Fannie, Freddie, Tony and Brian

Remember last week when all the talk was swirling around the fact that mega-mortgage giants Fannie Mae and Freddie Mac were “too big to fail?” I was one of those pundits who reiterated this over and over again. While I still believe that is absolutely true, I also know that there are countless stories of businesses and business owners who are small enough to fail. Today is devoted to these hardworking folks.

Yesterday I went to my tailor, Tony. I truly believe that this man is an artist and send as many people as possible to him. His story is at once ordinary and spectacular in America. Tony came from Italy as a penniless teenager and landed outside of New York City in a small city called New Rochelle. Early on, he worked for others but when an older businessman named Klein approached him to buy his business, Tony jumped in with his wife as an able partner. They never changed the name from “Klein’s” but over the past forty years, it has been their business, their baby and they have been the proud owners through those years.

I walked into the store yesterday only to learn that Tony will be forced to close his business because the building had been sold and the new landlord had tripled his rent. “Jill, I can’t afford it – I am going to have to leave this business that I love so much. How could this happen?” How indeed! I know that I should be seeing this as just another part of the business cycle—the churn, as my friend Burt likes to call it. But like everyone else, once the story affects me and those about whom I care, I lose my capitalist instincts and instead focus on the human element behind the numbers. In many ways, Tony is actually one of the lucky ones. He is 64 and has saved plenty of money, but it is terrible to think that this vibrant professional may not be able to do what he loves.

Tony is in better shape than Brian, who owns a private trash hauling company. Last week, 48-year-old Brian told me that due to the rising cost of diesel fuel and the price pressure from his larger competitors, he was forced to close down the business, sell his trucks and figure out what to do next. He is not in the position where he can go without income for too long, so he will use the proceeds of the truck sales to keep his family afloat and look for a job. If the situation persists, he will have to make some tough choices, like selling his home or maybe raiding his retirement account.

These are just two stories among thousands that occur during a downturn. But it can seem vexing to consider that large, irresponsible companies like Fannie Mae and Freddie Mac are candidates for a bail out, while Tony and Brian are not. In some respects, the small businesspeople, who form the backbone of much of this economy, have taken it on the chin, while the big guys are able to survive. This is one of those nasty realities which is unlikely to change now or ever, but in the end, it still stinks.