Problem with big sweeping government policies is they not only increase the size and scope of government-but they help big companies and crush little ones. We wind up working as a slave to the government rather than for ourselves. Big policies increase the risk on the business owner.
An example is Dodd-Frank. Big banks feel the sting because their costs go up with unnecessary and silly regulations. But mid size and small banks fold up shop and go out of business-or have operations that are severely curtailed.
Over reaching government is filtering through the broader economy and why we “unexpectedly” are still in recession after trillions in government spending and big huge programs.
Big government attacks entrepreneurs through every available portal. The EPA has been particularly aggressive since Obama took office. If you want to be in the energy business or the waste disposal business, you might as well walk around with a target on your back.
With all the turmoil in the stock market, you may have missed this column today. Entrepreneurs are dying. Or, even worse, they aren’t starting businesses in the first place because the risk and opportunity costs are so high.
It’s no secret that Obama’s record on job growth is the poorest in generations. Who cares about “saving” jobs? What’s really important is growing economic output and creating many new jobs. Approaching job creation with a “saving jobs” approach is fighting like the Black Knight in a Monty Python movie.
Some parts of the entrepreneur economy are growing, but on the whole the picture isn’t pretty.
In a recent report on entrepreneurship, the BLS said the number of new businesses less than a year old that existed in the year ending March 2010 “was lower than any other year” since its research began in 1994. The downdraft started with the recession.
“More people who were self-employed failed and left self-employment than people who entered,” says Scott Shane, an economics professor at Case Western Reserve University who wrote a study on entrepreneurship and the recession for the Cleveland Fed. “The net effect is negative, not positive, largely because downturns hurt those in business and those thinking of entering business.”
Critics of these ideas simply don’t have faith in themselves, or in the individual. Or, they are just socialists that don’t believe in the concept of profit for an individual entity. That’s why they believe in far reaching and aggressive government. Obama is a classic example of a person like that. They are part of the fringe 21% crowd.
You want to jumpstart America? The answer lies in plowing the field correctly so businesses feel safe to plant it. Otherwise the tractor stays in the barn-or worse, gets sold for scrap.
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