Click on WORD or PDF for full content
Joel Kotkin writes about the scarcity of start-up enterprises since the last downturn.
On Wall Street, even as layoffs mount, the upper echelons are clinking champagne glasses for good reason. The stock market is hitting new highs, propelled largely by Bernanke dollars and strong corporate profits. Big financial institutions like Wells Fargo and JPMorgan have announced record profits.
But on Main Street, for the most part, the mood is far more subdued. Big business may be flourishing, but small business is still in recession. The number of startup jobs per 1,000 Americans over the past four years fell a full 30% below the levels of the Bush and Clinton eras. The Ewing Marion Kauffman Foundation, a nonprofit that studies startups, estimates that the rate of new business formation in the U.S. has fallen to a record low. The number of startups in 2011 was lower than in 1994, when the economy was smaller, as was the workforce and population.
According to the BLS, smaller firms accounted for two thirds of all net jobs added between 1992 and 2007, a figure much cited by small business advocates. (This is hotly disputed by labor-backed economists, who have traditionally downplayed entrepreneurial ventures since they are not amenable to organizing.)
But whatever the actual percentages, the weakness of smaller, and particularly newer firms, is one key reason for our current, persistent job shortfall. This time around, as a recent Brookings study reveals, larger businesses came out of the recovery stronger, not their beleaguered smaller counterparts.
Big businesses often drive the economy but newer, smaller ones, historically, have created the jobs. If the U.S. had come out of the recession maintaining the same rate of startup formation as in 2007, notes McKinsey, we would today have almost 2.5 million more jobs.
The problem is that in many ways, the recession never ended for small business. The reductions in small business employment during the fourth quarter of 2008 and in 2009 were the largest ever recorded in the history of the National Federation of Independent Business data series. And now, as we enter the sixth year since the onset of the Great Recession, more than four years after the “recovery” officially began, small business remains in a largely defensive mode. Hiring and startup rates have been far less dynamic than in the aftermath of the downturns of 1976 and 1983. …
David Harsanyi says our large debt matters a lot.
No worries, America. Debt is a preoccupation of the fringe, a mere distraction for anyone interested in progress. And anyway, as President Barack Obama explained this week, “we don’t have an immediate crisis in terms of debt. In fact, for the next 10 years, it’s going to be in a sustainable place.”
That’s a pretty convenient position, wouldn’t you say, for a man who’s helped pile on trillions of dollars of new debt and created an entitlement that promises to escalate this non-crisis crisis of ours? Problem is that there are a few trillion things wrong with this contention.
The most obvious hitch is that neither this president — whatever we think of him or he thinks of himself — nor anyone else, even the best-intentioned economist or technocrat, can foresee what’s in store. Judging from our recent history — the wars, economic downturns, natural disasters, fake emergencies, bailouts, etc. — there will be plenty of new reasons to create debt we haven’t accounted for in our future. …
David Harsanyi reminds us that in 2006, the junior senator from Illinois made this speech on the floor of the senate. He grew up to be a reckless spendthrift president.
… Despite repeated efforts by Senators CONRAD and FEINGOLD, the Senate continues to reject a return to the commonsense Pay-go rules that used to apply. Previously, Pay-go rules applied both to increases in mandatory spending and to tax cuts. The Senate had to abide by the commonsense budgeting principle of balancing expenses and revenues.
Unfortunately, the principle was abandoned, and now the demands of budget discipline apply only to spending. As a result, tax breaks have not been paid for by reductions in Federal spending, and thus the only way to pay for them has been to increase our deficit to historically high levels and borrow more and more money. Now we have to pay for those tax breaks plus the cost of borrowing for them. Instead of reducing the deficit, as some people claimed, the fiscal policies of this administration and its allies in Congress will add more than $600 million in debt for each of the next 5 years. That is why I will once again cosponsor the Pay-go amendment and continue to hope that my colleagues will return to a smart rule that has worked in the past and can work again.
Our debt also matters internationally. My friend, the ranking member of the Senate Budget Committee, likes to remind us that it took 42 Presidents 224 years to run up only $1 trillion of foreign-held debt. This administration did more than that in just 5 years. Now, there is nothing wrong with borrowing from foreign countries. But we must remember that the more we depend on foreign nations to lend us money, the more our economic security is tied to the whims of foreign leaders whose interests might not be aligned with ours.
Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘‘the buck stops here.’’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.
IBD Editors say another jackboot has been placed on the throat of the economy.
The president reportedly will tell federal agencies they can’t approve major projects until their impact on global warming has been weighed. Why halt commerce in an economy in dire need of more?
