MAIN STREET VERSUS WALL STREET

34 comments

Posted on 9th April 2013 by Administrator in Economy |Politics |Social Issues

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Do small businesses, which account for 65% of all the new hiring in the country, become less optimistic during an economic recovery?

After another false start, small business confidence has sputtered and stalled again. For the sector that produces half the private GDP and employs half the private sector workforce -— the fact that they are not growing, not hiring, not borrowing and not expanding like they should be, is evidence enough that uncertainty is slowing the economy. Virtually no owners think the current period is a good time to expand, because they simply don’t know what the future holds. So why invest? And with the lack of any sustainable fiscal policy or a federal budget, no one’s banking that Washington will be at forefront of any meaningful change. Overall, it appears that there will be little growth coming from the small business half of the economy; as the world economy slows, even big business may suffer. NFIB chief economist Bill Dunkelberg

Small Business Optimism Down in March

The March NFIB Index of Small Business Optimism ended its slow climb, declining 1.3 points and landing at 89.5. In the 44 months of economic expansion since the beginning of the recovery in July 2009, the Index has averaged 90.7, putting the March reading below the mean for this period. Of the ten Index components, two increased, two were unchanged and six declined. Among the greatest declines were labor market indicators, inventory investment plans and sales expectations. 

Small business optimism report for April 2013

Small business owners are on the ground near the real people. They aren’t sitting in ivory towers at Princeton playing with regression models. They aren’t programming their high frequency trading computers to buy the dip. They aren’t calculating their bonuses and stock option compensation. They are trying to make payroll. They are trying to sell products. They are trying to understand how badly Obamacare will screw them. They are trying to navigate through the hundreds of thousands of rules, regulations and laws that are passed by politicians. They are paying experts thousands of dollars to decipher and comply with the IRS tax code. Well guess what? They have no plans to hire anyone and they expect sales to go lower.

Small business optimism components

Ben Bernanke’s money printing is not benefitting them in any way. His policies are not generating jobs. His policies are impoverishing savers, who now have less money to spend at small businesses. Ben Bernanke’s policies are designed to benefit Wall Street banks and mega-corporations. His policies are designed to drive stock prices higher and enrich the connected crony capitalists that control the country. Meanwhile, small businesses and small people are dying on the vine. The real economy is withering away under the weight of massive debt, crushing taxation, and ponderous government regulations and red tape.  

Top problems of small business owners

There has never been a greater disconnect between Main Street America and Wall Street in our history. It will not end well. Bill Dunkelberg seems to be an economist with common sense, as opposed to the Keynesian morons like Krugman and the other Wall Street shills paraded on CNBC.

 

COMMENTARY BY CHIEF ECONOMIST BILL DUNKELBERG

Bill "Dunk" Dunkelberg
NFIB Chief Economist
William Dunkelberg

Small business produces half the private GDP and employs half the private sector workforce. But it is not growing, not hiring, not borrowing and not expanding enough. Small business owners have been depressed since 2007 and that has not changed. In the March survey of NFIB’s 350,000 member firms, 77% expect the economy to be no better or even worse 6 months from now that it is currently. Only 4% think the current period is a good time to expand substantially, compared to an average of 17% for the period 1973 to 2007. More owners plan to reduce employment in the coming months than plan to create new jobs. More owners plan to reduce their inventories than plan to order new stocks. The bulk of growth comes from the increase in our population of about 3 million people and the growing need to simply replace stuff that is wearing out, not enough to get the economy back to trend growth much less the strong growth needed to restore employment to 2007 levels.

The Federal Reserve continues to assert its intention to purchase a trillion dollars of Treasury securities and mortgages, adding a trillion dollars to its portfolio and stuffing a trillion dollars of new liquidity into the banking system, until the unemployment rate falls below 6.5% or inflation breaks out. Then it will “consider” changing policy. Unless something really bad happens, this is a winning strategy for the Fed because eventually the private sector will improve, the labor force will shrink (as boomers leave), the unemployment rate will fall and the Fed can claim its policies “worked”, even if their policies made no contribution to the improvement or even slowed it down by creating uncertainty and fear among investors and business owners.

This is a risky strategy. The evidence that “uncertainty” is slowing the economy is pretty clear now (research at the San Francisco Federal Reserve for example) and uncertainty probably increases with the size of the Fed’s portfolio (as has the price of gold). The real economy is hardly growing yet the stock market and corporate profits are at record high levels. How do we make a record amount of money without producing more output and employing more workers? Such contradictions breed uncertainty.

In the meantime, a record low percentage of small business owners claim that credit is their top business problem (3%) while taxes get the most votes (23%). Record numbers of owners have no interest in a loan (over 60%), because they have no use for the funds that have a high probability of successfully generating a return so the loan can be repaid. The Fed has made sure that there is plenty of money to lend, but in the process may have reduced the confidence that borrows need to take risks, borrow, spend and expand. And then there’s the impact of fiscal policy (or the lack of a policy). The President is flying around the country doing fund-raisers and stumping for gun control, but he still has presented no budget proposal. Enough said.

