360° Coverage : The State of the Union On Main Street

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The State of the Union On Main Street

The State of the Union On Main Street

Jan 27 2014, 9:20am CST | by

President Obama will mention “small  business” in his State of The Union address many times, a popular pastime for politicians since owning a small business is one of the most respected occupations...

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26 weeks ago

The State of the Union On Main Street

Jan 27 2014, 9:20am CST | by

President Obama will mention “small  business” in his State of The Union address many times, a popular pastime for politicians since owning a small business is one of the most respected occupations in the U.S. (we will not mention where politicians rank).  He’ll point to the stock market at record high levels and note the millions of new jobs added since the recession ended.  But there are very few indicators that suggest the real economy is really doing well.  A record high stock market reflects government policy as much as underlying strength in the real economy where consumer spending and unemployment are more typical of a recession than of a recovering economy.  The economy has grown every quarter since the official end of the recession in June, 2009, but that growth has left employment over a million short of its peak in January, 2008.  Much of that growth has been accounted for by the brute force of population growth which adds about 3 million more people to the population each year (more haircuts produces new barber shops and jobs etc.)..

According to government statistics, small business produces about half of the private GDP (government excluded) and employs about half of the private workforce.  Most new jobs are created by small businesses, a sector that is the R&D for the economy.  Many firms start, many fail, providing tens of millions of jobs and on-the-job training in the process.  It is in this primordial stew where giants like WalMart, Microsoft, Apple and so many other large companies get their start (while many attempting to succeed will fail).  Thus, both in it dynamics and its aggregate size, small business is “big business” in the U.S.

But in this “recovery”, the small business sector has lagged.  The “stimulus” money was mostly squandered by transferring money to states to support public sector employees.  Monetary policy contributed to asset price inflation (a record stock market), but this left out the majority of people who don’t own large amounts of stocks and bonds.  New taxes sent negative signals to new entrepreneurs and drained consumer spending power. Record numbers of new regulations drained valuable capital from firms and the owners’ valuable time and threw up barriers to new starts.  Crises and scandals shook confidence in government, with record numbers of owners blaming “political conditions” as the main reason not to expand their businesses.  Uncertainty about economic policy ranked in the top 5 “Most Important Problem Facing Your Business Today”. In short, the economy became “bifurcated”, with large firms doing well, exports rising, while the small business sector was left treading water.

For many reasons, owners are not very optimistic about the future for the economy or their own prospects.  As a consequence,  record high percentage of the owners have no interest in a loan because there are few profitable uses for the funds (a record low 4 percent complain their credit needs are not met).  Few owners think it is a good time to expand their firms, and this view has persisited through the entire expansion.  Washington policies are not supportive of business and job growth, punishing those who create jobs with higher taxes and regulations and threats.  All the President talks about is redistributing income and wealth, taking from those who create and earn and giving it to those who not.  There is no meaningful talk about policies that will restore confidence and energize the private sector to grow and create jobs, the best way to address inequality and poverty.

Source: Forbes Business

 
Update
10

7 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rakyat was told ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

7 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was br ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

7 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by th ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Sel ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 millio ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

8 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri Mustapa Mohamed ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

8 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an allocation of R ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

8 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar Sche ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

8 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Damansara S ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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