A Radical Idea for Stimulating the Economy





The “bad economic news fatigue” keeps building.  That’s what I call that resistance people are building up to hearing about how bad the economy is. As I wrote recently, I “don’t know what’s worse, the bad economy or the incessant non-stop blaring of it in every news outlet, 24/7.”  Replaying the same sad song over and over does nothing to help you get into a positive business growth mode.

But on top of keeping the bad news bears at bay, we entrepreneurs have to hear about all the ill-conceived ideas-du-jour for getting us out of the recession.

First, there are the outlandish sums of money that everybody has their hands out for.  Everybody from big businesses to, apparently even some small business organizations, are asking for public welfare  er I mean, handouts bailouts.  Hey, I was all for the initial bailout because we had a crisis in our financial system and we needed to throw everything we had at it, like firefighters putting out a 4-alarm blaze.  Unfortunately,  there’s been little accountability as to where the money went, so the American public increasingly is showing less desire to throw more money at bailout money pits without knowing how the first batch is being used. 

And now we have our legislators suggesting huge fiscal stimulus packages.  Here’s a breakdown of the House stimulus package, courtesy of Catherine Rampell of the New York Times Economix blog:

fiscal stimulus breakdown

No doubt some of the public expenditures would be valuable for the public good in the long run.  After all, you need to spend some public money to foster a civilized society. 

But no matter how worthy the projects, I have a hard time believing that spending billions of taxpayer money on the outlined projects is going to do much to help the financial situation of my small business and millions of others in the next 6 – 12 months.  I’m not the only “stimuskeptic.”

Say — I’ve got a radical idea for how to get out of this recession. 

(1) The way out is first, don’t panic — as much as we hate them recessions are normal

(2) Second, grease the wheels of commerce.  I suggest that we each take it on ourselves to keep buying. You can’t cut costs forever and grow.  Buy something — especially from another small business.  On the other side of the coin, sell — and sell some more.  Do your darnedest to sell your company’s products and services.  

Don’t get worn down by the bad news blaring everywhere.  Don’t look to public handouts.  Don’t expect the government to solve business problems.  Instead, focus on making your small chunk of commerce more vibrant, by buying and selling as much as possible.  That’s something you have control over, at least.

19 Comments ▼

Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.

19 Reactions
  1. Anita, positive media . . . that is radical ;-).

    Just wanted to give you props for the informative articles found @ smallbiztrends. Those tips themselves help us entreprenuers keep grinding.

  2. Makes all kinds of sense to me! A nice reality check with my morning coffee!

  3. All but the Elite, Uber-rich Investor sentimental capitalist class got their little brown spots reamed good and bloody by George Bush and his undemocratic, imperialist extra-rich bastard associates. This was his parting shot at the people he was raised to despise from the elitist towers of his mis-spent youth by his elitist, white protestant surroundings. America is the victim of unregulated sentimentalist Capitalism of the worst form, government sponsored sentimental capitalism! This oligarchy systematically raped America, and transferred the wealth to the Uber-rich, remember, no money was destroyed, it only changed hands! no wealth was lost, it merely changed place! Somebody has it all, now, and it ain’t “We the People” so who is it? Georgie boy, before you conveniently disappear into a safe anonymity, please tell us where it went!

  4. If the corporations and business are having trouble then there must be something wrong they are doing. As Peter Schiff, let them fail and have new companies take over, or new industries emerge.

    This is the time to make a shift into the green industry.

  5. HI Uncle B,

    Former President George Bush should get his fair share of blame. But I’m not one of those who blames him for all the ills of the world.

    Let’s not forget, the Democrats have controlled Congress for the past several years — and recently increased their control — and are the ones suggesting the stimulus package.

    And so-called business “leaders” are the ones who played fast and loose with their shareholders’ money. Those so-called “leaders” are the ones who violated the trust of their employees and now expect handouts paid for by the U.S. taxpayer.

    If you ask me, there’s plenty of blame to spread around — well past George Bush’s feet.

  6. I’m reading this directly after I read how many more large companies are laying off more employees. Every day we hear the same story over and over. I know it’s good to stay aware but it only makes us panic more. I’m with you, I’d like to know where the first bailout went before we keep throwing money to everyone around.

  7. Anita, we do need to stay positive about the economy. It has been worse in my lifetime, like during the dismal days of Jimmy Carter.

    I disagree with your contention that we initially needed to throw everything at the financial problems. At some point the economy has to take its medicine. Otherwise we go from a mortgage bubble to a government bubble, and where do you go from there?

    Here’s how we get the economy going right now, not in 2010 or 2011:
    – enact an immediate two-month federal tax holiday (no withholding, no Social Security, nada)
    – eliminate capital gains taxes
    – reduce corporate and individual tax rates across the board

  8. I think America should be prepared for a real wake-up call. I recommend you to watch the documentary (I.O.U.S.A.) on former U.S. Comptroller General, David Walker’s fiscal wake-up tour. I saw it on Swedish television a few days ago.

