Advise the Advisor: Austan Goolsbee Follow-Up

Chairman of the Council of Economic Advisers Austan Goolsbee answers questions about small businesses and the economy and speaks about submissions he received in a recent Advise the Advisor post on Whitehouse.gov as he participates in the Winning the Future Forum on Small Business in Cleveland, OH. February 22, 2011.

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Closed Caption:

Ms. Bernard:
Hi, everybody,
I'm Sarah Bernard,
here with Austan Goolsbee,
Chairman of the Council of
Economic Advisers, and we
are here at Cleveland State
University for the Winning the
Future Forum on Small Business.
The President and his economic
team, including Austan,
are here meeting with a few
hundred small business leaders
to hear about their ideas
for improving the economy
and winning the future.
We want to extend that
opportunity to everybody online,
so we are here taking questions
coming in on Whitehouse.gov and
Facebook around key issues
for small businesses.
So today we're going to cover
things like entrepreneurship,
access to capital -- obviously
a popular one -- workforce
development, exports,
and clean energy.
So if you've got any questions
and want to participate
in the small business
conversation, just go to
Facebook.com/Whitehouse
and send in your questions,
and we'll pick them out.
Austan, anything you
want to say at the start?
Mr. Goolsbee:
Well, thanks, everybody,
for taking the time to
check in here.
We're having a
great event so far.
The President gave some remarks,
they've got five other Cabinet
members running sessions with a
couple hundred business leaders
from the Cleveland
area where we are,
where they're going
through these subjects,
and we appreciate the more
than 1,500 people who sent
in questions and comments over
the weekend in the Advise the
Advisors, which we asked.
So I just really appreciate
everybody's effort.
Ms. Bernard:
And before we
launch into questions,
I should explain why we have
an empty chair next to Austan.
We're expecting the
President to come by at 1:10,
so if you're thinking of
turning off your computer,
don't do that.
He'll come by and take a few
of your questions as well.
So why don't we launch --
why don't we launch in.
So we asked, we asked small
businesses about entrepreneurship.
The question we asked them was
when you first had a new idea
for a business how did
you convert that idea
into a growing business?
We really wanted to
hear from people.
So some things that we heard,
we'll take -- let me ask you
this one: From Rushma (phonetic)
in Vancouver, Washington, asks
I'm currently working on two
projects, one for profit and
one not for profit.
It was not hard for me to get
the online part up and running,
as I have experience in that
area, but to get the licenses,
real estate, regulations and
other legal things starting from
whether or not to go an S Corp.
or LLC, and all those hassles
are just a waste of time.
So I understand them and it's
not hard once you understand
them, but is all of this
hassle really worth the time.
Mr. Goolsbee:
Well, this is a great question,
and it's not just in Washington
where this business is
where this is an issue.
The important thing to remember
is that normally when you come
out of a recession small
business is one of the major
engines of recovery.
This was a very difficult
downturn on small business,
and we're still trying to
make that happen and get small
business fully recovered.
To do that we're going
to have to address,
as the President has outlined in
his Startup America initiative,
reducing regulatory burdens
and making it easier for small
business to operate in
the business environment.
The second piece of Startup
America is cutting taxes,
which the President has now cut
17 different times for small
business, and several of those
are tax simplification for small
business so you don't have
to fill out as many forms,
so you don't have to keep track
of every single cell phone call
you make and allocate which
ones were for business and
which ones were not.
And the third is trying to get
business mentors and the public
sector working with the private
sector to help people to get
past exactly this,
these kinds of issues.
I think that's a key question.
Ms. Bernard:
Makes sense.
I've got one from -- still on
the subject of entrepreneurship,
Michael Coppin from Hayes,
Virginia sent this in a
couple days ago.
Nearly 20 years ago -- it's a
great story -- he sat with a
colleague at his kitchen table
assessing our professional
strengths and weaknesses.
We knew what we wanted to do,
but not how we would get there
in terms of advertising,
performance,
and especially
managing our cash flow.
