Dear Mr. President,
On April 19, you will be in the economic capital (Los Angeles) of the world’s eighth largest economy (California). The Greater Los Angeles region alone has a GDP that would make it a top 20 economy if it were a nation. Similarly, the Greater Los Angeles area is the effective capital for our nation’s nearly 50 million Latinos with a GDP of more than $1 trillion. This would place American Latinos in the top 10 nations in the world.
Most small businesses in California, including the Greater Los Angeles area, want you to succeed, particularly since the majority supported you in the 2008 presidential elections.
We recognize the importance of fundraising in California, given our more than 80 billionaires. However, we would urge you to take the following Main Street actions while you are in Los Angeles to ensure that your economic recovery programs help lift the small-business boat that has suffered through this Great Recession. We are still being denied credit and forced to continue to lay off workers.
Our suggestions to you are in the context of recent data showing, for example, that job losses among small businesses during this Great Recession are six times greater than during the 2001 recession. It is even worse for Latinos and African-Americans. Their effective unemployment rate, including discouraged workers and part-time workers, exceeds 30 percent. As a result, California and the greater Los Angeles region have an unemployment rate of more than 12 percent.
Our key suggestions for revitalizing our economy are as follows:
• First, take a page from Franklin Delano Roosevelt’s New Deal job plan. Support Mayor Antonio Villaraigosa’s infrastructure public transportation plan that will create 165,000 jobs in the next 10 years. This mass transit plan, which is far more crucial for job creation than a high-speed rail system, which is highly unlikely to be built within the next generation, is a key for small-business development and attraction of workers. Our mayor’s plan is fully funded by our county’s half-cent sales tax increase approved by voters in 2008.
• Second, major financial institutions, particularly those provided with Troubled Asset Relief Program subsidies, have failed to creatively or effectively address our credit needs. During your visit to Los Angeles, please convene and preside over a jawboning meeting with the leadership from the five largest small-business lenders and key medium-size business lenders (such as City National Bank, Comerica and East West Bank), plus Goldman Sachs and Morgan Stanley, the two primary nonbank beneficiaries of your “too big to fail” policies. (Consistent with your strong support for transparency, representatives of five of the affected banks are on our advisory board: U.S. Bank, Bank of America, Wells Fargo, Citigroup and Comerica.) And please include small-business leaders in this meeting.
At this meeting, urge these financial leaders to create and invest in an L.A. small-business pilot program for expanded credit, including technical assistance and infrastructure capacity building.
• Third, bring to your L.A. meeting with the banks, Treasury Secretary Timothy Geithner and SBA Administrator Karen Mills to develop a pilot Los Angeles Direct Lending Program from the Small Business Administration to small businesses. This is essential since the largest financial institutions appear to be unable to effectively and/or expeditiously address our growing credit crisis.
• Fourth, California is home to 80 billionaires and is a potential resource of investment capital for small businesses. According to Forbes Magazine, Eli Broad of Los Angeles has $5 billion in net worth and Ron Burkle more than $3 billion. But you should also include the leadership and billionaires from Silicon Valley such as Larry Ellison, Sergey Brin, Larry Page and Steve Jobs. (Intel, for example, has just announced a five-year, $3.5 billion small-business investment project.) These billionaires could effectively assist you in terms of developing long-term L.A. investments that create good paying jobs necessary to ensure that our growing GDP lifts all boats, including the small-business boat.
• Fifth, some financial institutions may suggest that they don’t have the resources to expand credit. But you and your Treasury secretary are in the best position to discuss the close-to-zero interest rates that they can receive from the Federal Reserve, and the very substantial executive compensation raises at virtually every financial institution in 2009 that received a bailout. As small businesses, we also could thrive if we could borrow funds at a close-to-zero rate.
• Sixth, there are more undocumented Americans in the Greater Los Angeles region than anywhere else. They are one very important key to our region’s economic recovery. We therefore urge you to discuss your future immigration policies, which we hope will include support for the Congressional Hispanic Caucus’ proposal that leads to an effective amnesty.
Chairman and Chief Executive
Latino Business Chamber of Greater Los Angeles
President, Vasquez & Co.,
Vice Chairman, Latino Business Chamber of Greater Los Angeles
Maria de Jesus Rosas
President, M&D Pecanland,
Treasurer, Latino Business Chamber of Greater Los Angeles
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