    In the long-run, I think that the new intellectuals, capitalists and businessmen, will turn around this situation. America is still the freest country in the world and according to view, the land of opportunity! 🙂 Small Business Trends is a positive source in this journey.

  9. I agree. We need to stay positive and not panic.

    Changing the way we think would be a good place to start.

    We need to stop thinking that the Government can solve all of our problems.

    We need to stop thinking it’s the Governments job to redistribute the wealth.

    For ever Uncle B and I bet the B is for “Bitter”, there is someone equally as bitter that the Government wants to solve our problems through expanding the social welfare state which does next to nothing to promote business growth.

    We need to take responsibility for our own lives and stop looking for someone else to take care of us or to blame when life hands us a bowl of lemons.

    We need to think of how to help ourselves by being more brand loyal to American companies who manufacture good here with American workers.

    We need to look at Wall-Mart and ask is there no way you can add even 5% more American made goods to your shelves next year?

    We need to look at ourselves and ask is it not worth 5% more to buy an American made good?

    We need to look at our Government and ask is there no better idea to promote job growth than taking our tax dollars and paying someone to bury them in the dirt just to create a job for a fellow to dig them up?

    As Franklin said with his life on the line: “We must all hang together or most assuredly we will all hang separately”

  10. Anita,

    I think your post applies to all countries and it seems a lot of leaders are relishing in talking up the bad news then announcing yet another summit to discuss the problem.

    You gave simple but practical advice.
    Susan

  11. I agree with Harry Hoover’s thoughts. Not only will it be more efficient to manage (aside from depressing the accounting industry for a time, which is all about small business) for business and the government, it puts immediate cash into consumers’ and business’ pockets.

    One issue this country has now is how little people have in their savings accounts. Before spending starts again, they’re going to have to put some money in the bank to reduce debt and absorb day to day life. Its going to take time – but with a break on taxes it’ll provide the stimulus to get debt paid down and discretionary money back into everyone’s pocket.

  12. Amen, Anita!
    Don’t get worn down by the bad news blaring everywhere.

    Most people use Norton Internet to block certain types of sites — I’m blocking news media sites…

    😉

    I’m not doing the head in the sand routine, but the reality is one can’t listen to all the junk the mainstream media shares and not get overwhelmed or discouraged. I’m turning it off so i can turn on my business efforts!

    Thanks for the reminder.

  13. “Talking down the economy” has a very real economic impact on aggregate business cycles. Anita is spot on with her assessment of negative information distribution. In addition, I very much applaud Andy Wendt’s constructive, proactive initiatives. Both Anita and Andy write focused, results-orientated points of view. As for “Uncle B”your comments are inflammatory, ignorant and non-helpful. At the end of the day, we are all Americans and by God we will get through this global economic correction.

  14. You give the best advice there is to give regarding stimulating the economy – and that is to keep buying. We are a consumer driven economy after all. Therefore, we must “consume” in order to keep it alive. If everyone pulls back, it’ll only get worse.

  15. Chris,

    We need a natural flow of stimulation for the economy, not artificially created by printing more paper money without a sound backing.

    In order to survive, we have to produce first, before we could consume. As an example, think about the tale about Robinson Crusoe.

    I look forward to the day when I could return the productive America that has learned the lesson from the old fable called The Little Red Hen… 🙂

  16. My favorite line from your post is “business leaders playing fast and furious…”

    We have real opportunities right now to re-assess our business and what’s really important to our customers. Of course you can expect the worst if your business model is running on old assumptions.

    Small Business Owners need to re-set their benchmarks and step back from their current models and start re-thinking EVERYTHING inside their business.

    The economy is like the weather — you need do dress accordingly.

  17. Great article!

    Small business growth is indeed a great economic stimulus. Often small businesses need experienced resources to guide them through the path from startup to commercialization. A few mis steps and their success can be obstructed.

    Sometimes, the displaced veterans of corporate America have great ideas but lack specific guidance to accomplish their goals. There is help for that group of people in consultants who have guides many others. The specific product is not so important as the courage, determination, and tenacity of the guy with the idea.

    With proper support and guidance, they too can realize their objective. Encouragement from the likes of these blogs and expert business startup groups can be a valuable resource.

  18. Hi Anita
    I have to add to my above comment. Even with turning off the news, I can’t get away from the economic doomsayers. So, let’s brainstorm some pithy and motivational sayings to share with our fellow small biz owners and the consumers-at-large who are not in the same mindset as the person growing/maintaining a business.

    I’m going to quote a friend of mine from Level 7 Partners, Mike Forney:

    “Change is inevitable, but growth is not.”

    And, “Start looking at what you do have. Stop looking at what you don’t have.”

    Finally, “Don’t stop planting seeds. Seeds of your potential.”

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