President-elect Barack Obama’s announcement this weekend of a massive top-down jobs and infrastructure program comes as no surprise, but I had a queasy feeling as I listened to him describe each specific example: build schools, bridges, roads, high speed internet. One word came to mind. Slow. Rebuild our nation’s schools? Glorious, of course. But how long will it be before the surveys of the existing school conditions, committee meetings, architecture review panels, competitive bids and environmental reviews give way to high numbers of workers actually building something? Can you see any impact in less than a year or more?
What about roads and bridges, the shovels-in-the-dirt projects the governors were suddenly so enthused about? Again, planning, permits, delays, bidding. Months will pass, many millions will remain desperately unemployed.
And it’s all so heavily top-down. Not to mention, WPA. Guys building stuff. Anyone see a problem here?
How about a simultaneous mirror program, bottom-up, a huge jobs program, one that could be hiring people by the hundreds of thousands as soon as February? I’m thinking of the massive hiring power of the millions of small businesses, start-ups, and entrepreneurs in this country. What if we really had a small business administration, not the existing huge and slow bureaucracy, but a streamlined U.S. Small Business Bank that would get dollars into the hands of the fastest hirers in the country? So the question is, how to get that money into the right hands without creating a huge new, slow bureaucracy?
Actually, they’re already out there in communities all over the U.S. The people most astute in understanding small business and entrepreneurs: the hundreds of MBA schools all over the U.S., many of which have entrepreneurship programs. Harvard, Chicago, Stanford, Wharton, USC and hundreds of others. Take that faculty and those graduate students, and start them out with $50 million each. Their job is to invite, or go out into the communities and discover, companies that can use money right now to hire and to grow. We will have grass-roots hiring flourishing in every corner of the country. And it can happen really fast.
Every investment doesn’t need to be perfect, but they do need to move fast. Thinking like good portfolio managers of venture funds, and unlike the SBA, the faculty and grad student combine will be instructed to aim for one highly successful venture for each ten invested in. That in itself will be provide a decent payback for the taxpayer-investors.
But what about the side benefits: a thousand entrepreneurial lights will give birth to hundreds of thousands of jobs, ma and pa businesses will get a chance to grow, and the private sector will be hugely strengthened coming out of this deep recession. Without this bottom-up initiative, all we will have produced will be a massive, mostly one-time investment, with little new technology to show for it, and no development of small business and entrepreneurial skills to show for this huge opportunity for learning.
A new U.S. Small Business Bank. Money directly to those who can hire best, hire fast, and create long-term wealth. It’s what a good community organizer might come up with.