At one point they were
nearly 200,000 in the red,
but we kept the dream
alive through credit
offered to us by credit card
companies and a few banks.
Today they're successful,
earning an acceptable wage,
but he's really nervous that
entrepreneurs today don't have
the same financial backing.
He thinks that a mentor protégé
concept similar to the SBIR
program may help
small businesses.
What do you think?
Mr. Goolsbee:
Well, look.
You said it was Michael?
Ms. Bernard:
Yeah.
Mr. Goolsbee:
What Michael's saying
here is exactly right,
and in his own story you've got
sort of three key components
that you see all the time.
One, that good ideas of
successful businesses often
start in the kitchen and
the garage in very modest
circumstances at the beginning.
And they require access to
capital and lending to be able
to get out of that idea/very
beginning start-up phase into
the growth phase.
Now, the President's put a big
focus on trying to help small
businesses get
access to capital,
especially in an environment
where community banks have been
really hard hit by
the financial crisis.
So that's why he passed
the Small Business Jobs
and Lending Bill.
And then the last thing that
Michael brought up there was
this mentor-protégé
framework which is,
as I mentioned for
Startup America,
one of the key components.
And Steve Case, the
founder of America Online,
is heading up the Startup
America Foundation which
is trying to bring this
public-private partnership
model to finding these
business mentors, you know,
maybe they're retired executives
or people that want to give
back, that they can help
people who are starting
up their own companies.
I think it's really important,
and we've seen success with that
in the Small Business
Administration in the past.
They've also got the
Department of Veterans Affairs,
for example, is trying to foster
these incubators to give advice
to veterans who want to
start their own businesses,
of which there are literally
thousands around the country
trying to do that.
Ms. Bernard:
Makes sense.
I want to jump to actually
access to capital,
because Sandy Hood
on Facebook -- Sandy,
we found your comment
-- just had a question.
So she says let's support
and give small local banks
and credit unions
the help they need.
They will help local
small businesses.
What do you have to say
about local banks --
Mr. Goolsbee:
Well, that is the idea.
What Sandy's discussing
there of look,
why don't we help the local
banks and credit unions in
order to help small business.
That is the idea of the Small
Business Lending Fund that the
President got signed into law.
It's exactly that.
That we would give extra capital
to community banks and local
banks if they will increase
the lending that they do to
small businesses.
I think it's a great idea.
The President's
totally for that.
Ms. Bernard:
On the access to capital part,
we heard a lot of comments,
so we started taking comments
earlier in the week in a
program that we called
Advise the Advisor,
where we take input directly
to White House administration
officials like Austan here.
Here's an indicative
document from Christine
Higgins in Mt. Carmel, Illinois.
There is no access
to capital, all caps.
Banks refuse to lend.
The City acts like they don't
know what you're talking about
when you mention TARP money,
and the same with the county.
So where is the TARP money?
Where to go?
How do I get it?
(laughter)
I added that for you.
Mr. Goolsbee:
Well, look.
The Small Business Lending Fund
is exactly designed to be about
this kind of access to capital,
that we give capital to local
and community banks if they
increase the amount of
lending they're doing to
small businesses.
I would also highlight a couple
of other ways that we're helping
get capital to entrepreneurs.
The first is by cutting their
taxes 17 different times,
doing things like setting the
small business capital
gains rate to zero.
First, if you start
up your own business,
the capital gains rate on
that would be zero under the
President's -- what
the President has done.
And the other area that I would
highlight is as part of Startup
America, the Small Business
Administration is taking some
capital and using it as a
matching fund, essentially,
with private sector money that
if you can raise money in the
private sector, there is
matching money that could come
from the Small Business
Administration.
That has proven a better way to
do it than having the government
just decides who ought to
get the money, obviously,
because it has that
extra discipline on it.
Ms. Bernard:
L. Smallwood from Bridgeport,
Connecticut, has an idea about,
you know, maybe one of the
answers here is to start a micro
lending program, you
know, less than $15,000
to help people with great
ideas but little money
to get started.
