Thank you for joining us today under webinar. My name is Wayne Winegarden and im a senior fellow at the Research Institute and im pleased to say we have a bestsellingea author carol roth the just published a new book called the war on Small Business available today on line at your favorite bookseller and having read it i cannot praise it enough. He raises some important issues why Small Businesses are so important in the assaults thats being waged before the pandemic end during a pandemic. Its a Small Business that will lead to a prosperous future. Id like to start discussing whats wrong and why are we at the heart of our economy so carol in your opinion why was this so important to get into . That when i talk to people about how many big businesses versus Small Businesses there in the country most people dont have a good sense of the scope. They think they are millions of big business is but its actually the reverse. We have somewhere between 10 and 15,000 Large Businesses in this country and before covid we had 30. 2 million Small Businesses 6 million of which have employees that accounted for half the gdp and happy employment in the country. It really is a very significant part of the economy overall and also an important path for Economic Freedom. When you think about Wealth Creation, Wealth Creation comes with ownership. Small business enables anybody in people from all over the globe who like to come here to pursue that Economic Freedom and freedom of Wealth Creation or in some cases just other kinds of freedoms flexibility to do what theyey want to pursue their passion or whatnot in preserving that opportunity and the decentralization that comes along withun Small Business. It looks more like freemarket capitalism like the big business to do that make it critically important. Ill tell you everyone says how important Small Businesses and we hear from politicians and we dont have enough people so im thrilled that you are giving this important discussion of platform. Small businesses in my view aree more important as they are 50 of the economy. Small and Large Businesses come from somebodys garage today. So we are starting the entrepreneurial path with new ideas. Its all about bureaucracy and all these other problems and the truth is the market is in the Small Business. You forget that every big business that exist today the exceptions of the 80s came up with a bigger entity and started as that Small Business as a stepping stone to big business. Unfortunately when you disrupt that whether its disrupting capitol allocation or risktaking or wholesale shutting them down, it makes it much more difficult to get the incentive to have those businesses to innovate. I wrote aa book 10 years ago about the rest to Small Business and how hard it is to run a Small Business. But never didha i think the government was going to be the number one risk to Small Business and a situation where they were just in a wholesale shutdown and yet 50 months later here we are. Id like to dive into that because the important contributions of your book id love to talk about that but the pandemic you talk about how we needed to support Small Business yet all of the policies were geared towards harming Small Businesses. Before we get into that one of the thingss you talk about in te book in one of the most important part you start with the timeline and you start with a pandemic is just as much as theli government failure as it s the biology that goes along with that. Th before we had a pandemic here what could the government have done to lessen the impact . This is fascinating to me as i was doing the research and as i told you off line there were several books that i read wrote during the pandemic that ended up as this book. Facts were mr. Porter not reported in doing the research and laying it out with such ahead scratcher. Part of it right up front which was fascinating to me is we have trade deal signed with china which i feel put the blinders on any sort ofin push back from wht we are hearing coming up with china. N its been going on for years and your sense and maybe get it when in the middle of january 2020 and the president at the time is going okay thanks so much for your efforts in helping to keep this new virus away. There wasnt sort of this pushback other than the few people i mentioned who wrote a letter saying whats going on here w folks . China is not great at telling that you than the World Health Organization is covering for them but they really downplay it in the beginning. There were travel restrictions put in place in the course those were called racist and xenophobic. We didnt really get the full extent of those. I think the biggest issues came around the area c of testing and what was done for testing. If you look at places like south they had been through the failures from a government standpoint so right away they enlisted the privatesector pulls in some cases from their Lunar New Year celebration saying you need to get here right now and we needed to get on top of this. They said testing with the privatesector helped right away. Tapo 1. 