According to Bloomberg media, “President Barack Obama is preparing to tell all federal agencies for the first time that they should consider the impact on global warming before approving major projects, from pipelines to highways.”
Bloomberg says Obama plans to “expand the scope of a Nixon-era law,” the National Environmental Policy Act, “that was first intended to force agencies to assess the effect of projects on air, water and soil pollution.”
It’s happening just as Obama threatened it would: If Congress won’t pass the laws he wants — in this case limits on greenhouse gas emissions — he will just make law on his own, without constitutional restraint.
At risk under such a regime are “natural gas export facilities, ports for coal sales to Asia, and even new forest roads,” Bloomberg reports industry lobbyists as saying.
To that list we’d add fracking, which has produced a historic domestic energy, economic and employment boom. …
Reason Magazine corrects the latest liberal smear of Clarence Thomas.
In Django Unchained, director Quentin Tarantino’s bloody ode to the spaghetti western set in the pre−Civil War American South, Samuel L. Jackson portrays the despicable character of Stephen, the head house slave on a hellish Mississippi plantation. Reviewing the film for The Boston Globe, critic Wesley Morris struggled to convey the villainy of Stephen’s character, turning to a present-day comparison for help. “The movie is too modern for what Jackson is doing to be limited to 1858,” Morris wrote. “He’s conjuring the house Negro, yes, but playing him as though he were Clarence Thomas.”
It was not the first time a liberal writer had taken a cheap shot at the conservative Supreme Court justice. New York Times reporter Linda Greenhouse once described Justice Antonin Scalia as Thomas’ “apparent mentor,” yet we now know that Thomas has been the one quietly influencing Scalia’s jurisprudence. But the comparison to the slave power system was particularly contemptible, especially because no Supreme Court justice since Thurgood Marshall has written more frequently or powerfully about American racism than Thomas.
Consider his role in the 2003 case Virginia v. Black, which involved a state law criminalizing the burning of a cross “with the intent of intimidating any person or group of persons.” While most of his colleagues focused on First Amendment law, Thomas offered a different view. The law was intended to counteract “almost 100 years of lynching and activity in the South” by the Ku Klux Klan and other hate groups, he reminded the courtroom during oral argument. “This was a reign of terror, and the cross was a symbol of that reign of terror.”
When the case was decided several months later, Thomas went further in a lone dissent, arguing that cross burning was part and parcel of that racist terrorism and therefore deserved no protection under the First Amendment. “Those who hate cannot terrorize and intimidate to make their point,” he wrote. …
Jason Riley on the horror show nominated for secretary of labor.
President Obama has nominated Thomas Perez, head of the Justice Department’s Civil Rights Division, to be the next secretary of labor. The White House cites as an attribute his work at Justice in settling several fair-lending cases involving banks. But Republicans ought to question Mr. Perez’s fondness for using statistical analysis to bring discrimination cases.
Mr. Perez is a disciple of “disparate impact theory,” which uses statistics (selectively) to “prove” discrimination. As the economist Walter Williams has noted, disparate-impact theorists worship at the altar of racial proportionality. If blacks are 13% of the population, they should be roughly 13% of police officers, dentists, UCLA’s freshman class and residents of upscale suburbs like Scarsdale, N.Y. If they aren’t, then racial discrimination is to blame and legal action against institutions, municipalities, businesses and landlords is warranted. …
More on this terrible appointment from J. Christian Adams.
Today, President Obama issues a challenge to Republican Senators: in nominating Tom Perez as Labor secretary, he implies that Senate Republicans don’t have either the guts or organizational skill to stop what would become perhaps the most radical left-wing cabinet member in history.
Whether the president is right about GOP senators remains to be seen.
As they say, I wrote the book on Tom Perez. My New York Times bestseller Injustice: Exposing the Racial Agenda of the Obama Justice Department is largely a catalog of the rancid racialism over which Perez has presided.
The New Black Panther case is one small part. But so are the eighth-grade transvestite lawsuits in New York, and so are the race quotas in New York City. PJ Media has been covering Perez in a way that no other outlet has for the last three years: his wars on peaceful Catholic pro-life protesters, his dishonesty under oath, and his overruling of career DOJ lawyers in the South Carolina Voter ID case are but three more from a long list of radical transgressions.
Make no mistake — that’s why Obama appointed him.
Obama knows power is fleeting. You have a short amount of time to affect a large amount of change. He knows Perez is an unapologetic leftist from the Hugo Chavez-wing of the Democrat Party. (Not an exaggeration: Chavez once had Citgo make a payment to Perez’s illegal alien advocacy group Casa de Maryland.) …