He also thinks that we need
to relax credit scores and
standards for people, these
people who need a microloan
because they've had financial
hardships because of loss of
jobs, hospital bills, and
other recession-related issues.
Mr. Goolsbee:
Well, look.
Nobody's going to
-- I'm not a banker,
I'm not going to decide
who's credit worthy.
I will tell you this: The Small
Business Administration under
this President has had a
dramatic expansion in the,
they're playing a role
throughout this crisis of trying
to get capital to small business
people, including micro lending,
including money for working
capital where a lot of small
businesses have been squeezed
by if they're the supplier to a
bigger business, the bigger
businesses have squeezed them on
working capital or slowed
down the payments that they've
received, and I
would refer E.L.--
Ms. Bernard:
Yeah.
Mr. Goolsbee:
-- to SBA where we've got a
number of innovative programs
that are directly geared
toward exactly that,
as well as to Startup America.
Ms. Bernard:
Let's switch gears, for fun,
to workforce development.
So we posed a question how can
government and business work
together to better prepare the
next generation workforce for
jobs of the future.
An interesting point came in
from Leonard and Eileen -- I'm
going to butcher your name,
I apologize -- Ciaccio is what
I'm going to go with.
Staten Island, New York.
Talked about two-year colleges
and community colleges.
The return of the original
mission of the two-year
Associate degree that focuses
on job development is
very important.
It seems that there's been a
movement towards viewing the
first two years of an Associate
degree as the first two years of
a traditional four-year
college degree.
What that does is transform
the faculty in a research-based
faculty that's mostly committed
to four-year and graduate
students, and that faculty may
well shape the future of our
industries, but usually they're
not involved in training the
workforce at any given moment.
In contrast, the two-year
college with a focus on
workforce development can hire
faculty committed to training
students as workforce ready
for the present and prepare to
evolve as needs develop.
Mr. Goolsbee:
Well, I'd say this, and I
bet it's Ciaccio, or Ciaccio.
Ms. Bernard:
Thank you.
I'm sorry.
Mr. Goolsbee:
But the issue that they are
raising about the diversity of
workforce training and the
different types of educational
and training institutions
we have is super important.
In the same way nobody should be
saying automatically four-year
colleges are superior to
community colleges or something
like that, we shouldn't
do the opposite either.
There are, we have the
strongest higher education
system in the world.
Community colleges have been
one of the unsung heroes of our
educational system.
They've trained millions of
students to be ready to get into
the workforce, and we've
got to continue that.
The President has identified
the training of our workforce,
and especially through
community colleges and two-year
institutions, as one of the most
fundamental investments that
we've got to make in this
country so that five and ten
years down the road we are able
to compete against the workers
in other countries.
That's the basis for our kids
and ourselves to have the kind
of careers that we're going to
need to have that, you know,
that pay good wages.
I would highlight things like
the Skills for America's Future,
which is a public-private
partnership that was pushed by
the President.
You've got a number of large
and small employers around the
country who stepped forward and
they said let's form a nonprofit
in which we do the following:
Company A wants to hire trained
workers and they're willing to
put up their own private money
to get a community college --
a community college to set up a
program to train the workers.
The workers, potential workers
who want to be students,
they want to enter a program
that will get them a job at the
end of it, and the community
college wants to create a
program that will allow
them to work in that space.
So it was a natural area to
bring together employers,
community colleges, and students
to develop these programs where
they can hire people as
soon as they're ready.
And things like that, as well as
funding our community colleges
around the country are key
investments that we simply have
to make if we're going
to win the future.
See, I got that win the future.
Ms. Bernard:
Thank you.
Mr. Goolsbee:
If you didn't hear it, you can
read it on the thing behind me.
(laughter)
Ms. Bernard:
Along the lines
of taking courses,
Michael French from Indianapolis
wants -- notes that, you know,
workers who need new skills and
training are often unable to pay
for the courses, sometimes
even at community colleges.
They need more grants and
scholarships rather than loans.
