Will Obamanomics Spike Unemployment in 2009?
If there is a silver lining in every cloud, then the silver lining in the current economic crises (plural!) and the fast heating up international challenges may be a dampening of the new president’s grand ambitions for wealth confiscation. That could rein in his meddling in every industry, throw-money-at-every-problem spending, and an agenda so epic it must have even Marx, Lenin and Mao laughing in their graves.
Given the current conditions, perhaps those of us who find the true Obama a threat to business will suffer far less of his worst than we fear. And those who’ve gone ga-ga over the first messianic president will be bitterly disappointed, leaving the strident leftists expecting him to rubber stamp their initiatives frustrated once again. For that, we can hope.
I have just returned from speaking at a three-day conference attended by about 900 consultants, business advisers, advertising and marketing professionals, franchisors, and the like, from different industries and professions. For example, one works with 6,000 restaurants, another with 3,000 auto repair shop owners, another with 5,000 dentists. In total, they directly assist and are in constant communication with over 5 million small- to mid-sized business owners.
These three days provided opportunity to check the pulse of the small business population. It’s impossible to do the same check by watching television news programs, because small business barely gets reported on or discussed. In the rare and random instances when it does, the reporting and commentary are almost always ignorant and inaccurate.
You can now find some knowledgeable discussion on some nights of CNBC’s Donny Deutsch’s “Big Idea” show or occasionally on the ironically named financial show taped in a
So, some insight. Entrepreneurs are, by nature and conditioning, optimistic and resilient, but the successful ones are also realistic and pragmatic. They are putting all sorts of expansion, growth and business development plans on hold, avoiding most new investments, and downsizing where they can.
This comes from the uncertainty of Obamanomics adding fuel to the already burning fires of strained credit, rising costs, already high tax burdens, and the sudden loss of retirement savings and other hard-earned wealth. Much of this is thanks to what businesspeople correctly view as a
There is a strong, aggressive minority of entrepreneurs still launching new start-ups, expanding, making capital investments, and raising capital. But we are keeping one eye on the new guy, and are ready to retreat at a moment’s notice.
These business owners are determined to cut jobs should Obama proceed with his whole economic agenda. The businessmen are threatened by a lifting of the cap on capital gains taxes, wiping out existent Bush tax cuts, adding new health care mandates and cost to employers. That list also includes hiking Social Security taxes – thus imposing substantial new taxes on every business owner earning over $100,000.00 (not the $250,000.00 lie the media let him get away with).
Many entrepreneurs have, in anticipation of Obama’s threatened assault, already begun cuts. Should he pull the trigger on all of his plans, you can safely wager on a sudden disappearance of millions of jobs. Not the few hundred thousand lost in recent months; a few million. Almost over night.
If just the 5 million businesses represented at this conference each send one employee packing, that’s 5-million jobs gone. That doesn’t factor in the wave of store and office closings and consolidation already under way, certain to escalate and accelerate as soon as the wounded holiday selling season is over.
Obama has sworn not to let the auto manufacturers suffer, to keep pouring billions into them, with none of the problems sucking them dry fixed. That’s because there are something like 1 million jobs at stake. But he plans on pillaging the small companies and small businesses that can and will eliminate 10 or 20 times that many jobs.
If he proceeds as promised with all of his success-punitive tax schemes, we can stop worrying about unemployment creep from 4 to 6 to even 8 percent. It could be 16 percent in a blink. This is the catastrophe these small business owners clearly foresee, that they do not see accurately analyzed by anyone in mainstream media. They worry that Obama and his merry band are either ignorant of or careless about forcibly manufacturing economic equality even if his fantastic vision of a new kind of country destroys the economy.
Instead of reporting endlessly on GM, Ford and Wall Street, it might be smart for somebody in the media to delve into this story. To speak to and for small business – where the jobs are.
Dan Kennedy is a serial entrepreneur, adviser to business owners, sought-after speaker and author of 13 books. More information about Dan can be found at www.NoBSBooks.com, and a free collection of his business resources including newsletters and webinars at www.DanKennedy.com.