Where Do You Stand? Some say the new administration isn't exactly oozing with support for new start-ups; some say help is on the way. So what's the truth?

For the past six months, the nation has been on a financialroller coaster that has sent destructive tremors rolling throughoutthe economy. Consequently, small businesses have found it almostimpossible to secure risky venture capital, and even bank loanshave plummeted. Business bankruptcies are inching up, andunemployment is seesawing. In manufacturing alone, the Bureau ofLabor Statistics reported a monthly loss of 124,000 jobs in May anda total of 675,000 positions gone since July 2000. And that'sjust one industry.

In the past, laid-off workers in a tight job market have turnedto entrepreneurship, but according to the "Challenger JobMarket Index," a quarterly survey released by Challenger Gray& Christmas Inc. in April 2000, only 8 percent of dischargedmanagers and executives started their own businesses in the firstquarter of 2001. This is in sharp contrast to past downturns, whenstart-up activity thrived. In the first quarter of 1991, forexample, 18 percent of discharged managers and executives startedbusinesses.

Can the new administration pump up this lackluster start-upactivity? That remains to be seen. So far, the BushAdministration's small-business agenda has primarily clung totax cuts as the cure-all for entrepreneurial firms. "The taxrelief plan will increase cash flow of small businesses, givingfolks more resources to buy more equipment and hire moreworkers," said George W. Bush during a speech at the WhiteHouse to small-business owners in March.