Dashboard: Yes, It’s Time to Worry about the Debt Ceiling

[Music] welcome to another 21 hats dashboard brought to you by our sponsor the great game of business I'm Lauren Feldman and I'm here with Gene marks to talk about the things we think business owners should be following this week welcome Jean hello Lauren you know what was not a great game was the Sixers game I just want to say you know you bring up this great game of business and puts me in a bad mood and I don't think you can blame the great game of business for that though I think that's more of a sixer Prof listen they're talking about great games here and uh all my you know what if you live in Boston it was a pretty great game yeah I guess you're right if you're a Celtics fan but unfortunately yeah I'm a sixer fan too let's not talk anymore about that bumer all right well not a great game okay great game of business agreed you guys need to be careful how you're marketing your product Jean as usual you've been writing about stuff that matters to business owners unlike the Philadelphia 76ers you recently wrote that the brief age of the worker is over and that employers have the upper hand again did I detect some gloating in your piece James you know yeah and then like afterwards some things came out afterwards that made me you know kind of double thinkink some of the uh you know some of the stuff of what I wrote for starters for starters um this is a piece that I wrote I believe for the guardian and it was basically based on the fact that uh you know companies are laying people off all over the place and I figur it was the guardian of the Hill maybe but whatever so people are laying you know there's been big layoffs both in the tech and the construction industry big brands are laying people off as well um and a lot of the big companies I just reported on a lot of the stuff that um a lot of B companies were cutting back on uh the benefits that they were providing as well to employees you know no more paity leave and you know bean bag chairs in the restrooms and you know God knows whatever um and and it was because you know there was this sort of like backlash I mean employers now as the economy is slowing down employers are are doing what employers do and they cut back on overhead um I also have you know you know know that there's data because I looked back in I looked back in 2010 when you know we had the Great Recession and how so many employers cut back on people back then um and still managed to run their businesses effectively do you know what I mean yeah I'm waiting for the double think part the double think part was this after I wrote that piece um the labor department came out with unemployment numbers like a 50 or low so I'm like oh [ __ ] well you know employees out there so when there's a lack of Supply there's still a lot of say that employees had that was number one and then number two in the same week the Wall Street Journal released a report a study uh that said that like employee U happiness is like never been higher like a large percentage I don't know if you saw that article or not I did see that yeah a lot of employees were generally happening I'm like oh geeez okay so employers really are responding to their employees which I think is an important point of this with it which I did want to bring up um which is that I I don't think the great resignation was necessarily an entirely terrible thing for employers um you know if employees are making a little bit more money and are happy about it and happy about you know maybe changing jobs for um a career position that is more suitable to them there are a lot of winners in that scenario yeah there there definitely are and I you the whole point and I've written about this as you know before and I know I I come across as like the you know the angry old man and I get it because that's what I'm trying that's my intention um but at the same time I I really do if you look back at the stuff that I wrote about this stuff it's it's more of you know like tough love for employees I mean the way I you know finished that piece was to you know and people were like shoting on me on I get the tough part I'm not sure I see the love Jean well the actually it is at the very end it's basically like hey guys you know you know work hard uh provide return on investment for your employer don't stop with the [ __ ] quiet quitting and the you know the basic bare minimum Mondays and all that nonsense because that's the kind of stuff that employers you know you they fire employees that have that attitude both publicly and um you know and internally um you know the people that employers don't fire are the ones that work hard and provide return on investment and and you know are there for the long term and don't complain and by the way most employees are like that you know and I get that but you know the economy does turn down and we are heading into a recession if that is as many people believe although that's still I'm on the fence about that too we've been saying that for a long time we have been saying it for a long time meanwhile like inflation continues to go down unemployment 50 or you know 50y or low I you know uh there's all these signs that you and I I talked to my clients and I don't I'm not seeing recession right now at all but okay that's another it's a whole other topic to discuss my point is though is that um you know if the age of the employee um to me it seemed like it was ending and now I'm like huh maybe it's not ending yet because I mean the data is shown it's still a very strong labor market well what I hear you saying here and what you wrote in your piece is kind of a reminder to employees that this stuff is cyclical and you know it's kind of what comes around goes around and I would just note that goes both ways and even if you're right that uh the age of the employee is ending now we're still facing a structural labor shortage and it may not be gone forever and employers should remember that cyclical thing too yeah I don't it's funny that you say that like I maybe because I'm just I'm so subjective on this but I don't think employers need to be reminded of that like I I really do when I look at all of my clients um you know they they value their employees a lot and they treat their employees well um I see that you know I I think you're right about that I guess what when I hear the tone in your piece and the gloating that