4 million out in a short period of time and then we have this government bureaucracy and all the celebs who want to do tt bureaucracyin and because the authorizations which he erratically were supposed to shorten the process that created a new task or there was red tape and red tape and red tape so in the beginning the only entity that had the testing that could use it was the cdc so they had to ration it. They had their rules about who could be tested in the labs were desperate. They said we know how to do this but it just took so long that we did see this rationing which is not something that we could physically see in the free market. The other one which was a huge headscratcher was around the ppe personal protective equipment where we were getting all these companies to round the ppe and send it to china instead of stockpile it for ourselves thinking this isnt going to be a problem. There were all these kinds of things and people were starting to p take action. The government push back weather was the lapse or masking. They told us not to mask and they told us that masking was harmful. All these things at the media went into before they decided to take a different set of actions. Pandemics are with us. We need to learn the right lessons not just in terms of how we respond but what family do to prevent it and thats so important. There are things we can do to stop the pandemic or to give us a chance to get ahead of it. To me that was one of the lessons. When we talk about government failure and we talk about how you deal with the pandemic. There were so many private labs. We could have discovered it and self isolated and contained the virus before itndta spreads. We that opportunity and it was an important lesson is that we need to learn. I will add t to that one of e things that was frustrating is not that they didnt know aboutt this, they had run a series of exercises the year prior called crimson contagion. The federal government with 14 i think different states in this scenario that this mock trial was the same exact scenario that came out. Something came from a lab in china its almost like a little little and they ran these pandemic drills so they should have known exactly what it was in the holdups in the bottlenecks in the system and yet it speaks to this frankenstein that we created in terms of Big Government and the inability to do anything well let alone the actual things that they should haveua done. The more things you do outside of your core competency of the lessng well you will do. Toon me thats one of the Important Reasons of small government. As if you want them to do it well well. Everything else, exactly. This is important we talked about the pandemic the policies discriminated not intense with the discriminate against Small Businesses. Can you talk about that a little bit . Its up to you what conclusion you want to draw weather whether it was intentional or unintentional doesnt matter because the outcome is the same. They were in a scenario which is what the United Stateses stands for and protecting the rights of the individual. Possibly the most underreported story of the last 15 months but the government decided they were going to give you a label and you were either essential or nonessential based on their list of what was essential or nonessential. Turns out their list was based on political w connections not really science. As we talked about in the book and talked about previously i get my dogs nails and hair done at the bigbox retailer but i couldnt get my nails and hair done. Its been legal for a couple of yearse and certain jurisdictions and now deemed incredibly essential and then the issue the next level issue is picking winners and is they were not a perfectly compensated. The concept of Eminent Domain thee government wants to pay for your property for quote unquote public good which is basically what happened here. We need to shut some people found sohe looks like we are dog something or whatever. We werent together. We didnt have everybody locked out and up we would have had everybody locked out at amazon would have shut down their warehouses thats the dispensary to shut down. We probably would have had lots of loud screaming saying you cant do this to the economy. Because those connected folks were allowed to continue to be essential in some of the handful of big folks Like Airlines that were actually not directly affected. Indirectly affected by some of these mandates. They got these incredible bailouts and what Small Businesses got was this bpe which w was a fraction of the overall overall dollars put out and certainly not enough to compensate say you had this set of winners and and what that did was enable the Small Businesses that were closed close and their customers were Big Companies and those Companies Revenue is growing. The same time you have the Federal Reserve intervening at historic levels. At this point i think their Balance Sheets as is a hair shy of 8 trillion. Not only for the they revenue slightly higher but the overall valuations were increased with all the money that was flowing in the stock market. You saw last year 3. 4 trillion increase in value in seven tech companies. Seven companies in 3. 