Small business, Mike Kinsley, and G.W. Bush

Ordinarily columnist Michael Kinsley uses scrupulously clean logic. Something, however, about George W. Bush periodically makes Kinsley blow a fuse and start spouting non sequiturs and illogic. Case in point, this Slate column about Bush’s infatuation with small business.

In essence, Kinsley argues that Bush is in love with small business, and he (meaning: Bush) unjustifiably uses that segment of the economy to justify suspect tax cuts.

“The myth of small business is one of the more ridiculous bipartisan superstitions that influence government policy. Small businesses, by their nature, come and go. They create more jobs than big businesses and wipe out more jobs, too.”

This is interesting contrarian logic, the sort of thing that ordinarily appeals to me. Is it true though? Well, there is unanimity among studies (not to mention, common sense) in showing that gross job creation is inversely correlated with company size. But is Kinsley right, does the argument fall apart when you consider net job creation? In other words, is small business such a large destroyer of jobs that its prowess at creating jobs becomes dismissable? This is a controversial subject, and while the conclusions are not entirely clear, Kinsley is misstating the evidence.

To be specific, Small Business Administration data shows that small business is far ahead of larger business in net job creation, despite having its rate of gross job desctruction. It is misleading to fixate on the latter without pointing out the former, driven, in large part by the numbers: 94% of U.S. businesses have less than fifty employees.

So Kinsley is wrong in his premise, but let’s politely march on and look at one more of his arguments.

He highlights, for example, a recent Bush speech in Albuquerque, New Mexico, where he is at a company called MCT Industries. It was, Bush said, “the American dream”, a private company that made its founder wealthy.

Kinsley demurs, hecking Bush by saying there “is a logical problem here, isn’t there?” His point: Bush is using dubious logic by claiming that small business tax cuts are necessary when MCT and its founder have delivered the American dream.

While I’m fond of mischievous rhetoric, that is just too much. By that illogic of exceptions, the existence of an outlier would invalidate any broader program. To put it in terms with which Kinsley would be familiar, affirmative action programs must not be necessary. Why? Because Bill Cosby is black and he has been successful.

I like Mike, and generally thinks he writes interesting pieces. But rather than demonstrating Bush’s dubious logic, he has mostly given us a Petri dish laced with some of his own.