My 2 Cents | #4
The Impact of Political Chaos in the US on Entrepreneurs and Startups
16/10/2023
Opinion of the Advisory Principal Gianfranco Miranda
Elections. A time in the country when we choose our next leader, the representative of the people who is meant to make everything better... or at least that's the hope. However, in reality, it's a time of reflection where we find ourselves torn between Democrats and Republicans. The current political chaos in the United States, mixed with the uncertainty of whether Biden or Trump will be the next president in the 2024 election, not only affects investments but also generates a challenging situation for entrepreneurs and startups.
The Political Impact on Entrepreneurs and Startups: Lessons from the Past
It's essential to recognize that the political landscape in the United States has a long history of impacting entrepreneurs and startups. Let's take a journey through some historical examples to understand the significance of politics on the business world:
The Dot-Com Bubble (2000 Election): The 2000 presidential election between George W. Bush and Al Gore coincided with the burst of the dot-com bubble. The uncertainty surrounding the election results added to the economic turmoil, causing many startups and tech companies to collapse. Entrepreneurs learned firsthand how political instability could exacerbate market volatility (1).
The Great Recession (2008 Election): The 2008 election, featuring Barack Obama and John McCain, occurred during one of the most significant financial crises in modern history. The aftermath of the subprime mortgage crisis led to a credit crunch and a severe economic downturn. Startups faced funding challenges, as investors became cautious. Entrepreneurs had to adapt to survive in a harsh economic climate (2).
The Affordable Care Act (2012 Election): The 2012 election, pitting Barack Obama against Mitt Romney, played a pivotal role in the healthcare industry. The passage of the Affordable Care Act (ACA) had far-reaching consequences for entrepreneurs and startups in healthcare technology and services. Some benefited from new opportunities, while others faced regulatory hurdles (3).
Immigration Policy (2016 Election): The 2016 election between Donald Trump and Hillary Clinton ignited debates about immigration policy. This affected startups relying on skilled foreign talent through programs like H-1B visas. Policy changes under the Trump administration influenced the ability of tech companies and entrepreneurs to access global talent pools (4).
The COVID-19 Pandemic (2020 Election): The 2020 election featuring Joe Biden and Donald Trump occurred amid the ongoing COVID-19 pandemic. The government's response to the crisis, including relief packages and business support, had a direct impact on startups' survival. Entrepreneurs had to pivot, adapt, or even shutter their businesses in response to shifting policies and economic conditions (5).
The Role of Government and Mental Health Concerns
Throughout these historical examples, it becomes evident that the role of government extends far beyond politics. Governments and presidents have a fundamental duty to protect their citizens' well-being, which includes safeguarding mental health.
However, recent years have seen a decline in this responsibility, as behavioral health issues have risen in many US cities. The fast-paced changes in lifestyle, financial pressures, and struggles to earn even the minimum wage have taken a toll on the country's mental health.
Shocking statistics indicate a growing crisis in mental health. From 2019 to 2020, 20.78% of adults in the United States were experiencing a mental illness, equivalent to over 50 million Americans 6. From depression to suicidal tendencies, mental health issues have become a central concern for this upcoming election. Yet, none of the candidates seem to be adequately addressing this pressing issue. The focus has shifted towards winning the seat rather than addressing how they plan to assist all Americans in these trying times.
As the nation heads into the 2024 election, the economic challenges, political uncertainty, and mental health crisis are intertwined. Entrepreneurs and startups must keep a watchful eye on the political landscape, advocating for policies that promote stability and well-being for all. In these turbulent times, the importance of being aware of what is happening in the country cannot be overstated. It is crucial not just for entrepreneurs but for all citizens to actively engage, demand accountability, and contribute to shaping a brighter future for the United States.
Considering the upcoming economic climate it is best to be prepared, if you need to discuss strategies on how your business should navigate this year's elections schedule a time with me to talk and help you.
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