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The Death Cross Of American Business
So much for the recovery... As WaPo reports, the American economy is less entrepreneurial now than at any point in the last three decades. A rather damning new Brookings Institution report shows that US businesses are being destroyed faster than they're being created. As the authors of the report ominously explain: If the decline persists, "it implies a continuation of slow growth for the indefinite future," as new business creation has been cut in half since 1978.
This is the death cross of American Business!!
And the bottom line from Hathaway and Litan:
Overall, the message here is clear. 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.
Doing so requires a more complete knowledge about what drives dynamism, and especially entrepreneurship, than currently exists. But it is clear that these trends fit into a larger narrative of business consolidation occurring in the U.S. economy—whatever the reason, older and larger businesses are doing better relative to younger and smaller ones. Firms and individuals appear to be more risk averse too—businesses are hanging on to cash, fewer people are launching firms, and workers are less likely to switch jobs or move.
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Greenspan, Bernanke, and Yellen: Thanks!!!! Your crimes against humanity are plain to see.
fascist overlords have no interest in independent businesses... all must slave for the corporate giants or be crushed into dust by gov.
Why become an entreprenuer when their are so many .gov benefits
People who work and save are simply .gov and banker assets anymore.
Funny how the death cross happens in 2008... I wonder what event took place then that would have had an effect on business confidence?
Or the decline going back 30 years. If only there were a way to deduct 30 from 2008 to see what was occurring then and how it effected the American mindset. Alas, we'll never know.
Obama was elected? Seriously, for any business that isn't oin his orbit, he's poison to business confidence.
Go long office depot!
http://www.benefits.gov/
Everybody's twerkin' for the weekend, bitchez.
Aright! I'mma get me sum o' dat gubmint cheese!
Obama phones Bitchez!
That's the new gubermint cheeze!
This was all very predictable. As we progress even further down the path toward outright fascism, a small group of large companies — either tangentially connected to or directly controlled by the government — will destroy all competition.
And people wonder why black markets exist.
My point exactly, these graphs indicate top down consolidation, welcome to corporate fascism.
Back in the "old days" the big corporations were busted up... now they are celebrated as they merge and layoff workers. Young new vibrant companies are bought and their technologies tucked away.
Big corporations are the problem.
I hear it's getting more expensive to buy a politician these days... And then you have to cover up their indiscretions to protect your investment... A certain Sen Menendez comes to mind...
and people need to understand why this matters. Fascism is about total control... if they control all commerce, they can do anything to you and you have no options (beside the black market)... they will feed you poison and you will eat it because you have no options. there will be no health food that is actually healthy. no supplements that actually work. no electronics that are not set up with back door for spying... and on and on.
Planned economies are always set up to benefit the planners at the expense of everyone else.
Let's just hope we still have Dancing with the Stars in our shiny new dystopian nightmare.
We will all be stars in our centrally planned distopia. Out of many, one shining beacon of prosperity. Shame on you for injecting your poisonous western notions of celebrity, only dear leader is worthy of idolotry.
Shine On You Crazy Diamond
Part of it is the extreme pain it takes just to start a business particularly if you need an actual brick and mortar location. I listened to two friends of mine who just wanted to move their small deli across the street to a cheap location and the red tape, trouble, delay and idiocy of the bureacracy would have made me go postal.
This actualy supports businesses and large corporations who already exist and have margins and volume to suffer the bureaucracy.
I personally love the black market which is sometimes called a flea market.
large corporations lobby for more red tape /rules as it makes it harder for smaller competition.
You, of course, john39, have made the most cogent and lucid comment on this blog posting.
Obviously to us sane types, Brookings Institution, home to Rubin's Hamilton Project to privatize (screw up, and owned by the super-rich) everything, is another step in destroying all free enterprise and driving the masses into serfdom.
Another Brookings lemming, David Wessel, recently claimed (and we hear this on a daily basis) that there exists some ultra-secret office in the government which no one has ever heard of and which they will never tell us the name of (Wessel's sorry ass included) which counts each and every American who IS --- OR IS NOT --- looking for work, so they can keep manipulating that phony unemployment figure.
