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  January 26, 2017

How the Small Business Administration Will Be Used to Destroy Regulations

Former financial regulator Bill Black says Linda McMahon's career involved exploiting workers as independent contractors and sabotaging small businesses
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William K. Black, author of THE BEST WAY TO ROB A BANK IS TO OWN ONE, teaches economics and law at the University of Missouri Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. Black was a central figure in exposing Congressional corruption during the Savings and Loan Crisis.


SHARMINI PERIES: It's The Real News Network. I'm Sharmini Peries, coming to you from Baltimore.

Linda McMahon, who contributed between $6.5 to $7.5 million to President Trump's election campaign is also his nominee to head up the Small Business Administration. She breezed through her Senate Committee Hearings on Tuesday. Her qualifications and her past were hardly questioned during the hearing. She's the former CEO of the professional wrestling association, WWE, and a major fundraiser for the Republican Party, issues that the Senators ignored including her being one of the driving forces in forging a near monopolistic control for her company over professional wrestling in the U.S. Also during her time as CEO of the wrestlers, she considered wrestlers independent contractors at WWE and were thus denied any work-related benefits.

Joining us now to talk about Linda McMahon's appointment is Bill Black. Bill is Associate Professor of Economics and Law at the University of Missouri Kansas City. He's also a white-collar criminologist, a former financial regulator and author of :The Best Way to Rob a Bank is to Own One". Thanks for joining us, Bill.

BILL BLACK: Thank you.

SHARMINI PERIES: So, Bill, before we take a closer at Trump's nominee, Linda McMahon, give us a quick rundown as to what Small Business Administration is, what it does and what role will she play.

BILL BLACK: Well, Small Business Administration is actually important. It's one of those things that actually changes people's lives. And that's because even after the massive bailouts of the banks and the fact that they are awash with cash, they're very, very, very bad at loaning to precisely the things that banks claim they're the great friend of -- and that is the small entrepreneur.

So, in fact, it is the norm for people to get their start in small business with the benefit of a low-interest loan from the Small Business Administration that can be paid back over a number of years. So it should be treated seriously, but I must say, that Trump isn't the only president to not treat it very seriously. And like the Commerce Secretary, the SBA has typically been a major donor. And you, in the introduction, made the point that she is an extraordinarily large donor, so you can see the going price to be head of the SBA. It's somewhere in that $6-7 million range, under Trump.

SHARMINI PERIES: And so she's leaving a huge business operation, why would this be beneficial for her?

BILL BLACK: Oh! (chuckles) So first, let me say that, as a white-collar criminologist, I view the opportunity to be learning about pro wrestling... (laughing) to be the epitome of my career. 'Cause this is just front-to-back, a scam, but except it's not really a fraud because everybody knows it's a fraud, right?

SHARMINI PERIES: But the dollars garnered in that organization of the WWE, which has something like $6 billion annual revenue line, obviously, she's leaving something for... What's the pay-off?

BILL BLACK: No, they'll keep it very much in the family. So after hearings in the background, of course, she put Triple H, her wrestler who is also her son-in-law and, you know, has the incredible abs and such, as part of the shtick -- she was part of the shtick. She would come out onstage and do awful things and wrestlers would purport to do awful things to her. You know, this is the world where it's all fake, but people actually get hurt because the tricks they're doing can easily hurt people. And, to your point, they didn't want liability. They didn't want to be providing health to a sport where people can get really badly hurt, like paralyzed -- which can cost millions of dollars. And so, they insisted that they be independent contractors.

By the way, the usual economics is if you're running a monopoly, you pay the workers a surplus wage. That's how it normally works. So they want the best of all. They want to destroy all small business rivals to them. Hence, you can see why she should be head of the SBA 'cause she exists to destroy small business. And second, rather than sharing any of those games with the workers, she did the modern scam, you know. the Uber-ish stuff as well, "Oh you're not an employee, you are an independent contractor, so we don't have to do anything for you."

So it's the worst of modern America, plus it's completely fake. Plus, I love the concept of professional wrestling, you know, like professional astrology? (chuckles) So she has no expertise except in exploiting workers and destroying small business. (laughing) So, naturally, he made her head of the SBA. 'Cause it really doesn't get a whole lot better than this.

SHARMINI PERIES: Incredible. For those of you who are more interested in seeing what the WWE has done to professional wrestlers, so-called contractors, must-watch "Wrestling with Shadows"... it's actually called "Hitman Hart: Wrestling with Shadows" by Paul Jay and you can have a copy of it if you are a donor to The Real News. Let me get our pitch in. But, this is her husband, Vince McMahon, and how the operation was built where she was the CEO.

All right, Bill, getting to more serious issues here. Heading up this administration requires being able to manage and build a small business from small to one that's sustainable, do you think she's eminently qualified for that?

BILL BLACK: Well, is she qualified to run a particularly bizarre kind of business that hurts people? Absolutely. She's one of the best at it. Does she have any substantive interest in making America a better place for workers and small entrepreneurs? (chuckles) No.

But the serious thing is this, the administration, the Trump administration is going to use, as the Republicans have been trying to use for the last... forever, small business as their excuse for destroying effective regulation. And it is true that regulatory costs are, as a percentage, higher on small business. So you always want to be making your case in those terms. But here's what to watch for. You're going to see that they're going to define small business as extraordinarily big. And so while the rubric will be about helping small business, it will really be to help extremely large businesses.

SHARMINI PERIES: Right, Bill, as usual, thank you so much for joining us today.

BILL BLACK: Made my day. ...

SHARMINI PERIES: All right then, thank you for joining us on The Real News Network.




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