Mr. Goolsbee:
Look, the issue of the financing
of education is critically
important, especially
for low-income,
middle-income families who've
just gone through the worst
downturn since 1929.
I mean, that is why in
the President's budget,
he's got a firm
commitment to helping, A,
get college costs down, but
B, help keep it affordable on
financial aid.
It's why we're pushing ahead
with Skills for America's
Future, which is a program,
which is a partnership of the
public sector with the private
sector which has very little
explicit budgetary
costs to the government,
but where the companies
themselves who want these
workers with skills are willing
to pay for a significant share
of the cost of
getting this training.
I think if we're not
investing in our people,
what are we doing?
I mean, there's not anything
more important than that.
Ms. Bernard:
A lot of comments came in about
the baby boomer generation as a
large part of the workforce.
So Jay Hill in
Renton, Washington,
notes that we've got a large
workforce that is quickly
approaching, quote,
unquote, retirement age.
Most of us want to
still be useful,
productive members of society,
it's actually healthier to stay
active and involved rather
than become a burden.
How do we develop ways to make
this generation become better
teachers for the
younger generation?
Mr. Goolsbee:
Well, that probably means
teachers in the broadest sense.
Ms. Bernard:
Yeah.
Mr. Goolsbee:
Unless they really
truly mean teachers,
and that would be okay, too.
The President's got a
major initiative to try to,
we're going to have a lot of the
teachers retiring over the next
ten to 20 years and so he's, he
has called for increasing the
number of teachers in science
and math by more than 100,000.
So one thing you can
do is become a teacher.
More broadly, to be a teacher of
the young or mentor to whether
it's business people or
young people in general,
I think it's very
important that we do that,
and that we acknowledge and
recognize that people over age
50 are major high producers.
They're very productive
in the data, just,
they're important producers
for the American economy.
It's an important resource,
and we should definitely not be
neglecting that.
Now, it would be presumptuous of
me to tell anybody you should or
here's what age you
should retire at.
You know, that's, everybody's
got to figure that out for them
self, but, you know, their
contribution to the country is
quite important.
Ms. Bernard:
We've got an idea that just
came in from Carl Senna
(phonetic)
on Facebook.
I don't know if this idea's
ever crossed your desk.
Why no government investment
in inventors clubs?
They're small investment,
big results, new industries.
Mr. Goolsbee:
In investor clubs
or adventure clubs?
Ms. Bernard:
Inventor clubs.
Did I say investor?
Sorry.
Mr. Goolsbee:
Inventor clubs.
Inventor clubs.
Ms. Bernard:
Inventor clubs.
Mr. Goolsbee:
That sounds like a good club.
(laughter)
Look, there's always a question
of what is the appropriate role
of government, but if there
are clubs, gatherings,
two inventors meeting in their
garage in Silicon Valley where
they're coming up with ideas
that could be major companies
that could, as I've said before,
transform from an idea in the
garage to companies that employ
50, 100,000 workers in America,
the government wants to be
about facilitating the growth of
companies like that, and I think
with Startup America it might
actually be a fairly interesting
idea to hook them up
with some inventor clubs.
So thank you for
that suggestion.
Ms. Bernard:
Do you think the same
goes for universities?
We've got a comment from Larry
Lang in Sylacauga, Alabama,
suggesting government
universities partnering to offer
business incubators.
Same thing.
Mr. Goolsbee:
Yes, for sure.
You've seen around the country
and in some very public examples
the business incubator
function of universities,
the commercialization of
research from universities,
turning that into businesses
that can grow and employ people
in the country, has been one of
the great engines of invention
and growth over
U.S. history.
So the way the government has
tried to facilitate that are
taking policy steps to
facilitate the commercialization
of the research at universities
and government labs,
maintaining the research funding
for advanced science, R&D,
health science, the National
Institutes of Health and things
like that, and then
wherever possible,
through things like Startup
America or Small Business
Administration, enable the
access to capital for people
around universities or within
universities that are starting
up companies.
