One can hardly pick up a newspaper or turn on the TV news without a story about the economy. The Clinton campaign mantra, “it’s the economy, stupid” will soon be the mantra of the Obama White House – just as soon as he can stop answering questions about the wars, health care, the environment, Wall Street reform, what he thinks about Tiger Woods, etc. ad nauseum.
ProPublica reports that we have now spent a whopping 30% of the stimulus money. Those filing for unemployment actually decreased a little last month (or gave up trying) – click here to hear today’s NPR coverage. The FDIC shut down 6 more banks and 130 have failed so far this year – click here to read HuffPo’s story. Reuters reports a 26% jump in hunger assistance as family homelessness rises in cities across the US. And pundit after pundit prognosticate on when it will turn around – here’s a sampling from the Daily Beast.
DiscoverCard.com reports on its website (disclosure: I don’t have a Discover card) results of their research under the heading “November Highlights” that, “Economic Confidence Plunges; Low Expectations for the Holidays.” Here are some of the lowlights:
- Economic confidence among America’s small business owners plummeted in November, as more owners cited serious concerns about cash flow and saw economic conditions for their own businesses getting worse. The Discover Small Business Watch index fell 12 points in November to 76.5 from 88.5 in October.
- 52 percent of small business owners say they have experienced cash flow issues in the past 90 days, up from 44 percent in October.
- 53 percent of small business owners see conditions getting worse in the next six months, up from 43 percent in October.
- 62 percent of small business owners rate the economy as poor, an increase from 55 percent in October; 30 percent rate it as fair, and 8 percent say it is good or excellent.
- 53 percent of small business owners think the overall economy is getting worse, up from 44 percent in October.
Only 11 percent of Small Businesses Expecting Increased Sales This Year
- Small business owners have a glum outlook on the holiday season: Only 11 percent expect to see more business this year over last, while 46 percent of them are expecting less business than last year.
- 73 percent of businesses that extend credit say that they have customers who have delayed or asked to delay a payment in the last three months.
- 68 percent of consumers say that they have made purchases at a small business in an effort to keep it from closing.
In response to all the bad news, his visit last week to Allentown and the his big jobs forum, the President spoke this morning at the Brookings Institution (click here to read Facing South’s analysis of the speech) and here’s some of what he had to say about plans and possibly spending the $200 billion left over from the TARP (click here for the full text).
… That’s why it’s so important that we help small business struggling to stay open, or struggling to open in the first place, during these difficult times. Building on the tax cuts in the Recovery Act, we’re proposing a complete elimination of capital gains taxes on small business investment along with an extension of write-offs to encourage small businesses to expand in the coming year. And I believe it’s worthwhile to create a tax incentive to encourage small businesses to add and keep employees, and I’m going to work with Congress to pass one.
Now, these steps will help, but we also have to address the continuing struggle of small businesses to get loans that they need to start up and grow. To that end, we’re proposing to waive fees and increase the guarantees for SBA-backed loans. And I’m asking my Treasury Secretary to continue mobilizing the remaining TARP funds to facilitate lending to small businesses.
… Now, there are those who claim we have to choose between paying down our deficits on the one hand, and investing in job creation and economic growth on the other. This is a false choice. Ensuring that economic growth and job creation are strong and sustained is critical to ensuring that we are increasing revenues and decreasing spending on things like unemployment insurance so that our deficits will start coming down. At the same time, instilling confidence in our commitment to being fiscally prudent gives the private sector the confidence to make long-term investments in our people and in America.