OK

This diary has taken me a few days to sort out in my brain and it's still hard to write. There are so many angles and it's also just a bit depressing.

The other night my wife and I took our 2 year old out to the new neighborhood pizza place. I was home from work early - which means Deep Dish Pizza - it's the only way we can go to the place, if we get there by 5 PM we don't have to wait for a table and Liam's antics are a little more tolerable by the staff and other patrons (who are probably in our same boat). This pizza place is perfect for the neighborhood, moderate price yet a nice place to eat out, tasty food, kid-friendly early, good beer selection for the adults, TV's with sports for dad. Noe Valley is affluent and packed with small children - needless to say this place is raking it in. No sign of the recession here.

So we were discussing our various Christmas lists. My wife had gone to a place in the Mission District which she had patronized before, to buy something for my sister. She began to relate an anecdote about her trip to the store. I'm intentionally obscuring the product types to hide the identity of the store.

"It was pretty odd. They used to focus on (one particular type of product). They had really nice stuff, a little on the higher end, usually from local designers and it was all really cool, hip, unusual. But there wasn't very much selection, and most of it was not very good. Also they had changed an entire section to (a completely different product type). The new stuff was pretty cool, but not what they used to stock (and a product type with a substantially lower price point - say for example "sporting goods" instead of "cars")."

"So I get to the register, and I sort of casually ask "how's business". She was right next to me but maybe I'm thinking she didn't hear me because she doesn't say anything - doesn't even acknowledge the question or give a casual answer. She's just wrapping up the stuff I bought quietly. The only other customer in the store leaves and then she turns to me and says..."

"I'm sorry, I'm trying to figure out how to answer your question. I could just say 'great!' but that would be lying, but I don't want to be all negative and ruin your day. But it's not very good - there's no business. I don't know what to do - this is all I know. I'm trying some different things but it's just hard right now. Why is this happening? Obama was supposed to help us

OK, this sort of messed with my appetite. I've had a pretty dim view of the way we are doing things in this country lately, and I'm pretty well read and level headed. But it's all sort of abstract when you live in a bubble where most of your neighbors and all of your co-workers work at places like Apple and Google and are doing just fine, thank you. Even the people who don't work for Ebay that we are exposed to, work in the service sector in a pocket of the world that is feeding off those Genentech dollars.

It hits home when you see someone who has run a very successful small retail business for years and is having the bottom collapse out from under her. Sales go down, profits go down, cash is down. Cash being down means she can't float the better inventory, and she can't borrow the money to stock it either because credit is screwed. So she runs with less pricey inventory, and the customers who CAN still buy the better stuff abandon her because her stock is no good. So she tries to move into another product line that is lower priced and has lower margins, and it's hard to attract those customers because it's not what she's known for.

This is a "small business". You know, the 250k earners that the GOP is trying to protect. Baloney. My wife and I both work good jobs and we have a rental business on the side and we barely dent that 250k barrier in a good year after the deductions come into play. 250k+ a year is a good chunk of change. Good enough that if you are in that tax bracket, a tax break isn't suddenly sending you to my friend the shopkeeper with your newfound bounty.

If this tax deal goes through, I'll get a tax cut from the payroll tax, and my transit tax break continues. That money will go into my bank account. And sit there. If I feel like going crazy I'll make an extra principal payment on the house. What bracket am I in? I am in the bracket between "struggling" and "the Bush Tax Cuts for the wealthy" - defined as "I check my bank account to see if something is going wrong, or when making a major purchase, but I don't know when payday is". We "consider" our spending, but for most purchases we have been blessed to avoid serious choices.

If that's my bracket - who the hell is the group solidly in the 250k+ tax bracket that will see substantial extra money due to the cut? Someone who buys what they want when they want it. Maybe not "an airplane" but they aren't putting the pocket change into a jar to save up to go out for dinner, or using layaway. If they decide to go nuts with their extra tax dollars - they'll probably take a trip to Mexico and stimulate that economy.

This shopkeeper is not following the minutia of politics. She probably doesn't even know about the deal being brokered. All she knows is that her customers have disappeared. In order to get them back, Obama can use tax policy to put some fuel in the tank and help out actual small businesses that need help - like this one. Instead we are using some of the money in our arsenal to put in some more bells and whistles in the drivers seat. Sooner or later, if we run out of gas, the driver will be hitchhiking too.

It just continues the disappointment for me. I ride my bike to work and for a couple of months I have been riding past an ARRA sign on Central Expressway in Sunnyvale, Ca. They modified an interchange. If you ask me, they made it less safe, not more. And certainly the road was very usable without this ditch digging job. It does put money into the hands of some construction workers, but then the job ends and we've got a trinket instead of shoring up more valuable things like keeping the operations funds for our stressed out Bay Area mass transit system.

But what about the Pizza Place that is packed? He's not hurting. Maybe she's just a lousy businesswoman. Certainly, the pizza guy has found a very sweet spot - this is his fourth restaurant and all are doing well. He's definitely in the 250k plus bracket.

Well - the pizza place opened up DESPITE uncertainty over the continuation of the Bush tax cuts . This guy dealt with the pain of dealing with San Francisco's paperwork nightmares to get this restaurant open, and he was doing the planning while Obama was saying we shouldn't extend the cut for the top bracket! Two percent less after tax takehome of "A Boatload of Money" is still ... "A Boatload of Money". Just like people with comfortable lives just get what they want without really looking at the bank account first, small businesses who can expand and make a lot of money will do so regardless of the top bracket cut or not. We aren't even NEAR the point on the laffer curve where knockout businesses pack up their toys and go home. But we are definitely at the point where some very valuable but more tenuous businesses will need us to help their customers help them.

Put me in the disappointed camp.

Footnote: This Christmas - read up on the Tragedy of the Commons. It really sucks that you might spend some more money to support a local business and your next door neighbor goes to Wal-Mart and saves some money. Times are tight. But they will get a lot tighter if we don't band together and support each other. Buy local. Local retailers, local products - if at all possible. If the Government won't fuel the fires with tax policy, fuel it with your buying decisions.

Originally posted to murphstahoe on Thu Dec 16, 2010 at 01:09 PM PST.

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