FATTAH: Encouraging Small Business
I have laid out a plan to give small businesses the tools they need to grow in Philadelphia, including an emergency loan fund for small businesses in crisis, business relocation loans for intra-city moves, matching seed capital, creating an independent non-profit to provide free consulting services.
The city can do more in its day-to-day operations to help grow small businesses, like using city procurement to more effectively benefit city businesses and creating a one-stop shop for entrepreneurs to transact business with the city. Finally, we must take a regional approach to attracting small business to the Delaware Valley.
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From this response and what I’ve read about his small business program, it looks like crony capitalism. Who should get these loans? How can they be administered responsibly by a government agency if banks won’t lend? Look at the Federal experience with loan guarantees. The Feds lost several billion on loan guarantees to ship owners and many more billions by the guarantees in the savings and loan crisis a decade ago. With the resources of the Federal government and an effective Government Accountability Office, they have incurred serious losses in many areas. How can a city with far fewer resources and no history of effective oversight do this right if the Federal government can’t?
You don’t bring in small businesses. Small businesses locate near or where the owner lives. You create the environment for their founding in the city. Again, very naïve. The idea of allowing a firm to pay the tax rate from where they moved creates all sorts of moral hazard problems and will lead to deals for buddies rather than create a good business environment for all companies. What about the “Use and Occupancy Tax” on office space rented by businesses?
Basically, I see the tired old ideas that are proven money wasters. There is no discussion of how to create the right business environment. I fear continuing the legacy of Fattah's other buddy, John Street, of job decline and increased poverty.
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