34 Comments
  1. Administrator says:

    DISCONNECT?

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    9th April 2013 at 10:57 am

  2. KaD says:

    Small business is being crushed; I believe that was the plan all along. Consolidate everything into big multinational corporations who pay off Congress and senate. More money for the corporations, more money for the ‘representatives’. It’s a win-win situation. For them.

    9th April 2013 at 11:43 am

  3. Kill Bill says:

    This is big, really big. In fact, according to the analysts at Nomura, the Bank of Japan’s (BoJ) aggressive bond buying program will be 5-times larger than the Fed’s QE as a percentage of GDP. And, while the Fed has purchased a mere 25 percent of gross government bond supply (US Treasuries), newly-appointed BoJ chief Haruhiko Kuroda plans to buy an eye-watering 72.9 percent.

    Bernankes goal…BEAT JAPANs Bond Buying as % of GDP!!

    9th April 2013 at 12:28 pm

  4. Administrator says:

    Dow Jones At New All Time Highs – Here’s Why

    Submitted by Tyler Durden on 04/09/2013 13:36 -0400

    Curious why the Dow Jones Industrial Average just hit new all time highs? Here’s a partial list of recent economic events:

    •Markit US PMI Miss
    •ISM Manufacturing Miss
    •ISM New York Miss
    •Vehicle Sales Miss
    •ADP Employment Miss
    •ISM Services Miss
    •Challenger Job Cuts Miss
    •Initial Claims Miss
    •Trade Balance Beat
    •Non-Farm Payrolls Miss
    •Hourly Earnings Miss
    •NFIB Small Business Miss
    •Wholesale Inventories Miss
    And that’s ignoring the absolute economic collapse in Europe, the Chinese slowdown, and the Japanese economic basketcase.

    What is there to even say anymore: Stalingrad 4 Eva! Remember: central planning works.

    and if pictures are better than words…

    20130409_ECO_0.jpg

    9th April 2013 at 1:45 pm

  5. Administrator says:

    Monday, April 08, 2013

    Most Americans (54%) believe it’s no longer possible for anyone to work hard and get rich in this country, and just half (49%) think it’s possible for anyone to work his or her way out of poverty. They also remain deeply pessimistic about the future for the nation’s children.

    A new Rasmussen Reports national telephone survey finds that only 26% of adults think it’s possible for anyone in America to work hard and get rich. That ties the lowest finding in more than three years of regular tracking. Another 20% are not sure.

    9th April 2013 at 3:23 pm

  6. IndenturedServant says:

    I still believe on both accounts. Show me someone who does not believe and I can probably show them a dozen or more things they are doing wrong right now to cause or perpetuate their own downfall.

    I know it can be done but I fear that people are becoming too stupid to recognize how to better their lives. Add in the laziness that has set in and were really fucked.

    Since my ankle problem became chronic, I’ve become a lazy bastard myself so I can see how laziness can become comfortable. I’m going to hate the hard work and effort it will take to shake off the laziness and lose the weight but I’m counting the days till I can walk and work like a human again! I actually have vivid dreams in which I see myself walking normally. Sounds like a boring dream but I NEED it.
    I_S

    9th April 2013 at 4:14 pm

  7. Administrator says:

    IS

    When is the surgery scheduled?

    9th April 2013 at 4:17 pm

  8. IndenturedServant says:

    If they can work out the insurance maze it will happen June 11th.
    I_S

    9th April 2013 at 4:42 pm

  9. IndenturedServant says:

    Has anybody heard from Hope? I know she had a death in the family but I’ve not seen a post from her in some time.
    I_S

    9th April 2013 at 5:34 pm

  10. Mark says:

    Small Business Owner = White Trash

    9th April 2013 at 5:45 pm

  11. llpoh says:

    Business owners have an insurmountable pile of shit on their heads.

    Admin says “the real economy is withering away under the weight of massive debt, crushing taxation, and ponderous government regulations and red tape.” He is absolutely right. The reality is even worse than that, however.

    Running a business has become extremely complex and difficult. Law change every year. For instance, those folks that do not run a business do not know that little things like changes in tax rates or SS withholding rates cause small business extra work and issues. You have to change computer systems to keep up with the new withholding rules. If you are not a computer whiz, you have to hire someone to do it for you. It costs money. and you can get it wrong, at very high cost.

    Then there is shit like Obamacare. Small business would largely have its head in the sand over Obamacare. It is all too hard. Too intricate. Too difficult to understand. There will be financial penalties, and a lot of businesses will go under because of the new costs. Count on it.

    The list of ills goes on and on. This will not end well.

