The record of government meddling in the affairs of big businesses accepting government help leads me to say "No!!!"
Way back in March 2009 (It seems a lifetime ago!), Mark Sunshine wrote at Forbes:
Neither TARP nor TALF is going to quickly or meaningfully stimulate the small-business sector, and the economy isn't going to recover until small businesses begin to expand again. Small businesses are the backbone of the U.S. economy, and without a restart of normal lending to this sector, the economy will be stuck in reverse for a long time.
The small-business sector employs about half of all private-sector employees, and since the mid-1980s was responsible for more than 60% of new job creation. We need programs specifically focused on small-business lending and GARP (Good Asset Recovery Program) will do the trick.
TARP, The Troubled Asset Relief Fund, was mostly given to banks with the idea that they would lend to the rest of us. That didn't happen.
Instead many banks used TARP funds to repair their balance sheets, not even bothering to justify their actions.
According to Sunshine, prominent economists, including Willem Buiter and Paul Romer, suggested that a better way to restart lending would be to form new banks instead of continuing to push TARP into existing institutions, "zombie banks."
In March 2009, the Federal Reserve launched the Term Asset-Backed Securities Loan Facility (TALF) Program, which "is designed to help the non-bank lending sector."TALF is helping some consumers at some banks, but is it helping small businesses? Once again, the result is mixed: some yes, others no.[Read an explanation between TARP and TALF here.
GARP is Growth at a Reasonable Price,
An equity investment strategy that seeks to combine tenets of both growth investing and value investing to find individual stocks. GARP investors look for companies that are showing consistent earnings growth above broad market levels (a tenet of growth investing ) while excluding companies that have very high valuations (value investing). The overarching goal is to avoid the extremes of either growth or value investing; this typically leads GARP investors to growth-oriented stocks with relatively low price/earnings (P/E) multiples in normal market conditions.GARP investors are not in the banking sector, but unless they get their money from private funds that are not regulated by the Fed or by Washington bureaucrats, will small business, or any one, be safe from the kinds of traps that have befallen the likes of GM, AIG, and the rest?
Should business owners have to choose between failure and meddling in day-to-day operations and business decisions by bureaucracies?
Another power grab as we plod along on the American road to serfdom.
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
Sara
http://smallbusinessgrant.info
Posted by: Sara | July 24, 2009 at 07:19 PM