JONATHAN COHN JULY 26, 2010
(photo credit: Crunchy Footsteps)
New data out today from Discover and Rasmussen strengthens the argument that persistent poor economic conditions, not a host of new regulations from President Obama, are causing our slow recovery. A sampling from their survey of small business owners:
58 percent of small business owners rated the economy as poor, up from 51 percent in June, while 7 percent rated the economy as excellent or good, down from 12 percent in June.
45 percent of small business owners report economic conditions for their businesses were worse in July, up 2 percentage points from June; while 30 percent of respondents said conditions were better; 22 percent reported conditions were the same and 3 percent weren't sure.
57 percent of small business owners said the economy is getting worse, up from 51 percent in June; 27 percent think the economy is getting better; 14 percent think it is the same; and 3 percent are not sure.
It’s no surprise that business owners don’t want to make investments in expanding capacity or better production technology—they look ahead and see little demand for it. Seventy-five percent rate it at least somewhat likely "the economy [will] slip into another recession or significant downturn before it fully recovers." With expectations like those, it's pretty clear regulations aren't the problem.
There’s a legitimate argument to be made that President Obama has not done enough to nurse the economy back to health. And the survey shows only 39 percent of small-business owners somewhat or strongly approve of how Obama is handling the economy.
But the fault is not entirely his. Congressional Republicans, for example, forced over $100 billion in cuts from a more substantial stimulus proposal. And most of the money for a new jobs bill went poof by the time the Republicans, working with some conservative Democrats were done: a wide-ranging bill priced at nearly $200 billion became a $34 billion extension of unemployment benefits.
The government isn’t doing enough to make things better, I agree. With so many businesses seeing the economy as getting worse, however, the investment spending needed to accelerate the economy isn’t going to materialize. That’s not caused by a fear of regulations.