Fuck Brookings and all the other swinish plutocratic/kleptocratic outfits: everyone knows American bizness is ONLY good for creating junk paper, offshoring jobs and importing foreign visa scab workers.
Innovation in America? Is the engineer Dyson America, or British originally?
Can America ever do a decent urban transportation system --- NO, of course not, 'cause the rich and super-rich want to screeze and bleed every single penny from us.
Can American ever do high-speed rail?
NO, of course not . . .
Especially if you don't subscribe to the ISO requirements, and the endless bullshit paperwork that ensues. Honest business people, who do business with other honest business people know that all that recording and reporting add zero value to their operation.
I make stuff for a living. My customers don't have to deal with procedure and its direct result- bureaucracy: They deal with me.
At their core, these 'government standards' are make work policies designed to employ those who are otherwise unemployable.
The system of 'law' we practice is likewise designed- to keep people who can't do shit employed, and to incarcerate those who might actually 'do shit'.
Sustainable? Fuck, I can't see how it's lasted as long as it has.
But the BLS just said in the jobs report that the birth/death numbers were AMAZING.................
I also sport a half chub when I consider the death rate of Baby Boomers.
I was born in '57, so I guess that makes me your enemy. You're a dolt for not recognizing that the 'issue' we deal with today was spawned long before I, or your great-great grandparents were born.
Now, slap yourself in the face, resolve to do no harm, and join the revolution.
Do not discriminate, recognize your natural allies, and most of all disconnect from those who would like you to believe that your grandparents are your enemy. They're not.
No surprise the trend began just a few years after we went off the gold standard... That was the final nail in the coffin... All down hill after that... And here we are today... So many bad decisions....
Gold standard my ass. Rome was on the gold standard when it went bust. Face it, there is NO ECONOMIC MODEL that doesnt get top heavy and crash. N O N E
When banksters loan almost only for the subprime market (and check the data over the past 10 years and you can confirm this), entrepreneurship goes by the wayside.
I think there's still garage space to manufacture torches and pitchforks.
Have you seen what they teach in Elementary and Middle school these days? I remember the days of bake sales, lawn mowing campaigns and car washes. The schools now teach kids how to beg for money instead of how to earn it.
They teach kids to shut up, sit still, and fill in the bubbles.
Not a great methodology for creating entrepreneurs.
(former elementary and middle school teacher/principal)
they teach them how to pass tests, nothing more.
Wasn't there some kid of some rich dood recently in Potomac, Maryland (rich suburb of D.C.) who set up a lemonade stand and was promptly fined by the county government?
You get fined and criminalized at every free enterprise moment.
And never forget the hedge funds and banksters who did that virtual naked shorting number on over 7,000 small, public companies to destroy their stock value (utilizing DTCC's Stock Borrow Program, doing a number on stocks which weren't even in play but completely owned).
The war on small business has been going on for quite some time, hombres.....
They teach them to be global warming activists. Any boy who shows even faint signs of independence or vitality get diagnosed with ADHD and medicated into oblivion. It's all part of the plan.
That's the plan. Get rid of us. They don't want our communities able to take care of themselves
Out of the ashes will emerge.....(fill in the blank)
The Kraken.
'They didn't build it anyway!' - The Kenyan
Stil have a long way to go to zero?
Hmmm. Negative since Q1 2014. Guess we missed the zeroness. Its all rolling down as things get rolled up.
Death CROSS!!! Where's Hindenburg Blimp?
I can tell you as a small business person who still retains some ambition, FATCA is absolutely the worst, the single worst law EVER to kill American businesses. It is now impossible for any American person or small business to setup a branch to sell products overseas.
If you wanted to sit around and figure out a law that would single handedly destroy American entrepreneurial ambition, it would be nearly impossible to come up with something more effective than FATCA.
The fact that our elected representatives have approved such a law is beyond represensible. The author of FATCA Mr Dick Harvey still travels the world as a type of celebrity but nobody deserves more shame and scorn than this man and the people who put the law into place.
You nailed it Magnum, and in case it still isn't obvious to all:
ONE GLOBAL BANK
ONE GLOBAL EXCHANGE
ONE GLOBAL CORPORAION
...and ONE GLOBAL CURRENCY
One Ring to bring them all and in the darkness bind them.
