First and foremost, this is a consumer recession, and a nasty one. It hurts business, too, but not directly, and not right away — unless, that is, the business sells directly to the consumer. Thousands of stores are closing, and all those selling anything related to housing or autos are already hip deep in it.

But plenty of businesses sell only or primarily to other businesses, so they’re affected only via the daisy chain of relationships. They probably touch consumers somewhere, but the connection can be so distant, they barely feel it.

Banks have tightened credit and in some cases raised rates, but again, this primarily hits the consumer. (Watch for LIBOR to rise sharply very soon.)  Most businesses are too scared to aggressively expand, and since small-business inventory is shrinking, most don’t need to be borrowing.

If I were a business owner, I’d worry about taxes and inflation. Prices are out of control, and if you can’t raise prices, your margins are being pinched. On the tax front, I’d really worry. Here’s why:

• Guess who’s going to be paying for all these Wall Street bailouts.
• States and local governments rely heavily on the housing sector for tax revenue — and increasingly so for the last five years. All those related tax losses, combined with massive losses from shrinking retail sales (about 20% of which are directly tied to housing), will have locals and states looking elsewhere to make up the difference.
• More citizens are going to need assistance, which means much more government spending at all levels. And of course more spending means more taxes.