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All the ones that have enormous tax implications for business and individuals, like HC, C&T, EPA garbage, deficit spending, etc, etc, etc.
Obama's HC bill isn't law. The C&T isn't law.
The deficit has been with us since the Bush years.
So those policies/reasons can't be the cause of the economic malaise for small businesses.
I would attribute small business's problems to the worldwide recession. One of the main culprits there was the deregulation (and unenforced regulation) of the mortgage and investment fields permitting predatory mortgage loans to prosper which spread to every REIT on the planet like a virus.
The deficit has been with us since the Bush years.
So those policies/reasons can't be the cause of the economic malaise for small businesses.
I would attribute small business's problems to the worldwide recession. One of the main culprits there was the deregulation (and unenforced regulation) of the mortgage and investment fields permitting predatory mortgage loans to prosper which spread to every REIT on the planet like a virus.
The potential/prospect/impending legislation that obama is trying to implement is causing the hesitation/anxiety/doubt in business and individuals.
Get it now?
This is what business has been saying for half a year.
Bush left a $450 Billion deficit - obama has tripled that and is slated to increase the deficit to $9 TRILLION in ten years.
Obama has stated that he wants a tax credit for companies that hire "new employees". I'm curious about the effect that statement has had on the short term unemployement rate. I would think that any company that has seen demand for their product/service increase, and that is considering hiring additional workers, would now hold off until that credit was passed. Or that if a companie's situation was marginal, that they would now lay off so they could potentally rehire "new" emmployees and get this credit.
Business needs to make long term plans, develop products and processes, and make investments that might take a decade or more to repay. Yet congress makes decisions on a whim, with little forthought as to their effects. This makes it very difficult for any business to plan for the future, evalutate cash flow, etc. And when business has no sound basis to make decisions, they tend to do nothing, or do things that minimize that uncertainty, like move production to a more stable off-shore environment. Seems like a pretty simple concept, but one so hard for many to grasp.
Obama hijacked the Gibbs press briefing today - and said the most astounding things, one of which is below.
This absolute cements in my mind that obama and his team (who collectively have NO business experience), are completely clueless when it comes to why/how/when a business expands their payrolls.
Does he really believe a well run business will borrow money to "boost their payrolls"?
And they also won't borrow to boost their inventory UNLESS demand is there.
Demand AND profits will boost the payroll.
I am stunned at the level of ignorance from this guy.
Businesses borrow money to hire people. It's called leveraged hiring. It happens every day all across the country.
No, businesses hire people when there is a demand for their product or service that requires an increase in manpower to meet. Borrowing is one tool that at times can help facilitate this.
Obama's statement was (to paraphrase) that because a company is making profit, if they can borrow money they would then go out and hire. He has cause and effect backwards, or actually misses the cause. Businesses hires because of demand.
How else is a start-up company to meet payroll than to borrow the money?
If the company can't meet payroll, then either they need to find somebody else in their accounts recievable department or there is no demand in the market. You can't grow something by throwing money at it... common liberal non-sense.
You grow a business by ensuring that the demand for products and services are there and grow with the demand... at which time you boost and make payroll as the market allows.
Quote:
Originally Posted by Buckhorn
Leveraged hiring is an elementary fact of business life in america.
And if the demand is available, the ability to leverage should be there. The market determines what level of payroll is "leveraged"... not you or president Obama or anybody else.
Quote:
Originally Posted by Buckhorn
It's how business starts.
Actually, no. Most new start-ups are either financed wholey by an individual, group of partners, or investors... all from their own private abilities to obtain financing. Most banks, especially in this economic condition, aren't going to loan squat to Joe who wants to open a type-writer repair business.
Quote:
Originally Posted by Buckhorn
As to the wisdom of established companies engaging in leveraged hires, I have no opinion.
This happens much more often than it would in a small business, but I still don't see a whole lot of borrowing to leverage experienced people.
Quote:
Originally Posted by Buckhorn
The point is is that it was claimed that leveraged hiring NEVER happens when it's a commonality in the real business world.
No, the argument was that you don't borrow money to do so. Obama encourages banks to lend to small businesses so that they can boost payroll. So these business are going to go into debt with high payroll making a product that can't sell? Awesome plan.
Quote:
Originally Posted by Buckhorn
Anyone with experience in the business world knows this incontrovertible fact and Obama's statement was true.
Hmmm.. Funny, I own a small business and partner in another. What do I know.
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