Small business owners and entrepreneurs are not only vital to the American economy, but they often represent the spirit of our nation. It is somewhat concerning that fewer millennials than those of past generations our becoming entrepreneurs. As we enter a new year under the governance of a new president and new administration, who should President Trump model himself after to boost these slumping millennial entrepreneur numbers?
It is a given that Presidents can often have less bearing on small businesses and entrepreneurs than congress. In addition, one political move can often help one type of business owner and hurt another. However, there have been some presidents who have made it their mission to boost entrepreneurs in their quest of the American Dream. So, in honor President’s Day, let’s look at three of the best.
Franklin D. Roosevelt
On his Inauguration Day in 1933, banks were closed in 36 out of 48 states. The New York Stock Exchange and the pit at the Chicago Board of trade closed shortly after he took office out of panic. Gross domestic product had fallen by 50% to $55 billion. To counter this fear, Roosevelt’s emergency banking bill got banks to open again. He did this by restoring confidence in the banks and allowing depositors to feel good again. The Federal Deposit Insurance Corporation or the FDIC and other New Deal reforms strengthened the economy into recovery. The Securities and Exchange Commission was set up in 1934 to right abuses of the financial markets and the National Labor Relations Board was formed in 1935 to protect workers’ rights to organize unions.
The federal government funded job programs like the NRA (National Recovery Administration), WPA (Works Progress Administration) and CCC (Civilian Conservation Corps). Federal efforts reclaimed farmland from swamp and changed a whole segment of the country through the Tennessee Valley Authority.
Although Roosevelt expanded the government, he was fearless in busting up corporations and helping everyday citizens get involved in business. He even worked to get small businesses government contracts as the United States prepared for World War II.
Dwight D. Eisenhower
“If you just had one big company in the US, there would be no democracy.” This is what Dwight D. Eisenhower said upon creating the Small Business Administration. The SBA funded many small businesses during his administration from 1953 to 1961. Eisenhower saw a tapestry of small businesses across the country that would spur innovation, diversity and competition. “The establishment of the SBA had nothing to do with economics. It was about economic freedom,” Eisenhower explained. Since its founding, Eisenhower’s creation has delivered millions of loans and guided entrepreneurs with business sessions and assistance.
The SBA has recently come under fire for misguided loans for golf courses, wineries and Lamborghini dealerships, all with taxpayer money. Nonetheless, the SBA exists today and still is supposed to guarantee up to 90 loans from private lenders for small businesses to build facilities, buy property, and run operations, providing more complimentary terms than many of the businesses could get from private lenders without the support.
The 42nd President helped many small businesses with the signing of the North American Free Trade Agreement, Omnibus Budget Reconciliation Act and the Small Business Job Protection Act. The former, a deal that may be on its last legs, lowered tariffs and reduces non-tariff barriers. This has created a supply chain that stretches across borders. Ending NAFTA could shrink the market size for small businesses along with reducing access to materials for manufacturing. While NAFTA had lowered American manufacturing jobs and raised our trade deficit with Mexico, it has spurred small businesses to be more competitive globally.
Clinton’s first budget effectively raised the top income tax rate from 28% to 36% for those earning more than $115,000, and 39.6% for income above $250,000. It enlarged the corporate income tax from 34%to 36% for corporations with incomes over $10 million. It also ended some corporate subsidies, taxed Social Security benefits for high-income earners, and created the earned income tax credit for incomes under $30,000. Combined with this, Clinton enacted the Small Business Job Protection Act of 1996 which lowered taxes for many small business. Lastly, he signed legislation that increased the tax deduction for self-employed businesses from 30% to 80% in 1997. Under Clinton, the United States saw the longest uninterrupted economic growth in United States History, which lasted up until the Dot-Com bubble burst in 2001.