Mr. Walt Minnick, the Idaho representative is considered the most conservative Democrat in congress. In 2008 presidential elections, he took his seat by just 2 points. He gained support from unlikely sources like the United States Chamber of Commerce and Tea Party Express. Minnick started his political career as a Nixon administration official. But he resigned after the Saturday Night Massacre in which Attorney General Elliot Richardson was assassinated.
In his early years, Walt Minnick remained a successful businessman. He did a job with Trus Joist, a $30 million Boise based forest product company. He served the company for 21 years -16 years as president and now the company’s revenue is $700 million. He says “I realize I liked Trus Joist a whole lot better when it was a $70 million company than when it is 10 times that size, and bureaucratic.” Following this, he started his own business that dealt with nurseries. He comments, “I learned it as boss, but I’d take orders from anybody, depending on what job I was doing. Now, that’s good training for being a congressman.”
While in congress, Minnick introduced a bill meant for resuscitating local banks and to address other small business issues. Minnick points out key issues related to the current recession.
No business, credit demand
Minnick comments that the current recovery is ragged and uneven. Some businesses are going gangbusters, some are seeing small improvements, and others are trying to hang on by cutting costs. So, only businesses that have a sound base to expand and are improving can ask for credit. The rest cannot ask for loans from community banks and other financial institutions and this is the reason why the recovery is faltering.
Corrupt Banking system
The market value of the commercial real estate does not support loan values that are outstanding. Under such a case, the borrowers are found not to possess the reserve equity that can downsize the borrowed loan. In many cases, borrowers are forced to default on loans. The banks then resell the property at distressed rates. The F.D.I.C. also wants a one-to one ratio and is asking banks not to renew loan terms but to get rid of them.
Federal Government’s Role
Federal Government should quit spending money that it does not possess and restore the banking system. Pump-priming should no longer continue. Minnick says “Quit throwing money at the problem. Balance its budget. Quit digging the deficit hole deeper.”
Minnick says that his bill encourages large financial institutions to buy small loans and compile them into market-sized packages. The bill will also have the provision to allow the treasury to give federal guarantee to investment packages like quality, performing loans, so that they can be sold in institutionalized markets.
This article was submitted by Rohit Arora, co-founder of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to