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NFIB Small Business Optimism Index dropped to 90.8
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NFIB’s monthly Small-Business Optimism Index dropped one tenth of a point (0.1) in June, settling at 90.8, basically unchanged from the previous month. While some indicators rose slightly, including expected capital outlays, pessimism about future business conditions and expected real sales gains pulled the Index down, causing a small but disappointing drop for the fourth consecutive month. Although June marked the second year anniversary of the recovery, it appeared there was little happening to make small business owners more optimistic.
It is hard to think of anything that happened in June that would make small business owners more optimistic. The Federal Reserve Bank stayed course, making the big bankers and traders happy; the large manufacturers are doing well exporting and paying no taxes (well, GE anyway); all that liquidity is chasing stocks (new technology stocks are hot); and all is well on Wall Street and K Street. Virtually all of the employer firms in the U.S. are not publically traded. If they were, the stock market picture would be grim, with only 18 percent reporting earnings improvements quarter on quarter compared to 41 percent reporting declines. The Administration invokes the “helping small business” (recently found to be the second most respected profession in a Gallup poll) mantra, but they don’t have a clue.
Small business is invisible to them beyond the press conferences. Indeed, Treasury Secretary of the Treasury Geitner told small business owners in his Congressional testimony that the Administration needs more of their money to support government spending, remember the “1099 health care requirement” that was supposed to catch all sorts of tax cheats? Arguing that only 3 percent of the owners would be impacted, he suggested that if owners don’t pay up, education will get less money - not that Washington spends money on anything effectively, including education; they always cut something that hurts, not the political pork and patronage that cost billions. The “3 percent” figure is highly misleading, since the denominator in that calculation is based on 30 million Schedule C claims. But there are only six million employer firms in the U.S. that employ people other than the owner(s) so if the numerator is correct, the figure for those impacted firms that employ someone would be five times larger than the Treasury Secretary intimates. That’s the Administration’s “job creation” policy.
Also, the Administration seems to enjoy the leadership vacuum it has created. Nobody is in charge except the regulators who relentlessly pursue the “big government” agenda by issuing truckloads of edicts. The President brushes off criticism of the NLRB/Boeing controversy by saying he doesn’t involve himself with the NLRB (other than making recess appointments of SEIU cronies!). Does he think people really believe this? Did anyone notice that the TSA is now unionized, even though the original legislation prohibited this? About 8,000 of 40,000 employees voted for the union, that was all it took to put all employees under the union management which is now meeting with TSA. Stay tuned.
The Administration and its Wall Street affiliates don’t seem to understand the nature of the problems on Main Street, which is no surprise because few of them have ever had a real private sector job. But this produces bad policy, at best benign but often detrimental to the recovery they claim they want and that is underway. June was the two year anniversary of the recovery, in case you didn’t notice.
Posted: July 12, 2011 Tuesday 07:45 AM