Yesterdayís report that Sea Tow recorded a 19 percent increase in marine assistance calls during the July 4 holiday gets a big bravo! Oh, not because boaters had any problems out there, but because they were out there at all.
Itís good news when lots of people are using their boats. Because thereís no question the more people use their boats, the better the chance their desire for that new boat may be re-ignited. And, while weíve spent a lot of time these last couple of years lamenting the impact the ďcredit crunchĒ has had on our dealerships and customers, the truth is whatís really needed to get our industry going again is boaters getting fired up to move up.
ďThereís no problem a good sale wonít cureĒ is an old expression. Itís still true. So, when we talk about ďeconomic stimulus plansĒ these days, we should clearly be targeting consumer spending. But, thatís not happening. Washington continues to miss it and, therein, rests a critical part of our problem. Both Congress and the Obama administration have been great at lip service about helping small businesses and providing SBA loan money. Puleeze . . . as if that were a magic answer.
What did we get from the last $730 billion stimulus? For about $79 billion, we got a couple of broken down car makers (with lots of UAW employees) and some freakiní bridges and roads somewhere! Meanwhile, those who allegedly represent us failed to recognize itís the nationís small businesses that provide more than 60 percent of private sector jobs. People with jobs make money. People with money buy boats. So, they think making $30 billion available for SBA loans will miraculously turn all our small businesses around . . . why, theyíll borrow this money and begin hiring employees again! Itís time these politicians got back from Oz to Kansas to become reality-based again, if they ever were.
The fact is small businesses, like boat dealerships, will expand and hire people only when sales, not loans, justify the need. Thatís pretty business-school-basic, isnít it? So how does Washington conclude that a lack of loans is the reason thereís no hiring going on? The truth is SBA loans can, at best, be a short-term fix to keep things going until sales increase. Thatís fine — boating supports that. But, we also recognize itís not the key to solving the economic problems. Clearly, public policy needs to provide real stimulus by including provisions that substantially reduce taxes for consumers. In fact, consumers will face a big tax increase looming ahead next year if certain tax reductions are left by Congress to expire.
†Moreover, consumer tax reductions should be coupled with proposals like the temporary elimination of payroll taxes for small businesses and major tax credits for hiring. Until that happens, consumers will continue to hold back their spending, sales will not increase and small businesses will not hire again. Itís time Washington moved ahead, and with urgency.