It's not about one bank when Americans are forbidden to bank overseas. Its about big govt enacting a law to get more money for themselves but the end result will surely be the opposite as planned.
FATCA dooms all Americans.
You can be from any other country and open a branch office anywhere but Americans are actually forbidden from commerce due to fatca.
The govt bureaucrats are brain dead and at the same time have all the power.
FATCA, what an appropriate name - FAT (as in government) and CA (as in California). A fat California goverment. Can't make this type of stuff up as anyone operating a business in California will surely attest that on top of this piece of legislation (just one of many small businesses have to comply with), California is truly the poster child for a state discouraging busineses formation and operations. Maybe governor Brown and give Obama a wrap around this Thursday when the POTUS is in San Diego for another round of raping, pillaging, and plundering (oh I mean fund raising). Guess he can't do this remotely from Washington anymore and must be on location to extract as much money as possible from the few that still support him. No question America is doing its very best to isolate the country from the rest of the world and kill small business but then again, what would be expect from life long politicians that truly do represent the modern pirates.
I am a small business person with the wherewithall to find opportunity and launch new deals and hire people. Not all winners but the economy wins even if I fail. I invest in this country and I was educated in three countries. I can sell American products overseas. I communicate in different languages and I am American. There are others like me.
The way I see it, fatca alone is so rotten, such a horrible detriment to America as a country, I wonder "what's next". If they can pass fatca then there is a lot less incentive to plan new ideas. Guys like me should be hopeful and confident. The future is so bleak I can only lose confidence.
It is not that Americans are forbidden from banking overseas. The problem with FATCA is that the withholding and reporting requirements are so onerous that most non US banks refuse to open accounts for US citizens. It simply is not profitable, unless you are depositing $100,000 or more. However, there are ways around it.
Fuck this is depressing.
Get religion.
Embrace the entropy.
Glory to decay.. have a nice day. :-)
You just have to form a workable plan.
I'm saving empty chip bags and cookie boxes to use as a lure.
1.Snipe from a hide.
2.Render fat.
3.Sell Bio-diesel.
Gotta perfect that worm to filet mignon process. or maybe that will also become Soylent.
I prefer to embrace Negentropy.
Overqualified?
Underutilized?
That must mean the Birth/Death addition of 230K jobs last month is accurate.
Do these graphs account for consolidation?
PS Firms less than 1 yr old is 7% in 2008 and firms dissolving is 7% in 2008, this graph ignores the remaining 86% of businesses in 2008.
How exactly are we to conclude that these two data sets are correlated and that they represent a "death cross". Oh Tylers, stop the hyperbole.
I recently traveled through the downtown of the Seattle area, took photographs and compared them to those I took about 8 years ago: same empty places which were once filled, next door to newer empty places --- all once commercial/retail businesses.
Recovery, anyone . . . .
Conservatives and business owners have warned of this for over 5 years. With great dissatisfaction it has fallen on death ears as it does not bode with the narrative set forth by this administration and it's media counterparts.
Why does the graph start in the 70's then?
Looks like Reagan broke even... barely...
USSA!
what's next? Backwardation of businesses?
Waiting for the shit to hit the fan before I make any business investment. Ya, its been 5 years running but o well, i wont make an investment until we reset this monetary system.
If you don't think Obamacare has anything to do with this you are officially brain dead.
And big business1 is taking all the business...thus the stock market rising....what is going to make it change? When will the large corporations start enforcing their pricing power and adding more and more of each dollar of revenue to the profit line? As much as one must hate the current situation there is always two sides to the coin. The destruction of the American middle class is a big plus for the remaining public corporations. They don't care if they sell half the product at twice the price.,..because that means more profit.
"When"? WTF....haven't you bought gasoline recently?
nobody gives a fuck til they, are fucked. oh yea i give a fuck, but really what can i do that i haven't already?
credit union, minmal cash in a bank, nothing paper except 9 x 11 and dead prez crap. debt free. not feeding the monster any more than livin life...
well fuck em'. i'm still opening a microbrewery because fuck my job.
