The "Economic Recovery" Continues: Businesses Are Being Destroyed Faster Than They Are Being Created

by Michael Snyder

What would you say about an economy where businesses are shutting down faster than they are opening?? Well, a shocking new study released by the Brookings Institution indicates that this is exactly what is happening in the United States.? We are absolutely killing small businesses and the entrepreneurial spirit in this country, and as you will see below, the number of self-employed Americans has been on a downward trend for a decade even though our population has been steadily growing.? Traditionally, small businesses have been the primary engine of job growth in this nation, so the fact that study after study has found that small business creation is being crippled in the United States is a really bad sign for our economic future.

Personally, I write about our long-term economic decline nearly every day, but even I had no idea that businesses were being destroyed faster than they were being created.? According to the Brookings Institution, this first started happening?in 2009...

The American economy is less entrepreneurial now than at any point in the last three decades. That's the conclusion of a new study out from the Brookings Institution, which looks at the rates of new business creation and destruction since 1978.

Not only that, but during the most recent three years of the study -- 2009, 2010 and 2011 -- businesses were collapsing faster than they were being formed, a first.

And this mirrors an earlier study conducted by economist Tim Kane.? According to his analysis of U.S. Department of Labor data, the following is how the decline in the number of new business jobs per one thousand Americans breaks down by presidential administration...

Bush Sr.: 11.3

Clinton: 11.2

Bush Jr.: 10.8

Obama: 7.8

As you can see, this is a problem that has been building for decades and that has accelerated under the Obama administration.

We are strangling small business creation to death, and as a result the number of Americans that are self-employed just keeps going down.? Just check out this chart...

And keep in mind that throughout this entire time the U.S. population has been growing.? So the numbers in the chart above should be going up steadily as the population grows.? But instead they have just kept going down.

Meanwhile, the "economic recovery" is continuing in the corporate world as well.

On Tuesday, we learned that Office Depot is going to be closing 400 stores.

Why would that happen if the economy was actually getting better?

When this was announced, shares of Office Depot rose about 20 percent.

I can never understand why that happens.? You would think that when a business makes an announcement that essentially says "our business is failing" that it would cause people to dump the stock.

In any event, this comes on the heels of an announcement by Staples back in March that it was going to shut down 225 stores in the United States and Canada.

So where will we buy our pens and paper from now on?

If the economy really was "recovering", you would think that demand for office supplies would actually be on the rise.

But the only places where the economy is "recovering" is in places such as Washington D.C., New York City and San Francisco.

Those at the top of the pyramid are doing well, but almost everyone else in the country is really suffering right now.

When you kill off small businesses and the entrepreneurial spirit, it tends to increasingly funnel money to the very top of the food chain.? And this is precisely what is happening in America at this point.? In a recent article, Charles Hugh Smith?included a chart that shows how average household net worth in the U.S. breaks down by quartile...

Bottom 25%: $4,600

From 25% to 50%: $21,700

From 50% to 75%: $78,900

From 75% to 90%: $242,800

Top 10%: $1,606,600

As you can see, the bottom 50 percent are really not that much above zero at all.? In the old days, it seemed like almost everyone was "middle class" in America, but now that is rapidly changing.

We can see this increasing divide in the real estate market as well.? According to?Bloomberg, sales of million dollar homes are booming, but sales of homes at the low end are plunging...

"Million-dollar homes in the U.S. are selling at double their historical average while middle-class property demand stumbles, showing that the housing recovery is mirroring America's wealth divide.

Purchases costing $1 million or more rose 7.8 percent in March from a year earlier, according to data released last week by the National Association of Realtors. Transactions for $250,000 or less, which represent almost two-thirds of the market, plunged 12 percent in the period"

So this explains why it is almost impossible to find an affordable home in San Francisco, but the overall homeownership rate in the United States has dropped to the lowest level in 19 years.

But even in our wealthy enclaves there are signs of deep economic trouble.? For example,?in New York City the number of homeless children has soared to a new all-time high...

They're just like other kids except they have a secret. They are homeless.? Children are living hidden lives in plain sight. They are part a growing number of low income families who find themselves with no way out but they are working hard to find a solution.

It's a big issue. And it's growing. More than 23,000 children sleep in homeless shelters every night, an all-time high, according to the Coalition for the Homeless.

The only "recovery" being experienced in America is the one that is happening on Wall Street, in boardrooms in Silicon Valley and in the halls of power in Washington.

In the rest of the country, retail stores are closing at the fastest pace that we have seen since the collapse of Lehman Brothers, 20 percent of all families do not have a single member that is employed and?49 million Americans are dealing with food insecurity.

There is no way that we are ever going to have a broad-based economic recovery in this nation if we continue to destroy small businesses.? They are the lifeblood of any economy and they are the primary engine of job creation.

Sadly, our politicians seem completely clueless about all of this.? So they will continue to do the same things that they have always been doing and then wonder why the economy never seems to turn around.

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Gov't Forces Businesses to Overcharge Customers

Consumers and entrepreneurs--not the government--should decide how much a ride from a car service should cost. Consumers need the government protecting them from affordable prices as much as they need a government agency protecting them from pillows that are too soft. Government-imposed minimum-fare rules don't help consumers. All they do is increase costs, stifle innovation and protect industry insiders from competition--hardly a wise or constitutional use of government power. Tampa is one of only a handful of places where a minimum fare law like this is imposed, in this case by the Hillsborough County Public Transportation Commission: Most jurisdictions recognize that consumers don't need the government's protection from low prices. It is unconstitutional for Hillsborough County Public Transportation Commission to harm consumers by forcing them to be overcharged. It is also unconstitutional for this county agency to harm small business owners by preventing them from growing their businesses and creating jobs by offering better values to their customers.

http://www.ij.org/TampaFares

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Green Fascism: Businesses Face $1.1Million Fine If They Blame Carbon Tax For Rate Hikes

The truth will out on Labor's carbon scam
by Miranda Devine, The Daily Telegraph

THE whitewash begins. Now that the carbon tax has passed through federal parliament, the government's clean-up brigade is getting into the swing by trying to erase any dissent against the jobs-destroying legislation.