Ms. Bernard:
Makes sense.
How about we switch
gears to exports.
So the question we posed
out to everybody online
was promoting U.S.
exports is an effective way to
grow businesses and create jobs.
What obstacles does your
business face in exporting goods
and services to foreign markets?
I actually had an easy, well,
a straightforward obstacle from
Steven Martinez in Houston.
He says shipping costs can be
prohibitive to creating profits.
If there's a rebate system for
reaching certain export goals
perhaps we could
ship more overseas.
Austan Goolsbee:
It's an interesting idea,
the shipping costs question.
I haven't seen any -- and
I will look into the issue,
I haven't seen much directly
on rebates for shipping costs,
but I have seen the
Commerce Department,
and Secretary Locke is here at
the -- at the event today doing
a break-out session on exports.
It turns out for most companies,
and especially for small
businesses, if they export;
they export to only one country.
And so they have tried
to partner with shippers,
like Fedex and UPS, to
help these companies,
start-ups and small business,
just find customers
outside the U.S.
So if they're in one country,
they could match up and say,
well, look, we got a lot of
people in your line of work are
shipping to the following
kinds of people, you know,
almost like a Rolodex or
directory of where
the customers are.
And so I think that looking at
the shippers more broadly than
just what's the price they
charge of the shipping is
probably worthwhile.
Sarah Bernard:
I've got a question about taxes.
Taxing production
does not make sense,
per Jara Clifton in
Avondale Estates, Georgia.
Why do we penalize those
who generate wealth,
especially when they
are small businesses,
instead we should make America
a place where it's cheap to
produce and then export.
All those production jobs would
stimulate the economy for sure,
even if we do not get to
tax the products at the
point of consumption.
Austan Goolsbee:
Well, I think I agree in spirit
with what Jara is saying,
but I don't think that it's
true that we -- that the Obama
administration or the U.S.
in general is about trying to
tax production here in the U.S.,
especially small businesses.
As I say, the President has cut
taxes for small businesses 17
different times, including
setting the capital gains rate
to zero, giving health care
credits to small businesses,
and a series of other domestic
production incentives to
try to encourage people to
invest in this country.
And for small businesses, you
can write off several hundred
thousand dollars of -- for tax
purposes of capital equipment
that you buy, exactly to try to
encourage you to produce here.
So I think Jara is
on the right path,
but I disagree a little
with the premise.
Sarah Bernard:
I just want to comment to Gerard
Paragrin who just submitted
something on Facebook, noted
let's encourage SCORE executives
and SBA specialists to provide
hands-on services rather than
start-up advice.
I just wanted to tell you
that I'll pass that on
to the SBA for you.
And for folks, who might
just be joining online,
go ahead and submit your
questions on White House -- on
facebook.com White House,
we're taking questions live
right now for Austan.
Let's jump off of
exports for a little bit.
How about clean energy?
Jerry Crabtree from
Iowa wants to know,
this is a field
looking to the future,
but will it be enough -- will it
be enough in place of lost jobs.
Austan Goolsbee:
The focus on clean
energy he's saying?
Sarah Bernard:
Clean energy.
Austan Goolsbee:
Well, look, I certainly hope so.
And part of that depends on
policy and part of that depends
on how much innovation
we get in that space.
It's obviously been a key
priority for the President and
the administration that we can
get a double win of converting
ourselves to a cleaner energy
economy which will create jobs
and can be an industry
of the future,
across the skills
spectrum, I might add,
so it's not just Ph.D.
scientists or something, there's
a whole range of the kinds of
cleaner energy jobs
that we can focus on,
while at the same time reducing
our dependence on foreign oil,
reducing our consumption to
reduce our carbon pollution or
other kinds of air pollution.
So I think that's
been a big focus,
but we've got to have innovation
in that area if it's going to
generate the kind of new
companies and new jobs enough to
make up for what's
been lost, of course.
Sarah Bernard:
What do you think about a
program for the profits and
savings from clean energy that
could be made available to
business owners who pledge in
invest in those funds back into
their business to
hire more workers?
