Here’s Stephen Moore on “Why Small Businesses Hate Bidenomics.”
The latest Small Business Optimism Index from the National Federation of Independent Business could hardly be more depressing. It finds that the men and women who run our 33 million small businesses and hire more than half of American workers are in a somber mood.
Why is that? Isn’t Bidenomics supposed to be supercharging the economy? Expert David Malpass says that
Smaller businesses are being crowded out by complex regulations and direct competition from the $35 trillion national debt.
Meanwhile government programs are shoveling subsidies at big corporations like General Motors and Intel. And don’t get me started on green energy.
And then there is government regulation. The lefties and Pikettys say that the stagnation in wages since the 1970s is all about lower income tax rates and neoliberalism. But Powerline has a chart showing the number of environmental laws quadrupling from 30 laws in 1970 to 120 laws right now. Guess who really has a hard time keeping up with ever-changing environmental regulations.
This is not that hard. From Nazi jurist Carl Schmitt we understand that politicians only understand fighting the enemy and gifting their friends. From French aristocrat Bertrand de Jouvenel we understand that politics is all about Power. Which has nothing to do with the market economy which is all about meeting the needs of the consumer or, if you are really smart, figuring out what they will want next.
Look: politicians and activists are always going to be rigging the economy to help their supporters and their donors. It’s what they do. What we lack is a cultural understanding from high to low that government doesn’t have a clue when it comes to the economy. What we need is a culture where nice liberal ladies put out yard signs that say We Believe / Hands Off Small Business / Stop Big Green / Let Workers Work.
Because the default assumption among educated people, ordinary middle-class people, and lower class people is that business needs to be directed and regulated and controlled, otherwise Robber Barons / Malefactors of Great Wealth / Economic Royalists / Greedy Bankers / Koch Brothers will take over the world.
No! What we need to do is to understand that, unless government props them up all big corporations have a life-cycle: they are born, they grow, they mature, they decline.
Looking at La Wik, I’d say no member of the Dow Jones in 2024 was in the Dow in 1929. IBM got into the Dow in 1932, and it’s still there in 2024, accompanied by Amazon (2024), Apple (2015), Cisco (2009), Microsoft (1999) in the hardware / software department.
The story of IBM is illustrative. Back in the 1950s mainframe computers ruled the world. Then in the 1970 came minicomputers, and IBM lost its computer monopoly. Then by 1980 came microcomputers and PCs. Then laptops and server farms and iPods and iPads and iPhones. Today you can get a smartphone for $50 or $1,500 which is way more powerful than an IBM mainframe in the 1950s.
Today, IBM still sells mainframes. It says:
Mainframes are data servers that are designed to process up to 1 trillion web transactions daily with the highest levels of security and reliability.
But that, we can agree, is a horse of a different color. But I wonder if Amazon’s AWS uses any IBM computers.
Of course, everyone wants the government to help when the economy tanks. Only thing is the economy usually tanks because of government, typically in the period of adjustment after a major war. Or, as right now, in the period of adjustment after the government printed a ton of money during the late COVID unpleasantness.
So, if the government didn’t get into wars, and didn’t try to manipulate the economy with credit and subsidies and regulation, and if it didn’t spend 34 percent of GDP on government programs, and if it didn’t pay no nevermind to corporate lobbyists, then the economy would probably fluctuate a lot less. But it would still respond to fundamental innovations in technology with booms and busts.
And however large or small, or interventionist or laissez-faire, government would still make the economy worse.
But it would certainly help if everyone, from the richest to the poorest, understood that the economy and its billions of interactions were far too complicated for ordinary political mortals to grasp and control — let alone the best and brightest — and that the best thing to do is to adapt, the way humans have always done to changes in the world.