At this moment four years ago we were in the middle of The Great Recession whirlwind. We didn’t know how bad things were going to get because all of the shoes had not dropped in reaction to the financial crisis. Millions were still being laid off, GM and Chrysler had not yet taken bankruptcy and the federal government was injecting the first of trillions of dollars into a shell-shocked economy.
Today, 43 months after the technical end of The Great Recession, surveys I report about on my radio program (NFIB, Tatum, our online poll, etc.), indicate that about a fifth of small businesses are doing well, about as many are doing poorly, and the middle 60% are doing just okay. This economy should be a rising tide floating all boats; but it isn’t. Instead, as in 2009, every small business owner is still anxious about the next 12 months.
During recoveries of past recessions, concerns were about market dynamics created by the usual suspects: inflation, global trade, supply and demand, technology disruptions, fear and greed, etc. But this not-so-great recovery is different.
For the first time in my long career (seven recessions), the origin of what will wake up small business owners at 3am in 2013 are mostly challenges created by the federal government. Here’s the short list: higher taxes; unsustainable budget deficits and debt; hundreds of Obamacare mandates, regulations, penalties and taxes (Galen Institute); thousands of new 2013 regulations costing businesses $123 billion, plus 13.6 million compliance man-hours (American Action Forum).
But alas, there is one more thing which may be more troubling to this market sector that produces over half of the U.S. economy: A zero-sum philosophy coming from Washington that the financial success of “fortunate” Americans is at the expense of others. But successful entrepreneurs are only fortunate because, like every American, they have a Constitutional right to pursue success, not a guarantee of success.
Small businesses take economic headwinds in stride because they know the marketplace is self-healing with the passage of time. But government-created headwinds not only don’t heal, they compound, and this truth does not motivate small business owners to take risks.
Most small business owners want to grow and hire, but they don’t have to. So far, that’s not a government mandate. The next movie the political class may see playing on Main Street could be titled, “Small Business Shrugged.”
Write this on a rock…Eventually government expansion and economic expansion become mutually exclusive.
Jim Blasingame is one of the world's leading experts on small business and entrepreneurship. He is the creator and award-winning host of the nationally syndicated radio program, The Small Business Advocate® Show. In addition to his weekly columns, Jim is the author of two books; Small Business is like a Bunch of Bananas and Three Minutes to Success.