate is scheduled to vote on the Buffett Rule that would require those making over $1 million a year to pay a minimum tax rate of 30% to put them in line with the average middle class American.  Supporters of the proposal say that this is a matter of tax equity requiring the wealthiest to pay their fair share.  Critics say that Buffett Rule seeks to divide the country and punish the wealthy. Well, let’s say that we’re all on a big cruise ship, an appropriate analogy given all the media attention about the Titanic. Our cruise ship has developed a whole in the hull of the ship... read more

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