For over 30 years, Lloyd Chapman has worked to protect the interests of our nation s 27 million small businesses. In 2004, Mr. Chapman founded the American Small Business League with the goal of stopping the diversion of federal small business contracts to large corporations. Today, he is a champion of small business and has successfully fought the government for decades to protect small businesses and their intellectual property rights. He is also a regular contributor to the New York Times and the Wall Street Journal, and is a frequent guest on CNN's Hard Knocks. In this episode, we discuss how important it is for small businesses to have a voice in Washington, the dangers of artificial intelligence (AI) and the need for a strong middle class to support small businesses, and why the government should not be worried about self-driving cars and driverless trucks. He also talks about why he thinks the government is biased toward big business and against Main Street and why it s a recipe for economic suicide and why you should be concerned about the future of the economy if you don t work for a Fortune 500 company. And he explains why you shouldn t have to pay taxes on the 1% of people who don t pay taxes and don t create jobs in the same way you do for the rest of us. You can get a copy of his book, "No Deal with My Deal with the Pentagon." by clicking here. It's free and well worth the price of admission to the book, No Deal With the Pentagon by clicking HERE. If you're looking for a free copy of No Deal, you can get your own copy of the book here. No Deal with The Pentagon's No Deal by Lloyd Chapman, here you'll get it for free, no obligation to pay $900,000, no extra shipping, no additional shipping, and you get 20% off your first-world shipping and handling charges. No deal is better than $100,000 in exchange for $200,000 or more than $500,000 shipping and $150,000 gets you get an ad-free course from Amazon Prime membership, no shipping included in the course gets you a course that includes a discount on my deal, plus I'll get $5,000 and I'll send you an additional shipping and a $50,000 of shipping plan, plus you get a 20% discount when you sign up for an ad discount, plus an additional $25,000 is a discount at my website gets you an ad is available for free.
00:00:36.000Citrus Bureau data, 99% of all U.S. companies have less than five employees, 98% have less than 100, and 87% of all U.S. firms have less than 20, and the average American company has 10 employees.
00:00:50.000No small business responsible for over half the gross domestic product, half the private sector workforce, over 90% of US exports, and most importantly, about 98% of all net new jobs.
00:01:00.000So most Americans work in small businesses.
00:01:03.000And I think America, quite frankly, is a small business economy, because that's where all the jobs come from.
00:01:44.000With AI, it's going to amplify its capacity to just distort reality in order to achieve whatever nefarious ends, you know, people want to achieve.
00:01:56.000So I share your terror about that, but I'm also just worried about, you know, I'm worried about Driverless cars, self-driving cars, that must be a huge percentage.
00:02:11.000I saw a guy on TV talking about the fact that all the roadside businesses in America are going to go away because he says all those trucks are up there for trucks and we're going to have driverless trucks.
00:02:24.000And so all these roadside businesses all across the country are going to go away.
00:02:29.000So yeah, that's something that's very concerning.
00:02:45.000Well, federal law, the Small Business Act passed in 1953, mandates that a minimum of 23% of all federal contracts go to small businesses, and then a subset of 5% to women, and I think it's 13% to minorities and 5% to service-enabled veterans.
00:03:01.000And what most Americans don't know, the Small Business Act is the largest economic stimulus program ever passed by Congress for the American people.
00:04:57.000When the government says we're doing a great job of small business, say, let me see, this is what they give you.
00:05:02.000Let me ask you, because the Pentagon only wants to deal with Boeing, Lockheed, General Dynette, Northrop Grumman, and it doesn't want to deal with any small business.
00:05:21.000My father was a contractor for the Air Force.
00:05:24.000That's how I really kind of got into this.
00:05:26.000And if someone's working for the government in procurement, they want to work with big companies because when they retire, they can get a job with those big companies and it's called double dipping.
00:05:37.000So they retire from the Pentagon after 20 years and go to work for some defense contract and work there for 20 years.
00:05:42.000So they're not going to get jobs with small businesses.
00:05:44.000A lot of people in government will try to say, oh, small businesses are too small.
00:05:49.000I saw a statistic from a company that analyzed federal procurement data called FedMind, and I think 50% of all individual purchase orders from the government are $50,000 and less.
