A little more than two weeks to go before the 2012 American election. It seems like business is stuck in the mud–slinging.
I’m going to make the contrarian case that this is precisely the time for people to take action, because almost everybody is so scared about the outcome of the election.
If the President is re-elected, many people I talk to think it will be a bad thing for small business and manufacturing. But if you listened to his arguments, Obama is gung ho for small business and manufacturing, and the remarkable thing is that this segment of the economy has generally prospered since he took office. The “Jobs Act” of 2010 has been helpful by extending very favorable tax incentives for investment. These goodies end December 31, 2012.
Small business definitely fears Obamacare and it has been a significant deterrent to hiring because the regulations are still cloudy, but our business is seeing reductions in rates for next year for the first time in memory, which my agent tells me is a reaction by hospitals and insurance companies to compete for clients heading in to life under Obamacare.
I know the Obama haters will be furious about these remarks, but my point is that from an economic standpoint, our community has generally done well during Obama’s tenure and the GM/Chrysler bailout. Would we have done better with McCain? I don’t know, nor do you.
If Governor Romney wins, which I now believe is quite possible, I think a Republican administration with a leader like Romney will also be favorable for business. Regulation, particularly EPA meddling will subside. Obamacare, though unlikely to be repealed, will be restructured to consider the burdens on small business. And the mood will improve without the annoying confrontational posturing of Obama.
Either man will face the “fiscal cliff” immediately. I think there is a 90% chance of some kind of deal, even if it is the deferral of a compromise for a year. The Simpson-Bowles proposal is the framework for an ultimate resolution of the gridlock and I can feel the country moving toward a consensus that the debt crisis and entitlements must be addressed now. Neither party wants to be blamed for pushing the country into another recession after we have barely moved out of one.
My belief is that neither Obama or Romney will be a savior, but the country will survive under either man, because fortunately the President does not run the economy–though he is blamed for it. What I see now is a business environment paralyzed by fear of the unknown election outcome and the “fiscal cliff” stalemate. Whoever wins, the unknown issues will likely be clearer in six months. But by then the accelerated write-offs will probably have expired.
In case you care, I have tentatively decided to vote for Mitt Romney, almost as an act of faith, because his tax proposal does not add up unless the mortgage interest deduction is eliminated which strikes me as highly unlikely.
But our country has survived four years of Obama and we will pull through if we have four more. Maybe he will move more toward the center since Bill Clinton has become his key political adviser.
If my assessment is correct, and with the stock market up almost 7000 points from its low in 2009 tends to confirm it, the country will be ok.
In the next two months we will have the opportunity to acknowledge our fear of the future yet make decisions that will help us cope with what will come our way. The pessimism and indecisiveness is palpable at this moment. The opportunists will take advantage of the moment.
Question: If Romney wins the election will you be more likely to invest in more equipment?