trying to help the economy? quit trying to help (small) business

From Veronique de Rugy in Reason...

During recessions, small businesses are inevitably hailed as the key to recovery and showered with still more targeted programs. This latest recession is no exception.

In his State of the Union address this year, President Barack Obama announced that “jobs will be our number one focus in 2010, and we’re going to start where most new jobs do, with small business.” Since then he has proposed and signed a series of targeted tax breaks. The president also asked Congress recently to use $30 billion that had been set aside from the Troubled Asset Relief Program to start a new program providing loans and tax credits to small businesses.

These policies are based on a myth. It’s not true that the key to boosting employment is to help small businesses, even though Washington’s definition of the term is far more expansive than you might think. According the Small Business Administration, a small business is a firm with fewer than 500 employees—not just your average mom-and-pop shop. By this definition, 99.7 percent of all employer firms are small. Still, big companies—the ones that employ more than 500 workers—account for about half of the country’s total employment.

...new jobs come from small and big businesses. If your goal is to boost jobs, it doesn’t make sense to favor one over the other...Neither small nor large businesses can flourish in an environment of anxiety about government intrusions and burdens....the government is injecting uncertainty into the marketplace and making it harder for the economy to recover. To start helping American business, Obama needs to stop trying to help.