SCARY NEW DATA ON BUSINESS FORMATIONS …
Frightening new data on the state of American entrepreneurship has been uncovered by a Brookings Institution report released earlier this week.
According to the data – which explored the creation and destruction of U.S. businesses over the past three-and-a-half decades – American “dynamism” is on the wane.
“Business churning and new firm formations have been on a persistent decline during the last few decades, and the pace of net job creation has been subdued,” the report states.
How subdued? From 2009-11, businesses folded faster than they were created – the first time that’s ever happened.
The Brookings’ researchers refer to economic dynamism as “the process by which firms continually are born, fail, expand, and contract.” It’s a key measurement of innovation – which obviously includes creative destruction as part of the cycle.
“Research has firmly established that this dynamic process is vital to productivity and sustained economic growth,” they note. “Entrepreneurs play a critical role in this process, and in net job creation.”
Duh … which is why we’ve specifically advocated for tax relief that benefits entrepreneurs, most of whom are incorporated as sole proprietorships, partnerships or limited liability corporations (meaning they pay the federal government’s oppressive individual income tax).
We’ve long argued that such relief is much better for the economy than government doling out corporate bailouts and other targeted taxpayer-funded incentives to select corporations.
This is further evidence that we were (and are) right …
13 comments
The Brookings Institution?
I should have bombed those bastards when I had the chance!
I prefer firm exits over soft ones.
That being said, everyone likes a firm entry.
It’s the natural effect of free markets.
The greatest incentive government can give to entrepreneurs is to kill itself in a horrible, highly visible, and legally binding way.
I got out of the small business game in the nick of time. I would have lost my shorts under the current criminal tax structure.
I’m doing well in it, but I’m working the system over and staying way under the radar. It took a lot of pain though to figure it all out.
The system buries most people now, unless they get lucky and hit the right niche. New entrepreneurs have an even harder time because the business climate is so unforgiving, regulated and taxed to death. All this chart does is confirm what I’ve been seeing in businesses I visit outside my own little fiefdom.
I feel bad for the average person trying to do their own thing now, most of them can’t even get out of the starting get anymore.
But the stock market is going up and the GDP too….sure signs everything is ‘ok’, uh huh.
The fact that FITS has to ask, tells me his stupid @$$ should be out of business.
There answer lies in more funding for higher education in this state. SC needs to add an 1% sales tax for higher education so that our universities can teach more creative and innovative curriculi that will foster a creative atmosphere and birth the businesses of the future. It is time to invest in ourselves and our futures!!
So colleges can buy and require obscene, anti-Christian, Homosexual propaganda to read, to pay a kick-back to the gay creators…????…
When higher education gets caught what they got caught doing in the last 6 months, we’d be smarter to FIRE all staff and faculty, and start over. I would pay any amount of tax if you do that…
LMAO!
College’s loans are one of the biggest financial bubbles in existence with students graduating with huge debt and most of the not making enough to pay it off and you want to double down on stupid….great commentary.
Student loans have enabled both public and private institutions to milk students for every dime they can, and that has not translated into better education.
The bubble will pop eventually, but until then, you have tons of young people who are putting off their futures because they are strapped with huge amounts of debt. That’s capital that isn’t going to be spent in the economy. It is lost potential.
And to think there was a time when people could afford a lot of public AND private colleges relatively easily with just a full-time minimum wage job.
We don’t need to hike sales tax to pay for higher ed. If you’re worried about their funding, then return what was cut from them over the last decade or two.
Public colleges need to be more affordable first, the best way to do that is to exert better control over them to force tuition down and stop them from pissing money away on useless crap that doesn’t actually benefit the students.
I blame Bush.