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Agenda for Reviving the Independent Business Economy

The beating heart of the Hudson Valley and Catskills has always been independent
businesses and small to mid-scale farms. But in the last 35 years, the rug has been pulled
out from under independent business owners, who struggle to compete with offshoring,
subsidies for big businesses, and red tape that frustrates their operations. We see
monopolistic consolidation across industry after industry, tilting the playing field further
in favor of giant, global corporations.
The success of our independent business owners is essential. Dollars spent at local
businesses recirculate at a higher rate in the local economy.1 Locally owned businesses
invest more in their employees, with higher income growth and more employees per unit
of sales than big-box corporations.23 And local businesses are the soul of their
communities, with greater civic participation and social capital in areas with strong,
independent economies.45
Rebuilding a new, 21st Century Independent Business and Small-Mid Size Farm economy
is possible. But it means directly confronting decades of failed policy, driven by big
business lobbyists and misguided regulation.
To support thriving, local, independent economies, we must:
1. Make Big Banks Lend to Independent Businesses. We bailed out the big banks
because they said they would lend to small businesses and our communities. But theyve
used lobbyists to weaken the reforms to make them accountable to us. According to the
Federal Reserve Bank of Cleveland, since the Great recession, bank lending to small
businesses has plummeted. For example, in the fourth quarter of 2012, the value of

1

Going Local: Quantifying the Economic Impacts of Buying from Locally Owned Businesses in Portland,
Maine. Garrett Martin and Amar Patel, Maine Center for Economic Policy, Dec. 2011.
2
Does Local Firm Ownership Matter? Stephan Goetz and David Fleming, Economic Development
Quarterly, April 2011.
3
Locally owned: Do local business ownership and size matter for local economic well-being? [PDF]. Anil
Rupasingha, Federal Reserve Bank of Atlanta, Aug. 2013.
4
The Configuration of Local Economic Power and Civic Participation in the Global Economy. Troy
Blanchard and Todd L. Matthews, Social Forces, June 2006.

commercial and industrial loans of less than $1 milliona common proxy for small
business loanswas 78.4 percent of its second-quarter 2007 level.6
Access to affordable credit is the lifeblood of independent business both for start-up
and continuing operations. But the big banks are choking our economic recovery. We
must demand that they serve the independent businesses that are the backbone of our
private-sector workforce.
2. Buy American, Buy Local. Our current system makes no sense. Trade deals like
NAFTA and the proposed TPP are the work of lobbyists for big foreign monopolies, and
they are devastating for our communities. According to Bureau of Labor Statistics, since
the passage of NAFTA and Chinas acceptance into the World Trade Organization, we
have lost over 5 million manufacturing jobs in the U.S. That is roughly a 30% drop.7
The Hudson Valley and Catskill region is blessed with the countrys most fertile
farmland, yet so much of it goes unused despite billions of dollars is in unmet demand for
local and organic produce. We need local produce for local schools. Instead, we
subsidize giant agriculture corporations out West, and import dairy protein from New
Zealand and China. We ship our hides to Mexico to be processed, only to be shipped
back here to be sold in our stores. We need common sense trade deals that protect local
manufacturing and processing, and we must reject the TPP.
3. Cut Red Tape and Unfair Fees. Big companies hire lobbyists to get tax loopholes
in closed-door negotiations, while small companies have excess paperwork and none of
the tax benefits. Nobody starts a business to fill out forms and manage licensing fees. And
the aggregate cost of regulatory expansion is enormous. Regulatory growth from 1977 to
2012 has cost an estimated $4 trillion in national GDP.8
To make fair, sensible rules, independent businesses must have a voice. We need an open
and transparent rulemaking process. And we must demand that when any regulation is
evaluated, we consider the effect on local communities and their pillars, the independent
businesses.
4. Reduce Property Taxes. The tax burden on independent business owners is simply
too high. Because New York requires counties to take on Medicaid reimbursement costs,
property taxes are out of control and are a huge burden on independent businesses. The
state cannot continue to drown the counties in these costs and drive up property taxes
that hurt local, independent businesses. We must stand up for fair tax policy to relieve
independent businesses owners of their onerous tax burdens.