00:06:01.000So any notion that small businesses can't handle the business is untrue.
00:06:07.000The federal government is, I would say, aggressively anti-small business.
00:06:13.000So again, Census Bureau data, 98% of all U.S. companies have less than 100 employees.
00:06:18.000I challenge anybody to show me one piece of legislation ever to address those companies.
00:06:24.000You know, those companies are the heart of the national economy, and yet you won't see one piece of legislation that's ever been passed to help the small businesses where most Americans work, where most of the GDP comes from, and most of the tax revenue, and all the jobs.
00:07:00.000The first thing I'd do is make sure they're complying with the Small Business Act of 1953 and make sure the small business are getting a minimum of 23%.
00:07:07.000I would raise that to like 35% since, you know, small businesses are half the GDP, right?
00:07:15.000And 90% of the net new jobs were trying to create jobs.
00:07:18.000So I would make sure that that law is being complied with.
00:07:21.000The Pentagon has gotten hundreds of loopholes passed in the National Defense Authorization Act over the last 30 years that just keep willing away at that, you know, making it harder and harder for small businesses.
00:07:35.000Just recently, there were some sweeping changes in the 2024 NDA that are, again, chipping away at the small business program's So I would make sure that laws passed.
00:07:46.000One thing that I think that women should be concerned about is women are half the population.
00:07:51.000They own 43% of the business in America.
00:07:54.000And for the last 50 years, 95% of all federal spending has gone to companies owned by men.
00:07:59.000And that's why men are responsible for over 70% of all the political contributions.
00:08:04.000Men hold all the key positions of government.
00:08:06.000So to me, Men, you know, pretty much control the government.
00:08:09.000And I'd like to see more women in Congress, personally.
00:08:12.000One thing I'd like to see happen is for women to get a more proportionate share of federal contracts.
00:08:18.000So I think giving 95% to firms owned by men is a little lopsided.
00:08:22.000I would do something, I'd pass legislation and policy to give women at least 25%.
00:08:30.000If we got that up to 25%, That would infuse at least $200 billion a year in existing federal infrastructure spending into women-owned businesses and middle class.
00:08:42.000It would create millions of jobs and boost the economy dramatically.
00:08:46.000So I think that's something that needs to be looked at.
00:08:48.000But yeah, the government's anti-small business.
00:08:53.000The Republican administrations have been very aggressive to try to close the small business administration and end all programs for small businesses.
00:09:01.000Bush cut the SBA budget and staffing in half.
00:09:04.000So the SBA budget was bigger when Ronald Reagan was elected than it is today in 2024.
00:09:09.000It's the only federal agency, I think, in government whose budget is smaller now than it was 30 years ago.
00:09:16.000That's interesting to me because Republicans, at least the Republican Party I grew up with, was very pro-Main Street, at least in its ideology and its rhetoric.
00:09:26.000I guess one of their ideological impulses is just to get rid of all government assistance, and I suppose that's what motivates the hostility of the Small Business Administration.
00:09:39.000You know, the way I look at it, and again, I've been suing them for 35 years.
00:09:44.000Fortune 500 firms want every penny the government spends to go to them.
00:09:47.000So the Small Business Act mandates that a minimum of 23% go to small businesses.
00:09:52.000They're trying to close the SBA and end those programs because they want that money.
00:10:36.000A trick in Washington, if you want to close an agency and it wouldn't be popular with the American people, you combine it with another agency and then zero out the budget.
00:10:45.000So it never is reported that that agency has been closed, but they've done that.
00:10:50.000But that's what they would do with the SBA. They want to essentially close it by cutting the budget and staffing and combined with another agency.
00:10:56.000And when they combined with another agency, you can't tell anymore, right?
00:11:17.000So when you think about it, so we've got a country where 33 million small businesses are responsible for 98% of the net new jobs, half the gross domestic product, half the private sector workforce, over 90% of U.S. exports, and there's this little tiny agency that represent them, and they're trying to get rid of that?
00:11:32.000I think that's someone's not thinking right.
00:11:35.000But it's what you have talked about, corporate capture.
00:11:38.000Those big corporations have so much power in Washington, and they want that money.
00:11:42.000They want 100% of the money the government spends.
00:11:45.000And that's why they're so aggressive to get rid of the Small Business Administration.
