Everyone’s heard the yarn about the man who glances to the left and steps off the curb to be immediately run down by an automobile driving in the left lane — he’s in the UK — he forgot where he was and forgot the local rules and pays for that forgetfulness with his life.
Obama is about to learn the same harsh lesson and will only pay with his political life, not his real one, but his surprise will be almost as sudden and just as real. He’s been looking the wrong way and is about to be smacked hard. He’s forgotten where he is and he doesn’t understand the economy he is ruining.
You see, my company rides the wave of pre-leading economic indicators. Our customers do not file 8-Ks – they are much, much too small for that. They are small businessmen & women who may even be part time businesspeople with a job. But they have their own roadside fruit stand along the information superhighway and most of them prosper to the level they wish to devote their effort. For some of them, it’s their small web business along with their unemployment that has kept them afloat. I know because I have talked to some of them.
But in March and April, we noticed something alarming: new small businesses are not being formed at historic rates and existing business are departing the marketplace (read: going out of business). Now many RedState readers will recognize instantly just why – we have been reading and writing here about the political ‘why’ for at least a year now.
But allow me to supply some thoughts about the newer traditions of household small businesses that have traditionally supplied ‘pin money’. To today’s small online part-time business, that’s actually the car payment or even the mortgage. And those businesses are disappearing fast. New ones are also simply not being formed at rates we’ve seen in the past.
Now the government has absolutely no clue this is happening. They simply do not seek the indicators. The SBA considers you a small business if you have $20 million in revenues. Most of my customers laugh at that figure – they won’t be seeing those sales ‘this year or next year’.
But trust me, a prospective small businessperson looking at a $500/month nut to produce sales of $8,000 with $2,000 profit casts just as jaundiced an eye at the numbers as the hardest-nosed CPA filling out an 8-K. More importantly, he/she looks at the tax and regulatory environment with just as jaundiced an eye. They may fully realize that they could fly under government radar for a year or two if they are new, but why start if compliance is simply going to put them out of business entirely in year 3 or 4? They heard that the EPA is going to tell farmers not to raise dust to grow our food. They see that even politically correct solar projects can’t get build because of compliance issues and that restaurants will soon have to post calorie counts on drive-thru menus… and they know we haven’t ‘learned all that’s in that new health bill’ yet. Many are deciding not to continue or not to bother.
And that’s just in our little ecommerce corner of the world (but it’s a big corner). A moment’s reflection will surely reveal to the thoughtful reader that legion are the ranks of discouraged small businesspeople who are considering ‘hanging it up’ – or never get stared.
In 60 days, we’ll be seeing it first in rising car loan defaults. Then 60-90 days later we’ll see the mortgage foreclosures rise more.
Many of us have been foreseeing this for many months now. Mr. Waxman, you can call on me to testify on disclosure of the impact on small business of your crew’s vaunted legislation. Too many of my customers are going to be on your dole. Your tax revenues will continue to plummet while ‘entitlements’ rise and you hire more federal workers. The US will loose it’s AAA bond rating as Berkshire Hathaway and Proctor and Gamble get the bond sales you could have had.
But hey, that’s OK because you’ll have inflation soon to devalue repayment of historic debt, so it’s cool. China won’t notice or try to get out early – they’re our friends, right?
But the government won’t realize what’s happening until it’s much. much too late.
Look out, Obama, that economic auto about to run you down is not going to have time to honk it’s horn before it hits you.