I'm not sure this is what it looks like, so much as a sign that successful businesses now open company-owned franchises across the country, displacing what used to be lots of little one-offs. It's maybe a little depressing ("we're all Taco Bell now!"), but it's probably also a little more efficient. It might also result in the life expectancy for new businesses that do form, to be better than before.
In some ways whatever this means it's probably even more intense than it looks, because a lot of "small business startups" are actually unemployed people pretending, or not really trying very hard. I might reincorporate at some point just to have a corporate shell instead of working W2, but it wouldn't really mean anything. So the real businesses might be only half of those shown, and if the falloff is just in those, then it's proportionally even bigger.
The "increased" efficiency is debatable.
Using the concept of efficiency outside precisely defined situations is a farce. For example, everything is fine and dandy until the improbable or neglected outcome happens:
Large banks seem more efficient until they are too big to fail and require money printing bailouts.
Farmers growing the same highest yielding potato seems more efficient until a disease wipes it out.
Nuclear power seems more efficient until meltdown.
Etc.
When you have a corporate aristocracy, you endup with 5 ~ 6 big corporations and thats about it, slowly these corporations will gobble up the small fish and you will endup with just 2 ~ 4 corporations that control every sector.
You will work for, shop at, eat at, sleep at, live at XYZ corp.
Every fiber of your existance will be dictated by the corporation, "for your benefit" (really theirs).
As businesses get gobbled up it is inevitable that there will be a rise in:
Crime
Terrorism
and protest
Eventually all forms of protest will be blanketed under the term terrorism.
At which point you either get in line , or endup in a concentration camp (forced corporate labor).
That is where this inevitably ends up.
The goal is to have a world business model akin to the snake eating its own tail, the corporate top, will consume (literally) the bottom dwellers that work for the corporation, (people on the plantation).
You will have structured tiers , (pyramid style) to control and enforce corporate policy.
You will have "Policy officers" (police officers) that will enforce the policy with threat of gun point.
There will be corporate elections to "vote for the president" (O/C this will just be for show, all the candidates are pre-picked in advance, and the media will guide the public towards the "correct" choice), the public wont evne know that their opinion is being made up for them!
There will be law-makers, (corporate congress and senate), to create and regulate new corporat policy.
There will be rules and regulations and limitations governing the life you live
From
-Speed limits
-Parking violations
-Parking Meters
-Garbage Policy and fines
-Debt enforcement
-Debt Management
-Asset confiscation
-Property "taxation" and "confiscation"
-Border patrol to keep the plantation workers from escaping
-Drones to monitor and optimize the plantation
-New-Borns will be registered into this system at birth via a "birth certificate" and have a corporate ID number associated with them, it will be impossible to do business without this number (SS).
What a horrible future that will be. . . . O WAIT A MINUTE.... sounds like TODAY!
If so, then my advice is to shoot back.
Democracy and crony capitalism killed entrepreneurship.
Nope!!!!
Big business killed free enterprise!
Go back and research/read Roosevelt's TNEC study (Temporary National Economic Committee) and find their results: concentrated corporate ownership by the top banksters of Wall Street (this back in the 1940s) which generated a lawsuit from the gov't (United States v. Morgan et al.) which was killed during the Eisenhower Administration.
The lawsuit alleged a conspiracy dating back to 1914.
Note that date. . .
This has been a long time acoming.
Roosevelt's TNEC study (Temporary National Economic Committee) and find their results: concentrated corporate ownership by the top banksters of Wall Street (this back in the 1940s) which generated a lawsuit from the gov't (United States v. Morgan et al.) which was killed during the Eisenhower Administration. = CRONY CAPITALISM
Seems obvious to me.
So, here's the question: Has the BLS adjusted their "Birth/Death" model to reflect these changes? Or are they still pretending it's 1977?
Yea, go ahead and set up shop and have the IRS crawl up your butt every year with a microscope and demand payment every 90 days while the big corps ofshore their money and don't pay tax. And your supposed to compete with this?
I had a friend who opened up a simple barbeque joint and out of 3 years he was audited every year of the three. First year they found some Hams that he did not count in inventory. Second year after 2 weeks nothing. 3rd year? I don;t think he even cared at that point. He finally said enough closed up shop and said gimme my govt chesse.
