A reader who calls himself Colonelgirdle mentioned in a recent comment that he had lost his small business and his livelihood when refused credit by a bank which used its bailout money to buy another bank. I asked him if he could expand on his brief comment, and he has kindly done so:
For three years I owned and operated a mini-market/gas station in a Cincinnati, Ohio suburb. I bought an already existing store using all the assets I had, including my 401K funds, after being down-sized from my middle-management career of 22 years (in one of the many industries which the U.S. can no longer keep onshore).
Things went along fairly well and the business grew as I acquired a large clientele of regular customers from the local construction companies, other business owners, and the Ford plant. My girlfriend and I worked 90+ hour workweeks and, along with help from a few part-time employees, we operated 16 hours a day, 7 days a week, 365 days a year. In other words, I was a real practitioner of the kind of free-enterprise capitalism that our windbag politicians and business leaders praise to the heavens while making sure it doesn’t apply to them.
In the spring of 2008, I went to the county “economic development board” asking for advice about expanding my business. And because his office is in the same shopping center as my store, I walked over to Representative John Boehner’s (remember him? the Republican House Majority, now Minority, Leader?) office to ask for help. I asked the bureaucrats whether grants or tax breaks were available to help me hire employees, buy equipment, etc. No, no such thing available. Their only advice was to go to the Small Business Administration.
So I called the SBA. I won’t go into details other than that they sent out someone to take a look at my store and see if he had any words of wisdom. He was the former head of Ford’s truck and ambulance division and knew nothing I could discern about small businesses in general nor especially the retail store business.
So back I went to the county development board. After a few lengthy consultations, I was steered to a Vice President of Lending at a local branch of one of our nation’s larger banks (I won’t tell you which one, but their initials are PNC). In cooperation with that very nice VP, my girlfriend and I hashed-out a business plan and jumped through a multitude of hoops necessary to secure a relatively paltry SBA loan of $75,000.
Meanwhile, I realize now that throughout the spring & summer business had started to go sour. We were close enough to our customers that many of them confided their troubles: they were losing their jobs, they were losing their homes, their own small businesses were taking on water like Katrina. We finished up our paperwork with the bank and awaited an answer.The V.P. anticipated no problem as I had A-1 credit, very little debt, and a good plan for growing the business.
Then the financial tsunami hit…
Suddenly, Americans were informed the banks were bust and Wall Street toppled! Fed chief Ben Bernanke and his bankster buddies told us it was our money or our lives: we could either pony up nearly a trillion dollars or our economy would eat lead.
My business flow slowed to a trickle; people who are terrified don’t go out shopping. In the midst of all this it was announced that the bank I had asked for money was using its government bailout to buy the bank where I had my business accounts (National City). I didn’t think badly about that arrangement, until during that same time my business loan was turned down. The nice V.P. confided that “we just aren’t loaning to anyone right now. Come back in the spring and you can probably get it then.”
We hung on for five months after that. The store died a slow death. People without jobs to go to don’t buy near as much gasoline and candy. I let the employees go after the New Year holiday. In late February, I contacted the bank V.P. but was turned-down again. I heard on the news that the credit markets were still frozen.
A few weeks later, I put up the sign that said “Out of Business.” I didn’t get much out of the used equipment because so many businesses have gone belly-up that there’s a glut on the market (part of that real free-enterprise again).
I’m not embarrassed about my story because now most everyone is either financially ruined or close to it. And our so-called “leaders” don’t really seem to know or care about fixing it because the Dow Jones Average is going up again. I’m unemployed, broke, and waiting, praying/working for the revolution that seems inevitable.
(Editor’s note: Earlier today the colonel commented on Chuck Dupree’s posting, Thirty Million More Criminals. Since it follows naturally on the preceding account, I reprint it below.)
As one of America’s many financially-ruined citizens I have first-hand frustrating experience with applying to the government for assistance. To cite two examples: 1) so that my working, divorced daughter could go to college, she needed financial help with my granddaughter’s daycare. That took seven weeks of almost daily calling the social workers and, finally, in desperation a call to our state governor’s office hotline to get results. 2) I applied for heating energy assistance for this winter, which involves getting up about 3 am in order to stand in line in the freezing cold outside the application office to get one of 25 entrance tickets at about 8 am.
I was 17th in line, because some people camp out there all night. There were about 50 people in line, which means a lot of people turned away each day. My point is that there will be a lot of poor people spending a lot of their time going begging “hat in hand” to the bureaucrats in order to buy insurance.
I was once solidly middle-class and paid taxes for 37 years before being destroyed in the Great Recession. I was surprised at how confusing, uncaring, and inadequate our social safety net is. Pray that you don’t have to find out also.