Here you were thinking that the bad guys were crooked bankers, corrupt pols, and corporate welfare kings. Now comes Market Watch to tell you that the real problem is small business. Yes. Forget all that sentimental stuff about small businesses creating jobs or needing to be given a few breaks.
The piece is “Time to Stop Worshipping Kulaks Small Businesses,” by Rex Nutting.
Quote:
“America worships small businesses as the main engine of growth in the economy, but that’s largely a myth, perpetuated by leaders looking for simple answers to our economic problems.”
Size doesn’t matter, says author Rex Nutting.
Quote:
“If you define “small” as companies with fewer than 100 employees, small businesses employ about a third of U.S. workers.”
Actually, says Nutting, small businesses, once they get going, kill more jobs than they create them.
Quote:
“Once they pass their first birthday, small companies, on average, lose more jobs than they create. “
How this happens Nutting doesn’t explain. Is it that successful companies “take away” jobs from others? If so, it’s hardly “destroying” jobs.
Is it that they do things efficiently and reduce casual workers? Nutting doesn’t say.
But lest you think he’s against all business, he assures you he’s not.
Quote:
“Most startups are very small, of course. But it is not their smallness that creates the jobs, it’s their newness.
In other words, it’s entrepreneurship we want to cultivate, not some nostalgic memory of Floyd the barber as the hero of the economy. We need to get away from the idea that smaller is better. In fact, newer is better.”
Are you getting the picture now? Nutting just doesn’t like the present crop of successful business owners. He wants to move money to other hands, to newer ventures that haven’t made it in the market yet. You can imagine what they’ll be. Green companies, politically-favored ventures. Doesn’t matter if they succeed or not, just so long as they get started.
Because small biz doesn’t create jobs, right?
Oh and Nutting axes another red-neck superstition you might have been nursing. Lower taxes don’t help small businesses. That’s right. Small businessmen don’t think about how high or low their taxes might be when they hire workers.
Quote:
“Republican leaders are spreading another myth about small businesses. They say that if the tax hikes are allowed to go through for the 2% of taxpayers who earn more than $250,000 a year, it’ll keep small-business owners from hiring.
Their claim is nonsense. The tax rate that business owners pay is irrelevant to their decision whether to hire another worker.”
Talk about straw men. Tax rates on profits might not be the bottom line when hiring new workers but government regulations, tax rates, and every other form of meddling weigh heavily indeed when any businessman or woman considers if he is opening a new branch, expanding into a new town, or deciding to do a job or not.
So what is Nutting getting at in all this? The answer is in the conclusion of this insidious and deeply revealing piece:
“To foster a more dynamic economy, politicians and other leaders should think about nurturing entrepreneurs rather than coddling old companies, even the cute little ones. They represent the past.”
Translated, this means more breaks for start-ups and all kinds of one-off shots that go nowhere after the first year and close their doors by year-end. Thumbs up for any unviable scheme that has a paper from the state to prove it’s a business. But thumbs-down for long-standing successful real businesses. In fact, tax ’em into the ground.
Call this any thing you want.
I call it redistribution from people who know how to turn a profit to people who don’t.
The kulaks must be put under the yoke.
Another groundnut scheme. So he wants to create jobs for 1 year to foster the illusion of growth?
A business that lasts 5 years has made the grade. Invalid ideas or poor managers fail early. Are we to encourage failure, based on warped statistics?
Very progressive magazine. Did they start it 1 year ago?
Weird piece isn’t it?
Have no idea where they came up with this..
weeble-also,
thanks for stopping by.
I just read your AgoraStory. Incredible, but similar to Catherine Austin Fitts’ previous problems. You and her should talk. Great website by the way. I will bookmark and return.
“some nostalgic memory of Floyd the barber as the hero of the economy. We need to get away…
rather than coddling old companies”
Those phrases will resonate with the 30 and 20 something crowds. I get it all right. Problem is (for the small business owners anyway) so few others will, on both sides of the political spectrum of right and left.
Are these are the new, “talking points”?
Paint It Black – Rolling Stones.
Nice couple of posts, btw.
Thanks Weeble, Clark, Robert…
Keep an eye on today’s action in the metal market.
It’s going to be very interesting and we will get confirmation if this uptrend will continue or whether there will be profit taking in the short term.
Hi Lila,
I wrote this on The Daily Bell today after thinking more about it:
I would suggest you all go to Lila’s site and look at her Marketwatch article from yesterday. They want the middle class to now go to the debt supermarket to pick up some 1 year financing to squeeze new ideas out of entrepreneurs. Did anyone ever watch the movie, startup.com?
They will grab the good failures, and all start-ups will be failures. Tiny bubbles, in the air, tiny bubbles . . . . They sense John Galt is alive and well. Keep your hands under your bum, folks.
—–
But I neglected to add a link. Oh well, there will be a next time, I’m sure. And yes, I have a small business. It is the only way to go.
Now for a laugh:
http://www.cbsnews.com/8301-503544_162-20017543-503544.html?tag=strip
Hey weebs –
Thanks, I saw that.
I already put my link in…probably better you didn’t..
I don’t want to hog poor DB’s space with other people’s links.
Yeah. I saw that Colbert clip.
It was on some talk radio show..Hannity, I think.
Why was I listening to Hannity?
Trying to figure out how people think..
Makes me far less optimistic than DB about the inevitable victory of truth, light, honest money and the internet.
I put links there all the time, and DB’s site has momentum; it would be sporadic.
This article is a good catch. I am working on more ideas as to what it means. Disposable companies comes to mind. Entrepreneurs sucked into being Petri dish experiments to glean the new transistor, or the new CCD. Oops, the business failed, because the financing stopped. Good idea though, let’s take it.
I was driving with my wife when I heard Colbert (I rarely listen to any mainstream now, too busy with the DB in my spare time.) I did not know it was him, and thought he was serious. That guy is an enigma. He is playing a dangerous game, maybe not? Confusion abounds.
Yes. I can’t figure out whether some of these guys are just picking up stuff and running with it..or whether there’s something deeper at work.
Anyway, I don’t monitor the radio…the best I can do is keep abreast with the bigger promotions in the print media