The SBA’s version of Mike Brown

December 9, 2005

The WaPo had a good editorial today hammering the Small Business Administration for its ridiculous performance, particularly in response to disaster loans. There was just one thing the Post missed.

At a recent hearing of the Senate Committee on Small Business and Entrepreneurship, Hector Barreto, Bush’s hand-picked man to head the SBA, didn’t reassure lawmakers that he knows what he’s doing.

The committee chairwoman, Sen. Olympia J. Snowe (R-Maine), began the session by pointing out that the Small Business Administration had, at that time, processed only 10 percent of 28,540 applications for disaster loans from small businesses in the Gulf Coast area and had approved only 3 percent of them. Mr. Barreto responded with a long and self-pitying description of how difficult things remain in the Gulf, how emergencies are not really his responsibility and how much his agency’s performance had improved lately.

Unfortunately, “improvement” isn’t the first word that comes to mind when the SBA’s loan records are examined a month after that hearing. As of Tuesday, the SBA had received 37,214 applications for disaster business loans. Of those, 2,127 have been approved. Meanwhile, Mr. Barreto and his agency are still resisting the committee’s proposal to give the SBA funding to make short-term “bridge loans” similar to those set up to help businesses affected by the Sept. 11, 2001, attacks (loans that the affected states were making before they ran out of funding), arguing that the same needs are met through other SBA programs. This may well represent the first time a government agency has resisted a congressional attempt to give it more money. It may also help explain why economic recovery in Louisiana is going so slowly.

Indeed, the Small Business Administration’s apparent inability to process Katrina and Rita-related loans has been embarrassing for a while.

So, what’s the unstated tidbit? Hector Barreto is a former Republican fundraiser (read: inexperienced hack) who has no business running the SBA.

No one can accuse Hector Barreto of being unfamiliar with small business. His Los Angeles firm, Barreto Insurance & Financial Services Company, had only ten employees. Alas, now that he is in charge of a bigger operation — the Small Business Administration (SBA) has over 3,000 employees, a budget of about $600 million, and a portfolio of loans totaling $45 billion — Barreto is struggling.

Last year, the SBA failed to notify Congress that it needed additional funding for its largest and most popular loan program and was forced to temporarily shutter it because, as Barreto’s spokesperson explained, it was “out of money.” Meanwhile, the SBA was doing such a poor job managing the $5 billion in loans the government set aside to help small businesses recover from September 11 that, according to an Associated Press investigation, the vast majority of the money went to businesses not affected by the terrorist attacks — including a South Dakota country radio station, a Utah dog boutique, and more than 100 Dunkin’ Donuts and Subway sandwich shops.

I sometimes wonder which is worse with the Bush administration — the corruption or the incompetence. It’s a close call, isn’t it?

Small business people all over this country support Bush. They wrongly assume that his policies which are geared to help the supper rich are geared to help them. Or they a they dream that someday they too will be super rich an able to benifit from Bush’s policies. Why not do narrowcast advertizements in publication geared to small business people pointing out how the Bush hackary is hurting them?

  • It is definitely a toxic combination. And Rege is spot on–but I think it also includes the fact that Americans are brainwashed from an early age that business, regardless of size or morals or anything, is great. Capitalism, great. You are either with business or against business (commie).

  • Some of the worlds best business people are Chinese. Red Commie Chinese business people. Business will always function to the best of its abiity within the guidelines set out by government. This business = freedom and limiting business (in any way) = un-American evildoers is very 1980’s. We need a Democrat who can re-frame the business/government relationship in a way that is not so tainted. Just like “people” seem to feel Dems are anti-millitary they also thins Dems are anti-business. This is not the case and is a fundamental pillar holding up the Repub party.

    In a truely free market society there would be ZERO government involvement in business. This would mean no SBA lending. If a hurricane destroys your business that is your problem. Dems need to nail Bush to the wall on this.

  • “In a truely free market society there would be ZERO government involvement in business. This would mean no SBA lending. If a hurricane destroys your business that is your problem. Dems need to nail Bush to the wall on this. ” Comment by MNProgressive

    So true, and the country would then be just like new orleans is right now (it pretty much sux). But as I have noted in the past, down here a large chunk of the areas which were devastated were populated by die-hard Republicans of the “keep government out of my life and leave my money alone” sort. Boy have they changed stipes as they are all now “FDR democrats”, squealing like stuck pigs for the government to buy them new shrimp boats, pay for their under insured/non insured homes, asking for trial attorneys and sueing everyone under the sun, etc. etc. etc.

    With the anti-tax crusades going on, most of this country will soon become, if it is not already, extended new orleans where infrastructure is horrible and one small natural disaster will turn into something much greater.

  • This just reinforces the fact that the Bush administration operates as a ‘crime family’, not a real governing body at all. It’s so sad.

  • What does it say about many of our fellow citizens that the more simplistic the explantion (critcism) ( blame) that is offered on any issue the more palatable it seems to be.

  • This kind of thing did not just happen during the “bush” administration – I worked for the federal government for 20 years and it was rampant in every administration that was in office during those 20 years.

    • Comments are closed.