FSM: Cap and trade bill will wreck U.S. economy

Former energy executive Claiborne Deming told a Friday lunch gathering of about 100 Fort Smith area business and civic leaders that the proposed federal cap and trade bill is “extraordinarily draconian,” will destroy the U.S. economy, and it was “hijacked” by environmental extremists in the Democrat Party. And those were the kind things he had to say.

The American Clean Energy and Security Act of 2009, commonly referred to the cap and trade bill and the Waxman-Markey bill, was approved by the U.S House of Representatives on June 26 on a 219-212 vote. U.S. Rep. Vic Snyder, D-Little Rock, was the only member of Arkansas’ delegation in the House to vote for the bill. It is now on the Senate calendar.

Among its numerous provisions, the proposed bill establishes a national energy production standard requiring 20% of retail electric sales to come from combined renewable energy and energy efficiency by 2020. The bill also establishes greenhouse cap and trade provisions that cover 85% of the overall economy, including electricity producers, oil refineries, natural gas suppliers, and energy-intensive industries like iron, steel, cement and paper manufacturers, according to the filing by Entergy Arkansas.

Read the full article at The City Wire

State’s Jobless Rate Rises to 7.4 Percent

Arkansas’ unemployment rate rose to 7.4 percent in July, compared with 7.2 percent in June. The state’s jobless rate was 5 percent in July 2008 The U.S. rate for July fell slightly to 9.4 percent, compared with 9.5 percent in June. The nation’s unemployment rate in July 2008 was 5.8 percent. Arkansas’ civilian labor force decreased 5,200 in July, the state Department of Workforce Services said. “This unemployment rate increase was not unexpected, with nonfarm payroll jobs declining between June and July,” said Kimberly Friedman, communications director for the department. “Arkansas is still feeling the effects of the recession, though we continue to have a jobless rate lower than most other states.”

Read the full article at Arkansas Business

Financing your firm with a credit card? Bad idea!

Think twice before slapping down that credit card to cover costs at your new business.

The high cost of plastic credit can drag down growth at a young firm and increase the chance that it will fail in its first three years, according to a study conducted for the Ewing Marion Kauffman Foundation.

For every $1,000 in unpaid credit card debt, a start-up business increases the probability that it will close by 2.2% on average compared with having no such debt, economics researcher Robert H. Scott said in a report released this month.

“Relying on credit card debt is very expensive and makes these businesses financially unstable,” said Scott, assistant professor of economics and finance at the Leon Hess School of Business at Monmouth University in New Jersey.

Yet almost 6 out of 10, or 57.9%, of the nearly 5,000 firms in the study used credit card debt to get started. The report looked at credit card use by the businesses in 2004, the year they all got going, through 2006.

The negative effect is probably higher today because credit card interest rates and fees have climbed dramatically while credit limits have been chopped. Even mainstream card companies are charging rates of 30% or more in some cases.

At the same time, more small-business owners are relying on plastic to start a business or fund an existing operation because other sources of money have dried up.

Read the full article at the LA Times

Wall Street: Bailed out - Main Street: Can’t get a loan

Where’s My Stimulus?

As the government throws billions at bailouts, Main Street is feeling left out.

During her four years as an entrepreneur, Trina Nelson has seen plenty of ups and downs. But nothing prepared her for the crisis last December, when the American economy lay in tatters and her Dallas-based catering business nearly collapsed.

“The phones stopped ringing,” says the founder of Par-T-Trayz Catering (motto: “From sushi to soul food”).

Unfortunately, Nelson, 38, has had a history of borrowing woes. In 2007 she needed a loan to stay afloat but was turned down by four banks because she didn’t have an established line of credit. (Like many startup founders, Nelson had used personal credit cards to fund her business; now her credit rating is “shot.”) Lenders said the amount she was seeking — $15,000 — was too small.

“They told me I wasn’t asking for enough money,” she recalls. “Why would I ask for more money than I needed?”

Read the full article at CNN Money

Small business owners react to Obama Health Care Bill

Small business owners employee about 80% of the population!
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I am a restaurant owner, and I have had this restaurant for over 16 year. I have over 10 employees currently, some part-time, and some full time. It is not I don’t want to provide health care for my employee, I just can not afford. Obama’s health care plan will put me out of business. My business just does not have extra money pay for employees health care. With the minimum wage increase to $7.25, my business is going to under a lot of pressure. I really don’t know what else to do, I already work over 70 hour a week try to save some labor cost. I just want to Obama give our small business break. All small business owner work really hard to try to stay in business. I know a lot of small business owner don’t even have insurance for themselves.

National health plan will kill business.

Shirley

I work for a major health insurance company. We have already felt the effects of the economy on our company and are afraid we will not survive at all with Obamacare. We have a hiring freeze on right now. Many contractors that we use for projects have not had their contracts renewed. Many growth projects have been put on hold. Many fears layoffs will come. They have already told us they are looking at our retirement benefits and to expect change. Is this the change Obama promised? If we get national health care, this will probably force our health insurance company out of the private sector. Then I guess we won’t have to worry about the change in our retirement benefits because we also won’t have a job anymore. Thousands more people from a health insurance company, to boot, will be needing health insurance and a job. Yes, this is change we can believe in.

Linda

For us it is not a matter of hire/fire, but very much a matter of possibly dumping the health insurance we have for our managers (paid 100% by our company) because there’s no way we can afford to cover our p/t employees too. If coverage is mandated for everyone in the company we are better off taking the 8% payroll penalty, thus dumping everyone, including top brass (me,too) into the public health system. After seeing the rules today such as must pay 72% of employee’s cost AND pay 64% of dependent costs, it took me less than five minutes to do the math on that one.

Chris

I am President of a small (250 employees) directional drilling company. We are the embodiment of the American dream. Starting with seven employees in 2003 we worked hard and now provide good paying jobs and a nice benefit package, including health care for all of our 250 employees. Our future is in jeopardy because of the one two punch of Cap and Trade and Government Health Care reform. If corporate taxes are increased to pay for this anvil around our necks then I doubt that we will be able to survive much less compete with the giants in our industry (Halliburton, Schlumberger, Baker Hughes). We have already reduced salaries, furloughed over 30 employees and are considering reducing the benefits we provide. Stimulus? What’s that? Obama is no friend to small business. The only decent jobs that will be left if Congress rolls over are government jobs. Those will be short lived because hard working schmucks like me won’t be feeding the pigs at the trough.

Mike

My partner and I are consultant engineers in the business jet aviation industry. As luxury items go in a recession, the current economy has taken a big hit on our business. Two of our employees have left our company and we have not replaced them. Instead, we use part-time contractors on an as needed basis. With that said, 2 full time employees could be hired. However, we will not be hiring anyone near term with the current economy, threat from Obamacare, and the threat of increase income taxes. We are going to wait to evaluate the economic outlook and additional government cost burden before making any new investment decisions.

David

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