ECONOMY - Did the Federal Government Protect Small Business During Collapse?

Note that there's an issue on what is meant by 'small business.'  This is also a story of the FDIC not ding its job of regulation, and of what happens when you turn over your job to the private sector.

"Small businesses left in lurch when local banks collapse" PBS NewsHour 5/4/2014

Excerpt

SUMMARY:  Did the federal government do enough to protect small businesses after the banks they relied on collapsed during the 2008 financial crisis?  Correspondent Rick Karr investigates what the FDIC did with the assets it took over.

RICK KARR:  Jesse Morreale has a lot of experience buying run-down buildings in edgy neighborhoods, fixing them up, and opening bars, restaurants and clubs in them.  It’s his business model and his passion.

JESSE MORREALE:  I see, for instance, a building like this as an opportunity to contribute something to the community in addition to myself.  As the businesses around me are growing and being more successful, my businesses are more successful.  This is basic economics.

RICK KARR:  Morreale’s been lauded by the City of Denver for helping to revive a few neighborhoods there.  He started out rehabbing old theaters when he was a concert promoter.  That’s when I first interviewed him.  He bought this building in 2008 and opened a couple of restaurants on the ground floor.  He dreamed of converting the upper floors into a luxury hotel.  But as the restaurants started to attract crowds the hotel project ran into trouble with city inspectors and his business plan derailed.

RICK KARR:  Your company was wounded, but was it a mortal wound, in your opinion?

JESSE MORREALE:  Absolutely not.  It was a distress period.  Manageable issues, curable issues.

POLITICS - GOP Blockage NOT Helping Small Business

"Obama to Senate GOP: Stop blockading Small Business Relief Bill" Rightardia 8/30/2010

President Obama is accusing Senate Republicans of harming the U.S. economy by blocking a bill to aid small business. He said the measure should be the Senate's "first order of business" when it returns Sept. 13 from its summer recess.

President Obama:

Here’s what’s happening: Up until a few months ago, SBA was able to waive the fees for SBA loan borrowers. This allowed small business owners to put more money back into their business. . .

At the same time, we were able to increase the government guarantee on SBA loans, to encourage more banks and credit unions to go ahead and make SBA loans to good, creditworthy small businesses.

This worked. SBA lenders approved about 70,000 SBA Recovery loans for small businesses since the Recovery Act passed, nearly $30 billion in total. And, we brought more than 1,300 lenders back to making SBA loans at a time when other banks were cutting back their small business lending.

Unfortunately, the funding for these popular enhancements ran out at the end of May . . .With support in Congress for extending these successful loan enhancements, we started the Recovery Loan Queue, a stand-by list just like at the airport.

Today, that list is at nearly 1,000 small businesses long . . . With the passage of the Small Business Jobs Act, SBA will be able to fund these loans. Additionally, among other programs, the Act will create the Small Business Lending Fund to provide additional capital to small, community banks so they can boost their lending to small businesses locally.

Some Republicans objected to the loan fund. Some supported the bill but objected to limits that Democrats put on amendments.

How typical. The party that chants about "small business" blocking a program that helps those very businesses, for political gain.