Wednesday, August 17, 2011

Is is 2013 yet?

The constant barrage of news coming out of Iowa this week makes my head hurt thinking about another Presidential election in 2012. If there was a way to press fast forward and skip to 2013, I'd be all for it.

I read this note from a small business owner yesterday and thought it was pretty telling. I think players from both parties should take note because I think it is true and reflects the current status of our economy.

"Cut my taxes and I'll say thank you, but I'm not hiring until I see a pick up in end demand."

Republicans like to paint over every problem with a "cut taxes" brush.

Democrats like to use the "jump start the economy" brush (ie, spend our way to prosperity).

Neither of these solutions will lead to sustainable changes in our employment picture. Business owners hire when demand exceeds their capacity to meet that demand and we are not in that environment right now.

On a related note, this story from the Washington Post should make both Republican and Democrats scratch their heads. The wealthiest enclaves in America our now outside of Washington, DC partly because of runaway government spending but the tricky part is that much of this spending is going toward private contractors.

So, the Republican loves the small business success stories but would want to cut the pipeline of money pouring out of Washington.

While the Democrat is okay with spending but bothered by the concept of someone paying $15 for a drink with artisanal ice.

"Washingtonians now enjoy the highest median household income of any metropolitan area in the country, and five of the top 10 jurisdictions in America — Loudoun, Howard and Fairfax counties, and Falls Church and Fairfax City — are here, census data shows.

The signs of that wealth are on display all over, from the string of luxury boutiques such as Gucci and Tory Burch opening at Tysons Galleria to the $15 cocktails served over artisanal ice at the W Hotel in the District to the ever-larger houses rising off River Road in Potomac.

Sixteen percent of Great Falls households earn $500,000 or above a year, and more than half make at least $250,000, according to Nielsen Claritas. By comparison, 11 percent of households in Potomac earn $500,000 or more, and McLean and Bethesda each boast 10 percent at that level.

More than $80 billion in federal contracting dollars will flow to the region this year, up from $4.2 billion in 1980, according to Stephen Fuller, director of the Center for Regional Analysis at George Mason University. Adjusted for inflation, that’s a seven-fold increase. A third of the region’s gross regional product now comes from federal spending."

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