you acknowledged I worry that you're sending a signal to employers uh that is contrary to that but I I agree most certainly most of the business owners I know understand that they do but at the same time the employers that I know and the The Bu you know the clients that I have although they do value their employees they value their good employees I mean they're running a business they value the people that are working hard not giving them [ __ ] and and are providing return on investment for them and the ones that they value the least um are the ones that give them the most headaches you know and so that was the point of the peak that you know if the age of the worker is ending cyclically um if you're an employee just be aware that your employer doesn't want to get rid of you but will if you're not providing the return on investment for you know for what they're paying you to do next topic last week the uh Business Insider declared the metaverse is dead uh you've told us about the metaverse a little bit you've prepared us for the day when we're all going to be buying our clothes there and opening shops there do you think it's dead no no no no it's far from dead I think it's delayed um and I I can tell you the reason why I know that is because I I know specific people that are working on projects um building server Farms you don't even want to know where both in the US and outside of the country that um you know with thousands of servers to do just that to host this metaverse it is going to happen um it's just not happening as fast there's been an economic you know downturn in the tech industry because of you know uh which is restricted capital for investing so a lot of the companies are like you say Lauren even before things are cyclical a lot of companies are just a little bit delayed what's really holding off the metaverse what's really stopping it Lauren is Hardware you mean the the headset thing that that uh that people need to use it yeah I mean right now it's just it's just a game isn't it you know it's like playing like a video game like you go into some you know alternate world it's really not something that is like has daily use in life but when the hardware catches up when we're a to wear glasses like I'm wearing now that don't look you know ridiculous and are light and can have the processing power and the ability to like jump from The Real World into a virtual world at a at a voice command I I the metaverse itself will be a huge huge place um where a lot of people will be meeting and conducting business but right now it's just slowing down it's not dead though do you think Mark Zuckerberg is still glad he changed the name of his company to meta um yeah I do because I think if Mark Zuckerberg is as smart as I think Mark Zuckerberg is um I think that he is not thinking about 2024 he's thinking of 2034 and I am sure that you know the name of his company meta will be absolutely in the right place in 2034 next topic is it time to worry about the debt ceiling yet so it is and I'm G to tell you why and I'm I'm writing about this for the inquire probably next week because I'm I'm interview it's amazing how many how many people have no idea have no advice to give about the debt ceiling you know um and I do um one advice is yeah you should worry about it now like we're talking about this the middle of May um people project that we're going to hit a wall in June um but by the way once we hit that wall um you know treasury secretary Yen has got some choices about prioritizing certain payments she can still pay down the debt and hold off paying other areas for government services and then in the middle of June uh what's projected is an increase in in tax payments comes in because quarterly payments come due which may give some relief to her so it's not going to be like a a one-time thing and we fall off a cliff it's going to be like this you know money management issue and the politicians are going to argue back and forth ultimately it's going to get resolved but I do expect there to be disruption so if if you're running a business a certain type of business you you better prepare yourself for this by doing so first of all it's um you know anybody that obviously does Direct Federal Contracting um needs to prepare themselves I mean I was just reading how like almost 30% of federal contracts go out to small businesses um that's like a mandate so there are a lot of small companies out there and it's not just the ones that get Direct Federal Financing or Contracting but if indirect you I mean you might be working for a federal contractor doing work and their payments are going to get stopped or suspended for a while that could have a serious impact on your cash flow what what can a business do to prepare for that so if you know that in advance I mean I know it sounds you know oversimplified but you got to you got to build cash right now um you have to double check your lines of credit and your your financing capabilities to make sure you're you're covering your overhead if you were depending on payments coming in under these Federal contracts um and also uh you know you need to be talking to your suppliers and your customers even your employees and just letting them know in advance there might be some um you know some waves you know in the river coming up uh until this gets resolved people just need to prepare it in their minds and you should be talking about it now and preparing for it now there is absolutely no question the other people that get affected by this there's some some smaller impacts I mean there are a lot of small businesses as you know that are located near uh Federal Office Buildings just something like 300,000 or 350,000 literally according to the KO Institute like Federal buildings you know warehouses and buildings around the country so you know they all have a a ecosystem of small businesses that Supply them and uh and their employees so if one of the options that Janet Yellen decides do is to you know is to shut down government work for a while to make payments on the debt um you know those those businesses that are will be impacted by those bus you know by those employees not coming to work and then there's a bunch of other Federal services that could impact you you got to be thinking ahead I mean passports will be even more delayed uh they're super delayed already the IRS won't be you know might not be providing as