Another friend raised hogs on a hog farm and its a crying shame what the corporate lobby of Tyson, Monsanto, the EPA and FDA and others did to the small American hog and corn farmers,. Go ahead buy 250 free range hogs today or plant a field of corn from seed you saved and watch what happens next. You won't make the first year before the suits show up claiming your animals have cholera, your corn has pantented genetics you did not pay for, or your polluting a wetland and or endangering a tortoise in the desert. Bundy is just more of the same of what has happend for 30 years
And they are waiting for small bus hiring to pick up as it accounts for most new jobs and was always first to lead us out of depression. lol gone with the wind.
Big gov is the gorilla in the Room. Who wants to innovate with the ape breathing on you ?
More regulation and taxes should help.
Nice try, but not many US taxpayers are effected by FACTA. Were you trying to set up an offshore business to keep from paying taxes? Lucky for you, other wealthy tax dodgers have managed to postpone 2010 FACTA for another two years, after financial industry lobbyists had their way.
"This latest delay reflects the series of failures, despite consistent congressional attention, to actually rein in offshore tax havens. The Justice Department has charged 35 bankers criminally for their role in aiding tax evasion, but has not extradited one from his home country. Out of 14 banks under active investigation, only one, Wegelin, has been indicted, probably because it was going out of business anyway."
http://www.newrepublic.com/article/117652/shameful-irs-skips-crackdown-t...
When citizens don't pay their taxes, other citizens have to pick up the slack. The vast majority of small businesses aren't employing tax shelters overseas or engaging in money laundering. Sorry if I have no sympathy for globalists. Keep the small business tax breaks for US domiciled businesses.
This was supposed to be a reply to Magnum's comment.
American companies both large and small are testing the limits of how much straw you can put on a camel's back. From the annoyingly mundane to mortally fatal, governments are heaping law and regulation on the backs of US (and European) enterprise. Detroit, one of the wealthiest cities in the world and a marvel of wealth creation is the poster boy along a continuum of failing cities as businesses, the raison d'être of cities in the first place, die a slow death under the American and EU Raj.
Referring to chart one, It is a depression. More businesses go out of business than in business during a depression. This chart, while interesting, should not surprise anyone who believe my point in the previous sentences.
If I am reading this right the number of firms disolving exceed the number of startups. If this is the case, how could the BLS be so optimistic in their birth/death model in their NFP report?
too much trouble to open a business, today. why bother? trading is the most hassle free money in the market, hardly any paperwork and no employees.
America is the greatest and richest capitalistic society in the world, yet we should note that our entrepreneur class that is surprisingly small and shallow. According to the Small Business Administration only 10% of Americans own a business and 80% of these are single self employed businesses.
This means only 2% of all Americans actually employ at least one non-relative employee. Few businesses are large conglomerates like Walmart or McDonald's with hundreds of thousands of employees, some are mediums size, but by far most are small companies with under 50 employees. More on juust who small this group of job creators is in the article below.
http://brucewilds.blogspot.com/2012/01/only-few-are-entrepreneurs.html
Small business, with two to ten employees, are becoming an endangered species in America. The family business once the backbone of this country is under attack from the unintended consequences of the laws passed in recent years.
Inspections, a plethora of permits, licenses, taxes, insurance requirements, and regulations make it almost impossible for a small business to open and operate legally. More onwhy small business is being crushed in the rticle below.
http://brucewilds.blogspot.com/2012/01/small-business-endangered-species...
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Hmm, not really. Dynamism is based on dynamic. The more contraints you place on something the less dynamic it will be. The more you try to CONTROL something the less dynamic it will be. The problem and the solution appear to be self evident.
Did these people actually go graduate high school?
Has anyone noticed a strong trend at WaPo since Bezos bought it? Maybe he is fighting for what is best for him - a healthy small business environment. No wait, what?
Own a website, some land, some seeds, go to garage sales, distressed sales, craigslist, roadside sales, farm, eat, shit, fuck, sleep, rinse, repeat.
fuk da guv
fuk da bank
cash in hand