This Is Small Business in America: Burdened, Crushed, Doomed (February 25, 2012) If you make it increasingly costly and risky to open a small enterprise, then no wonder unemployment remains high. You hear a lot about Kafkaesque stifling bureaucracy in Greece and other struggling European nations, but America's Status Quo is trying its best to destroy small enterprise with taxes and crushing bureaucracy. I am self-employed, and have been for most of my life. When I did take a paid position, it was in other small enterprises or local non-profit organizations. I mention this because there is an unbridgeable divide in any discussion of small business between those who have no experience in entrepreneural enterprise (i.e. they've worked for the government, NGOs/non-profits or Corporate America their entire careers) and those who have. There are all sorts of similar chasms that cannot be crossed and which quickly reveal a surreal disconnect from actual lived reality: for example, the difference between actually playing football--yes, with pads, a muddy field and guys trying to slam you to the ground--and being an armchair quarterback who's never been hit even once, never caught a pass or ever struggled to bring down a faster, bigger player. (And yes, I did play football in high school as a poor dumb skinny kid who mostly warmed the bench for good reason, but I lettered.) At the extreme of this disconnect, we have armchair generals screaming for war who have no experience of combat or war as it is actually experienced. You get the point: it's very easy for well-paid pundits who have never started a single real enterprise or met a single payroll to pontificate about "opportunity" and small business as the engine of growth, blah blah blah. It's also easy for those with no actual experience to reach all sorts of absurd conclusions about how easy it is to turn a small business into great wealth. (No, Bain Capital or other Wall Street outposts of financialization are not "small business.") In real life, it's only easy to run a small business into the ground, especially when there's a thousand tons of junk fees, taxes and useless bureaucratic requirements on your back. Lest you think this an exaggeration, consider that it took two years and $200,000 to open an ice cream parlor in a vacant retail space:
"Ms. Pries said it took two years to open the ice cream parlor, due largely to the city’s morass of permits, procedures and approvals required to start a small business. While waiting for permission to operate, she still had to pay rent and other costs, going deeper into debt each passing month without knowing for sure if she would ever be allowed to open. There is nothing mysterious about the cause of this Kafkaesque Status Quo: each city, county, state and Federal fiefdom must justify its existence and payroll, and everyone in each fiefdom will fight with every fiber of their being to protect their turf. Politically, it's a fight to the death to trim even the thinnest slice of bureaucracy, and so little if any ever gets trimmed. Nobody will care until the city, county and state's revenues collapse as people opt out of supporting the bloated dead-weight of the Status Quo with their own sweat and blood. The only way to survive is to not have a "real" business, i.e. you write code in your living room or parents' basement, or you do enough business in the informal sector (cash) to support your high-cost formal business. Taxes and bureaucracy are not just urban phenomena, as this insightful report from Eric in Texas shows. Eric draws a critically important causal line between the stifling of small enterprise and high structural unemployment: if you make it so costly, risky and burdensome to start a business and hire people, then no wonder unemployment is high and will stay high.
One of your recent posts made me think of how difficult reinventing communities and coming up with creative solutions for the problems of unemployment and displaced people in our society is. I think it has to do mainly with the way in which lower middle class / middle class people are overburdened with taxation. As you stated in your post, the amount of taxation is staggering. Especially for the self employed, like myself. Well said, Eric, thank you. Before you jump in to "correct" this view of small enterprise in America, first list how many enterprises you have started, owned or run, and how many people were/are on your payroll.
If you think it's so easy to get rich in small business, then here's the keys,
and payday's on Friday.
If this recession strikes you as different from previous downturns, you might
be interested in my new book
An Unconventional Guide to Investing in Troubled Times (print edition)
or
Kindle ebook format. You can read the ebook on any
computer, smart phone, iPad, etc. Click here for links to Kindle apps and Chapter One.
The solution in one word: Localism.
Of Two Minds Kindle edition: Of Two Minds blog-Kindle
"This guy is THE leading visionary on reality.
He routinely discusses things which no one else has talked about, yet,
turn out to be quite relevant months later."
NOTE: contributions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
Or send him coins, stamps or quatloos via mail--please request P.O. Box address. Subscribers ($5/mo) and contributors of $50 or more this year will receive a weekly email of exclusive (though not necessarily coherent) musings and amusings, and an offer of a small token of my appreciation: a signed copy of a novel or Survival+ (either work admirably as doorstops). At readers' request, there is also a $10/month option. The "unsubscribe" link is for when you find the usual drivel here insufferable.
All content, HTML coding, format design, design elements and images copyright © 2011 Charles Hugh Smith, All rights reserved in all media, unless otherwise credited or noted. I would be honored if you linked this essay to your site, or printed a copy for your own use. |
Add oftwominds.com to your reader:
My Big Island Girl
Instrumentals by my friend
|
Survival+ | blog fiction/novels articles my hidden history books/films what's for dinner | home email me | ||