No question. Our long ailing economy played a deciding role in delivering the Republicans a victory in last night's elections. Six out of ten voters say that the economy was their primary concern.
So what should we expect in the new Congress? Rather than get the perspective of a billionaire or trillion dollar money manager, this column's typical subjects, I wanted to get a look at the midterm results from small businessmen.
Why focus on small businesses? Well, many small businesses are start-ups, which are the greatest source of new jobs in the economy. If we're going to restart the jobs economy, we've got to revive the ability and desire of Americans to start up new businesses. And that means making the economic and political climate friendlier to start-ups.
I spoke with Bill Mitchell, President of iWorx Systems, which develops advanced physiology teaching kits and life science research tools for physiology research. It's no longer a start-up, having been in business for 18 years. But it has a keen eye on the climate for small businesses.
LL: Was this election a repudiation of the Democrats?
BM: Yes, as Carl Rove said: "The President single-handedly revived the conservative movement" The Democrats have managed to scare the daylights out of this country. However, I don't think this was a vote FOR the Republicans.
LL: Do you think the Obama Administration will hear the message of job creation rather than big gov't?
BM: Probably not the administration, because they are way far to the left ideologues who don't believe in capitalism and the free markets.
LL: How will the balance of power impact your business? Do you want grid-lock?
BM: Business, I believe, generally prefers grid-lock in the government so that they can't do anything mischievous that will disrupt the free market forces. The results of yesterday's election I view quite positively for this reason.
LL: Do you think Congress has the political will to change their spending ways and to make tough decisions to right the economy?
BM: Unfortunately, no. Both parties seem to feel that the people will only re-elect them if they bring home the bacon.
LL: How would you characterize the health of the U.S. economy?
BM: Going by the numbers, it is in bad shape.
LL: What is your greatest fear in regards to the economy?
BM: My greatest fear on the economy is the trend toward socialism and the costs that it will heap on businesses. Look at the hit we are taking on health care costs. It is only going to get worse with the government involved. We do a lot of business with state governments. Every chance they get they hit us with fees for the privilege of doing business with them. More and more states are outsourcing their procurement services and adding 2 to 3% to as a required discount on every order.
My greatest fear regarding the economy doesn't really relate to me or my business, but to my children and grand children. It used to be that each succeeding generation would have a higher standard of living than the preceding generation. I think this is coming to an end.
LL: Let's turn to taxes- what would you like to see Congress due in regards to the Bush Tax cuts?
BM: Extend them permanently.
LL: The Administration has said small businesses will not be affected if the Bush Tax Cuts are allowed to expire. Will your business be impacted if the Bush Tax Cuts expire?
BM: Yes, we are a Sub "S" corp., so the income of the business flows to my personal income. Our business exceeds $250,000 in taxable profit each year, so we stand to take a significant hit. If the Bush Tax Cuts expire then my taxes will increase by 10%. On $250,000, I now pay approximately $95,000 in taxes. If they expire, I will pay $9,500 more. This is the financial impact. The psychological impact is that it discourages investment and growth of the business, because in the back of your mind you know that the more you make the more you will pay in taxes and that they will keep going up.
LL: What needs to get done to incentivize businesses to hire?
BM: Generally, create an environment of cooperation with, as opposed to antagonism toward the private sector. Give real long term tax breaks for hiring that are free of complicated conditions.
LL: How has health care reform impacted your business?
BM: Our premiums from Anthem went up 20% this year and I expect that next year will bring the same.
LL: Would you like to see health care reform repealed if the GOP can?
BM: Yes, it needs to be repealed and the government needs to get out of the health care business. It is just a power grab that will end up bankrupting the country.
LL: What is the biggest challenges facing your business?
BM: Because employees are becoming so expensive, we are always looking for ways to improve efficiency by outsourcing and implementing automated systems.
LL: How would you grade the health of the consumer?
BM: Even though consumer spending has been inching up recently, I think there is a general malaise among consumers.
LL: How would you grade the President and Congress on their efforts to right the economy?
BM: F- . They are spending us into oblivion as if they don't even care and I think it is because they are un-principled ideologues who do not believe in capitalism and the American way.
LL: Do you think QE2 is a step in the right direction to fix the ills in this economy?
BM: We should do away with the Federal Reserve altogether. The FOMC is a hoax. So I guess my answer is "NO".
LL: Are you worried about Cap and Trade?
BM: Not after the results of yesterday's election. I think it is, and should be, dead in the water.
LL: How is the state of lending for small businesses?
BM: We obtained an SBA loan last year and had little difficulty in obtaining it. However, we had lot of collateral which the bank insisted we pledge.
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A Senior Talent Producer at CNBC, and author of "Thriving in the New Economy:Lessons from Today's Top Business Minds."