All of these bailouts are going towards big businesses, but the majority of jobs (and job creation) are from small businesses.
The Federal government is still spending, as are states that aren't facing budget calamities. What many small manufacturers see every day is this: A government worker will contact a manufacturer about their widget. The rep for the manufacturer will explain the details about the widget. The government worker will put in a purchase req. A government purchasing agent calls the manufacturer for a quote on the widget. The purchasing agent then goes to a major reseller like CDWG (and I don't mean to pick on CDWG, they are simply one of the largest of literally thousands) because they are on the GSA schedule. The purchasing agent almost always winds up paying more for the widget from the reseller because they don't want to deal with the hassles of purchasing from a vendor who is not already set up in their archaic, complex purchasing system. (It seems that government purchasing agents are not taught how to negotiate for better prices.)
The CDWG's of the world get a large chunk of the manufacturer's margin for being nothing more than order takers, and us taxpayers are paying more than we need to for these widgets. Governments should encourage purchases directly from the manufacturers, allowing manufacturers to keep more of their margins. That would make a big bottom line difference for a lot of struggling US manufacturers and it would save taxpayer dollars to boot.
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It's not just the CDWG's. I have a spreadsheet of hundreds of mom 'n pop resellers who specialize in nothing but selling to the government. Usually they are "women" or "minority" owned, and they add no value to the transaction. Most of these companies are owned by former government employees. Most of these companies are "women owned," when the reality is the hubby worked for a federal agency for 20 years, retired, then set up a business and named his wife as president so the company could more easily get contracts.
If there is anyone reading this who denies what I am saying I will call you a liar.
Its not just the widgets, some people run there own employment agencies of sorts. Since congress mandates that x amount of the contracts be awarded to small or disadvantaged businesses in a quasi thoughtful, but misguided effort to try to help small business. It skews the bid process. Unfortunately most small businesses dont do business with the govt, so these govt purchasing agents set up their own small business when they get out of govt service, knowing that the purchasing agents dont get enough bids from small businesses to fill the govt quotas and so they make out like mad. Say they need an contractor to fill a position over a 12 month period. So write the bid at 25$ an hour for labor, then advertise the job in the local paper for 15$ an hour w/no benefits, and pocket the other 10$for doing nothing. Meanwhile we wonder why a contract to renovate a bathroom costs 250k.
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