The Small Business Administration (SBA) recently announced it is expanding regulation in light of recent abuses. As The Washington Post reported recently, some large firms have been using small businesses as front groups to gain government contracts. Yet this is a good time to ponder the need for such an agency.
There is something deeply ironic about a federal government agency being tasked with promoting free enterprise and entrepreneurship. Yet that is precisely the SBA’s mission. As a federal bureaucracy, it is in an awkward position to carry it out.
The SBA exhibits an inherent conflict of interest. Does it function for the sake of small business owners or that of the hand that feeds it — the federal government? On its face, it would appear that the SBA indeed works to advantage small businesses, and certainly there are many sincere, hard working employees who believe they are doing just that.
But as is the case with many government programs, good intentions rarely survive political reality. The Small Business Administration is no exception.
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“A lie can make it half way around the world before the truth has time to put its boots on” — like a false statistic recently spread by supporters of Wisconsin’s government-employee unions, such as MSNBC’s Rachel Maddow. Despite being debunked by PolitiFact, it has since been widely repeated in multiple letters to the editor, and it remains uncorrected on the web sites of publications like The Economist.
On Wednesday, PolitiFact debunked the claim by Wisconsin union supporters that Virginia, which bans collective bargaining in state agencies, ranks 44th in the nation in ACT/SAT scores, compared to Wisconsin ranking 2nd. For example, it noted that in 2009, Virginia ranked 22nd in ACT scores, while Wisconsin ranked 13th. As PolitiFact notes, this claim was originally disseminated by the Wisconsin Democratic Party, which has now retracted it.
(Although PolitiFact didn’t note this, in 2010, Virginia actually beat Wisconsin in ACT scores, with Virginia ranked 12th and Wisconsin ranked 17th. Unlike Wisconsin, Virginia is a right-to-work state that bars forcing employees to pay union dues. Collective bargaining with government employee unions is currently mandated in Wisconsin, but banned in Virginia.)
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Tech:
Gmail accidentally resetting accounts, years of correspondence:
“If you’ve got a working Gmail account, you might want to back it up every so often — as many as 500,000 Gmail users lost access to their inboxes this morn, and some of them are reporting (via Twitter and support forums) that years worth of messages, attachments and Google Chat logs had vanished by the time they were finally able to log on. While we haven’t experienced the issue personally, we’re hearing that the bug effectively reset some accounts, treating their owners as new users complete with welcome messages. For its part, Google says that the issue “affects less than .29% of the Google Mail userbase,” engineers are working to fix the issue right now, and that missing messages will be restored as soon as possible. We’ll soon see if this is a momentary setback… or a lengthy wakeup call.”
Playing around with Tracking Protection in IE9:
““The issue though becomes how do they make that difficult decision? What are the criteria for what the tracker can do?” Trilli noted. “We’re helping them make that complicated decision because people don’t want to spend a lot of time understanding the specific nuances of this.””
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Virginia schools have better-than-average test scores. Virginia obviously doesn’t rank an abysmal 44th in the nation on SATs and ACTs, as supporters of Wisconsin government-employee unions keep falsely claiming. They’re making that claim up because Virginia bans collective bargaining by government employees, and Wisconsin, which currently mandates collective bargaining in government agencies, is considering proposals by its newly-elected conservative governor to bar such bargaining in areas like pensions, which frequently result in government costs being passed on to future generations.
In 2009, Virginia ranked in the middle of states on the ACT and SAT, and in 2010, it actually outranked Wisconsin on the ACT (12th vs. 17th in “average composite score“). The reason it doesn’t rank higher on the SAT is because so many of its students take the test – including marginal students who wouldn’t even take them in another state. (Wisconsin boasts a higher average SAT score than Virginia partly because only “four percent” of Wisconsin students took the SAT, compared to “67 percent” in Virginia. Virginia’s lower average SAT score is a function of a larger pool, not dumb students or bad schools, as PolitiFact pointed out in debunking the false claim that Virginia ranks 44th.)
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The budget deficit for Fiscal Year 2011 is projected to be a staggering $1.645 trillion, out of a budget of $3.819 trillion. The Republican-controlled House of Representatives voted to cut $61 billion — about 2 percent — out of this year’s budget to shrink the deficit. Remarkably, to Senate Democrats, this tiny cut is too much.
The Washington Examiner’s Susan Ferrechio reported on Wednesday that “Senate Democrats proposed a short-term budget on Tuesday that would keep federal spending at current levels, setting up a showdown with House Republicans that increases the possibility of a government shutdown as the GOP presses ahead with plans for steep budget cuts.” (On Friday, though, they showed a potential willingness to compromise by cutting a smaller amount: those few “programs that President Obama has already marked for elimination.”)
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CEI Weekly is a compilation of articles and blog posts from CEI’s fellows and associates sent out via e-mail every Friday. Also included in the weekly newsletter is a brief description of CEI’s weekly podcast and a feature on a major CEI breakthrough made during the week. To sign up for CEI Weekly, go to http://cei.org/newsletters.
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Back in 1998, the states settled their lawsuits against the big tobacco companies in a deal called the tobacco Master Settlement Agreement — the biggest legal settlement in history. In exchange for state attorneys general dropping their lawsuits against the four biggest tobacco companies, tobacco companies agreed to pay the states more than $240 billion over the first 30 years of the agreement, and billions more annually in perpetuity. In addition, trial lawyers received over $15 billion (not million, billion).
But there was a catch: to get that money, the states would have to pass laws protecting the big tobacco companies against competition from smaller, newer companies that had never lied about the dangers of smoking, much less been sued for it. That would enable the big tobacco companies to raise prices in unison and pass them on to smokers. Essentially, the states became Big Tobacco’s partner in the cigarette business.
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Tech:
London Stock Exchange Hit by Technical Glitch:
The London Stock Exchange suffered a second embarrassing system glitch in a week on Friday when UK share trading failed to start on time, angering clients keen to trade because of tension in Libya.
Google Declares War on Content Farms:
“Google has announced a major algorithmic change to its search engine, subtle in nature and perhaps unnoticeable to many users, but one that should dramatically improve the quality of Google’s search results.”
Google Penalizes Overstock for Search Tactics:
“Google Inc. is penalizing Overstock.com Inc. in its search results after the retailer ran afoul of Google policies that prohibit companies from artificially boosting their ranking in the Internet giant’s search engine.”
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Have a listen here.
Vice President for Strategy Iain Murray, who also directs CEI’s Center for Economic Freedom, discusses the labor reforms that have led to a thousands-strong sustained protest in Madison, Wisconsin. While the reforms themselves are relatively minor, both sides know that the stakes are high. This may prove to be at a watershed moment in the relationship between public sector unions and taxpayers.
Image credit: WxMom’s flickr photostream.
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