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US: Business in trouble
  • Vitaliy_KiselevVitaliy_Kiselev

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    Business dynamism and entrepreneurship are experiencing a troubling secular decline in the United States. Existing research and a cursory review of broad data aggregates show that the decline in dynamism hasn’t been isolated to particular industrial sectors and firm sizes. Here we demonstrated that the decline in entrepreneurship and business dynamism has been nearly universal geographically the last three decades—reaching all fifty states and all but a few metropolitan areas.

    http://www.brookings.edu/~/media/research/files/papers/2014/05/declining%20business%20dynamism%20litan/declining_business_dynamism_hathaway_litan.pdf

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  • 9 Replies sorted by
  • Vitaliy_KiselevVitaliy_Kiselev

  • firstbasefirstbase

    IMHO, Mike Maloney hits the nail on the head. Sadly, the Democratic party in the U.S. is bent on creating more dependency, and the Republican party leadership isn't far behind. Dependency = more centralized power and influence. I think Maloney would agree with Jack Kemp's words from 1990:

    "America is not divided immutably into two static classes. But it is separated or divided into two economies. One economy -- our mainstream economy -- is democratic and capitalist, market-oriented and entrepreneurial. It offers incentives for working families in labor and management. This mainstream economy rewards work, investment, saving and productivity. Incentives abound for productive economic and social behavior.

    It was this economy, triggered by President Reagan's supply-side revolution of tax cuts in 1981 that generated 21.5 million new jobs, more than four million new businesses, relatively low inflation and higher standards of living for most people. This economy has created more jobs in the past decade than all of Europe, Canada and Japan combined. And according to the U.S. Treasury, federal income taxes paid by the top 1% of taxpayers has surged by more than 80% to $92 billion in 1987 from $51 billion in 1981.

    There is another economy -- a second economy that is similar in respects to the East European or Third World socialist economies. It functions in a fashion opposite to the mainstream capitalist economy. It predominates in the pockets of poverty throughout urban and rural America. This economy has barriers to productive human and social activity and a virtual absence of economic incentives and rewards. It denies black, Hispanic and other minority men and women entry into the mainstream. This economy works almost as effectively as did hiring notices 50 years ago that read "No Blacks -- or Hispanics or Irish or whatever -- Need Apply."

    The irony is that the second economy was born of desire to help the poor, alleviate suffering, and provide a basic social safety net. The results were a counterproductive economy. Instead of independence, the second economy led to dependence. In an effort to minimize economic pain, it maximized welfare bureaucracy and social costs."

  • johnnymossvillejohnnymossville

    You've got 500 or so politicians in DC that think they can run your business and everyone else's better than you can. It's not going to change anytime soon either. Net Neutrality is just another nail in the coffin.

  • firstbasefirstbase

    Dick Armey said it best. "The market is rational. The government is dumb."

  • RottenCarcassRottenCarcass

    I cannot believe this nonsense propaganda. According to this joker, everything is the fault of "regulation" and we need to abolish "regulations" and "laws". Yeah, right. Let's go back to the times when we had no regulations on health products, and so we had people dying from BS snakeoil medicine. Let's go back to when Wall Street was unregulated and we got the Great Depression - we put in the Glass-Steagall and other regulation and we had enormous stability, right until Wall Street and bankers got that regulation abolished and we were back to world-wide crisis in 2008 collapse. Let's go back to unsafe cars, unsafe medicine, destroy the environment, poison our water, our air, our food, hunt down to extinction every animal and plant on the planet, all for short term profit. That's when we will really have a great economy... like we had back 200 years ago with no regulation and people were living to age 35, what wonderful times!

    I tell you where you have no regulation paradise - in Somalia. Maybe this guy can go there to live in his dream world, or any other third world hell-hole with no regulation. He complains about worker protection - maybe we can go back to the times of Dickens when poor people worked like slaves 18 hours a day and we had child labor and no protections. Oh, what wonderful times those were - such a middle class! Sorry, but the only time we had a rich middle class is when we had strong unions in America in the 50's and 60's and the strongest economy in the world. Germany is doing best in Europe and they have strong unions. I tell you where they have no unions, and no protection for workers - Somalia and the third world. As unions started to be destroyed in this country, so also went down our middle class. This idiot would like to exploit his workers with no protection - OK, great, mister wise guy... and when you exploit your workers to the very last drop, and pay them sh|t and no protection - who will buy your products when the middle class has been destroyed? When we had the Great Depression we had it because all those factories that made products had nobody to buy them... people HAD NO MONEY. Unions brought people money, and that's how the middle class was built. Now, unions and worker protection can have also problems - because any institution made by humans will have problems; the answer is not to abolish all protection, the answer is to reform rationally and balance the rights - which is hard and a difficult task, not as easy as screaming like this idiot does "Abolish HR departments!".

    The problem is not regulation - without regulation you would have greed and short term profits destroy any advanced economy. You cannot have an advanced economy without regulation. You MUST have regulation to have a complex economy. You can have good and bad regulation - but that means you have to make difficult decisions and a lot of research to make the RIGHT regulation. But that is a lot harder to make propaganda about - much easier to scream "abolish all regulation!". Some regulation is poorly thought out - reform it, but don't abolish ALL regulation.

    This is stupid POLITICAL propaganda and nothing more.

  • Vitaliy_KiselevVitaliy_Kiselev

    "The market is rational. The government is dumb."

    Funnies thing is that it is not true. :-) Market is not rational, contrary to Austrians and economics books.
    And government is not dumb :-)

    According to this joker, everything is the fault of "regulation" and we need to abolish "regulations" and "laws". The problem is not regulation - without regulation you would have greed and short term profits destroy any advanced economy. You cannot have an advanced economy without regulation. You MUST have regulation to have a complex economy

    It is good statements. Austrians dream is super weak government and something like Wild West. And it is true that the more advanced is the system - the more laws and regulations exist and are required.
    Yet, it also make some things worse, as it adds complexity (you can check post about Collapse of complex societies) and it also makes Peter principle shine like midday sun.

  • jrdjrd

    It was this economy, triggered by President Reagan's supply-side revolution of tax cuts in 1981 that generated 21.5 million new jobs, more than four million new businesses, relatively low inflation and higher standards of living for most people.

    More jobs were created in Carter's first (and only) term, which included a recession, than Reagan's first term. And Bill Clinton, who raised taxes, "created" more jobs in both his terms, than either of Reagan's, with lower inflation and much lower deficits -- and his term saw the first increase in real wages for many years (not seen during the Reagan presidency). Even Obama, dealing with the financial crisis, has "created" more jobs than Reagan, according to that left-wing publication, Forbes:

    http://www.forbes.com/sites/adamhartung/2014/09/05/obama-outperforms-reagan-on-jobs-growth-and-investing/

    So much for the "supply-side revolution" and the Miracles of Saint Ronnie.

  • brianlbrianl

    Funnies thing is that it is not true. :-) Market is not rational, contrary to Austrians and economics books. And government is not dumb :-)

    Thank you.

    I'd like to add that government needs to be more than merely "Not dumb", it needs to be smart. Smart government knows how to work in the capitalist framework and help discourage the kind of fragility you're alluding to about complex systems. It's not an easy task, but neither is it impossible.

  • Vitaliy_KiselevVitaliy_Kiselev

    Smart government knows how to work in the capitalist framework and help discourage the kind of fragility you're alluding to about complex systems. It's not an easy task, but neither is it impossible.

    May be, we just need to find such capitalist government who are not just puppets of global banks and corporations.

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