I wrote a blog post for commercialdeals.com/blog that was posted last night. They had asked for my take on the mid-term elections, and I thought you might find this interesting.
There were five top issues for small businesses in this year’s mid-term election, and these same things should be carefully watched during the next two years:
1. Uncertainty. I’ve been asked about the Republican surge in the recent mid-term elections, and the truth is that there are extremes on both sides of the aisle. The extreme on one side would further the growth of regulations and taxation, while the extreme on the other would do things like unfund the SBA. As with most things, a middle-ground is the best course of action. If reasonable heads prevail after the election, then we may not see tax increases, and we may see bad legislation and regulations (well-intentioned, of course) get rolled back. This would provide some certainty that things may not get much worse. When that occurs, the productive class (job creators, large and small) can start to plan their future growth. Without certainty, these folks (people like me) will continue to tread water and try not to take any chances (which are fundamentally necessary for rewards in the future).
2. Taxation. When government “penalizes” the profit-motive for entrepreneurs (by increasing their taxes), the risk-reward ratio for owners of businesses big and small becomes skewed. Fewer people are willing to innovate and start new businesses (or try to grow and hire more people for existing businesses) when this occurs. Raising taxes will only strangle economic growth further. Every time taxes are lowered, receipts rise (partly due to increased economic growth). We need to make economic growth a primary focus, but some in Washington have let ideology trump that.
3. Regulation. As with taxation, the government can (and has) made running and trying to grow a business more onerous by increasing regulations. We’re at a crossroads culturally where we have to decide if we want more entrepreneurs or fewer entrepreneurs. This election will help impact that cultural shift. Because we’re in difficult economic times, the knee-jerk reaction has been to tighten-up on regulations (to try to prevent mortgage bubbles, stock market crashes, etc.), but it won’t provide the economic stimulus we need. A few “bad apples” have poisoned the cart for everyone, tougher regulations are the result. The problem, as usual, is that the pendulum has swung too far in one direction. The results of the mid-term have potentially swung it back the other way.
4. Attention paid to Small Businesses. As a rule, small businesses don’t get nearly the attention they should in Washington. Everyone, rhetorically, is “for” Small Business, but the fact that the ARRA provided only 0.899% of its funds to a sector that employs over 50% of the population is rather telling, just as one example. My online video, THE CRISIS ON MAIN STREET, put forth my explanations for this prior to the elections, but suffice to say we culturally genuflect to Big Business at the exclusion of Small Business. For a while there (maybe from the mid-80’s to the early 2000’s), we elevated entrepreneurs some, but those in Washington seem to be mostly looking out for those who can afford fleets of lobbyists these days (whether it’s Fortune 500 companies or labor unions). These “newbies” in Congress are mostly on-record as being for the “individual” over the “group” or “government.” This should bode well for America’s entrepreneurs IF they maintain those principles.
5. Vilification of business and the profit-motive. The idea that “government is good” and “business is bad” needs to be moderated some. As I’ve said in previous speeches earlier this year, “Entrepreneurs are fundamentally Creators and because of that, we need more of them, not less.” These entrepreneurs are the ones who’ll boost the economy and create the jobs and wealth of tomorrow. These need to be priorities one, two and three right now. Nothing less will do . . . unless everyone wants another “historic” election in 2012.
What are your thoughts on the mid-term elections? Leave a comment below to voice your opinion about something I’ve written, or to simply share your side of things.
Dedicated to Your Continued Success,