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Mr. President, a recovery is not an expansion

Dear President Obama:

For as long as there have been organized economies there have been economic cycles, of which there are essentially three elements:

  • Beginning at the bottom, a recession (sometimes, but rarely, a depression). Historically, sir, recessions are short – often measured in months.
  • In the middle is a recovery, which has the task of healing the defects that caused the downturn while reversing negative growth. Depending on the severity of the recession, recoveries take a little longer, from months to a year or so.
  • And finally, the tide that floats all boats, the expansion. Expansions can last for years, as they did under two of your predecessors, Reagan and Clinton.

In America, we expect a recovery to be a means to an end, not a way of life. Alas, that isn’t your standard, because perpetual recovery has been our economic fate since you took office, four months before the Great Recession ended in June 2009.

Recently, in a speech in Elkhart, Indiana, you said this: “By almost every economic measure, America is better off than when I came here at the beginning of my presidency.” Those of us who have made payroll every month of your tenure see things differently, as, apparently, does your own Department of Labor. Two days after the Elkhart speech, the Bureau of Labor Statistics reported a measly 38,000 jobs were created in May – the worst jobs month in six years. And labor participation – the number of Americans who work – has languished under your watch at rates not seen since the last president who manufactured malaise, President Carter. You can’t have an expansion, sir, if people aren’t working.

Let’s review your economic performance, Mr. President, by the numbers. First, we’ll cut you some slack and throw out your first year in office, 2009. The recession ended halfway through, but ’09 was a horrible year you didn’t create, going almost 3 percent negative. But the next six years, through 2015, the economy averaged a pitiful 2.15% GDP growth. Those are not expansion numbers, sir, and they’re the worst for any president since World War II. Any economist will tell you an expansion is annual growth averaging at least 3%. By the way, 2016 is not trending any better than the past six.

It’s a misnomer to refer to a president as “handling of the economy,” because there are really only two ways you factor directly into its performance: 1) helping by getting government out of the way of job creators; and 2) hurting by putting government in the way. Mr. President, you’ve set a record for the latter as an unprecedented assaulter on job creators. Your weapons are:

  • Anti-business rhetoric – “You didn’t build that” and referring to successful people as “fortunate” who need to pay their “fair share”;
  • Anti-business laws – both the specter and the reality of Obamacare, plus Dodd-Frank, to name the big two;
  • Anti-business regulations, guidance and executive orders from your EPA, NLRB, Labor and FCC.

All of these are unprecedented for any president in their tone, scope, and damage. Not to mention the palpable fear and uncertainty that manifested among job creators.

Here’s more evidence: The NFIB Index of Small Business Optimism, the gold standard for such research, reports the longest stretch of pessimism in the Index’s 43 years during your presidency. This from the sector that creates over half of the jobs and half of the U.S. economy. In my own polling of small business owners, only 9% think you have “been good for the economy,” while more than two-thirds think your policies have been “an economic nightmare.”

Referring to the economy in the Elkhart speech, you said, “We can make it even stronger.” Who are “we,” Mr. President? The Oval Office door will soon hit you in the backside for the last time. With all due respect, sir, if “we” make “it” stronger, that will happen after you leave.

Write this on a rock … Out here on Main Street, Mr. President, we’re not going to miss you when you’re gone.

Remember America’s militia on Memorial Day

This is Jim’s traditional Memorial Day column.

Reasonable people disagree on the origins of Memorial Day, but most accept that the practice of decorating the graves of Americans who died in military service began in earnest during the Civil War.

On May 5, 1868, General John A. Logan, Commander of the Army of the Republic, made Memorial Day official with General Order No. 11, which stated in part, “… the 30th day of May, 1868, is designated for the purpose of strewing with flowers or otherwise decorating the graves of comrades who died in defense of their country …” And other than Congress making Memorial Day a national holiday on the last Monday in May, America has since honored its fallen heroes from all conflicts pretty much as General Logan ordered.

When America issued its first call to arms before we had a professional army, it went to the militia, which was identified as “all able-bodied men.”  Called “Minutemen” because they could be ready to fight on a minute’s notice, they were primarily shopkeepers, craftsmen, farmers, etc. Today we call them small business owners.

From as far away as Scotland, America’s Minutemen were impressive. Writing about the colonies’ quest for independence in “The Wealth of Nations,” Adam Smith predicted America would prevail thanks to its militia which, “…turns from its primary citizen character into a standing army.”

Early in the 20th century, state militias became the National Guard and the National Defense Act created the Reserves. In every war or conflict since, America has deployed these latter-day Minutemen (and women) alongside regular forces, where they represented a proportional number of casualties.

On this Memorial Day, as we honor all who paid the ultimate price in service to this country, let’s also remember the long tradition of America’s militia, including small business owners and employees, who served courageously on behalf of a grateful nation. It’s hard enough leaving family to march into harm’s way, but the degree of difficulty of that commitment is compounded for volunteers who also disconnect from businesses and full-time careers.

Contemplating the blessing of freedom wherever it may be found, there is one prime truth: Freedom is not free. As beneficiaries of those who paid the ultimate price for our freedom, our only method of repayment—the only way we can ever be worthy of their sacrifice—is to do all we can to maintain the freedom that they paid for and gave to us.

Write this on a rock … God bless those who paid the ultimate price for our freedom, including past and present Minutemen.