fast Services the small business administration um if you need help with immigration if you're waiting for regulatory approval all these things could be impacting if uh funding is suspended while um you know while the government you know gets their [ __ ] together and you know passes a you know a debt sealing Bill and and gets back to work so got to be thinking about it now are you seeing clients of yours making a decision to hold off on a planned investment of some type in order to hoard cash in preparation for this not yet not because of this but one of the things that people are really worried about which I'm less worried about is that it could have a significant impact on the credit markets um if there's a full-blown default because the I still think the chance of that like most people are think it's pretty remote but um it could it could create a lot of uncertainty and volatility in the credit markets which could have a big impact on employ you know on small businesses getting bar you know getting financing so but I haven't seen it I haven't seen it yet if anybody is trying to hoard cash right now is there anything they should be thinking about in terms of where they keep that cash to just be careful yeah so before you know it's funny when I speak to these groups you know and and when I offer advice to clients about you know what to do with your cash if you can make cash if you don't mind your cash being non-liquid you know treasuries and certificates of deposits are the safest bet for you as long as you um spread it out among different institutions but not now is there any reason to think it might be hard to get that treasury money back if uh if something happen I don't I don't think that should be a concern at all but but I do want to say something is that um you know when I'm talking to normal businesses that are like you know yeah if you've got the cash you know and you can you can take a percentage and make it you know a liquid treasuries are are absolutely a safe investment will continue to be um as well as certificates deposits but um if you're in the business where you're relying on government work the last thing you want to do is make your cash non-liquid so uh you want to avoid those non-liquid Investments and keep it just in your checking account ready to go so that you can use it to pay operations all right last topic and this is somewhat related the New York Times R in a story last week reporting that there's a a little noticed part of the house debt sealing bill that could make regulation impossible I I'll quote from the story The leg legislation would require Congress to approve regulatory actions before they go into effect uh under a fast-tracked legislative process that would force up or down votes on the rules without any possibility of amendment any major rule that failed to pass both houses of Congress could not be proposed again for at least a year that sounds pretty significant there's also a a case moving uh that the Supreme Court has heard and is going to rule on uh that affects the ability of agencies to issue regulations um is this a good thing or a bad thing I know you don't like being told what to do with your business what are you thinking about all this Jean yeah I mean I think if you were to pull you know at least the business owners that I speak to um I you know I I think they think it's a very good thing uh they are you know most of the people that I hear when I man you know I got to tell you Lauren when I when I talk about um you know the upcoming regulations that we're expecting from the from the Department of Labor this year worker classifications overtime rules pay transparency potentially mandated vacations um you know the EEOC OSHA regulations which are coming uh regulations from the nlrb even the FTC on non-compete um you know these are things some of them are can be issued through the department and others need Congressional approval but man you should see the the the guys in the audience look like they're just ready to pull out a gun and kill themselves so but luckily you know they're not allowed to carry uh the guns uh so that that's good news U because they would shoot it at me so when when when these people these these business owners hear that there's you know a pullback on regulations or making it harder for government to issue regulations um they breede that sigh of relief it's just it's a natural reaction of most business owners well this may not make it harder this may make it impossible I mean do you really want a world without regulation no of course not of course not but you know it in this political environment right now I mean you know it's so you know uh divided that it might just lead to just complete stalemate over the next two years that's you know for all I know and you know what um okay I mean if it's stalemate for the next two years until the next you know you know the next presidential election I think we can cope with that until a new Administration comes on but um you know I mean the people voted for the House of Representatives Lauren you know so they are duly elected people and if the house voted to pass uh you know this law which could slow down regulations or even make them very very tough to get through um you know we live in a democracy that's what that's what the people voted for we'll see what the Senate has to say about it fair enough uh you told us one piece you're working on anything else we should be watching for this week Jean Roth baby and I don't mean himman Roth from The Godfather I mean right William Roth the the senator the Roth for I'm I'm working on a piece right now uh for the inquire we can talk about it next week because I really um we should take a deep dive you and I um and talk about uh Roth 401ks for your business because they're a fantastic employee benefit to offer in an amazing tax vehicle right now you know tax savings vehicle so that's something we we we should definitely talk about next week I will look forward to that Gene marks is a CPA who writes weekly on small business for the guardian the hill the Philadelphia inquire the Washington Times the Chicago Daily Herald Forbes and entrepreneur you can also hear him on ABC radio's ey on the world with John Bachelor Jean hosts two small business podcasts with paychecks Corporation and the Hartford Jean thank you so much thank you we'll see you next week have a great week everybody [Music]