Jim Blasingame

Business futurist, award-winning author, speaker and columnist

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Government / Politics

Will government help for small business be fast enough?

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The national response to the coronavirus pandemic – however necessary – is crushing Main Street.

This economic tsunami wasn’t caused by market animal spirits, irrational exuberance, bad business practices, or bolloxed supply chains. In the span of a month, an invisible Black Swan took us from robust to shut down. It’s not your fault, small business owner. You didn’t cause this.

That’s why you’re going to hear me say something I’ve never said to the government before. Instead of “Get out of our way,” today I’m saying, “You must step up and step in.”

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Keeping the coronavirus pandemic – and our response – in perspective

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Perspective: The capacity to view things in terms of their true and relative importance.

Four stock market crashes, seven recessions, three wars, three pandemics, one global financial collapse, one Y2K – and 9-11. This scary list identifies the varied major crises which have taken place during my long career. In the aggregate, they’ve ground a perspective lens through which I view momentous moments, like the pandemic of COVID-19 disease caused by the novel coronavirus.

Of all the things on my list, we’re likely to agree that the two most frightening and destructive are the 9-11 attacks and the 2008 financial crisis. But you might be surprised to learn that the challenge providing me with the best perspective on the coronavirus pandemic is the Y2K event. Not for what happened, but because of what didn’t happen.

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What politicians, small business and mice have in common

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As we stand here on the threshold of another national election year, it’s appropriate to turn to the legendary book by the late Dr. Spencer Johnson. Who Moved My Cheese? tells the story of four characters who ate only one thing: cheese.

Every day, all four characters went to a specific place in their world – a maze – where they found cheese. The first two were not picky about their cheese, nor where they found it – it was just food they found in a place. Then, one day – you guessed it – somebody moved their cheese. These two unfinicky fromage finders immediately began looking for the new place where cheese was being put.

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Jim Blasingame’s 2020 crystal ball predictions

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Here are my 2020 Predictions – my 21st set – by major category. Through 20 years, my record is 73% accuracy.

Small Business

Prediction: Small business confidence will remain strong for the fourth consecutive year, exceeding the NFIB Index’s almost half-century average.

Prediction: For the 13th straight year, small businesses will continue to limit borrowed capital and rely on organic resources to fund growth.

Prediction: The USMCA and China trade deals will deliver direct and indirect economic benefits for U.S. Main Street businesses.

Prediction: A growing number of state minimum wage increases will cause harm to the least of the marketplace participants: the smallest small businesses and low-skilled workers.

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Will small business decide the presidential election – again?

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Three years ago this week one of the most prominent markers of the 240-year American experiment took place: A national election to choose a new leader of the Executive Branch. Since then, a terabyte of words has been written and spoken – often apoplectically – about the Constitutional result of that election: Donald Trump.

Today, on the penultimate threshold of our 2020 quadrennial, let’s consider an oft-overlooked voting bloc that had – and likely will have again – a significant say in the next electoral outcome. I’m talking about America’s small businesses, of which the SBA reports there are over 30 million. Six million are employers who make payroll for over 60 million employees. The rest are marketplace quarks – the smallest business entity – solopreneurs.

Mathy alert. Here’s an electoral calculation rarely contemplated by most people or pundits: Add the first and third of the foregoing numbers and you get 90 million. Allow me to re-state that in context: Ninety million voters. Now add to that sum their voting age dependents – spouses and children – and the small business electoral critical mass easily grows to well over 100 million of America’s 245 million eligible voters. Let’s call that small business cohort “the stakeholders,” because regardless of how they vote, each one has a stake in the future of a small business.

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Why the new tax law is still unfair to small business

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Two years ago in this space, April 30, 2017, I began warning about the impending tax law –nine months before it was passed – specifically how it might not be fair to small businesses. The Washington rhetoric pointed to one thing on their mind – significantly reducing the top tax rate for big business. So, when they revealed their number – 20% – I piped up that small business should get the same number.

It’s important to note here that there are essentially two kinds of business tax reporting: 1) C Corps, mostly all the large corporations, which file and pay taxes like an individual, but at their own rates; and 2) most small businesses are legally structured as S Corps and LLCs, which file a return, but – and this is important to remember – “pass through” any net profit as income on the shareholders’ personal returns. Most small businesses – millions – are “pass-throughs.”

Three months before the new law passed, in my October 1, 2017 article, my concerns proved justified as I revealed a single paragraph in the proposed law that began with the tax writers revealing that while they were holding on to the top C Corp rate of 20%, small businesses (pass-throughs) should expect the top tax rate to be no less than 25% – one-fourth higher than corporate America. And then, adding insult to injury, the second part of the paragraph revealed this smoking gun: “The committees will adopt measures to prevent the recharacterization of personal income into business income to prevent wealthy individuals from avoiding the top personal tax rate.”

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