President Barack Obama had a pretty good idea for streamlining government. In 2012 he proposed consolidating six agencies that focus primarily on business and trade — including the Small Business Administration — into one new department.
Obama argued this would enable small businesses to navigate the dizzying array of programs supposedly designed to help them. Alas, the idea went nowhere, amid opposition from the small business lobby and the small business committees in the House and Senate.
We recall this only to note that President-elect Donald Trump's pick to head the SBA, former World Wrestling Entertainment chief executive Linda McMahon, supported Obama's notion during her (unsuccessful) campaign for the Senate that year … (G)iven what little else is known about her policy views, this history is a modest point in her favor.
Federal support for small business in general, and the SBA in particular, could use some fresh thinking.
Banking-sector discrimination against small firms, due to their assumed riskiness and lack of collateral, is, in theory, a market failure that argues for intervention.
So it seemed in 1953, when Congress established the SBA. In practice, innovations such as credit scoring make it more likely that banks will lend objectively. Meanwhile, the SBA's mission creeps: 98 percent of all U.S. businesses now fit its definition of "small."
If the Trump administration is serious about changing Washington, the small-business bureaucracy should be on its list.