NFIB Agrees: Key Uncertainty is About Demand, Not Regulations or Taxes

January 12, 2012 2:00 pm ET — Jamison Foser

Hidden away in a recent National Federation of Independent Business (NFIB) survey was compelling evidence that when conservatives talk about "uncertainty" preventing "job creators" from hiring, they're talking about the wrong kind of uncertainty. Conservatives think — or pretend to think — uncertainty about taxes and regulations is stifling growth. But the NFIB survey showed that when small business owners talk about uncertainty, they mean economic uncertainty — uncertainty about demand — not uncertainty about taxes or regulations.

Now a new NFIB report reinforces this conclusion. The conservative organization's latest "Small Business Economic Trends" survey concludes:

There are many critics of the proposition that "uncertainty" is a major cause of the slow recovery, many because it reflects badly on the Administration's policies (which are characterized as "bad" by a 50 year record high percentage of consumers). However, such a "reality" is very logical, and is now confirmed by substantial survey evidence (if common sense wasn't enough!). Plans for job creation, inventory investment and capital spending are all highly correlated with expected real sales (around 70 percent). Pessimism about future sales translates into less real spending.

This passage is remarkably disingenuous. Critics of the uncertainty talking point aren't critics of the idea that pessimism about sales slows hiring — that isn't the way Republicans and conservatives use the word "uncertainty." Instead, they use it in relation to taxes and regulations. The people NFIB is criticizing in fact agree with NFIB that demand — real and anticipated — is the key factor holding back job creation.

In short, NFIB is criticizing progressives while supporting their point, and supporting conservatives while undermining their argument. That isn't particularly surprising — NFIB is, after all, a conservative organization that backs Republican policies more reliably than the interests of the small businesses it claims to represent. But if you fight your way through NFIB's hackish implication that Republicans are right about uncertainty, you'll find that the group is actually agreeing with economists, the Bureau of Labor Statistics, the Treasury Department and basic common sense: Lack of demand, not taxes or regulations, is the problem.