00:11:48.000Again, I think most Americans would be shocked to find out that 97% of their tax dollars are being spent with 1% of the companies in this country.
00:11:58.000And those companies have not created one job since 1980, and many are paying no taxes.
00:12:05.000I just think that's just insane, right?
00:12:08.000But Bush closed most of the regional SBA offices.
00:12:13.000I think all the regional offices need to be reopened and the SBA budget needs to be restored to some reasonable level so they can help small businesses and create jobs.
00:12:23.000And then how do you get your funding and what is your background?
00:12:28.000My background was, quite frankly, I was a real estate agent.
00:12:32.000And a friend of mine started a computer company around 1985, and I came out to help her just for fun, right?
00:13:21.000I was asking for these reports that the Pentagon had on how much money the defense contractors were actually giving to small businesses.
00:13:30.000So the Pentagon was telling Congress that they were giving small businesses the 20% at that time of law mandated.
00:13:36.000I wanted to see these reports, and when I got a few of them, I saw that the small business goals were in tenths of a percent.
00:13:43.000So while the Pentagon was telling Congress they were giving 20%, the contracts I saw were like 1,600 to 1%, you know, two-tenths percent, 1%.
00:13:52.000In fact, here's how I really got started doing this.
00:13:55.000Again, I just didn't know anything about it.
00:13:57.000And I saw on television that Lockheed got a big defense contract.
00:14:01.000And so I did a Freedom of Information request for a copy of the small business subcontracting plan for that contract.
00:14:07.000And again, my father was telling me what to do.
00:14:09.000I got the paper, and the small business goal was 16, 101%.
00:14:30.000Yeah, there was a congressional investigation into this contract, and they boosted the funds for small businesses from $16 million to $517 million.
00:14:40.000And that was like maybe five or six phone calls.
00:14:43.000And I thought, well, hey, this is easy.
00:14:45.000So I requested information on a couple more contracts, and that's when they decided it was top secret.
00:14:52.000I lost at the district court level to a judge whose brother was a high-ranking Pentagon official, Judge Rukazan.
00:14:59.000And then I appealed to the Ninth Circuit, and I won that case.
00:15:03.000And the judges were so angry with the government's attorney, this poor woman, she was probably about 35 or 40, they were just screaming at her, and she was crying, you know, in court.
00:15:14.000And I won that, and I won basically the release of all these reports that showed that they were, you know, not hitting the goal.
00:15:21.000So what the Pentagon did was pass a program called the Comprehensive Subcontracting Plan Test Program that eliminated reports that I'd won the right to see.
00:16:26.000I had a meeting one time at the Inspector General at the SBA. From my experience of winning that case in the Ninth Circuit, I prompted a congressional investigation into fraud and abuse in federal small business programs during the Bush administration.
00:16:40.000And I was meeting with the head of the SBA, Inspector General.
00:16:45.000And at that time, I was suing the SBA under the Freedom of Information Act for the phone records of the press office director, who I assumed was working with the Pentagon.
00:16:53.000So as I left my meeting with the Inspector General, I got in the elevator, and I saw the sign that says, SBA press office.
00:17:00.000He said, go over and say hi to this guy and kind of harass him.
00:17:03.000And there was a stainless steel door with a bulletproof glass and a keypad.
00:17:08.000So I just walked out of the executive offices of the SBA. I could see the SBA administrator's office.
00:17:14.000When I walked in this door, there was a secretary, and I could see the SBA administrator's office.
00:17:18.000The inspector general's office was down in the hall and their chief counsel.
00:17:22.000But when I tried to go to the press office, it was the stainless steel door.
00:17:26.000My personal opinion is the Pentagon runs the SBA out of that office.
00:17:30.000And back a few years ago, I was always dealing with the SBA press office.
00:17:35.000I was always fighting with them in the press, right?
00:17:37.000And the guy who was head of the SBA press office was a retired naval commander whose specialty was surface weapons warfare systems and reputation management.
00:17:46.000I find that to be a little suspicious, right?
00:17:51.000In fact, right now, It's like 30 Rock, you know, where Alec Baldwin played the director of television programming and microwave ovens.
00:18:46.000So the SB is just a little sample of every agency is just like that.
