NFIB Survey: Lack of Demand Is Biggest Impediment To Growth (And The Second-Biggest, Too)

December 06, 2011 4:08 pm ET — Jamison Foser

For years, economists and the Bureau of Labor Statistics and the Treasury Department and countless others have been telling policymakers that business aren't hiring because of a lack of demand for their goods and services, a concept that even Republicans used to understand. But because they don't like Nobel Prize-winning economists and official government data, or because they're intentionally sabotaging the economy for political gain — or both — Republicans have pretended not to hear. Even when corporate executives and small business owners have said lack of demand is the problem, Republicans — who typically ask "how high?" before corporate executives can even finish saying "jump" — have pretended not to notice.

Here's how absurd the GOP's blame-everything-except-demand economic analysis is: A new survey of small business owners conducted by the National Federation of Independent Business finds that not only do more small business owners identify lack of demand as the biggest impediment to growth than any other factor, most of those who identify "uncertainty" as an impediment really mean lack of demand. 

NFIB found that "25 percent named demand as their single greatest impediment versus 22 percent who named uncertainty. ... [N]o other impediment is nearly as significant." (Just 11 percent, for example, named "regulatory or legal issues their most significant impediment," contrary to non-stop Republican rhetoric about onerous government regulations. And only five percent identified a "lack of skilled employees" as their biggest problem.)

Now, Republicans love to claim that "uncertainty" about taxes and regulations is keeping businesses from hiring, so it isn't hard to imagine them taking comfort in the fact that "uncertainty" was the second-most-frequently mentioned impediment to growth — or trying to concoct some excuse for claiming it was really first. So here's where things get interesting: It turns out that when small business owners say "uncertainty" is an impediment to growth, they mean economic uncertainty, not political uncertainty. And by economic uncertainty, they mean uncertainty about demand.

Now, I don't expect Sen. Olympia Snowe (R-ME) and Rep. Eric Cantor (R-VA) to take my word for it, so let's just quote the NFIB — a right-wing advocacy organization that overwhelmingly supports Republican candidates like Olympia Snowe and Eric Cantor — directly:

The majority of those who claim uncertainty as an impediment think of it as economic in nature. [...] Forty-seven (47) percent say their uncertainty is totally or mostly economic (Q#6a). Fourteen (14) percent claim theirs is totally or mostly political. However, 36 percent split their attributions between the two. ... [E]conomic uncertainty dominates; 83 percent [of those who named "uncertainty" say that it creates an impediment for them.

The survey did not define either economic or political uncertainty; it let respondents define these terms. But small-business owner responses clearly suggest political, particularly when combined with economic, means government deficits and how they will be financed, future tax obligations, the implications of new regulatory requirements, pending requirements of the recent health-care overhaul, etc. Economic [uncertainty] appears more closely tied to future sales and earnings, and the general course of the economy.

So there you have it: Small business owners are most likely to identify lack of demand as their biggest impediment to growth. And those who identify uncertainty as an impediment generally mean uncertainty about future sales — i.e., demand — rather than deficits or taxes or regulations.