Saturday, October 23, 2010

Under Capitolized

I have worked recently with a number of small contractors in the building trades, striving to keep themselves and their employees engaged and productive in spite of the effects of the economy and the onset of winter. They grapple directly and daily with many of the issues of the real estate market, the financial system, and the regulations and restrictions placed upon them by government. They struggle with regulation and bureaucracy that is increasingly more intent on controlling every aspect their industry; insisting that the proper completion of paperwork is equally, if not more important than the results that these professionals achieve for their customers. 

Like many other entrepreneurs in the country it seems these days, they somehow manage to do it, and mostly in an uncomplaining fashion. They are often hampered however, by a shortage of the capital required to grease the moving wheels of even a small business. Even when they know that a potentially golden opportunity has presented itself and that their efforts might be worthy ones, they are often forced to delay gratification of their immediate desires to maintain or expand their businesses (and pay more taxes to the government that often impedes them) because of the lack of this capital funding. 

Though frustrated by such impediments, they exhibit extraordinary patience, using good judgment and sound business management principles while attempting to operate within their limited cash flow. Perhaps government could learn something from these smaller entrepreneurial efforts, putting off their hopes and desires (or at least those of the controlling political party) for greater benefits to provide a better tomorrow, by remembering how important it is to maintain an adequate cash flow to run the state or the country. 

Maybe it's time that someone in government realizes that money and jobs are not generated by the capitol (state or federal), but instead by capital in the hands of these savvy business operators. Of course contractors across the country do not have the same advantages provided to at least the federal government under similar circumstances. They have not reserved the right and ability to print money as they deem necessary, a task these days that means as fast as it can spend it. (OK, not quite that fast.) 

Unlike the government that often makes their life more difficult, they cannot hope against hope that the revenues that they so desperately need and desire will not magically appear without effort; but will have to be earned through hard work and judicious spending. Nor are they in a position to take advantage of the concept that any debt that they incur in the process can be somewhat overcome by the inflation caused by their constantly running printing press. Having watched almost helplessly what must be an entrepreneurial ballet in a minefield, 

I cannot help but think that perhaps what we need in this country today is more responsible small business thinking and less irresponsible big government thinking. Perhaps the guiding principles used by these small time gamblers are far clearer, cleaner, and more worthy than that of the shills who are running the game. Just maybe what the world real needs to put it back on its feet (and put a roof over its head) is less under-capitalization and more "under-capitolization".

No comments: