Excessive Regulations and Small Business Pessimism Go Hand in Hand

The Hill reports that “small-business optimism was essentially unchanged in September” according to a National Federation of Independent Business optimism index.  The index slid down 0.1 points last month to 92.8.  The reason the number remains largely unchanged is that business owners are waiting in anticipation of the election.  Conservatives and liberals (as evidenced by the Obama administration) have two different ideas of how regulations affect small business.

At present, small business owners are in maintenance mode “spending only when necessary and not hiring, expanding or ordering more inventories until the future becomes more ‘certain,'” according to William Dunkelberg, NFIB’s chief economist. 


“In the more than quarter century [NFIB] has produced the optimism index, the monthly figure has come in below 93 on 56 different occasions. More than half of those – 32 in all – have occurred since the current economic recovery started in June 2009.”

The real take away from this article is that “owners were ‘collectively pessimistic’ about business conditions, with the percent of companies planning increased investment in the next three to six months dropping.”

Another nationwide survey that came out in October indicates that 69% of small business leaders say complicated government regulations impede job creation.  Moreover, “Of those surveyed, 68% said that more businesses are investing in new technology rather than new employees “to avoid complications created by federal employment laws, mandates and regulations.”

Does any of this come as a surprise, though?  Not really.

What is breathtaking, however, is that so many lawmakers in America — a country whose economy depends so much on the health of small business — do not seem to care.

Heritage’s James L. Gattuso and Diane Katz wrote a revealing paper on the 106 new federal regulations that have added $46 billion per year in new costs for Americans and that are strangling American businesses.  When will this insanity stop?  Frighteningly, despite the fact that the economy is not being given a chance to come up for air, Gattuso and Katz predict:

“This regulatory tide is not expected to ebb anytime soon. Hundreds of new regulations are winding through the rulemaking pipeline as a consequence of the vast Dodd–Frank financial-regulation law (the Wall Street Reform and Consumer Protection Act), Obamacare, and the Environmental Protection Agency’s global warming crusade, threatening to further weaken an anemic economy and job creation.”

Until lawmakers see fit to remove their blinders, small businesses will continue to suffer.   And in this country, as small business goes, so goes the economy.  You picking up what we’re putting down?  Cause most lawmakers aren’t.


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