The Agenda
How small-business issues are shaping politics and policy.
The news from the National Federation of Independent Business on Tuesday was grim, very grim indeed. Confidence among small-business owners — or, more precisely, among a certain subset of small-business owners — dropped precipitously in November, as gauged by the organization’s Small Business Optimism Index. And the reason for the pessimism, said the N.F.I.B.’s chief economist, Bill Dunkelberg, was clear: President Obama won re-election.
“Something bad happened in November — and based on the N.F.I.B. survey data, it wasn’t merely Hurricane Sandy,” Mr. Dunkelberg said in a news release accompanying the report (pdf). “The storm had a significant impact on the economy, no doubt, but it is very clear that a stunning number of owners who expect worse business conditions in six months had far more to do with the decline in small-business confidence.”
The indications of pessimism in the Optimism Index, which is drawn from the N.F.I.B.’s monthly Small Business Economic Trends survey, were myriad. More businesses anticipated lower, rather than higher, sales in the next quarter. More owners think it will be harder to get loans. And the share planning capital investment in the next three to six months fell. Most jarringly, as The Times noted Wednesday, the net percentage of business owners who expected business to improve over the next six months — that is, the share of respondents who predicted improvement less the share who anticipated decline — fell to negative 35 percent, down 37 points from October’s very modest, but positive, reading.
Of course, there is good reason for any business to be concerned about 2013 — many economists agree that if the simultaneous tax increases and spending cuts scheduled to take effect at the beginning of the year (the “fiscal cliff”) aren’t averted or adjusted, the country will plummet into another recession. But here’s something to keep in mind about the N.F.I.B.’s measure of despair: The survey is not a random sample of small-business owners; it is a random sample of small-business owners who are N.F.I.B. members. And as you might imagine, that is a fairly self-selected lot.
The N.F.I.B., after all, has been known to take strong conservative positions on economic issues, even when those positions seem to conflict with its members’ tangible self-interests. (N.F.I.B. officials say that most small-business owners share conservative views about the role of taxes and government, but some — those who vote Democratic — just aren’t as emphatic about it.) Although an N.F.I.B. spokeswoman, Cynthia Magnuson-Allen, said that the organization has never polled its members on their party affiliation, it is understood by many in Washington to be a Republican constituency. In the Congressional elections last month, the N.F.I.B. endorsed 307 candidates, of which 303 were Republicans. Of those, 48 of 279 candidates for the House lost, and 16 of 24 Republicans lost their Senate races.
It is not entirely surprising, then, that for N.F.I.B. members, November offered little reason to be thankful.
Article source: http://boss.blogs.nytimes.com/2012/12/13/n-f-i-b-suffers-the-post-election-blues/?partner=rss&emc=rss
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