The jobs report was bad enough. But it’s hardly the only indication of continuing trouble for the U.S. economy. Released at the end of June, U.S. Bancorp’s annual survey of nearly 3,000 small businesses confirmed what many people already know: the recession that began in 2008 never ended for vast swaths of the U.S.
That is the obvious conclusion. Less obvious, however, is what the survey says about U.S. attitudes, the morphing nature of our “economy,” and some hard truths that far too many of us continue to avoid or deny.
First, the obvious: Nearly 80 percent of small business owners (defined as companies with less than $10 million in annual sales) believe that the economy is still in a recession, even though the “official” designator of recession – the National Bureau of Economic Research – declared the recession over as of June 2009. True, the belief that a recession exists is often an indicator of mood and sentiment rather than a reflection of an overall economic contraction. But the percentage is striking, as it was last year when the number was closer to 90 percent.
The main issues small businesses point to are weak sales and general uncertainty. The latter is particularly notable: Business owners crave clarity about future trends, whether that is strength of sales and revenue or regulations and taxes. Today, overall economic activity is at best uneven and muted, and Washington is in a continual state of disagreement and inaction punctuated by legislative battles with no clear end (see the ongoing fight over the Dodd-Frank financial regulation bill). That fuels anxiety in small business owners, who find themselves unable to decide whether to hire, how much inventory to stock or whether to spend on the possibility of future growth.
And yet, that very expectation of certainty is a problem. I suppose there was a brief period in the mid-20th century when you could start a business with some level of confidence that government would be a decent steward, that growth would continue year after year, and that a good company with good managers would see good results. But that Golden Age, if it truly ever existed, was fleeting and won’t come again. The global economy is evolving, and the national economic system with it, and that is happening too quickly and with enough novelty to make certainty about the future all but impossible.
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But that’s no reason for businesses to sit on their hands. For one thing, good businesses can and do plan for varying scenarios of regulation and rates and act accordingly.
In addition, good businesses can and do find microeconomic environments in which to thrive even if the macro picture looks bleak. The notion that there is the single entity called “the economy” that’s the same for everyone is a fallacy. It’s true that sectors like construction, housing, media, law, large parts of the financial industry, small towns and local retail businesses are struggling mightily. But parts of the nation and certain industries are booming as never before: shale gas, Apple iPads and iPhones and iEverything, agriculture, luxury goods, pockets of domestic tourism, information technology and security, health care services.
Starting, nurturing and maintaining a viable business has always been a challenge, and today those challenges may be even greater. Many who try will fail. Business is increasingly competitive and there’s no point in hoping for the old “normal” to lift all boats. And it’s the denial of this reality that it shows up as pessimism, petulance and anxiety in surveys.
The flip side of that denial — and the attitude that will allow some businesses to thrive — involves remembering that success was never easy; that we still possess vast resources of wealth, a legal structure that facilitates the creation of vibrant enterprises (and the dissolution of ones that aren’t), and millions of ingenious and ambitious people whose can face almost any obstacle except their own crisis of confidence.