Corporate Bailouts are Bad for Small Business

With all the attention from the media on corporate bailouts, political opinions and expert economists all talking about the need for corporate bailouts to save industries it seems no one has looked at the impact of these actions on small business. Is their a negative effect on business? Does this negative effect have any long term effect on the economy?

As big business receives billions of dollars to stimulate their individual business, small business is left wanting. None of the media has been successful in estimating the impact this will have on small business. Maybe it's because the do not understand the nature of capitalism or the natural progression of business in our society.

Big business that have chosen to adopt poor marketing strategies, bloated budgets and unsuccessful products, their leadership have steered devastating courses into corporate bankruptcy. All the while small business by the thousands all across our country have seen this trend, the same trend sense the beginning of capitalism, and have started to met the consumer demand for a better product and more effectively run company, as big business customers begin to flock away from larger failing company they flee into the arms of smaller companies poised to meet the consumers needs. But government intervention is stopping this natural exodus and actually doing harm to the consumer market and the economy with bailouts. Let me give you an example.

I run a small national business; one of the products we market is an alternative health program to meet the needs of families that can not afford the average $700 per month for health insurance. For example, our program is $88 per month per family for savings on doctors, hospitals, prescriptions, dental, etc. As the economy has taken a downturn, more people are unable or do not wish to spend hundreds a month on health insurance for their families. So what’s the solution? Those consumers start to leave the larger overpriced insurance company and find a product like ours that is meeting the consumers need. As customers leave a natural shift should occur. The larger company shrinks drastically, if they are smart they prepare for it and adapt for it, which most have not which is why they are in the mess they are. But as the larger company shrinks the smaller company grows, as it grows it begins to add capital, hire more employees, and broaden its reach. The natural shift is survival of the fittest company. This is the way capitalism is intended to work; the jobs lost from one company are claimed by the other.

But the government is not allowing that to happen!

Instead our congress which 95% have no private sector experience have decided that these companies are too big to fail, causing the largest out pouring of bailouts in history, so what does that do to the small business? It halts them in there tracks! Now the growing company faces a competitor with unrivaled supplies of cold hard cash and a leveling unfair advantage over them. So what happens to the large company? Do they then survive and rebound. OF COURSE NOT! They run through their cash with the same mismanagement and misuse of capital finding themselves in the same situation the year before, but one difference. The small business ready to take their market share is driving to the brink of destruction. And what does our market have to show for it? A blotted company that still does not meet the needs of its customers and is still laying of workers and is still losing customer because of consumer distrust. Do you know anyone lining up to get AIG insurance? Now there is no small company with a product to meet the disenfranchised consumer and we spiral out of control. We saw this with the banks, before they were bailed out the collapsing banks were simple bought out by the properly run banks, um can you say, WAMU bought by Chase, all WAMU's customers are still there, they are just simply Chases now, the better run company survives and other smaller banks begin to grow and compete. Then in steps big government that completely destroy these simple principles by giving money to failing business that will continue to fail.

It reminds me of the Vegas mentality, I need to borrow money to win back all the money I lost at the crap table. As a kid my dad always told me "you should never through good money after bad". We are rewarding failure and punishing growth and success. We are investing in failing business and abandoning companies that are succeeding.

If you had a $1000 to invest in one companies stock, which would you choose? A company like GM that your not sure will survive and market is drastically reduced, or company that has had 200% growth this year even in the hard economic time? Right! It's a no brainer! When did common sense leave Washington economics?

In recent report insurance companies announced they are losing loads of their healthcare customers because the customers can no longer afford the $700 per month average premium. So where would you invest your money, in there declining business, crossing your fingers the figure out how to bounce back, or in a company like Renco Direct that is picking up their dropped customers. Better yet if you are out of work which company would you want a job from? Tell Washington to stopped hurting small business and giving an unfair financial advantage to large companies and let thousands of companies like Renco Direct put people back to work already.

If you're out of work tell Washington NO to more stimulus and then give us a call, we are still growing, and we will as long as Law Makers stop their shameful interference.

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