On cue comes the Australian Competition and Consumer Commission, which this week issued warnings to businesses that they will face whopping fines of up to $1.1m if they blame the carbon tax for price rises.

It says it has been "directed by the Australian government to undertake a compliance and enforcement role in relation to claims made about the impact of a carbon price."

Businesses are not even allowed to throw special carbon tax sales promotions before the tax arrives on July 1.

"Beat the Carbon Tax - Buy Now" or "Buy now before the carbon tax bites" are sales pitches that are verboten. Or at least, as the ACCC puts it, "you should be very cautious about making these types of claims".

There will be 23 carbon cops roaming the streets doing snap audits of businesses that "choose to link your price increases to a carbon price".

Instead, the ACCC suggests you tell customers you've raised prices because "the overall cost of running (your) business has increased".

It's all very Orwellian: the tax whose name cannot be spoken. We are already paying for the climate-change hysteria that has gripped Australia for a decade. Replacing even a portion of our cheap, coal-fired power with renewable energy is hellishly expensive. It also requires costly adaptation of existing infrastructure.

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Virginia Is Not for Small Businesses

by S.M. Oliva

No matter how bad the economy gets, governments at all levels will always put their own petty authority ahead of productive market activities. An example is the Batesville Store in rural Albermarle County, Virginia, which was closed -- without notice or due process -- by a local bureaucrat who decreed the store, which was being used primarily as a restaurant and live music venue, had too many seats. The store?s owners explained:

The Batesville Store is closed until further notice.

Earlier today two representatives from the state of Virginia showed up at the store without warning, informed us that we were not in compliance with certain state regulations, and gave us basically no choice except to close immediately.

This came as a complete shock to Liza and me. We believed that we had been operating in compliance with all state regulations since we opened in April of 2007, and we received no indication otherwise from anyone representing the state.

In fact, we have been inspected regularly by Warren Ollinger, the representative from the state's Department of Agriculture and Consumer Services who is responsible for inspecting the store, and he has always given us favorable reports on our operation. He never suggested in any way that we would encounter what happened today. The two representatives who showed up this afternoon told us that Mr. Ollinger initiated the complaint and the subsequent review that led to the decision to close us down.

Jessica Jaglois of CBS 19 in Charlottesville added:

A store employee [said] that the reason behind the shutdown wasn?t a health issue, but a safety?issue. He says the store had exceeded their seating capacity.?A country store is allowed to have 15 total seats by law, but The Batesville Store has over 40. The employee was frustrated saying that the Health Department hadn?t given them a warning.

The problem, as Waldo Jaquith noted, is that Virginia officials classify the Batesville Store as a ?country store,? which legally restricts their business to certain government-defined functions. Unfortunately, the store?s owners chose to serve their customers instead of the bureaucrats, and now everyone will pay the price:

As you know from yesterday?s email, the state has given us no option except to close The Batesville Store.

For the past five years, we?ve attempted to serve the community by keeping this classic, historic country store alive and thriving. Ironically, our success has proven to be our undoing.

Although we have always operated with an eye toward Virginia State Health Department guidelines (and have never been cited for a health code violation of any kind), we were in fact defined by the state as a country store and thus fell under the governance of the state?s Department of Agriculture and Consumer Services. We were regularly inspected by the Ag Department and were never informed of any significant problems with our operations.

However, the state representatives who suddenly appeared yesterday afternoon and shut us down without warning told us that it was decided (note the passive voice, please) that we do too much business to remain a country store. They went on to say that our only option for remaining open was to convert the store into a restaurant that would comply with all Virginia Health Department regulations.

Our kitchen is basically in compliance with Health Department regulations now. But the legalities of the store?s historic status as well as the limitations of the building itself make it impossible for us to meet the state?s other requirements for operating a restaurant.

We would have to make a host of changes in the facility to stay open legally, but because of a combination of the law and practical realities, we cannot make those changes.

So much to our regret, we are closing The Batesville Store ?

No doubt Thomas Jefferson, Albemarle County?s most famous former resident, is beaming with pride at how the government he helped to establish has crushed a small business for the greater glory of the state health department.

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Apparently, there were problems:

http://www.newsplex.com/home/headlines/Historic_Albemarle_County_Store_Closes_Unexpectedly_123670304.html?storySection=comments

Here is what one of the commenters on the article said about the store:

by sean Location: batesville on Jun 12, 2011 at 04:56 PM

"The store is disgusting, not to mention slow as heck. I complained to Cid two years ago because I saw one of his employees put a spoon in her mouth, then back in the pasta salad to stir it. Not just disgusting, but dangerous. Cid told me the girl was having 'problems' and that he's had similar complaints about her. He wasn't going to do anything about it, though, so I called the dept of health. Turns out they're under the dept of agriculture. What a joke. I'm glad they've been shut down before someone gets killed like in Germany."

"Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing ever happened..." - Winston Churchill

Physician, heal thy self.

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"Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing ever happened..." - Winston Churchill

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