This Is Your Obama Economy, Part MMMCCXVLIII

A report from the center-left Brookings Institution shows that not only is busines dynamism – the pace of new business openings and old business closings – the slowest it’s been, but during the Obama “Recovery” the pace of closings has far outrun the pace of new business creation, for the first time in post-Great-Depression history:

Says Brookings:

Research has firmly established that this dynamic process is vital to productivity and sustained economic growth. Entrepreneurs play a critical role in this process, and in net job creation.But recent research shows that dynamism is slowing down. 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. This decline has been documented across a broad range of sectors in the U.S. economy, even in high-tech. …

While the reasons explaining this decline are still unknown, if it persists, it implies a continuation of slow growth for the indefinite future, unless for equally unknown reasons or by virtue of entrepreneurship enhancing policies (such as liberalized entry of high-skilled immigrants), these trends are reversed.

Why has America become less entrepreneurial? 

I’m going to suggest it’s two things; the constant accretion of new regulations atop old regulations, which continually make new businesses harder and harder to launch, and a culture – especially a school system – that is slowly leaching the desire independence out of the citizenry.

(Via Ed)

4 thoughts on “This Is Your Obama Economy, Part MMMCCXVLIII

  1. So Governor Jim Beam signed a law yesterday that says any companies with state contracts have to have the average pay of their female employees be equal to or greater than their male employees (although having only 2 genders is way to binary for the modern Democrat).
    Now Minnesota companies have to have the added expense of documenting thier pay details for Mother Government.
    The question for the legal minds…..can a company sue the state if they are denied a contract, but can show via performance reviews, length of service recoreds, career accomplishments, etc that their male employees as a whole provide more value than their female employees?

  2. I highly doubt any company would want to risk the inevitable sexism PR backlash campaign the left/professionally aggrieved would mount once that lawsuit became public knowledge.

  3. The change is even more dramatic when you realize that mergers are not counted as a reason for firm exit–and that the Depression was a great time for new firms to get started. Seriously nasty situation we have here….

  4. “Research has firmly established that this dynamic process is vital to productivity and sustained economic growth.”
    Common sense shows this as well. New companies have greater potential to grow and hire more people. One of the things that indicates that Obama is way over his head when it comes to the economics of job creation is his emphasis on large, existing employers. These are mature companies. G.E. and Apple aren’t going to increase their workforce much even if the economy is showing strong growth. If Obama and the Democrat party of 2014 had been in power in 1994, they would have used regulation to strangle the tech boom in the crib.
    When the Democrats are in charge, the liberty of the People is the enemy of the State.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.