Getting Real With Roses

The Next Four Years

Waiting for the Presidentís second inauguration is like waiting in the lobby at your dentist. It is inevitable what is going to happen next, and we know that the last time it involved kicking and screaming. The economy is stagnant and small businesses--the creators of growth-- have lost out in almost every debate in the past four years. The next four years donít appear to be promising for innovators, entrepreneurs, small businesses, and therefore they also look bad for our economy.

Unemployment insurance leads the parade of poor policy choices affecting employers. Just extended by the fiscal cliff deal unemployed workers can stay on unemployment insurance for 79 weeks. It isnít at their full salary, but at our staffing company we speak to these individuals all of the time. They are out of work, collecting unemployment insurance, and they arenít interested in many jobs. In fact, they often tell me to call back when their unemployment runs out. Extending the benefits when the economy hit rock bottom might have been necessary. However, while history can judge that choice it is evident that we need to get unemployment insurance back to where it was before the collapse. Getting people back to work instead of paying them to stay home will help spark the economy back toward growth.

Second in our tragic parade is the abrupt end of the Social Security tax break. Because it was left out of the fiscal cliff deal negotiated by the President, employees will abruptly go from paying 4.2% to paying 6.2% in payroll taxes. This effectively offsets any raise that employers were able to muster for their current employees in this stagnant economy and helps to crush the morale of an already distraught workforce. This is tough for both the employers and the employees, but at the biggest disadvantage is the small employer doing everything they can to reward their loyal workers. It is also evident that continuing an ill-advised tax break isnít the correct policy solution. Social Security is bankrupt and is facing a tidal wave of baby boomer retirements over the next several years. What was desperately needed was a bridge policy that would put us back on a glide path to the 6.2%, but a discussion of a slow return was never discussed.

The final float limping along the parade to celebrate the Presidentís Inauguration is one that it took both the President and Congress to build. They shifted the balance of power in innovation toward large corporations instead of the next great garage inventor. They supported a fundamental shift in innovation that makes teaching our kids that they can develop a better mousetrap almost impossible. Now our kids will need to beat a team of lawyers from a large corporation to the patent office in order to file a $20,000 patent. Then they will need to defend themselves in a patent law system that is now underfunded, more complicated, and tilted toward bad actors who can more easily stop the innovation from changing their own market. Then and only then they can sit down and attempt to build their idea. Innovation and the ability to create the better mousetrap represents American Exceptionalism, but this change has greatly dampened that ability and will therefore hurt the economy. Most of all, it again puts the small business, the upstart entrepreneur, at a disadvantage while trying to fight to the top.

Like waiting in the Dentists lobby the next steps are going to happen. The President is already in office. He will be inaugurated again. Unfortunately, he will also almost assuredly continue to push policies that overlook small business and support large corporations.. What is needed now is a focus on growth, which means a focus on small businesses, entrepreneurs, and innovation. If that proves too much to support, then lets hope that he at least attempts not to attack them this time around.