| Submit your comments on this article |
| Economy |
| ItÂ’s About the Death of Small Business |
| 2009-11-06 |
| The big issue in the US economy is the massacre of small business. That’s why the household survey shows that 558,000 Americans “became unemployed” during October, while the establishment survey of payrolls shows a decline of only 190,000 jobs. The establishment data, which are collected from larger businesses, are more reliable; the household survey is based on telephone interviews with randomly-selected households. But the numbers are so large as to make clear that small businesses are shutting down. With commercial and industrial lending by American banks down 13% since September 2008, and most banks continuing to “tighten lending standards” in the Fed’s official poll, this is not surprising. Wal-Mart will make it through a recession; not the tea-cozy shop down the mall corridor, much less the real-estate agency in the half-abandoned exurb. The global speculative grade default rate, as Moody’s reported this week, has risen to a post-Great Depression high of 12%. Credit lines for small businesses (including home equity, credit cards, and all the other devices entrepreneurs use to fund themselves) will continue to shrink. Numerous analysts have made the point that in all previous post-war recoveries, it was small business that led job creation. During the 1980s and 1990s large businesses lost employment and small businesses grew. The fact that job losses at small business are evidently far higher than those at large businesses does not make this look like any recovery at all. |
| Posted by:tipper |
| #3 You can't centrally manage thousands of small business. You need to get it down to a handful of state monopolies. |
| Posted by: Procopius2k 2009-11-06 22:30 |
| #2 newc, Don't make the mistake of thinking the neo-communists are stupid; they are not. So we should try to understand that they do know what they are doing, and WANT it to go this way. |
| Posted by: Glenmore 2009-11-06 21:54 |
| #1 As long as democrats continue to act like legslative asses, the unemployment rate will increase, tax revenues will continue to decline, spending will continue to decline, and the nation will collapse. Not a Democrat on the planet knows anything at all about economics. The last one was JFK. |
| Posted by: newc 2009-11-06 21:11 |