For twenty years I've sued the federal government on behalf of small businesses. I have won more than 25 lawsuits and legal battles against various agencies. I have over a dozen active lawsuits and 15 more to file. When the Supreme Court refused to hear a case I had against the Small Business Administration (SBA), it was the only time I lost. I testified before Congress and provided information to federal agencies that resulted in a number of federal investigations. These all uncovered the fact that Fortune 500 firms are the real recipients of most federal small business contracts.
But I've come to understand that no matter what I achieve, my opponents in Washington continue to try to convince the media and anyone willing to listen that I am a conspiracy theorist. So here's another one of Lloyd Chapman's conspiracy theories.
I don't think President Obama is trying to create jobs. His jobs bill is designed to get him re-elected. I think if you looked at the facts you'd agree. President Obama rolled out his jobs plan Thursday night. At this point in time, nobody knows the details, but it appears to cost in the neighborhood of $450 billion. And it appears 60 percent is going to be in tax cuts. The rest is for infrastructure spending. I think he's basically proposing to spend $450 billion of our hard-earned taxes on his reelection campaign.
First, the research proving that tax cuts don't create jobs is extremely persuasive. A number of Nobel Prize winning economists have agreed that tax cuts don't create jobs, including George Akerlof of UC Berkeley, Franco Modigliani from MIT, Paul Krugman of Princeton, Kenneth Arrow of Stanford and Joseph Stiglitz of Columbia.
And the most conclusive evidence that he's not trying to create jobs is that he is ignoring the most cost-effective job creation program in the history of America, which is the Small Business Act of 1953. Today that legislation requires that a minimum 23 percent of all federal contracts be awarded to small businesses. The latest Census Bureau data indicates that small businesses are responsible for more than 90 percent of all net new jobs. About half of all Americans are employed by small businesses, about half of GDP comes from small businesses and more than 90 percent of all U.S. exports come from small businesses. So it certainly makes sense to direct federal contracts to small businesses. Yet since 2003, a series of federal investigations have found that billions of dollars a month in federal small business contracts actually go to Fortune 500 firms in the U.S. and to the biggest companies in Europe and even Asia.
In 2005, the SBA Inspector General (SBA IG) released Report 5-15, and referred to the diversion of federal small business contracts to large businesses as, "One of the most important challenges facing the Small Business Administration and the entire federal government today." The part that really gets my attention is, "the entire federal government today." That's a powerful statement, and inspectors general aren't prone to publishing conspiracy theories. That should carry some weight with the media, Congress and the public. It seemed to carry weight with President Obama during his 2008 campaign when he released a statement in support of small businesses that ended with this sentence: "It is time to end the diversion of federal small business contracts to corporate giants." But when you search for anything he's done to end this abuse since being elected, you come up empty. He's done nothing to stop the flow of small business funds to the largest businesses worldwide. These are businesses like Boeing, Lockheed Martin, Rolls-Royce, General Electric and Finmeccanica--an Italian defense conglomerate with 75,000 employees and $33 billion in assets.
If President Obama were sincerely trying to create jobs, he would simply issue an executive order halting the diversion of federal small business contracts to large businesses. It would redirect upwards of $200 billion every year to the middle class. But the President is not doing that. He is flushing an additional $450 billion down the toilet. So I say that Obama's real goal with his jobs bill is simply to get reelected. Because if he really wants to create jobs, he needs to stop giving federal small business contracts to the largest companies in the world. This would create more jobs than any policy he has ever proposed.