Why every 2016 presidential candidate will trumpet small businesses
Part of our series on the future of Main Street
It only took Sen. Ted Cruz, the first major politician to officially declare he is running for president in 2016, a few minutes to mention the words "small business" during the speech announcing his candidacy.
The first reference came when discussing how his wife, Heidi, started a bakery in grade school. The second came during a litany of thoughts on what Cruz believes is wrong with America.
"Imagine instead of economic stagnation, booming economic growth," Cruz intoned. "Instead of small businesses going out of business in record numbers, imagine small businesses growing and prospering."
The fact that Cruz felt it necessary to mention small businesses early on in his speech shouldn't come as a surprise. For the last three decades, politicians have extolled the virtues of small business as the cornerstone of the U.S. economy. In May of 1983, Ronald Reagan gave a radio address about how small businesses owners have led this country since the American Revolution.
"When you think about it, every week should be Small Business Week, because America is small business," Reagan said, noting that small businesses accounted for nearly half of the jobs in the country. (And that's what makes this such an effective political tactic — millions upon millions of Americans own or are employed by a small business.) "We came to Washington confident that this small business spirit could make America well and get our economy moving again. Well, it's working."
Every president since has at least talked the talk when it comes to small businesses. (The Obama administration boasts on its website that it has enacted 18 tax cuts for small businesses and has approved 334,815 small business loans totaling $163 billion through the Small Business Administration.) And many of Cruz's likely competitors for the White House seem downright eager to continue the pattern and talk up the importance of small businesses.
During a speech in January, former Secretary of State Hillary Clinton said that one of the biggest problems facing the United States today is that the country isn't adding enough small- and medium-sized businesses to the economy. Last October, Sen. Rand Paul stopped by a business roundtable in Iowa to talk with local entrepreneurs. As the governor of Texas, Rick Perry supported a tax cut that affected more than 40,000 small businesses. Wisconsin Gov. Scott Walker hosts an annual small business summit to give entrepreneurs in his state a chance to interact with members of his cabinet.
The roots of this outreach — more cynical political observers might call it pandering — stretch back to colonial times, according to Robert Wright, a professor at Augustana, a college in Sioux Falls, South Dakota. "Jefferson was constantly talking about the yeoman farmers and how they were the backbone of the economy," Wright said. " He also talked about how artisans had to be protected from foreign competition."
Presidents Madison and Monroe presided over a time when the American economy began to see the rise of indigenous corporations like the textile mills in New England and the iron foundries in Pennsylvania, which were putting artisans out of business. Jefferson's successors often found themselves rhetorically rising to the defense of the small business class against the wishes of larger companies.
The Industrial Revolution later ushered in the era of big business, all but muscling out the small business person as a key political constituency. The 20th century saw the rise of the mega-conglomerates and the service economy. "After World War II, it's the heyday of the big corporation," Wright said. "We get General Electric, General Dynamics, and General Mills — these highly, vertically integrated companies that become the place to work as opposed to striking out on your own."
But as with most things in politics, the issue has come full circle, and we're back to a point where candidates are once again talking about the importance of small businesses. This time around, instead of talking to farmers about their landlords or artisans about trade protections, our politicians will most likely have plans that include decreasing taxes, relaxing regulations, and perhaps tinkering with the minimum wage. But one thing will be the same: In 2016, every major candidate will be talking about how small businesses built America, and how they will keep building America.