Skip to comments.The number of new businesses in the US is collapsing — and that's disastrous news for the economy
Posted on 09/20/2016 7:40:53 PM PDT by Lorianne
Possibly the defining business trend coming out of the financial crisis has been a "startup boom." Everyone is building an app or starting their own business it seems.
This image, however, may be just an illusion, according to Michelle Meyer, US economist at Bank of America Merrill Lynch.
Both the formation of firms (for example, McDonald's as a whole) and establishments (an individual McDonald's restaurant), have dropped off precipitously since the financial crisis and remained low.
This is important, according to Meyer, because new businesses typically hire faster and produce higher levels of productivity than firms that have been around for a while. Thus the decline in business formation can explain some of the labor market's postrecession problems, and is at least part of the reason for the steep drop in productivity.
Additionally, Meyer says, it can end up affecting the nation's gross domestic product. Here's Meyer (emphasis added):
"A recent paper from the Federal Reserve Board (and referenced by Vice Chair Fischer in his Jackson Hole speech) estimates that there is a persistent increase in both GDP and productivity as a result of changes in the number of start-ups. Specifically, they found that a one-standard deviation shock to the number of start-ups led to an increase of real GDP culminating to 1-1.5% and lasting 10 years or longer. This suggests a notable and lasting impact on the economy from weak rate of business entry over the past decade."
(Excerpt) Read more at businessinsider.com ...
My area is in convenience store overload.
I want to start a business gutting/scrapping abondoned malls. Thank you barack Hussein
“Both the formation of firms (for example, McDonald’s as a whole) and establishments (an individual McDonald’s restaurant), have dropped off precipitously since the financial crisis and remained low.”
Maybe it’s also related to the skang that Mickey D’s has been foisting off on the public for decades as food. I lost my taste for “suetburgers” while I was in college.
Obonzo is doing the exact same thing with the economy that Clinton did. Use the liberal media to convince the low information and college snowflake types on how wonderful his horrible economy is and then raise hell when a Republican comes in and gives the morons the bad news that they’ve been had.
From what I’ve seen, the millennials mostly want to start a new restaurant or wine bar or some other foo-foo crap joint that serves existing demand rather than manufacturing or primary economic activities.
I’m not sure about other states, but here in California the fastest way to have a Small Business is to start with a Large one.
I have come to think of convenience stores like cockroaches. They survive while all else around them withers and dies.
Now there’s a plan!
Or an artisanal goat cheese farm when they have never been within 500 miles of a farm animal.
“They survive while all else around them withers and dies.”
Thanks to the Mass Lottery. Astonishing.
Gee ... Maybe we need a businessman who understands business in the Oval Office.
For the first time in US history, the death rate of small businesses exceeds the birth rate.
Lenin said that taxation and inflation are the millstones between which we will crush the bourgeoisie (middle class).
The modern left has added regulation to that toolbox.
Obama has implemented the largest tax increase in human history, embarked on an epic inflationary run of debt and money printing, and has churned out tens of thousands of pages of regulation every year, under the sweeping powers granted by Obamacare and Dodd-Frank (Financial industry takeover), as well as EPA crushing coal and the energy sector.
No wonder the Middle Class is crushed - it is always the plan of the hard left. No more uppity individuals spouting off individual opinions - everyone on their knees for their food coupon from the Overlords in Government, is their dream for total control.
As Alinsky taught, “Destroy the Middle Class, while pretending to be for them”.
Culvers butterburgers. Even the buns are way better.
Towns are looking like ghost towns of the Wild West.
Thanks, I’m posting this if you don’t mind.
The overdue correction come after Nov. 8. Guess who gets blamed?
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