David Dodson, a lecturer at Stanford Graduate School of Business and a small business adviser, doesn’t like what he sees on Main Street and the US economy as discussions continue on new financial and economic stimulus measures in Washington, DC.
Dodson, who once ran for the Senate in Wyoming and was CEO and chairman of several companies, including auto parts retailers and truck companies, said the fourth quarter was bankruptcy for many main street owners and retailers. I told CNBC. If no progress is made in stimulus, the wave of bankruptcy could reoccur, causing serious damage to the national economy.
“I knew that the bridge we built in April wouldn’t take us to the other side. We wasted five months in the process of the election …. an emergency occurred. It’s a success or a failure. “
The retail sector will enter an important fourth quarter, including a holiday sale that represents the largest annual revenue period for many. “If it doesn’t work, it could have a spillover effect on other economies,” Dodson said. “The 850,000 Covid-related bankruptcies we saw in the summer wouldn’t look like anything.”
While some economic indicators have improved, the US economy is showing signs of slowing recovery from the Covid recession.
Mr Dodson explained that while politicians are discussing financial and financial bailouts, retailers need to make important inventories decisions.
“They can’t wait until November to determine the amount of inventory to order,” Dodson said. “They need to be doing this now.”
The economic benefits of retailing are not limited to the struggle for the smallest stores on Main Street. Even the world’s targets employ cleaning services, snowplow services, window cleaners, and small businesses. So while the spillover of bookstores is great (when added to all other small retailers), the loss of large retailers will have a greater impact on SMEs, Dodson told CNBC. I did.
Dodson sees a situation that continues to disappoint business owners. “At breakfast [Fed chairperson] Powell said there was an emergency. At lunch, wait until the election is over. At dinner, a new bill will be submitted. “
“Too little support will weaken recovery and create unnecessary difficulties for households and businesses …. Over time, household and corporate bankruptcies will increase,” Powell said in a parliamentary testimony this week. Would be. “
The fourth quarter is a blunder for retail small business owners, and the lack of economic stimulus from Washington, DC could lead to another wave of bankruptcy on Main Street.
Noamgarai | Getty Images
Karen Kerigan, president and CEO of the Small Business & Entrepreneurship Council, said in a statement after Trump’s tweet on Tuesday that negotiations were suspended until after the election. Close the door to important support for SMEs and their employees. Doing nothing can result in distress to the national economy. … away from the negotiating table is equivalent to leaving the main street and the small businesses in our country. Closed millions of small businesses are at stake. “
Mr. Trump later tweeted that he was in favor of certain bailout programs, such as direct stimulus checks for airlines, small businesses and individuals.
According to Dodson, the first round of the Paycheck Protection Program in April was reassuring to many small business owners and continued to operate, but since then it needs more visibility and the federal government. Failed.
“So what’s happening now is those employers, those companies are pending. They aren’t hiring people, they aren’t expanding, they aren’t buying inventory, They are waiting, “said Dodson. “That’s the problem. The economy needs to be active, but while the main street is on fire, we’re waiting for Washington to stop messing around.”
As part of the current stimulus package, another round of PPP is being considered with changes to promote use by employers. Confusion over the terms of the loan program, including forgiveness, was cited as the reason why money from the first round of the program was not used in the spring and summer.
Small businesses continue to monitor Washington for stimuli that can be accompanied by anxiety and frustration.
“SMEs have been waiting for the necessary bailouts for a very long time, and the consequences of the delay have meant hundreds of thousands of closures affecting the labor market and the economy. Now is not the time to face political crisis. “The Amanda Balantine Street Alliance, executive director of SME advocacy, said in a statement.
Surveys show that SMEs have become more optimistic about their viability since the worst closure in the country in the spring, but many are concerned that they will do enough in social distance measures. There is.
“If the retail sector declines, we can’t do this because the suppliers to retailers will be hit, then the real estate industry will be hit, then the banking industry will be hit, and then system failures will occur. . Economy. “
The argument from conservatives, including President Trump, that local governments are mismanaging aid and more federal stimulus goes to the “blue states” is about local governments as a key to economic growth. He says he lacks points.
Municipalities make up 17% of the economy, including everything from buying soccer uniforms for schools to fire trucks and sewer projects that employ multiple small businesses.
“This is a huge sector of the economy that has grown at 5% a year in the last decade,” he said, and he added that it is fair to discuss whether public spending has increased too much. , More stimulus will hit small businesses selling football uniforms and spread throughout the economy.