Skip to comments.This Is The End: More businesses in America are being destroyed than created
Posted on 05/13/2014 5:41:29 AM PDT by SeekAndFind
This is the end
My only friend, the end
Of our elaborate plans, the end
Of everything that stands, the end
No safety or surprise, the end
You know its bad when I begin by quoting The Doors, but The End has been stuck in my head since I started collecting stories for this weeks column.
The first was Erik Shermans Inc. writeup  of a recent Brookings Institution report on the decline of American entrepreneurship. According to Brookings, “entrepreneurship has reached at least a three-decade low across virtually all of the country.” Three decades also happens to be as long as Brookings has been tracking such things. Sherman adds:
For decades, the entrance of firms outpaced their exit, meaning a net increase in new businesses. The authors see that–reasonably, it seems–as a proxy to an inclination toward entrepreneurism. But since at least 1978, the lines have converged, albeit slowly. In 2008, they reached a watershed moment and crossed.
The math is simple: More firms leaving than arriving means a shrinking percentage of business is being controlled by entrepreneurs. And notice that the exits were relatively steady. It is the creation of new firms that has sagged.
The trend line has never been good, but it accelerated sharply downward in 2010, the year Obamacare was signed into law. While that ought to be the big economic story of the week, as Jean Card writes for US News & World Report , “Riddle me this:”
A Google News search for this weeks alarming study from the Brookings Institution on the decline of business dynamism in the U.S. yields a mere half-dozen results, making it like the proverbial tree falling in the forest. The study is a big deal. It should make a huge amount of noise. Its economic implications are staggering. But no one appears to be listening.
Maybe thats because the mainstream media was busy touting the ACAs reputed successes. A Google News search for “Obamacare Success”  yields thousands of results from just the last week. The “success” being touted was President Obamas claim that eight million Americans had signed up for insurance on the various federal and state exchanges, despite earlier claims that the law would cover nearly twice that many. Of course, the original rationale for Obamacare was that 46 million Americans lacked health insurance but anything can be construed as a success provided you have a compliant media helping to move the goalposts ever closer.
But as we’ll explore right after the page break, were just getting started.
Sean Hackbarth  reported late last week at the U.S. Chamber of Commerce that we could suffer the loss of up to a quarter of a million jobs, due to the ACAs Health Insurance Tax:
Small businesses should brace for big health plan premium increases. Some are already seeing this happen. Rod Winter, a Wisconsin business owner told the Wall Street Journal:
Our 440-employee business just received its initial premium from United Healthcare for our July 1 renewal. The renewal premium represents a 29% increase over the current premium. UHC indicated that our premiums are going up 11% to bring our deductibles and out of pocket maximums in line with the provisions of the ACA. In other words, without the ACA, our premiums would be going up approximately 18%, not 29%.
New research finds that the added costs of one of Obamacares taxes will be brutal on employment.
More than half the expected job losses will come from small business the once-vibrant heart of American entrepreneurship. Big business doesnt exactly have it easy, either. General Electric, UPS, Dollar General, and Cognizant  all reported lower-than-expected earnings last quarter, in part due to the “Affordable” Care Act. That means fewer opportunities for people looking to move up the corporate ladder, and fewer opportunities for entrepreneurs looking to build their own ladders, so to speak. The sound you hear is millions of doors being slammed shut by those who already have theirs which is something you should keep in mind the next time you hear President Obama or any Democrat complaining about income inequality.
Also keep this in mind , courtesy of Jay Cost at the Weekly Standard:
Liberals claim the law is working. This omits the dozens of provisions that the president has suspended or delayed because they were not workingfor budgetary or political reasons. The suspended or postponed provisions include the mandate that businesses cover full-time employees, the cancellation of noncompliant plans, and cuts to Medicare Advantage.
One can assume that, absent a Republican in the White House come 2017, the ACAs suspended strictures will eventually come into force, denying us even more jobs and lost opportunities to live out our own American dreams.
As I said, were just getting started.
Hey Mr. CNN, if you’re reading this, let me make you happy by chanting your slogan...
“Bring back American jobs now!” :)
Welcome to Socialism. Fewer new businesses is a feature, not a bug.
The 0BAMA DEPRESSION is in full swing and the kenyan, commie usurper in the white hut couldn't be happier.
How long till we roll out the guillotines?
But...but...but, Barry’s “media” is telling us that Barry’s “conomy” be “boomin’!”
In a labor market like this one (too few jobs, too many job seekers) I’d think more people would be starting their own businesses. That’s what I did and it was the best move I ever made.
Raising marginal tax rates had consequences. What the progressives, media, low information voters, academics, and politicians don’t understand is that growing small businesses are typically capital starved. Income taxes for the business are declared as the owner’s personal income. Entrepreneurs, particularly during the early stages of the company’s life, typically live a frugal lifestyle in order to poor every available dollar back into the business. When Obama raises marginal tax rates to soak that $250,000 income of an entrepreneur he is really taking cash desperately needed to fund the growth of the business.
The pictures progressives have painted of the $250,000 entrepreneur is someone living like the Obama’s, jetting around the world, going to parties and concerts, riding in limousines, and eating expensive food. The reality is, most of these entrepreneurs drive a beat up old pickup truck with the name of the business on the side, live in a very modest home in a middle class neighborhood, and never take a vacation. They probably live on $50,000 or less of the $250,000 and if there is anything left over after taxes it goes to buy new equipment for the business.
During the current depression, bank and venture capital funding of small businesses has almost completely dried up. For a small business owner to grow the business, they have to generate the cash for expansion internally which is difficult in good times and impossible in tough times, particularly when the government’s take is increasing.
Unfortunately the multinational corporations and too big to fail banks that fund both political parties, and run the chamber of commerce, care nothing about the plight of small business. As a result the politicians are totally ignoring the issue.
America has sent American manufacturing to China.
This was extremely short-sighted, because China has a population of nearly five times America’s.
Nobody is paying attention, to the simple fact we have exported our very own future.
Bring back American jobs.
If you want less of something, tax it
If youy want more, subsidize it.
We tax the heck out of businesses, and pay people to sit on their asses.
Who could have guessed?
One of the methods used by statists to destroy capitalism consists in establishing controls that tie a given industry hand and foot, making it unable to solve its problems, then declaring that freedom has failed and stronger controls are necessary. Ayn Ran
eh - you know who...
What else did you expect when a bunch of ignorant socialist run the show, not only are most of them dumb but crooked to boot, with many reflecting the image of their constituents.
The other day I took a friend to the airport to see him off. From a distance I watched as my friend had to make her way through the abominable security check, with people having to take their shoes off etc. At this point the thought crossed my mind how it used to be during my frequent travels domestically and abroad without all this rigmarole we have to face now and then I took it a step further to analyze what brought it all about. It did not matter however I posed and twisted the question, invariably I arrived at an answer that a good portion could be traced to a despicable religion conceived by a war mongering pedophile who on top of it plagiarized portions of it from the Judean Christian religion. And the other part of this situation could be traced to socialism. If you dont believe it, just remove (i)slam and socialism from the equation and you will end up with a much more peaceful world as well as airports without lengthy Security check lines.
This is my take Saintgermaine
A lot of it is the greatly increased “hassle factor” of all the registering and permitting and special licensing and special insurances and guilds with silly rules aimed at preventing new entries and competition. It isn’t always a matter of finance. Sometimes the operational barriers to getting started cost more than can be undertaken in a small start-up.
I think this preemptive barrier effect is actually a larger matter than finance.
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