I believe this election is an ill wind for the future health of small business enterprise. I fervently pray I am wrong and, while I am existentially sunny about the ongoing entrepreneurial process, I have a jaundiced, glass half-empty fear that the next few years will offer new dystopian challenges and a possible vertiginous descent into an entrepreneurial Slough of Despond. The following are a farrago of what, I believe, awaits all entrepreneurs, to one extent or another, with the advent of a newly buttressed Obama administration.
Here’s where I’m coming from. I didn’t vote for Obama, but, that said, I’m an old hippie who cleaves to much of the socially liberal lineage of my youth. I’m a libertarian who is OK with everything from legalized marijuana to gay marriage to reasonable gun control to the rich paying more income tax. (I didn’t say I was a consistent libertarian!) However, my alarm over out-of-control debt, regulation, and multiplying bureaucracies, around Obamacare and Dodd-Frank particularly, knows no bounds. There is nothing more threatening to our enterprise community than the loss of freedom to create and the harnessing of business as a controlled arm of a well-intended, but hegemonic, triumphalist welfare state.
So here are some very specific predictions. Behold, Cassandra speaks.
- There will be a capital strike from entrepreneurs, VC’s, PE, and banks. Why invest, why risk, why lend when animal spirits are polemically dampened, creative enterprise publicly denigrated, and profitability truncated? Last Sunday the NY Post quoted Anand Sawal of CB Insights reporting a capital flow fall of fully one half in Q3. Why would that trend reverse? John Galt will continue to leave the party.
- Employment growth will become moribund as small businesses strive to stay under 30 full-time employees and avoid the bureaucratic nightmares of Obamacare.
- Small companies will purposely limit their growth, except where they can add part-timers and free lancers around the edges. (See 2.)
- There will be a very serious recession within four years. (And it will be George Bush’s fault—still.)
- The National Labor Relations Board will take even more radical labor measures against all businesses and force even more bureaucracy and outside control on us, assuring time-wasting inefficiencies directly affecting ROI. (See Boeing, circa 2010.)
- After an initial few months of good feeling, as we all try to “just get along,” small business will bear the brunt of “revenue enhancement.”
- Inflation will begin a long-term rise, which will serve as a hidden tax on all of us and, ultimately, risking, at worst, hyper-inflation levels. (Note the one hundred trillion dollar note that is required to buy a loaf of bread in Zimbabwe.) Weimar Republic, here we come. Thanks, Ben Bernancke.
- The bureaucratic regulations burden will grow steadily, distracting time and energy from productive enterprise.
- Small businesses who do business with the government will do better. All others will face a serious headwind. Real estate in Washington D.C. will continue to rise.
- The national debt will increase from 16 to 20 trillion dollars.
So those are my cautionary expectations one week after the reelection of President Obama. One of my most successful entrepreneurial friends calls the next four years “the beginning of America II,” a European-style, bureaucracy top-heavy nanny state aborning.
Predictions are dicey, presumptuous things. I would be ever so pleased to be proved a Chicken Little hysteric over the next four years.
As Casey Stengel said, “Never make predictions, especially about the future.” Good point, Casey.