6

"Why Small Business Lending Isn't What It Used to Be," Ann Marie Wiersch and Scott Shane, Economic
Commentary, Federal Reserve Bank of Cleveland, August 2013.
7
Manufacturing employees in the United States. Politifact. BLS statistics available at:
https://infogr.am/9651f617-2394-4958-95b5-189f19b82f7c
8
The Cumulative Cost of Regulations. Bentley Coffey, Patrick A. McGlaughlin, and Pietro Perreto,
Mercatus Center, April 2016. [http://mercatus.org/sites/default/files/Coffey-Cumulative-Cost-Regs-v3.pdf]

5. Reduce Health Care Costs. Independent business owners are being squeezed by
health insurance costs, where coverage for themselves and their employees is simply too
expensive. We must reduce insurance costs by fighting the outrageous behavior of big
pharmaceutical corporations that set arbitrary and abusive prices. For example, reports
show that Americans pay up to 600 times what those in other countries do for critical
cancer drugs.9
According to the Center for Responsive Politics, in 2014 alone, drug companies spent
$229 million to influence lawmakers, and another $32 million trying to get their
candidates elected. And we see the effects of big pharmas lobbying. Our drug spending
increased 12.6% that same year, leading to a spike in health care costs.10 Those costs are
then passed on to us, and hurt the bottom line of independent business owners who want
fair, affordable coverage.
6.
Revive Antitrust. As industry after industry has consolidated, our economy has
become one where giant corporations corner markets, while independent businesses
struggle to compete. Whether its cable companies, airlines, food distribution, or a dozen
other industries, once competitive markets with mid-size players are now controlled by a
handful of mega-corporations. From 1977 to 2010, the number of job-creating businesses
started by Americans annually fell by 53%.11
Big companies push out smaller competitors by shutting them out of key markets,
crushing innovation, and violating antitrust principles. But with armies of lobbyists, they
get away without punishment. We must demand that the FTC investigate unfair business
practices and punish wrongdoers. By actually enforcing existing laws, and expanding our
antitrust tools, we can take on the modern monopoly powers.
7. Invest in Rural Infrastructure. Access to high quality, affordable Internet service
is essential to compete in the 21st Century economy. Yet the services we now have are
woefully inadequate. 70% of upstate New Yorkers cannot access high-speed broadband
at 100Mbps, including thirty-two counties with no access at all to broadband at that
speed. In Montgomery County, as of March 2014, 17% of households have no access to
broadband.12
Whether you are a tech company in Kingston, a farmer in Schoharie planning crop
rotation or connecting to online markets, or a photographer in New Lisbon sharing
digital pictures with clients, your business depends on this infrastructure. The number of
people in our counties with substandard service, or no service at all, is unacceptable. In
the 1930s, the Rural Electrification Act lit up our region, providing electricity to every
farmhouse. We need REA for the 21st Century, to provide broadband service to every

9

Americans overpaying hugely for cancer drugs study. Ben Hirschler, Reuters, September 15, 2015.
National Health Expenditure Projections, 2014-24, Sean P. Keehan, et al., Health Affairs, 2015.
[http://content.healthaffairs.org/content/34/8/1407]
11
How America became uncompetitive and unequal. Lina Khan and Sandeep Vaheesan, Washington
Post, June 13, 2014.
12
NYS Broadband Update on Montgomery, Fulton Sullivan and Orange Counties - March 19, 2014 - See
more at: http://nysbroadband.ny.gov/presentations.htm#sthash.qewAf6KT.dpuf.
10

reach of the Hudson Valley and Catskills, and to boost our independent business
economy to its thriving potential.