I wish I had a better feeling about the Small Business Jobs and Credit Act President Obama signed yesterday. The law has some features which look good in a press release, but I am not sure they will truly make any difference.

The $12 billion in tax cuts aimed at small businesses are welcome, but I know from my own experience as as a small business owner, and from talking to other small business owners, that what we really need is more customers. Tax incentives are most effective for small businesses that are protecting net income, but in this environment, it’s not so much about protecting net income as it is about generating net income. I think most small business owners would say they aren’t the ones who need the help; it’s the buyers who need help. Tax programs aimed at consumers are probably more important at this point than programs aimed at businesses. Even in the B-to-B arena, profits are ultimately dependent upon consumer strength.

There is a lot of talk in the banking industry about a new $30 billion lending fund. Only healthy banks have access to the fund, so it will increase the difference between healthy and struggling banks. The ultimate result of that growing difference will be accelerated industry consolidation as the competitive landscape tilts too far uphill for the struggling banks. And I am not sure healthy banks lack for lendable funds, but we shall see. There may be some areas of the country where this additional access to capital may prove worthwhile.

Given the way government policy hurt so many banks (think worthless Freddie and Fannie stock), it would have been nice to see some government effort directed at struggling banks. The 10-year amortization on real estate losses would have been a meaningful measure for many banks, struggling and healthy. But that concept didn’t make it to the final version of the bill.