    9th April 2013 at 7:34 pm

  12. Stucky says:

    Clueless Dumbfuk = Mark

    9th April 2013 at 7:42 pm

  13. Kill Bill says:

    Okay Mark, you made the claim, it is not for me to disprove, the burden of proof is now yours.

    Please elaborate on your ‘small business owners are white trash’ claim

    Waiting….

    9th April 2013 at 7:54 pm

  14. llpoh says:

    I am not sure, but I hope, and think, Mark may have been trying to say that the powers that be are treating small business owners poorly, as opposed to calling them white trash. Maybe we should clarify that before we tear him a new asshole.

    Speak up Mark.

    9th April 2013 at 8:23 pm

  15. Mark says:

    Small business owners= cock gobblers, 8 year old boy ass rapists, and black cock tea baggers

    9th April 2013 at 8:43 pm

  16. llpoh says:

    Stuck – doppelling will get you into trouble.

    9th April 2013 at 8:47 pm

  17. Stucky says:

    llpoh

    You have your answer.

    9th April 2013 at 8:50 pm

  18. Stucky says:

    llpoh — absolutely not me doppling. Swear on my son’s life.

    9th April 2013 at 8:50 pm

  19. Mark says:

    Small business owner parade

    Picture+19.png

    9th April 2013 at 8:53 pm

  20. Mark says:

    “I own a small business, go fuck yourself”

    3956833361_b206a907a5.jpg

    9th April 2013 at 8:58 pm

  21. Mark says:

    Small business owners=white trash cock suckers.

    llpoh,
    You own some factory making dipsticks or something?

    9th April 2013 at 9:01 pm

  22. Kill Bill says:

    Mark has nothing..

    Shocker.

    9th April 2013 at 9:04 pm

  23. llpoh says:

    I will elieve it is Mark when he posts with his original green thingie, as I think it is a dirty doppler.

    9th April 2013 at 9:14 pm

  24. Kill Bill says:

    It could be a doppler, but it sooo lame..

    If your gonna dopple, FFS, be good at it.

    9th April 2013 at 9:16 pm

  25. Zarathustra says:

    The smaller the company, the more likely they will fuck you over every chance they get.

    9th April 2013 at 9:17 pm

  26. Administrator says:

    It is a Doppler.

    9th April 2013 at 9:17 pm

  27. Kill Bill says:

    The smaller the company, the more likely they will fuck you over every chance they get. -Z

    Okay, prove it.

    9th April 2013 at 9:22 pm

  28. Kill Bill says:

    http://www.foreignpolicy.com/articles/2013/04/05/david_stockman_s_dystopia

    thought this might interest you admin, just read it.

    9th April 2013 at 9:26 pm

  29. BUCKHED says:

    Thank God Big Business has joined with Unions and the Gang Bangers of Eight to form a perfect immigration bill. It fucks all Americans !

    9th April 2013 at 9:39 pm

  30. Zarathustra says:

    “The smaller the company, the more likely they will fuck you over every chance they get. -Z

    Okay, prove it.”

    Fine. From personal experience (amounts owed for previous work):

    CFM, Inc. $2500
    Monroe Machinery, Inc. $7,300
    Discflo, Inc. (unknown). Stole a patentable product.
    Integrated Systems, Inc. $250,000 (est.)
    Columbia Pacific Associates, Inc. $50,000
    Hiflo Products, Corp. $5,200

    9th April 2013 at 10:37 pm

  31. SSS says:

    Zara

    You listed 6 companies who stiffed you. There’s an old saying, “Fool me once, shame on you. Fool me twice, shame on me.”

    Well, you got zinged not twice, but 6 times. You might want to review your business model.

    9th April 2013 at 11:21 pm

  32. llpoh says:

    Z- Some of those corps still exist. You should be able to sue their asses and get your money, unless you have no written documents.

    SSS – it is reasonably easy to get trapped and be owed money. Companies go broke unexpectedly, you can get in disputes over terms of contracts and whether or not the work was completed, etc. The only way around the risk is getting paid up front – and almost no one will do that. If you are in business for very long, you will get burned, no ifs ands or buts. The key is to minimize the impact and frequency. If one of our customers misses a pay by date, we immediately cut them off. No exceptions.

    That would have been a big hit for Z, and perhaps he could have done things better, but perhaps not, too. Doing business entails a lot of risk, and not getting paid is one of them.

    9th April 2013 at 11:41 pm

  33. IndenturedServant says:

    llpoh,
    In construction is was/is common for contractors to file liens against properties when a job starts and then supply a lien release with paid in full invoices. Can businesses like yours file liens against the assets of other businesses until you are paid? You may not get more business from that company but why would you want it if they stiffed you in the first place?
    I_S

    10th April 2013 at 2:27 am

  34. AWD says:

    8636744583_30bc9ec3b8_b.jpg

    10th April 2013 at 10:34 am

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