Why Are Small Business Owners Feeling Like Jeff Spicoli??

Jesse W. Hurst, CFP^®, AIF^®

February 24, 2025

Source: Medium.com

Fast Times at Ridgemont High is an American coming-of-age comedy film directed by Amy Heckerling, in her directorial debut. The screenplay was written by Cameron Crowe, based on his 1981 book Fast Times at Ridgemont High: A True Story. The film chronicles a school year in the lives of sophomores Stacy Hamilton and Mark Ratner and their older friends Linda Barrett and Mike Damone, both of whom believe themselves wiser in the ways of romance than their younger counterparts.

The movie was released in 1982, when I was a sophomore in high school, so many of the characters and humor hit very close to home for me. It is one of those movies that when I see it playing on TV, I have to stop for at least a couple of minutes and watch a scene or two, much to Rachel's dismay. The cast of characters includes a subplot with Jeff Spicoli, a perpetually stoned surfer, facing off against history teacher Mr. Hand throughout the movie.

Sources: Amazon.com and YouTube.com

On the first day of school, Spicoli runs afoul of strict history teacher Mr. Hand when he shows up late for class. A battle of wits and wills occurs as Mr. Hand attempts to get Spicoli to take school seriously. This leads to the following exchange between the two characters.

Mr. Hand: Why are you continuously late for this class, Mr. Spicoli? Why do you shamelessly waste my time like this?

Jeff Spicoli: [long pause, but then with complete truth in his answer] I don't know.

Mr. Hand: [Mr. Hand goes to blackboard and writes the words "I DON'T KNOW", then underlines them] I like that. "I *don't* know." That's nice.

Mr. Hand: [imitating] "Mr. Hand, will I pass this class?" "Gee, Mr. Spicoli, I don't know!" That's nice. I really like that! You know what I'm going to do? I'm going to leave your words on this board for all my classes to enjoy, giving you full credit, of course, Mr. Spicoli.

Jeff Spicoli: All right!

Please remember that Jeff Spicoli is played by actor Sean Penn, who has earned numerous accolades, including two Academy Awards, a Golden Globe Award, and a Screen Actors Guild Award. It's much like watching Tom Hanks, who also has two Academy Awards and six nominations, play goofball Rick Gassko in the 1984 movie Bachelor Party.

It's much funnier on screen than on the written page. Therefore, I have included a YouTube link to the scene below. You will want to start the video at 1:30 to see how this plays out.

Fast Times at Ridgemont High Movie CLIP - I Don't Know (1982) HD

It seems like more and more small business owners are feeling like Jeff Spicoli. Each month, the National Federation of Independent Business (NFIB) surveys its members about the state of their small businesses. They ask about employment, wages, sales, inventory, credit conditions, etc. On each of those questions, respondents have the option to answer, “I don’t know.” This valuable data is compiled into an “Uncertainty Index.” Below is a chart of this NFIB data since 1986.

Source: NFIB

Note that this isn’t a measure of optimism or pessimism. The uncertainty index was low in 2008–2010, not because conditions were good (they weren’t) but because everyone knew how bad it was. Now, we have the opposite situation. Uncertainty among small business owners is at a historic high point.

This shouldn't be surprising given everything small business owners have dealt with over the last five years, starting with the COVID-19 lockdowns in March 2020. Most of us remember the phrase “two weeks to bend the curve.” The lockdowns were followed by multiple rounds of stimulus, massive growth of money supply, huge spending bills, persistent and rising inflation, and the Federal Reserve Bank raising interest rates at the fastest pace in 40 years.

We can now add to this a flurry of new economic policies and executive orders under President Trump 47. Many of these policies should theoretically stimulate economic growth and be good for inflation, such as lowering government spending, reducing the federal debt, reducing business regulation, lowering energy prices, and keeping tax rates low. However, these are juxtaposed against things that could potentially increase costs, at least temporarily, such as additional trade tariffs and reduced immigration, which could lead to fewer workers and higher wages.

This might be more manageable if the economy weren’t already confused and uncertain, thanks to inflation and interest rates. Recent inflation data indicates that prices are not improving and may be worsening, likely delaying any Fed rate cuts that may have been expected this year. The University of Michigan’s consumer sentiment survey asks people about their inflation expectations. Recently, they have been all over the place. Our last chart measures the standard deviation or dispersion of the answers.

As you can see above, expectations about future inflation are less confident today than they have been in nearly 40 years. Given everything small business owners have dealt with over the last five years and the fast and furious pace at which the new administration has been directing policy initiatives, it is no wonder they look at surveys like the one from NFIB, do their best Jeff Spicoli impression, and simply say,” I don't know.”

All of this does not mean that the economy and the stock market will do poorly. It just means there is less near-term certainty, which does cause small business owners to sometimes pull back on spending and expansion plans until they have more clarity and confidence about the future. We thought this was an important story to tell. Since this is not an easy or fun topic, I wanted to frame it in a way that would allow you to smile by thinking of an entertaining movie that is now more than 40 years old.

The CFPs of Impel Wealth Management will continue monitoring these trends closely and monitoring their impact on your financial situation and investment portfolios. Our mission is to shepherd your hard-earned assets and keep you informed as we continue “Moving Life Forward.”

Senior Wealth Manager

Why Are Small Business Owners Feeling Like Jeff Spicoli??

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