Maintaining our economy's engine

During Halloween week, some of the spookiest sights came in the form of new government figures.

On Wednesday, gross domestic product was reported down 0.4 percent, its worst one-quarter drop in a decade. Thursday brought the manufacturing numbers, also down. Friday, unemployment rose.

It's unclear how much of the damage can be chalked up to a sharp, but perhaps short-lived, popular reaction to Sept. 11. (It's worth noting that the next quarter includes retail's richest months.)

But with so many Americans reacting to so many swirling shards of information, uncertainty - perhaps the biggest economic destabilizer - may be at an all-time high.

Consumer confidence hovers at a seven-year low. And seeing such poll-based reports, accurate or not, gives would-be spenders pause.

One group taking a hit: small-business owners - and not just those near New York's ground zero.

Some 5.2 million US firms employ fewer than 100 workers. And 99 percent of US firms employ 500 workers or fewer, according to the Small Business Administration.

Washington seems to be hearing small firms' concerns. Tax incentives and relief measures aimed at them are now chugging through Congress. A ban on Internet sales taxes appears set to be extended.

Still, critics say that complying with federal regulations introduced last year costs firms with fewer than 20 workers nearly $7,000 per head, compared with less than $4,500 for firms with more than 500 workers. Can little guys thrive?

The answer is yes, if you believe a new Gallup poll. It indicates US consumers are more optimistic about their local businesses than about the economy at large. Can they back that optimism with cash?

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