Baron Covers Whitehouse in Woonsocket

From great local reporter Jim Baron, an article where we go with Whitehouse to Woonsocket to talk about why the economy stinks so bad:

Whitehouse visits city businesses: Woonsocket Call

August 12, 2010
By Jim Baron

Gil Denomme, owner of Terry’s Tire and Auto, sees TV commercials where banks advertise that “we are here to lend you money,” but he says when a small businessman goes in even for a Small Business Administration (SBA) loan, “you have to do everything but pull out your teeth and put them on the table.

“They aren’t lending small businessmen any money,” he said.

Terry’s used to have five employees on the payroll, Denomme said, “and now it’s down to two, and I am one of the two. I’d love to put five more people on the payroll again, but it just ain’t happening.”

He said auto sales at his Blackstone Street shop are down about 75 percent from what they were five years ago and people today are more inclined to fix a broken-down car — even to such extensive repairs as replacing an engine — then they are to buy another one.

Customers only want to get the work that absolutely needs to be done, he said, and are less likely to spend money for things such as scheduled maintenance.

“They are only coming in when it breaks down.”

Sen. Sheldon Whitehouse talked to Denomme and several other Woonsocket small business owners Tuesday on a tour of the city to discuss the Small Business Jobs and Credit Act currently stalled in the Senate.

Whitehouse said the legislation allocates about $30 billion to small community banks on the theory that they will in turn make loans to businesses in their area that could total as much as $300 billion.

Whitehouse told The Call that, “I just wanted to listen to their stories of how hard it is to keep a small business going. The common theme was that it is really, really tough out there, hard to get customers through the door.”

From my own perspective as a small business owner, these are indeed frightening times. Think of the realtors whose commissions are in the toilet, if they can even get things to sell. Think of the people losing their jobs and their health insurance, going without health care and mental health care at a time when they are likely to be more vulnerable to depression, more in need of support as they carry out Plan B to get themselves back into the job market.

One of the interesting things about Rhode Island’s Energy Independence Day was listening to Greg Gerritt talk about local initiatives to set up composting. It occurs to me that in our terrible economy, one thing worth investing in would be composting for the state. In places where it has been enacted (some parts of California) there have been significant rewards in terms of producing fertilizer locally and doing other ecologically sound things with the compost. There is also the short-term and long-term gain of not putting all that biodegradable material in the landfills. I hope that Senator Whitehouse is aware of this issue and is doing what he can to advocate for research and funding for composting as a way to reuse and recycle in Rhode Island — and provide a few more jobs for our economy.

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2 responses

  1. Here’s something I don’t understand…

    If 75% fewer customers are walking through the door, how will a Small Business Loan help at all? Employment is based loosely on demand, not how much cash the business has in the kitty.

    No matter how much money community banks have, they’re not going to make loans to companies that are doing a quarter the business they were the year before.

    Too much debt and too many loans are how we got into this mess in the first place… Before things can get fixed, we need to understand that we can’t build an economy on real loans made from imaginary money. Unfortunately, that means that a -lot- of people are going to have to trade their old jobs for newer, lower paying ones. It also means that government services (and public sector compensation) are going to have to get trimmed to match this brave new world of stagnating production.

  2. I tend to agree, Mangeek. Loans may prop up a payroll for a while, but they are not going to turn the economy around.

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