Published November 24, 2010
During this week of Thanksgiving, we must all remember that our country's greatest strength rests with our people and their ingenuity, creativity and the freedom to control their own destiny.
The American people have always risen up to overcome any adversity. Even though we remain in the long shadow of a deep, protracted recession, this entrepreneurial spirit still offers the best hope to lead an economic recovery.
Our federal government has been active in its attempts to spur job growth. The extent of its foray into the private markets has been worrisome while only mildly effective.
The federal government has essentially nationalized some of America's largest companies through recent investments in GM, AIG, Chrysler, Citigroup and many other financial institutions. Yet the real unemployment rate is at about 18.5 percent. It's higher today than it was when President Obama signed that $787 billion dollar stimulus in February, 2009. More than half of the TARP funds have not been repaid and banks continue to tighten lending standards for commercial real estate lending according to the October 2010 FRB lender survey.
However, my disappointment in government has been ameliorated by my new found confidence in American capitalism. As Ronald Reagan so eloquently reminded us almost 30 years ago, "government is not the solution to our problem." Just when government proves incapable of reviving the capital markets, the private sector gets to work to solve the problem.
The distress in the capital markets and the contraction of traditional credit has given rise to many online financial solutions aiming to help return liquidity to the capital markets. These do for America what our government has not. These new online liquidity solutions include The Receivables Exchange, which creates an electronic market for small businesses to access financing for their receivables, and Second Market, which helps investors and individuals obtain liquidity by marketing illiquid assets such as bankruptcy claims and shares of private companies.
A third such innovative new company is Reliquid Capital Network, www.reliquid.com. Founded by Marcus J. Mollmann, Reliquid combines the latest technology with the power of networks to finance commercial real estate. Reliquid has created a virtual marketplace for owners to access debt and equity for commercial real estate by aggregating many different capital sources willing to lend and invest in real estate into one central location. Reliquid is partly a "dating" website in that it quickly matches a real estate owner seeking capital, known as a Capital Seeker, with a willing source of capital, called a Capital Provider.
"On our Web site, a Capital Provider can quickly access relevant information about a deal and a Capital Seeker gains direct access to interested capital sources," explains Mr. Mollmann. "By the time a Capital Seeker and Capital Provider meet through Reliquid, they are already a match."
The goal of Reliquid's platform is to expedite financings and lower transaction costs, making capital more readily available for those who need it. So far, Reliquid has attracted capital sources representing over $91 billion in assets under management ranging from large banks to small funds and high-net worth family offices. And its capital network is growing at 5 percent per week.
Those numbers hardly sound like capitalism's epitaph, but instead, firms like Reliquid may be just the type of productivity boost our economy needs.
Such is the spirit of America's entrepreneurs and the resolution of our entrepreneurial spirit that these new ideas may help in the rebuilding of our economy.
Let's look to our entrepreneurs to lead our recovery and say a word of thanks to good old fashioned American capitalism.
Bradley A. Blakeman served as deputy assistant to President George W. Bush from 2001-04. He is currently a professor of Politics and Public Policy at Georgetown University and a frequent contributor to the Fox News Opinion.