One of my earliest memories is a story told on television by Captain Kangaroo. It was about a little boy who wanted to be a star athlete, but wasn’t very good until somebody gave him a pair of “magic sneakers,” and told him that he would be great at sports if he wore them.
So he put on the shoes and, sure enough, became a big star. I’m a little fuzzy on the details (it’s been almost 60 years), but eventually whoever gave him the shoes told him that there was no magic in them at all, and he had achieved success in sports on his own ability.
The lesson, of course, is that we can all accomplish great things if we believe in ourselves. Evidently it has stuck with me.
I often think of that story when I look at professional athletes, not because sports was the original allegory, but rather because the effect is so apparent. Take tennis, for example. There is not much difference in the skill set among the top 30 players in the world, and yet they nearly always go through tournaments according to their rankings. If a player thinks he (or she) is going to win, he usually does.
I play tennis myself, and there is no doubt that my confidence level and my level of play are closely linked. Unfortunately, I have never been able to figure out where the on-off switch is located, nor do I have any advance knowledge of what position it’s going to be in. It can easily flip on or off in the middle of a match, for no discernible reason.
In the case of great athletes, there has always been some debate about what “goes first” as they age. It could be foot speed, for example, or endurance, reflexes, eye-hand coordination, mental toughness or whatever. My own answer is confidence, and once it goes it is not likely to come back.
I happen to work in a business which is almost entirely dependent on advertising, which in turn depends on confidence. It may not be the way they teach it in business school, but companies tend to advertise more when they feel good about the future, both in terms of their own product and the economy in general. That dynamic is especially true among the small, independent companies that make up most of this industry. (It makes a difference when you’re spending your own money.)
On account of all that, I am very interested in the “Index of Small Business Optimism,” which is compiled monthly by the National Federation of Independent Business (NFIB). On January 10 of this year, when NFIB released the figures for November of 2016, it showed the sharpest increase that I ever remember seeing.
The index showed a startling 38-point spike in the number of small-business owners who expect conditions to improve in the coming year, taking it to the highest level it has seen since 2004. NFIB President Juanita Dugan said that “small business is ready for a breakout, and that can mean very good things for the U.S. economy.”
Consumer confidence also shot up in November, to a 13-year high, and all the major stock indices soared to new records. Wherever you looked in November and December, the country seemed to be awash in confidence. Why do you suppose that was?
How you answer that question says a lot about your political inclination. Those who support Donald Trump tend to give him all the credit for the mood swing, while those who oppose him tend to ascribe it to other reasons, such as the improving employment and housing market. I’ll stay out of that particular squabble, but I don’t think there’s much doubt that the election itself was a significant factor.
The stock market took off immediately after the race was decided, probably because Wall Street anticipated a possible reduction in corporate taxation and regulation. Personally, I think the market rally had a lot to do with the upsurge in consumer confidence, either due to the so-called “wealth effect” of the fattened 401(k)s, or because people assume that rising markets portend a rising economy.
In terms of the NFIB survey, I think it’s fair to say that small business owners have been in a funk for a long time, and I don’t need to tell you all the reasons why that is the case. Let’s just say that these have not been the easiest years to run a small business, in the school supply industry or most other “old-economy” sectors.
At this point, a lot of us might welcome a change of direction, even if we don’t really believe that jobs are going to start coming back from China or anywhere else. When you’ve been sailing into headwinds for long enough, any new tack seems worth trying, and we don’t like taxes and regulations any more than anyone else does.
Then there’s health insurance. I don’t know about you, but I used to take some pride in the fact that our little company was able to offer health insurance to our employees, long before there was any kind of mandate. We contributed enough to cover a single person with a reasonably good policy, and people could add whatever extras they needed for their own situation.
Now I am almost embarrassed to tell new hires what the company participation covers. We actually have employees who turn down our subsidy and pay a penalty on their income taxes and have no health insurance at all. Can Donald Trump fix this problem?
I don’t know. He says he can, and you get the sense that he believes it. He also seems convinced that he can bring peace to the Middle East, stop gang violence in our inner cities, rebuild the entire infrastructure of the United States, and balance the budget.
Mr. Trump possesses an almost unnatural level of self-assurance, which is unshaken by anyone else’s opinion or any contrary evidence. I recently heard one of his children say that nothing motivates him more than being told that his goal is impossible to achieve.
I’ve heard a lot of elaborate theories about how someone like Donald Trump could be elected president, but here is my own explanation. He won because millions of discouraged people were drawn to his absolute faith in himself.
I wish that you and I had that kind of self-confidence (although we could be a little more tactful about expressing it). Confidence is a powerful force, which could have a profound effect on our businesses and our industry.
In my case, at least, that’s not going to happen. I don’t think it’s a matter of self-doubt so much as just a general skepticism and tendency to look at the dark side of everything. In other words, I’m hopeful that good things will happen in this new era, but I’ll believe it when I see it.