That's from Michael
French in Indianapolis.
Austan Goolsbee:
Well, I think, Michael,
it's an interesting idea,
we'd have to think
through exactly,
and maybe Michael has got some
more details of what it would
be, but we need to think
through the mechanics of that.
In general, take an initiative
like retrofitting buildings,
okay, where you, again, you can
get in a double win where you
can save the business or the
residence hundreds of dollars a
month, thousands of dollars a
year by putting in insulation,
windows, you know, more
efficient appliances,
can put out-of-work construction
workers back to work doing it.
And the President has been
fairly active in trying to
encourage and incentivize
that kind of behavior.
Seems like for energy-saving
appliances, machinery,
boilers and other things, they
would qualify under the -- what
Michael is talking about there.
And I would describe part of the
policies we've done as being in
the spirit of what
Michael is saying,
of trying to give incentives
so businesses can do something
where they're going to save
money if they're plowing -- so
they will have the money to plow
back into their own companies.
Sarah Bernard:
We've got -- I want to skip
back to access to capital,
because we've got a lot
of points coming in.
Warren Nagler writes:
Private equity and
venture capital need
to be efficiently partnered
with good business ideas,
the need to be made into winning
businesses with sustainable
competitive advantage.
His private equity
firm does that.
How can the government
facilitate this process?
Austan Goolsbee:
Well, you know,
for the most part,
that's a private
sector activity.
The people allocating the
capital and what are good
business ideas is best
done in the private sector,
and I think everybody
acknowledges that and
recognizes that.
What you've seen with start-up
-- the Start-Up America program,
as an example, is Small Business
Administration using kind of a
matching function rather than an
explicitly them being the ones
to decide what are -- what will
be successful business ideas,
that if you can attract
significant private either
lending or venture capital or
private equity funding that you
could get some match from SBA,
that strikes me as a
viable way to do it.
The second way I think the
government can facilitate it is
by continuing the funding of
research and development so we
are generating the new ideas,
and commercialization of
university and
national lab research,
which historically have led to
some of the biggest companies in
the United States
employing the most people,
they started in
somebody's garage.
And so we got to keep those
ideas getting generated.
But those strike me
as two important ways.
Sarah Bernard:
Stephanie Myers wanted
a quick clarification.
Did you really mean to say that
you're only interested in ideas
that can create 50,000 jobs, or
did I misunderstand the
earlier comment?
Austan Goolsbee:
Did I say that?
I don't think I said that.
What I said is we
want to generate jobs,
we want -- and I think it was
in the question about inventor
clubs, and I said, look,
inventor clubs may sound like a
rag-tag, you know, five
kids in the garage,
but some of our biggest
companies that employ 50, 000
people started like that.
So certainly I
want more of those,
but I'm not meaning
to say that only 50, 000-person
companies matter.
Absolutely the opposite.
I mean, the data show, and the
reason the President is here in
Cleveland for this small
business event with six members
of the Cabinet is small
businesses are two-thirds of the
net new job creation that
we've had in recent decades,
and so we've got to have an
emphasis on the whole ecology of
the economy across the
full-sized distribution.
Sarah Bernard:
As an Internet event, I have to
ask this one from Larry Ward in
Seattle, he is noting that an
obstacle for small business is
unfair competition
with Internet sales.
We sell golf equipment and
a consumer can buy it on the
Internet and not have
to pay sales tax,
it's an unfair advantage
for Internet sales.
Austan Goolsbee:
Well, much of that, as you
know, on sales tax is state law,
so it's not -- it's
not federal law.
President Obama:
Hi, guys.
Sarah Bernard:
Hello.
President Obama:
I thought I'd join you here.
Austan Goolsbee:
Mr. President.
President Obama:
I'm sorry,
did I interrupt an answer?
Sarah Bernard:
Nope.
Thanks for joining.
President Obama:
You bet.
Austan Goolsbee:
Okay.
President Obama:
All right.
