Democrats, Republicans posture as friends of small business

[Hannah Bell]

One of the hoariest rituals in official American politics is the pretense that the Democratic and Republican parties are the advocates of small business. Rhetorical incense about the great contribution of small business to jobs and economic welfare is used to perfume the stench of the corporate lobbying and legalized bribery that prevails in the Washington corridors of power.

President Obama engaged in this noxious form of political posturing Wednesday during a media event at the Tastee Sub Shop in Edison, New Jersey... He criticized his Republican congressional opponents for blocking passage of a bill to expand tax breaks and lending to small businesses, which is now being filibustered in the Senate. The venue could not have been chosen more effectively to make a farce of the claim that small business will be the “engine” of economic recovery. Edison...was the location of a huge Ford assembly plant that closed in 2004. No amount of sandwich shops can replace the enormous hole in the local economy created by the destruction of thousands of good-paying auto jobs...

Actually, small businesses have suffered disproportionately in the economic collapse, and are in no position to “lead” or even take part in a recovery that has benefited only the stock and money markets and the profits of big corporations. Bank lending to small businesses remains extremely weak, and without access to credit, small firms cannot survive, let alone expand and hire new workers...

An article published Thursday in the Wall Street Journal explains why corporate business lobbies like the US Chamber of Commerce have endorsed the Obama administration bill. Headlined, “Big Firms Win in Small-Business Bill,” the article reveals, “The costliest provision in the bill is a tax break for companies that make large capital purchases...” This “bonus depreciation” tax break allows companies to write off 50 percent of the cost of equipment purchased in 2010 on this year’s taxes, rather than spreading the depreciation over a longer period. This will save big companies an estimate $5.5 billion in taxes over the next 10 years, more than one-third of the $15 billion total cost of bill...

The Republican Party position is equally cynical. The Republican congressional leadership, working with the Chamber of Commerce and the National Federation of Independent Business, has decided to use the plight of small business as an argument for extension of the Bush administration tax cuts for the wealthy, which are scheduled to expire on December 31...

http://www.wsws.org/articles/2010/jul2010/busi-j30.shtml