Representative Darin LaHood thinks …"Washington continues to approach economic problems with the same failing answer: throw taxpayer dollars at ineffective programs… (We) need to cut overreaching regulations, eliminate burdensome mandates, and reform and simplify the tax code by closing loopholes and cutting rates. The government needs to step out of the way and let the American people drive innovation, open small businesses and expand existing businesses. That's the best way to grow the economy and create jobs…" (Source: https://lahood.house.gov/economy)
The same old tired bromides. It sounds a lot like Ronald Reagan, doesn’t it?
Forty years ago, Reagan was halfway through his presidency. And today, Mr. LaHood and Republicans continue to blather – just as Reagan did -- about regulations, mandates, loopholes, and cutting tax rates.
Forty years, with very little to show for it -- apart, perhaps, from some nibbles at the margins. Still blathering. Still not getting much done for everyday people.
Lest we forget -- there also was the so-called trickle-down effect. The wealthy were styled as job creators.
What a bunch of hooey.
(Did you notice that the color of the fluid that supposedly trickled down was – yellow?)
Oh. Wait. The Republicans HAVE done one thing: cut tax rates.
The Tax Cuts and Jobs Act of 2017 (TCJA) cut corporate taxes, cut personal taxes for the very wealthy, scattered a few crumbs for everyday people, and ballooned the federal deficit.
Parts of the TCJA are up for renewal (or sunset) in 2025. Representative LaHood wants to renew many of them.
(You’ll read elsewhere that Mr. LaHood postures himself as a deficit hawk. Tain’t so. His support of the budget-busting TCJA belies that.)
Going all the way back to Reagan and the Bushes (plus Trump), Republican tax policies have run our economy into a monstrous hole.
I do agree with the representative that we should “...let the American people drive innovation, open small businesses and expand existing businesses.”
But we should do it in ways that Mr. LaHood overlooks.
For one, he completely ignores climate change and its effect on the economy.
Our economy must be tailored to what our ecology will bear. I call it the eco-eco premise.
It’s more than curbing pollution and CO2 emissions. It’s about creating wholly new styles of businesses.
We long have had white collar jobs and blue collar jobs. Anyone for adding green collar jobs, and the economic opportunities that climate change inadvertently provides?
Electric cars? Better construction and building standards? Retrofitting and insulating? Solar? Wind? You know the rest.
Second premise: we must create a trickle-up effect.
Huh? Trickle-UP?
Yes. I said trickle-up.
In a trickle-up economy, local and home businesses will be encouraged and nurtured to power our economy. It’s almost the opposite of what Mr. LaHood decries as “...throw(ing) taxpayer dollars at ineffective programs.”
(Do you remember from biology class the term “transpiration”? It’s how plants draw water from their roots. A trickle-up economy would work the same way green (ahem, yes, green) plants do.)
Economic transpiration (a/k/a trickle-up) will be transformative.
So, Scott, tell us. Just how would you establish a trickle-up economy?
Through education, microloans, and microgrants to home and community-based startups. And through wholly new philosophies and mindsets.
Education? Through community colleges. (Full disclosure: I’m a former community college trustee.) A number of them have programs on how to start a business. My own McHenry County College has a Small Business Development Center. They work with the U.S. Small Business Administration and the Illinois Department of Commerce and Economic Opportunity. https://www.mchenry.edu/isbdc/
Okay. Subsidize the community college programs so that they can offer no or low-cost tuition to pre-qualified candidates for courses in administrative functions like incorporating a business and bookkeeping and taxes. Subsidize skill courses, too: auto mechanic, welder, and food service are examples. Combining administrative and skill courses would help someone open a restaurant, or a repair shop.
Establish business incubators. These are places where groupings of small startups can set up shop. Costs are held down by pooling administrative and clerical functions. Coaches provide advice. Peoria’s NEXT Innovation Center is an example: https://www.peorianext.com/about/ Rockford’s EIGERlab is another: https://www.eigerlab.org/
Set up General Stores in communities and neighborhoods, and provide microloans and microgrants to do so. My “General Stores” idea is a bit like a cross between farmers markets and business incubators.
Home based businesses would have a central place (a vacant storefront, perhaps?) to offer goods and services on a cooperative basis -- that is, participants would take turns staffing it for everyone else. Baked goods? Arts and crafts? House plants? Antiques? Books? Clothing?
Importantly, bands of service providers could ride a circuit among several general stores, offering occasional fixed days for repairs to bicycles, small appliances, clothing (i.e., mending on the spot), computers, phones, and shoes.
Perhaps you’ve heard of enterprise zones, designed to lure big companies with tax and other incentives. General Stores could (and should) become mini-enterprise zones: state sales taxes could be waived.
As grass-roots small businesses grow, communities will grow with them. Expanding neighborhood businesses will create good jobs that can’t be shipped overseas. They will boost property values. Critically – intangibly – they will help instill pride and purpose.
See what I mean by trickle-up?
So Mr. LaHood: change your mindset.
Economy must be tailored to what our ecology will bear: the "Eco-Eco Premise"
Create a "Trickle-Up" Effect through Economic Transpiration
Incentives for "Mini-Enterprise" zones that help small businesses and their communities grow together
Economic development is NOT a top-down process. Tax breaks and other perks for morbidly rich individuals and "chew-em-up" megacorporations are NOT where it’s at.
Instead, channel economic development directly through the good people of the sixteenth district. Your neighbors and mine. Your voters and mine.
Make things trickle UP.