Austan Goolsbee:
The President of the
United States is here.
Why don't you tell
us why you're here.
President Obama:
Well, Cleveland I think is a
great example of cities all
across the country, but
especially in the Midwest who
are starting to
reinvent themselves.
These are typically
manufacturing cities,
they were built of
the auto industry,
on heavy manufacturing, steel,
and as manufacturing has become
much more productive, fewer
workers are in manufacturing,
even though manufacturing
continues to contribute a lot to
the economy, and so these
regions are having to think,
you know, what's going to be the
businesses of the future that
end up employing more people
and providing more opportunity.
And small businesses are going
to be the ones that I think are
going to be making the biggest
impact on regions like this one.
A lot of risk-takers, a
lot of entrepreneurs here.
And what we want to do is make
sure that we listen to small
businesses, hear from them, find
out what kinds of barriers they
are meeting, whether it's
capital or finding the right
workforce or how do they
partner with larger companies.
And so far, we've already
gotten some terrific ideas.
Austan Goolsbee:
He's better at this than we are.
Now, we've got some questions
for you from Whitehouse.gov --
President Obama:
All right.
Austan Goolsbee:
-- that we were
going to shoot to you.
James Peppetone
in Addison, Texas,
with the virtual death
of local banking,
it's next to impossible today
to get bank loans for anything
other than fixed assets.
For working capital,
speculative funding or others,
entrepreneurs must look
to saved capital, family,
friends or even
a first customer.
Traditional financing sources
only help the more traditional
forms of business.
Innovators must look elsewhere.
There were a lot in this spirit,
and we were wondering
what your view is.
President Obama:
Well, one of the things we
hear most frequently from small
businesses is the problem
of start-up capital.
Obviously a lot of small
businesses do get started with
the entrepreneur savings,
family loans, credit cards.
But over the last two years,
it's been especially tough for
small businesses because
of the credit crunch,
both in the banking industry
as well as the fact that folks
don't have home equity loans
that they could use potentially
to start a business,
their credit cards might
have been maxed out.
And so what we did over the last
two years was try to make sure
that the Small Business
Administration, the SBA,
filled some of this hole.
We increased the guarantees that
SBA's would provide to banks if
they loaned -- if they made
a loan to a small business.
We eliminated some of the
fees that might be required.
And as a consequence, volume
from the Small Business
Administration went
up substantially.
The other thing that we did
was we increased the limits
on the loans that might be
provided through the SBA.
So the SBA has done
a lot of good work.
The treasury department has also
tried to make sure that they set
up funds that would
help to facilitate
lending to small businesses.
That's especially important in
part because small businesses a
lot of times have trouble
getting loans when their
collateral has gone down, the
value of their holdings have
gone down, and typically that's
been real estate for a lot of
small businesses.
So we've got a range of
products that through the SBA,
through Treasury, are providing
loans to small businesses,
helping encourage small banks
to get back into the business
of lending again.
But we heard some good ideas
here today about, for example,
providing tax credits
for angel investors,
that right now there have been
some discussions in Congress
about setting up some additional
legislation that could help
small businesses, and
we're going to see if
we can implement it.
Sarah Bernard:
We had a lot of questions come
in about -- or comments and
thoughts about preparing the
next generation workforce.
Roy Paulson in
Temecula, California,
noted the economy developed
some pockets and clusters,
why don't we match this with
our workforce development
for the best results.
We all know that people have
many different jobs over their
lifetime, and we need to retrain
where and when it's needed.
Keep it simple, apply it
quickly, keep it local.
The local aspect allows
easy access for people
that need the training and it's
tailored to local environment
and conditions.
President Obama:
Well, you know, the
answer is in the question.
I think that
question is spot on.
What you find as you travel
around the country is that
there's certain regions that are
starting to gain expertise in
bio-tech or they're starting
to gain expertise in advance
battery manufacturing or they're
starting to gain expertise in a
particular industry which
requires a particular skill set.
