The economic experts are worried.
From the Managing Director of the International Monetary Fund, to the central bankers of China, the U.K. and France, to the specialists on Wall Street, some of the presumed “best and brightest” among us are expressing concerns over a global economic slowdown. And the fussing got a little louder after last Friday’s employment report here in the U.S.
These presumed geniuses, including the IMF’s Christine Lagarde, in particular, need to understand something. Their friend President Barack Obama has become nothing short of an enemy to one of the world’s greatest economic engines – American small businesses.
It’s insufficient to say that President Obama isn’t helping small businesses, or that the President isn’t “trying hard enough.” The Obama Administration is proactively attacking small businesses, as though they were domestic terrorist cells – while at the same time they seem genuinely surprised that “job creation” is so weak.
Small businesses and their respective advocacy groups have no idea how to cope with the mandates placed upon them by Obamacare, nor how vicious the President’s army of 50,000 new I.R.S. agents will be in auditing and penalizing them. And since 2010’s “banking reform” laws came to pass, banking and lending institutions have been in a state of shell-shock trying to figure out how to continue doing what they do – lending – without getting penalized for allegedly violating the all-important reforms.
What isn’t so widely known, however, is the increased frequency with which individual businesses are being confronted and threatened by governmental agencies other than the I.R.S. For example, U.S. Congressman David Schweikert (R-Arizona) tells a horrifying story about a small business owner and his government- and it’s a story that helps explain why the economy isn’t growing.
While visiting a local coffee house in his hometown of Scottdale, Schweikert is confronted by another patron who asks “can you please help me?” Turns out this other patron is the owner of Zoe Inidustries, Inc., a small, local company that designs and sells custom plumbing fittings and supplies (see their website at ShowerBuddy.Com).
As Congressman Schweikert sits down to listen to the man’s story, the sickening details emerge. This small, private business has been employing people in Scottsdale since 2000, and has earned itself an “A+” rating from the Better Business Bureau, but is now being told that it must pay $447,000 to President Obama’s Department of Energy.
Why would the D.O.E. know anything at all about Zoe Industries? The Department of Energy regularly, and randomly tests new plumbing fixtures that are bought and sold in the U.S., and a particular shower head product that Zoe Industries designs allegedly didn’t measure up to federal standards.
The U.S. federal government requires all new shower heads to possess what is known as an “O-ring” flow restrictor mechanism within the shower head that - as its’ name implies – reduces the flow of water and presumably reduces water consumption. And while all of Zoe Industries’ shower heads have the proper O-ring mechanisms in them, the Department of Energy believed that, in one particular case, the O-ring was “too easy to remove” during a test.
Schweikert got to work, investigating the D.O.E.’s case against Zoe Industries. Fortunately, Zoe Industries was able to recently “settle” the complaint against them by their government, by paying a much smaller fine – just slightly under $30,000.00. But this happened after the company had engaged in over a year’s worth of “discussions” and “negotiations” with the D.O.E., and after the company had accrued over a year’s worth of legal bills to defend themselves against the D.O.E.
For his part, Congressman Schweikert also shot-back legislatively, authoring and passing an Amendment to a Department of Energy funding bill that would forbid the D.O.E. from spending any of its funds on testing shower heads. This restriction on how the D.O.E. spends its’ money likely won’t hold up in the Democrat-controlled Senate, but it nonetheless got the D.O.E’s attention-after its’ passage the D.O.E. was on the telephone to Congressman Schweikert expressing “concern” that there had been a “misunderstanding.”
So did the D.O.E. extort Zoe Industries? Clearly, an agency of our federal government used its own brute force to extrapolate money out of the pockets of a private citizen. And the growing fear among business owners is that instances like this are only a “sneak preview” of things to come, when the I.R.S. begins policing individuals and companies for alleged Obamacare compliance violations.
And the word “alleged” is very important here. One need not have violated the law at all – but if your government alleges that you have, you either must pay the fine that your government is demanding, or be prepared to run-up potentially massive bills paying Attorneys to represent you and fight on your behalf.
This is why our economy is stagnant right now. The President who claims he is saving us from oppressive healthcare bills, is the same President whose Administration is comfortable fining a small plumbing supply shop owner nearly half a million dollars. American businesses are living in fear of American government, and businesses owners are not in a position (financially or otherwise) to take more risks and try to grow and expand – they are “tapped out” just trying to survive.
Austin Hill is an Author, Consultant, and Host of "Austin Hill's Big World of Small Business," a syndicated talk show about small business ownership and entrepreneurship. He is Co-Author of the new release "The Virtues Of Capitalism: A Moral Case For Free Markets." , Author of "White House Confidential: The Little Book Of Weird Presidential History," and a frequent guest host for Washington, DC's 105.9 WMAL Talk Radio.