To say America has been experiencing a less-than-titillating economic recovery since 2008 is trite. Unless you are Rip Van Winkle, you know that nominal unemployment of more than 8 percent persists with real unemployment in the midteens. Larger businesses have, in general, been slow to grow, deleverage debt and build cash. They adopted what I call the “criminal test” toward adding jobs: The need must be “beyond a reasonable doubt.”
And why not? The uncertainty surrounding taxes, Obamacare and exploding regulations has been, as Steve Wynn succinctly said, a “wet blanket” on the economy, and that sentiment has been echoed by a chorus of business leaders much larger than the Mormon Tabernacle Choir. Adding to these substantive impediments to growth is an anti-business, anti-job creator, psychological environment that has emanated from this administration. These regular pontifications cause otherwise rational and sane business folks to say nasty things to their TVs.
But I believe that a critical shift in the American business psyche has recently occurred. It gradually has been building over the past year. Instead of a cautious, generally negative mindset in the business community that conserves cash and deleverages, I see what I call the “thoroughbred in the starting gate” mentality that can be described as antsy, snorting, with hoofs scratching at the ground and ready to run.
Let me give an example: In mid-May, a number of us from Heart of America Group attended the International Shopping Center Convention in Las Vegas. It is the mecca of the retail industry world. It is a place where deals for the future are made. Three years ago in 2009, the annual retail powwow was like a giant funeral. In 2010, it was a wake, but an Irish wake, morose but with some parties. Last year, it was, “We’re here, feeling better, but just looking.” But this year was distinctly different. Attendees were raring to go, saying, “Let’s make a deal for late 2013 or early 2014.” It was a “We need to make deals, what’ll it take?” attitude.
It was distinctly upbeat, like everyone had gotten their mojo back. But there still is a hesitant, halting aspect to this optimism. It’s as if business has one foot on the accelerator and one foot on the brake, and this pervasive mentality isn’t confined to retail. It’s everywhere I go.
The cause of this is clear. The job creators in this country increasingly believe there will be a regime change in about 140 days. I heard “yeah, baby” more than a few times the day after the Wisconsin recall election, and it wasn’t from the people that were fired up about reining in public-union excesses. Business leaders saw it as a proxy fight for the fall election. Wisconsin was the first step toward the restoration of certainty and positivity. It is just like the run-up to the 1980 election - only this time, the resurgence will happen much faster.
Business leaders are optimists by nature - they have to be. But they are sick and tired of being down. They think of the election and get fired up, and then consider “four more years” and pull back. But they are now in the starting gate: antsy, snorting, hoofs scratching at the ground and ready to run.
Mike Whalen is the founder of Heart of America Group.