4 trillion in value. It was a record year for access to Capitol Record values and at the same time hundreds of thousands of Small Businesses have shuttered forever and millions more were hanging on by a thread. Retirees were earning zero interest and you had these two separate economic outcomes that are 100 by government mandate which is again when you think about that in the context its mindblowing. I think this is worth emphasizing. There are so many things and what you actually have is the pandemic economically a lot of it didnt make sense. First of all so much money was that it didnt have anything to do with the pandemic. Sending out checks because cktheres a pandemic and people who are not not impacted me the senseless waste of money. Or people who were dead. No matter what the keynesian multiplier is it just didnt make sense. The ppe program in the book talks about this we need to emphasize it. Ill bet spending is based on the idea thatha Small Business was it will justify everything. What the government did to Small Businesses with the comp . Plan and they can understand and semi Small Business owners they kept upping it again and again. It took months to find out if they could get their loans. Of as opposed to saying here is the money we say you cant run your business. And we said we will compensate you. You take somebodys property in the compensate them for it. If you jump through our hoops we will make that long forgivable in the bank will understand. So we created this process and Small Businesses didnt wanted after while. So much of the ppe went to the big businesses anyway. Theab whole thing was just te biggest cluster trying to do everything wrong thats what came out with it in general and the ppe provisions in you hit the nail on the head. The way was ruptured, its not a bailout. Its notd you did bad things and we need to rescue you. This is Eminent Domain and this is their mandate so we are giving you money to compensate but all the money that was given out through the cares act to universities who have been paid by students who by the way got the money from the government anyway that nationalized the funding business to the Kennedy Center which was shut down in it forch love employees and had all kinds of access to all of these other organizations and not money out right for whatever reason because of their cronies who are connected and you had the struggling Small Businesses. You arent sending them money and you have that information. As a business you have that file payroll reports and file with the irs. You had to go to the bank and you had to hope your credit was okay read get denied in that First Tranche was crumbs in a fraction of the overall care package. Because of the way they structured it it did go to these Big Companies. Kanye west was named the billionaire by forbes unveiled his new collaboration with the gap, his company got a p. P. P. Loan and tom brady got a ppp with loan. These entities likely had other access to capitol they probably werent going away because of the government mandates. I was exhausted and 13 or 14 daysys so if you are a smaller business you are going okay ive been turned down for it dont have it or dont trust the government. Ive heard that a lot. Im not sure they are actually going to forget this and given the fact they were 35 rule changes at a time when it was originally conceived in that first month or two its understandable. You have to keep up with 35 rule changes to what should be due compensation for shutting down your business. If you are trying to put Small Businesses out of business in a way that was only 95 obvious instead of 100 obvious you try to get more people on the governments role so the government will take care of you. Is there anything you would have done differently to help Small Businesses . It looks pretty intentional. You would have mandated it through small banks and that would have made it more difficult. Most of the money the beginning did go to the big banks and that was part of the problem. They serve their customers first because those were the people they had relationships with. It was the structure of the program. If you are a Small Business you dont have time to spend the hours you need to spend to get the long antimatters. They dont have a years worth of payroll to show them. Maybe a couple of months at best. You probably dont even understand it and the headache. You dont have a department. Its economy of scale which is why you are more vulnerable and why shutting you down and makes a big bigger difference. To put this into perspective the government created a problem for Small Businesses. They mandated shutdowns in people contracted and i did a lot more on line shopping and i got amazon. You are not Small Business so you have that illusion and what was particularly valuable was the Pandemic Response was to Small Business and that was a problem and we still see economies are recovering at the hep all this but you stilloo hae Small Businesses that are suffering. Particularly restaurants and those things that are really coming back but you put this in perspective methot this is really important ongoing what you call war on Small Business. I love howo you start off what s this ongoing work in Small Businesses . Everyone talks about Small Business being ang wonderful thing. Its fascinating. Obviously Small Businesses are this bastion ofti free markets d decentralization and they stand as independent thinkers and if you are trying to consolidate power which we have seen depending on how you want to define it, the amount of spending the purview of the decision of what you are involved in. We have seen a consolidation of power at all levels of government to protect way the federal government. If you are trying to continue to consolidate that power its t mh easier to deal with the hample of businesses than to try to get the support of all of these independent Small Businesses and by the way they just want to serve their business. The challenges this is obviou