Poll results: Which of the frontrunners would you vote for?

The Question:
It’s the week before the Iowa caucuses. Which of the frontrunner of the two parties would you vote for?

4% - Hillary Clinton
7% - Bernie Sanders
44% - Donald Trump
25% - Ted Cruz
20% - If these are my choices, I won’t vote.

Jim’s Comments:
So, there you have it. The Small Business Advocate Iowa Straw Poll results.

First, you have to notice that small business owners are heavily weighted toward the GOP. When asked why, they typically say, “Because I make payroll twice a month.”

Second, the two troublemakers, Bernie and The Donald, are the frontrunners in their parties. Surely this who-woulda-thunk-it scenario will be the stuff of books and civics lessons for years to come.

Finally, for those of you who support the Democrat O’Malley, or Bush, Rubio or any of the other Republicans, please forgive me for leaving them out of the survey. We just didn’t have room other than to offer the “anyone else” option at the end. Even so, with only 20% choosing this line, it looks like the choices were offered were justified, as they align pretty well with the national polls.

I’m looking forward to our edition next week where we’ll compare our numbers with the actuals of the caucuses. Stay tuned.

And thanks for your abiding support of our poll each week. Check out our new one below.
Poll: Do you think your business is prepared to be relevant and competitive into the next decade?

Poll Results: What grade would you give President Obama?

The Question:
From the standpoint of the impact on your business, what grade would you give President Obama for his time in office?

5% - A
6% - B
6% - C
9% - D
74% - F

Jim’s Comments:
As you can see, President Obama is a failure to three-fourths of our small business audience. It’s been clear from day one that the president has been ambivalent to the Main Street economy atbest, and against us at worst. In seven years in office, the only policy he’s proposed that looks anything like pro-business is the Trans-Pacific Partnership trade deal he cut last year.

On the other side of the coin, the anti-business stuff is a long list, which I’m going to innumerate in an article in the near future. Stay tuned. Thanks for participating.

And thanks for your abiding support of our poll each week. Check out our new one on how you would vote today, click here.

To listen to more about these poll results, click on the link below.

Small business owners have give Obama a grade

Small business owners – still crazy after all these years

“Still crazy after all these years” is the title of a contemplative, 1975 song by the legendary singer-songwriter and multiple Halls of Fame member, Paul Simon. Listening to it on the radio the other day for the zillionth time, the song’s title/refrain made me to think about what makes small business owners different.

They’re different in the way they look at the world. How they think about challenges, imagine outcomes, appraise risk, project potential, and measure all of that against their resources and themselves is different from everyone else. And when they decide to go, like the poker player pushing all his chips to the middle of the table, small business owners are all in. Against all odds. No one else in the marketplace does that.

Still crazy after all these years.

Mountains of evidence should dissuade them from starting a business. The SBA reports over half of all small businesses fail in the first four years, and that’s a 20% increase in mortality over the past 20 years. Every new technology that lowers the barrier to entry for a small business simultaneously disrupts a traditional business model while producing a hundred new competitors. And yet thousands of new ventures are created every year.

Still crazy after all these years.

Many voices ask good questions: “No one’s ever done that before – what makes you think you can?” “How’re you going to create something from nothing?” “How can you compete with the Big Boxes?” “How did you talk the bank into a loan?” To which small business owners have one simple, but classic response: “I didn’t know I wasn’t supposed to.”

Still crazy after all these years.

Small business owners are constantly compared to other, more popularly trodden professional paths that could have been taken. “Why don’t you get a real job?” “Your brother’s job has retirement and healthcare.” “If you worked for a corporation you’d get bonuses and overtime.” “If you worked for the government you’d get paid leave, sick days and job security.” But to someone who took the entrepreneurial path less traveled, those “others” sound like receiving a sentence.

Still crazy after all these years.

In the face of all this, with no fanfare and little recognition, small business owners create over half of the U.S.’s $18 billion economy, 55% of innovations, are 93% of exporters, and sign the front of paychecks for over 70 million Americans, while simultaneously anchoring every Main Street in America.

What’s crazy to others sounds about right to a small business owner. Thank God.

Write this on a rock … Still crazy after all these years. You’re welcome.

POLL RESULTS: New Obamacare compliance is coming for small businesses in 2016. Do you know how it applies to you?

The Question:

New Obamacare compliance is coming for small businesses in 2016. Do you know how it applies to you?

11% - I am prepared to comply with new Obamacare rules.
9% - I am not yet in compliance, but know what to do.
23% - I am not in compliance, and still don’t know what to do.
57% - My business does not have to comply with Obamacare.
Jim’s Comments:
Most small businesses have fewer than 50 employees, which is currently below the criteria for having to comply with Obamacare under the employer mandate. So I’m not surprised to see that our sample responded with 57% in this category.
But I am surprised to see that about a third of our folks still aren’t yet in compliance. The reason is likely that we’ve all seen how many times the law has been unilaterally changed by the Obama administration — more than 30 since 2010 — including moving compliance date deadlines. Why jump through a bunch of hoops if you don’t have to, right?

However, I think Obamacare is where it’s going to be for now, so if you have to be in compliance, either do so or know your exposure for non-compliance. Good luck.

Thanks for your abiding support of our poll each week. Check out our new one below.

http://survey.constantcontact.com/poll/a07ec20m7kriiucwr57/start.html




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