Policy Priorities

For most of the last 47 years, “taxes,” “inflation,” and “regulation” received more votes as the “single most important problem” than any other competing category of problems (choices: inflation, taxes, credit, regulation costs, weak sales, labor cost, labor quality, insurance, competition from large firms). Politicians historically have promised to deal with some of these issues using various types of policies. Paul Volcker was given the task of reigning in inflation by President Reagan. The Federal Reserve used a 21% prime rate of interest to send the economy into a recession, but it broke the back of inflation. President Johnson used Great Society programs to address poverty. President Obama chose health care, the Affordable Cares Act.

President Trump promised more jobs and growth via deregulation and tax cuts. His policies made a difference as these two problems faded from top billing, replaced with concerns about labor quality, something business owners can undertake policies to address. Until the virus struck, the economy enjoyed the lowest unemployment rates in recent history.

For small business owners, dealing with the virus will be at the top of the policy list desired from the new administration. Sales for many of these firms depend on “foot traffic,” shoppers out eating, dining, traveling, patronizing small retailers, etc. However, unless there is a major change, most of the rules regarding individual behavior and firm operations will come from state and local governments, not Washington D.C. Beyond that, health insurance, taxes, and regulations are likely to remain top issues for Main Street. The Biden agenda promises higher taxes for some, higher energy costs, support for unionization and a higher minimum wage for starters. However, if we have shared power in Washington D.C., it will be some time before policies take on more specific shapes.