Over at the Amex Blog we’re starting a conversation about how this financial crisis effects small business. The site has given me a chance to think more deeply about what it means to run or be part of a small business – none of us here in the Valley like to think of ourselves as “small” but by nearly every definition, we are. And FM works with nearly 200 other “small” businesses. Join the conversation, we all might learn something. From my post:
…But that doesn’t mean I don’t wake up in the middle of the night, worried about what might be coming next. Many of us in the Internet industry are veterans of the last big bust – 2000-2002 – and we can still feel the pain of losing it all (as I did with the Industry Standard), or at the very least, having to cut back to the bone and wait it out. And this time, something feels different. This crisis is not limited to an overinvestment in telecom and Internet, this time our entire financial system has been brought to its knees. How can you not be worried when Congress is in an extended session to determine the best way to spend nearly a trillion dollars, money that, in fact, we don’t actually have (we’ll be borrowing it, given our national debt)?
It’s a well worn saw that as goes small business, so goes the economy. If all of us start laying off employees and cutting back expenses by a third, our economy will go into a deep funk. If, on the other hand, we all declare faith in the future and start acting accordingly, our businesses will become the engine of economic recovery.
So what do we all need to move away from fear, uncertainty, and doubt, and toward faith and optimism in the future? I’m really eager to hear your thoughts and stories. What are you doing to deal with the current economic situation? Given your business and industry, what actions do you want government to take? What stories do you have to tell about how today’s environment is changing your business outlook? Perhaps if we start to talk about this, and share our knowledge, we can start to effect change – one story at a time.
Typo: …about how this financial crisis effects small business…
Should be ‘affects’
Good article, John — and I am particularly happy to see a strong response level developing. As I noted in my response ( http://blogs.openforum.com/2008/10/01/as-the-world-turnsinside-out/#comment-2211 ), Google is now becoming a major disappointment to not only the tech industry but also the entire market economy: Google’s search engine (which used to be the primary focus of their attention — indeed, there was a time when they wrote into their mission statement that it was their exclusive focus) no longer functions very well at all. As a one-size fits-all engine, in can do little more than return domain names (such as amazon.com, ebay.com, hotels.com, etc.) and (as I argued in the article) it has repeatedly failed as “one-size fits-one-campaign” engine, because the people at the controls of Google’s machinery manipulate the results to suit their own interests.
In short: Google’s claim to having an “algorithm” has become a farce.
Good questions. What amazes me is how a bunch of boneheads in New York and a bunch of boneheads in D.C. managed to get us into this mess … the only thing that amazes me more is how we expect these same exact boneheads to get us out!
How am I reacting? With caution, but with calm. And what’s the best way to avoid the fear-uncertainty-doubt? Turn off the news. Really, the talking-heads don’t have a monopoly on thought about what’s going on, so don’t give in to them.
I’m not advocating we ignore the perils, of course. In fact, I’ve seen a great plan to get us out of this, in 3 steps.
1 – Insure the subprime bonds/mortgages. This would cost $50 billion – a fraction of what they’re demanding now – and would instantly create a market for these bonds, thus creating liquidity.
2 – Remove mark to market accounting rules for two years on only subprime Tier III bonds/mortgages. This move creates patience in the market and has an immediate stabilizing effect on failing and ailing banks—and it costs the taxpayer nothing.
3 – Remove the capital gains tax completely. Investors will flood the real estate and stock market in search of tax-free profits, creating tremendous—and immediate—liquidity in the markets. Again, this costs the taxpayer nothing.
This plan, called the “Common Sense Fix”, could be enacted very quickly, and two of the steps would cost us *nothing*.
In fact, the only people I see lose in this plan are:
1 – the boneheads in NY who won’t get $700 billion
2 – the boneheads in D.C. who won’t get more unconstitutional power and authority thanks to a “crisis”
Your thoughts?
For more details on this plan, go here:
http://www.daveramsey.com/media/pdf/the_common_sense_fix.pdf