00:18:50.000So an agency that was designed to help small businesses is actually being run by people that are trying to help the Pentagon, not the small businesses.
00:18:59.000But from what I've seen, I've been in Washington quite a bit.
00:19:01.000I've been in every office in the House and the Senate.
00:19:03.000I've met most of the presidents in my lifetime.
00:19:06.000And that's the way the whole town runs.
00:19:07.000You know, so Washington is run not for the American people, but Washington, D.C. is run for Fortune 500 firms.
00:19:14.000In fact, here's something I want to be sure to talk to you about that I think you probably know about.
00:19:17.000In the last four or five months, I've discovered that the DNC is completely run by corporate lobbyists.
00:19:26.000If you search on DNC corporate lobbyists, you'll see a multitude of stories that talk about, from the top to the bottom, it's corporate lobbyists, and the RNC, I think, is very similar.
00:19:57.000The New York Times reported this week that the DNC has already raised $1.1 billion for this election and that they're on track to raise $3 billion.
00:20:08.000You know, they're using that money to Make sure nobody else gets on the ballot.
00:20:13.000So the Democratic Party, when I was a kid, was about voting rights.
00:20:17.000It was trying to make sure that every American could vote no matter what.
00:20:21.000And now the DNC, controlled by corporate lobbyists, intends to subvert democracy, to make sure that people can't vote, disenfranchise anybody.
00:20:32.000And they're doing the same thing to Trump.
00:20:33.000I'm not a fan of Trump's, but But they're trying to get them off the ballot in the courts.
00:20:40.000This is a banana republics, you know, and trying to weaponize that, you know, they're weaponizing the Secret Service against me.
00:20:47.000They're using the agencies to, you know, to make sure I have to pay more money, to make sure all of this stuff is nothing about democracy anymore.
00:20:56.000It's all about promoting the interests of those big companies.
00:21:48.000I thought about this driving over here.
00:21:49.000I sincerely believe the United States government has terminal cancer, and the cancer is corporate capture, and they've captured every area of government.
00:21:58.000There's no area of government that you can look at that's not Yeah.
00:22:05.000I think that something really bad's going to happen.
00:22:07.000I think our whole economy is going to collapse.
00:22:10.000If we're giving 97% of all the tax dollars to this 1% of companies that don't create jobs, don't pay taxes, that sounds like a real bad idea to me, right?
00:22:18.000And shifting all the trillions of dollars upward to create this new oligarchy of You know, somebody asked me the other day, one of the mainstream press reporters who was angry at me because she said that I was, you know, telling everybody the government was corrupt and now I'm trying to run the government.
00:22:37.000How am I going to run it if it's all corrupt?
00:22:39.000I said, I'm going to make it tell the truth.
00:23:34.000Here's a report they put out called Slided, and here's what it says at the bottom.
00:23:38.000Accounting tricks break false impression that small businesses are getting their share of federal procurement money and the political factors that might be at play.
00:24:56.000So the day before 9-11, Donald Russell gave a speech and said the biggest threat, I think, to national security was not some far-flung dictatorship.
00:25:57.000So the middle class economy is imploding.
00:26:00.000I believe one of the reasons is, I think you probably agree with this, one of the reasons the middle class economy is imploding is all of the government spending is going to this tiny 1% that doesn't create jobs.
00:26:12.000And I believe that if they would comply with the Small Business Act and give small businesses at least 23%, they would create millions of jobs.
00:26:21.000The Senate Small Business Committee did a study about 10 years ago that said for every 1% that contracts a small business went up and create 100,000 new jobs a year.
00:26:29.000That's the Senate Small Business Committee, right?
00:26:31.000All the research, all the experts I've talked to, all the lawsuits I've won, small businesses are getting 3%.
00:26:36.000So if we give small businesses 23%, that's 20% more, right?
00:26:41.000And according to the Senate Small Business Committee, that's 2 million new jobs a year.
00:26:44.000The government's only claiming to be creating 2.5 million jobs, which I think is completely fabricated.
00:26:50.000But think about free and easy, no new taxes, deficit neutral, creating 2 million net new jobs a year by just complying with a law that Eisenhower signed.
00:27:21.000Let's do something for women, get them their fair share of government contracts so they can have the political power to get more women elected to Congress.