Terry Corbell, The Biz Coach
By Terry Corbell
Business Consultant

Economic Climate for Business – Why Obama Misread the 3 Ms


Updated Jan. 29, 2016 –

After President Obama has nearly completed his second term, Americans are facing a harsh reality — the economy is groggy
.

The gross domestic product (GDP) only increased .7 percent in Q4 2015. GDP indicates the size of the U.S. economy because it’s representative of the total value of goods and services.

Using the 3 Ms as criterion, from the perspective of most small businesspeople, the three Ms can be defined as the mandate, moment and mood. Based on his strategies, has Mr. Obama misread his 3 Ms?

imagerymajestic sleeping employeeApproaching the end of his second term on the job, clearly, the answer has been yes. But we’ve known for years the economy is sleepy.

Small business optimism plummeted to one of its lowest levels in history, according to a nationwide study by the National Federation for Independent Business (NFIB).

The NFIB study explains why small businesspeople are depressed by their prospects.

Clearly, business is still uncomfortable with his strategies for hope and change. There are worries about the economy and dissatisfaction with the nation’s leadership coupled with a huge lack of confidence – Americans see too little action – too late.

Why so many depressed businesspeople? Well, when it comes to Main Street, the Obama Administration has a tin ear.

Bailouts, heavy spending, cap-and-trade legislation and especially ObamaCare have been the misguided priorities for the Obama Administration. Even a major union announced it’s demand for “repeal or complete reform” of ObamaCare in April 2013.

Confused with Lincoln?

Much has been written about Mr. Obama’s idolization of President Abraham Lincoln. Genetic liberal pundits have even tried to draw favorable comparisons.

But the differences are stark.

Mr. Obama has been off-target with assessing strengths, weaknesses, opportunities and threats.

He has accomplished little regarding the economy and job creation. A May 2013 Biz Coach article explained the scary reasons not to get giddy over the lower level unemployment claims.

The total employment rose by 293,000 during April. However, part-time jobs increased by 441,000

What does this mean? Full-time jobs declined by 148,000. So news reports on unemployment claims aren’t only misleading, they don’t tell the right story.

Mr. Obama’s message is also off-base – really missing the target. The nation’s confidence is sinking. His disapproval ratings are below 50 percent.

“Instead of giving a politician the keys to the city, it might be better to change the locks.”

-Doug Larson

Business fears

A May 2013 study by Grant Thornton shows economic uncertainty and regulatory compliance and enforcement are the biggest concerns of in-house company attorneys.

Government policy should be focused on alleviating uncertainty for employers – not creating chaos. For businesses to increase spending, it starts with confidence. So, they’re not likely to buy machinery or high-tech, which would create jobs.

Big companies can borrow at lower interest rates. Even though small businesses comprise the lion’s share of the nation’s economic engine for job creation, most small businesspeople feel as though government has declared war on them. Many have suffered severely and have lost their positive credit ratings – making it impossible for them to borrow at decent rates. That’s a shame.

Small Business Administration (SBA) figures show small companies represent 99.7 percent of all employers, and employ more than 50 percent of the private-sector workforce. The SBA says account for 44 percent of payrolls, and more than 50 percent of the nation’s non-farm gross domestic product. They comprise 97.3 percent of exporters, and are responsible for 13 times more patents per employee than big companies.

Inequalities

Just like during the Bush Administration, the SBA in the Obama tenure has decimated government-contract opportunities for small businesses. Twenty-three percent of all federal government contracts must be allocated to small businesses. In 2010, the Obama Administration admitted it failed to achieve the goal, even though it claims to have given $96.8 billion in government contracts to small business. Or did it? No.

A study released by the American Small Business League concludes that a whopping 60 percent of the top 100 contracts resulted in welfare for big companies.

To name names: Boeing, British Aerospace, Dell, General Electric, Honeywell International, Lockheed Martin and Raytheon all received corporate welfare – government contracts intended for small entrepreneurs.

Small business climate

Small businesses are getting a raw deal in other ways. Consumers have been so hammered, they can’t buy goods and services – even if they want to do so. Financial reform did nothing to help consumers and small businesses long pillaged by predatory credit card companies. New cars and trucks continue to be parked at dealerships.

It’s small business that creates jobs in this era of corporate-bailout largesse. However, small businesses are being choked because they can’t get credit and they’re facing a slump in demand.

They’re also facing ObamaCare that favors bigger companies. Mass small-business cutbacks have already started. Other government-forced paperwork will increase. Plus, every company must produce a Form 1099 to each vendor when annual purchases total more than $600.

The SBA says employers with 20 or less workers now have to spend 45 percent more of their hard-earned resources to stay in compliance with federal mandates. IRS audit hours for small firms jumped 30 percent in just five years. You guessed it – audit hours for their big-company peers are down by a third over the same period.

Leadership?

There are red flags from Mr. Obama’s violations of the Constitution — his abuse of the appointment process.

In a unanimous ruling, the three-judge panel of the U.S. Court of Appeals for the District of Columbia ruled President Obama has abused the appointment process. In January 2013, I posed this question: will NLRB’s controversial decisions be reversed after a court rules Mr. Obama violated the U.S. Constitution?

Another word about honesty:

On the first day of the Obama Administration in 2009, the president made a promise about open government. However, his for promise for a transparent government has been repeatedly broken according to an authoritative study

Conclusion

Little wonder the so-called recovery is crawling along. Every economic report has delivered bad news. President Obama has misread his 3 Ms.

From the Coach’s Corner, from a macro-economic perspective, it’s also been alarming to watch American officials scold the Germans for not spending enough. But it’s Germany with the healthiest economy in Europe.

An article in Forbes explains it well: “The U.S. Killed The Summer Of Recovery – We did it by framing the wrong problem,” by scholar Thomas F. Cooley.

Another example of Mr. Obama misreading the 3Ms: Instead of lecturing Germany, it’s time to look inward and stop wasting money. It’s time to sequester Air Force One vacation flights.

“Instead of giving a politician the keys to the city, it might be better to change the locks.”

-Doug Larson

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Photo courtesy imagerymajestic at www.freedigitalphotos.net

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Seattle business consultant Terry Corbell provides high-performance management services and strategies.