In a statement to the Daily Business News, House Financial Services Committee Chairman, Jeb Hensarling (R-TX) expressed both hope and concerns over the economy.
Hensarling said that “…although our economy is clearly red hot today, there are some worrisome signs that we must confront. Number one, as recently as 2016, entrepreneurship – the provision of startups – reached a forty-year low. We know that IPOs have been on a slide downward. Although we’ve seen a gradual uptick, they are half of what they were 20 years ago.”
“Although we passed a bipartisan banking bill, it is largely a community bank, credit union, and banking bill – when 80% of our business debt comes from investors in our capital markets, not from lending officers in our banks,” Hensarling said.
“Small business represents 99% of all business enterprises and half of our U.S. jobs. Surely they are the job engine of America. And when companies do go public, unfortunately, many are withering on the vine,” he stated.
The context was a hearing with Securities and Exchange Commission (SEC) Chairman Jay Clayton.
“And so we have a number of challenges. If these businesses cannot find adequate capital, it begs the question, where will the Amazons, the Googles, and the Apples of tomorrow come from? How can we sustain long-term 3% GDP growth without ensuring that we have plenty of these startups in the pipeline?”
“It also begs the question, how will we successfully compete with China – particularly “Made in China 2025” – unless we infuse more reforms into our capital markets? Because we know China is committed to dominating several different fields including high tech, biotech, and artificial intelligence. And we know they have a very healthy IPO market and currently produce roughly a third of the world’s IPOs – IPOs that I think we would much prefer to have in America,” the Texas congressman said.
The topic is a different kind of look at an issue that MHProNews has been spotlighting for over a year. Namely, the harm that occurs to companies that can’t adequately access capital.
Some of the arguments made by Hensarling could be applied to the harm caused by monopolistic practices.
“And another question that we have to ask ourselves and ask the SEC, how can Main Street investors have more opportunities to invest in their futures? How can they invest in great companies when we look at our IPO market and see that so many of our public companies are now older, they’re bigger, they’re fewer? And when they go to the public markets, this is often at a billion dollar valuation when so much of the explosive growth took place as a private company that they were not allowed to invest in. Why was it only the wealthy that managed to invest in these companies on the way up, and not our teachers, our barbers, our farmers, and our first responders?”
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