Business despise uncertainty, and have been faced with nothing but uncertainty for the last two years. Recent changes in Washington will be viewed by the business community favorably, and will help to get us rolling in the right direction.
Our country is facing a number of problems right now. Unemployment has continued to be high. We have huge deficits for as far as the eye can see. Our nation debt is around $14 trillion and growing. Our politicians in Washington have been more focused on the expansion of government services,
and regulating businesses, than understanding what it takes to stimulate our economy. Some seem to believe that any dollar spent is stimulative by nature. But not every dollar is spent equally. Dollars spent by the government is only reshuffling the deck. Dollars spent by consumers help businesses to grow. And dollars spent by businesses is what creates jobs and wealth in our country. And what is the best way to grow our economy? By creating a positive business atmosphere where businesses look for opportunities to create jobs and create wealth.
The business community has been sitting on the sidelines, and it's contributing to a sluggish economy. The economy and the markets do not like uncertainty, and they have been faced with nothing BUT uncertainty lately. The good news is that several things have happened recently that should help give the US economy a kick start.
1 - Tax Rates
Business like certainty, and predictability. Businesses have been faced with potential raising tax rates. If Congress had allowed tax rates on the "rich" to expire, then half of all profits from small businesses would have been effected by the higher tax rates. Critics like to explain that the higher tax rates will only effect a small number of small businesses. But this is incredibly misleading. Most small businesses are VERY small, and do not provide employment opportunities, or make enough money to be effected by the higher tax rates. Think of piano teachers, independent carpenters, Mary Kay consultants, local musicians, or the attorney down the street working out of her house. These are the people who make up the majority of small businesses. And while they're very important to our communities, they're not the job creators. It's the "bigger" small businesses that create the jobs, and make enough money to be effected by the higher tax rates.
Do you want these small businesses to create jobs, or do you want them to be strangled with regulations and economic fear? Is it more important for these businesses to create jobs so that people can get off unemployment, or to pay more taxes so that we can keep more people on unemployment? Despite what some critics would like you to believe, keeping these tax rates consistent will be good for the economy, and good for job creation.
2 - The Omnibus Spending Bill
One of my biggest disappointments with the current Congress is that they haven't even attempted to pass a budget for 2011 until now. We are already a couple months into the 2011 fiscal year, and all they've done is passed continuing resolutions to keep the government funded. This last week in the Senate, Harry Reid introduced a spending bill to fund the government for 2011 loaded with billions in earmarks from both political parties. The document was nearly 2,000 pages, and Reid was pushing for a quick decision from the Senate to pass the bill. It's a good sign that the bill has been pulled. Maybe politicians are finally understanding that we can't keep spending money we don't have. And that the American people are fed up with business as usual in Washington.
Investor's Business Daily explained it this way: "The lump of coal in our Christmas stocking that was the omnibus spending bill is dead. The Congress the people elected, not the one they repudiated, can now guard the public purse, not pick our pockets. The failure to pass a budget or any of 12 appropriations bills despite full control of both houses of Congress led to this paroxysm of spending, a $1.27 trillion bill full of earmarks that represented the antithesis to the type of government voters on Nov. 2 said they wanted. Those voices evidently were still being heard, particularly by the 23 Democratic and independent senators up for re-election in 2012."
Families have to be fiscally responsible. Business have to be fiscally responsible. If the federal government doesn't get its fiscal house in order, fear and uncertainty will continue to dominate the business mindset. The fact that this bill was pulled will be seen as a positive by the business world.
3 - Business Friendly Environment
For the last two years, rightly or wrongly, the business community has viewed the White House and Congress as anti-business. From new health care legislation that imposes new costs and responsibilities on businesses, to new financial regulations that impose new burdens on the financial community, Congress and the White House have pushed for priorities that are not viewed as pro-business, or pro-economy. The business community wants to be optimistic about the future. Seeing the first signs from the White House that they're willing to consider a more pro-business approach will be seen very positively by the business community at large.
If Congress can continue to focus on tackling out of control spending, deficits, and the national debt, we should see some resurgence in our struggling economy. If President Obama and the White House continues to move to the center and work with business leaders, confidence should return. And hopefully we'll put our small businesses in a position to grow, create wealth, and create jobs.
