The Most Disturbing Economic News I've Heard of This Decade.

[El_Machinae]

Economically speaking, who cares? Why should I care about whether a President is "small business friendly"? What exactly does it mean?

Most new jobs come from business growth. Small businesses grow the most. Large business hiring is mostly replacement.

OJH has it mostly, especially considering it was just a one-line answer.
Small businesses are a major source of jobs, and are the major source of new job growth. There's a steady 'roil' of employment caused by small businesses as they comes into being and die off. And then, occasionally a small business 'pops', economically, and then can cause a large expansion in jobs and wealth. It doesn't happen often.

Once a corp gets bigger, they're happy to use layoffs to help their bottom line. And small business that is growing gets most of its 'new wealth' from expansion, so layoffs aren't as vital for the bottom line. Mega corps expand a lot less than small businesses do, certainly in any percentage metric.

So, ideally, you want a thousand entrepreneurs trying a thousand ideas. The roil itself is of benefit, but the running of experiments is also of benefit.

Well, if a company like Walmart is killing off entrepreneurs by delivering more goods at lower prices, so what? I'm not sure why general merchandise should be done by (really) small business anyway.

I don't think that Walmart kills off entrepreneurs, it merely shifts the local of those entrepreneurs to lower wage countries. Now, unless my instincts are wrong, delivering savings to the customer is 'zero sum' if it comes in the form of lower wages to the employee. There's no net wealth creation (though the marginal utility of the dollar must be considered). In addition to marginal utility, there's also the question of whether the product is itself wealth-creating, then lower wages (and lower prices) would cause net wealth growth over time.

In other words, buying cheap Walmart goods produced in China can be zero-sum or better, depending on what you buy and then how you use that product.

 

[Formaldehyde]

It seems pretty clear to me from this graph that while entrepreneurship isn't as big as it was decades ago, this latest downturn is just a reaction to having limited funds due to the mortgage crisis and the ensuing recession.

Why is this surprising in the least, especially the usual partisan nonsense of trying to blame the Democrat president?

 

[Cutlass]

Most of the declines happened under Reagan and Bush.

 

[cramstpuee757]

Is it a bit odd if I find it surprising? Entrepreneurship is risky but it has good rewards. People should not be afraid of barging inside the business industry.

 

[El_Machinae]

Entrepreneurship is not just risky, it's hella risky. Unless you can set up a system in which you get paid and a resume while you try, you can really derail your life.

 

[Cutlass]

Is it a bit odd if I find it surprising? Entrepreneurship is risky but it has good rewards. People should not be afraid of barging inside the business industry.

The public perception in America is definitely very much for the self made man, the guy who starts his own business. It's always been an American thing. It's the source of our prosperity. And it's been a very big thing in political rhetoric in the past generation. That's a big part of why I find it so disturbing that the reality is going in the opposite direction.

 

[Farm Boy]

Entrepreneurship is not just risky, it's hella risky. Unless you can set up a system in which you get paid and a resume while you try, you can really derail your life.

Combine that with the fact that enterprises in fields that generally make money have a lot of competition, probably from people with a lot more capital than a startup does. The more you let capital accumulate without knocking it down between generations the less and less different businesses you are going to have. Corporations accumulate and never die persay. Wealth passess down between generations and is protected from failing by government subsidy. Capital sticks and hoovers up the little guys into economy of scale. Want it reversed? You need to hammer the top 25% or so of households/entities on net worth. Otherwise they're just going to routinely win when it comes down to competition over finite resources and limited space.

 

[El_Machinae]

That's mostly true. The majority form of savings in the middle class, and higher, is in the form of stocks. Blue Chips. That massive influx of cash only helps entrepreneurs in an extremely circuitous manner.

 

[onejayhawk]

That's mostly true. The majority form of savings in the middle class, and higher, is in the form of stocks. Blue Chips. That massive influx of cash only helps entrepreneurs in an extremely circuitous manner.

Bonds too, but it is a valid point.

J

 

[Hygro]

Entrepreneurship is not just risky, it's hella risky. Unless you can set up a system in which you get paid and a resume while you try, you can really derail your life.

In California, a failed startup counts positively on your resume.