Bidenomics is a new term that is a response to Reaganomics, the political policy established by Ronald Reagan in the 1980s. Instead of allowing the free market to work without interference, the Biden administration is putting a strong emphasis on providing government loans for small businesses around the country. It is a continuation of the Obama led Community Advantage Program "aimed at helping entrepreneurs struggling to secure capital for their business." (LA Times)
The Community Advantage Program was "designed to increase loan access specifically for low-income, underserved business owners through most nonprofit, approved lender." After the program was extended into 2023, loan maximums have increased from $250,00 to $350,000 and make it easier for more financial institutions to become lenders. In addition, under this program, Black business owners received 23% of SBA funding, compared to just 4% of traditional SBA loans. (SBA)
In the case of Alfalfa, the restaurant Vice President Harris was visiting, the Community Advantage loan allowed for the transformation of their business. After being denied loans by both banks and investors, the government loan allowed them to expand operations from Hoboken, NJ to California. Alfalfa now employs "more than 100 people" and will continue expansion throughout California later this year. As Vice President Harris claims, "we have so many small businesses that are doing great work, they are part of the community... but they don't necessarily have the access, or relationships with the big banks." (LA Times)
Government granted small business loans should continue be an important part of growing the foodservice and hospitality industry in the United States, regardless of the political party in charge. To own and operate a successful, independent restaurant is an incredibly complex and challenging task, one that people famously fail trying. Those that are able to handle the operational difficulties and reach profitability, to the point of wanting to expand their business, should be especially considered for SBA loans.
Restaurants are community centers, providing a place for family and friend gatherings all over the country. Restaurants provide steady jobs for poor and minority individuals, people often overlooked by other professions. Lastly, restaurants are absolutely essential to the American economy, employed about 10% of the total U.S. workforce. (NRA)
Regardless of your personal politics, I believe the extension of "Bidenomics" is clearly a public good. You can imagine the amount of successful foodservice businesses that were overlooked for loans due to either their physical appearance or lack of financial connections. Regardless of what happens in the upcoming presidential election, this is a policy I hope to see continue for decades to come. Will this policy result in the next Chipotle or Chick-Fil-A? I would be a little skeptical. Just don't be surprised if an SBA loan results in the opening of your next great local joint.