And if we can get businesses
to partner with local community
colleges or local universities
and have them help to design the
training process for the
jobs that already exist,
it's a win-win.
For the businesses, it means
that all their workforce
training costs are
absorbed somewhere else,
which is obviously good
for their bottom line.
For the students, what it means
is that if you actually go
through this program, you know
that there's going to be a job
at the end of the day because
the employers have actually
helped to design the program.
And so skills for America's
future is a program that we've
been trying to implement that
gets those partnerships between
businesses and colleges
and universities.
The local community college is
a particular asset that has been
underutilized over the last
several years that we want to
really ramp up.
The Department of Labor is also
working with state and local
governments so that they can
design and tailor their own
particular approach to training.
But the key here is to recognize
that for the vast majority of
folks out there, you're not
going to have one job or two
jobs during the
course of your career,
you're probably going to have
six or seven different jobs.
And even mid-career, you may
have to start retraining.
And what we want to
make sure of is, A,
that there's financing out
there for you to retrain,
which is why we increased
access to student loans,
eliminating some of the
unwarranted subsidies that
went to banks so that we could
expand the Pell Grant program,
make sure that starting in 2014
if you take out student loans,
that in repaying them,
you'll never have to
pay more than 10% of your
income, so we've expanded
access to universities and colleges.
But we also want to make sure
that you're being trained for
the right stuff.
And that's particularly
true for your second career,
for older students, they've got
a family, they may be working,
they can't afford to go
to school, take out loans,
and then it turns out that
what they were getting trained
for didn't provide an
immediate job opportunity.
Sarah Bernard:
Helpful.
I don't know how your time
is, do you have time for
another thought?
Austan Goolsbee:
He's the President
of the United States.
President Obama:
I'll take --
Austan Goolsbee:
You got one online?
President Obama:
I'll take one more
question if you got it.
Sarah Bernard:
Oh, it's really
putting me on the spot.
Let's see what's just come in.
Austan Goolsbee:
Some of them we
have to clean up.
Sarah Bernard:
Yeah, you know, we have
a lot of comments about
a lot of things coming in.
President Obama:
Generally speaking, though, the
-- what I'll do is just talk
about what I've heard
in some of these forums.
In addition to financing, I
think the other thing that
people really wanted to find out
is how can they get mentored and
partner with some
larger businesses.
And we're very lucky, we've got
Steve Case here who obviously
used to be with AOL, he's agreed
to be the chairman of our sort
of umbrella organization
that is Start-Up America,
which is going to help to
mentor and partner with
would-be entrepreneurs, get them
with more mature businesses,
medium-sized businesses,
large businesses,
because a lot of times what
they need is financing,
but sometimes what they need
is mentoring, networking,
they need to -- you know, if
you're in the high tech space,
the most important thing for you
is to potentially get in front
of a Steve Case or a Steve Jobs
or a Mark Zuckerberg or others,
and get a sense of what it
is that is happening in your
industry, who are
the players there,
and so that's another
opportunity through a
public-private partnership,
doesn't cost money,
but it can potentially provide
opportunities for people.
Austan Goolsbee:
And we did hear from a number of
people who they're in the later
part of their career,
and they said, look,
we still want to be productive,
can we -- how can we help out,
how can we teach
the next generation.
That seems it fits
with your theme there.
President Obama:
Absolutely.
So bottom line is that small
businesses create two out of
every three jobs in America,
we're here in Cleveland to make
sure that we're highlighting
all the tools that are available
right now to increase
opportunities for small
businesses, tax credits if
you're providing health care to
your workers, tax credits if
you're interested in investing
in a small business right now,
you get zero capital gains on
those investments.
There are a whole range of tools
that we're trying to bring to
bear to make sure that we
continue to be the most dynamic
economy in the world.
And I'm sure that Austan and
Sarah will be interested in
monitoring our website to
get even better ideas as
time comes up.
And let's make sure people know
what the website is, it is --
Sarah Bernard:
Whitehouse.gov.
President Obama:
Whitehouse.gov.
All right. Thank you, guys.