Small Business Gandhi

The markets fear Obama too much. Like Foch, they're fighting the last war. Obama is not FDR or LBJ.

His vision of wealth redistribution is retrospective and idealized, but not in a Marxist way. Think of him as small business Gandhi.

Gandhi believed, perhaps accurately, that the cultural soul of India was found in the villages and rural farming communities across the country. Likewise, Obama sees America's vitality coming from small businesses and entrepreneurs. If banks won't lend to small businesses, then the SBA will compete directly with the banks. He targets Wall Street, not as an enemy of labor unions, but as an enemy to the commonsense managers and proprietors of businesses on Main Street. In the Obama model, innovation is created by the Jerry Yangs of the world rather than the Vikram Pandits.

Is he right? Only if the necessary conditions for supporting an entrepreneurial model are in place. There are enormous barriers to entry caused by the confusing tax code and health care costs. One should not need to pay a lawyer and an accountant just to do business. It should be possible for a sole proprietor to keep her own books without losing competitive advantage to those who can afford to hire sophisticated accountants and lawyers. Right now, you need to have money to make money. Adding financing opportunities without addressing the tax code just places entrepreneurs into a deeper leveraged position than is warranted.

The cost of maintaining a small business is compounded by escalating health care costs. I don't know the solution, but this has to be addressed. Furthermore, many enterprising people are deterred from quitting their jobs and starting a new business because they don't want to lose their health benefits, which are too burdensome to afford on their own. Nationalizing health care would be the best thing ever for small businesses and innovation.

Gandhi's vision scared the modernists of his country. That's why he got shot. I fear that Obama's vision, should it continue to be qualified as "socialist" or "fascist" (make up your mind, people!), will pose a threat to the entire country. I do hope that the message gets out that he's targetting an entrenched class of million- and billionaires, not business as a whole. Obama is not riding with Stalin and the Bolsheviks, gunning for managers. Let's be real here. Without a better attempt at selling his vision of the new capitalism, however, his initiatives will be as effective at reforming the economy as Gandhi's white dhoti was at preventing the Kashmiri wind from chilling his skin.