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We Are Witnessing The Death Of Small Business In America

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Historically, small businesses have been the primary engine of new job creation in the United States.  If the economy was getting healthy, we would expect to see the number of jobs at new businesses rise.  Instead, we are witnessing just the opposite.  We are told that the economy is supposed to be “recovering”, but the number of “startup jobs” at new businesses has fallen for five years in a row.  According to an analysis of U.S. Department of Labor data performed by economist Tim Kane, there were almost 12 startup jobs per 1000 Americans back in the year 2006.  By 2011, that figure had fallen to less than 8 startup jobs per 1000 Americans.  According to Kane, the number of jobs in the United States at businesses that are less than one year old has fallen from 4.1 million in 1994 to 2.5 million in 2010.  Overall, the number of “new entrepreneurs and business owners” has fallen by more than 50 percent as a percentage of the population since 1977.  The United States was once known as “the land of opportunity”, but now that is fundamentally changing.  At this point we truly do have a “crisis of entrepreneurship” in this country, and that is a huge reason why America is in decline.  We are witnessing the slow death of the small business in America, and that is incredibly bad news for all of us.

Unfortunately, the problems that small businesses are experiencing right now have been building up for decades.  The economic environment for small businesses in America has become incredibly toxic.  Sadly, we can see this in the numbers.  According to Kane, the following is how the decline in the number of startup jobs per 1000 Americans breaks down by presidential administration

Bush Sr.: 11.3

Clinton: 11.2

Bush Jr.: 10.8

Obama: 7.8

Obviously, we are headed very much in the wrong direction.  Kane speculates about why this may be happening in his paper

There is anecdotal evidence that the U.S. policy environment has become inadvertently hostile to entrepreneurial employment. At the federal level, high taxes and higher uncertainty about taxes are undoubtedly inhibiting entrepreneurship, but to what degree is unknown. The dominant factor may be new regulations on labor.  The passage of the Affordable Care Act is creating a sweeping alteration of the regulatory environment that directly changes how employers engage their workforces, and it will be some time until those changes are understood by employers or scholars. Separately, there has been a federal crackdown since 2009 by the Internal Revenue Service on U.S. employers that hire U.S. workers as independent contractors rather than employees, raising the question of mandatory benefits. New firms tend to use part-time and contract staffing rather than full-time employees during the startup stage. According to Labor Department data, the typical American today only takes home 70 percent of compensation as pay, while the rest is absorbed by the spiraling cost of benefits (e.g., health insurance). The dilemma for U.S. policy is that an American entrepreneur has zero tax or regulatory burden when hiring a consultant/contractor who resides abroad. But that same employer is subject to paperwork, taxation, and possible IRS harassment if employing U.S.-based contractors. Finally, there has been a steady barrier erected to entrepreneurs at the local policy level. Brink Lindsey points out in his book Human Capitalism that the rise of occupational licensing is destroying startup opportunities for poor and middle class Americans.

Kane raises some very good points in his analysis.  Without a doubt, small businesses in the United States are being taxed into oblivion.  If you doubt this, just read this article.

And the regulatory environment for small businesses is more suffocating than it has ever been before.  Unfortunately, our politicians never seem to learn that lesson.  During his first term, Obama piled on mountains of new regulations, and now that he has won a second term he is preparing to unleash another massive wave of new regulations.

But many times the worst offenders are politicians on the state and local level.  There are some areas of the country (such as California) that have created absolutely nightmarish conditions for small businesses.  California had the worst “small business failure rate” in the country in 2010.  It was 69 percent higher than the national average.  And in 2011, the state of California ranked 50th out of all 50 states in new business creation.

Yet the politicians in California just continue to pile on even more regulations and even more taxes.

Sadly, this kind of thing is happening from coast to coast and it is killing off hordes of small businesses.  Just consider the following statistics…

-According to the U.S. Census Bureau, the U.S. economy lost more than 220,000 small businesses during the last recession.

-As a share of the population, the percentage of Americans that are self-employed fell by more than 20 percent between 1991 and 2010.

-As a share of the population, the percentage of “new entrepreneurs and business owners” dropped by a staggering 53 percent between 1977 and 2010.

-The average pay for self-employed Americans declined by $3,721 between 2006 and 2010.

So what needs to be done?

Well, first of all, the tax burden and the regulatory burden on small businesses both need to be greatly reduced.

Secondly, the balance of power in our nation needs to be dramatically shifted.  Conservatives run around talking about the need to reduce the power of government and liberals run around talking about the need to reduce the power of corporations, and actually both of them are right.

Our founding fathers intended to establish a Republic where power would never be concentrated in the hands of just a few.  That is why they tried to strictly limit the power of the federal government in the U.S. Constitution, and that is why they greatly restricted the size and scope of corporations in early America.  For much more on this, please see this article: “Corporatism Is Not Capitalism: 7 Things About The Monolithic Predator Corporations That Dominate Our Economy That Every American Should Know“.

Our founding fathers wanted to empower individual citizens and small businesses.  They never intended for us to have a system where big government and big corporations dominate everything and crush the “little guy” at every opportunity.

Even as we witness the death of the small business in America, corporations are absolutely thriving.  The following chart shows how corporate profits after tax have exploded to new record highs in recent years…

So has this been good for workers?  No, it has not translated into more jobs and higher wages.  In fact, wages and salaries as a percentage of GDP are now at an all-time low…

That is why it is imperative that we change “the rules of the game” so that the balance of power is shifted back in the direction of individual citizens and small businesses.  We desperately need to turn back to the principles that this nation was founded upon.

If nothing is done, these trends are going to get even worse.  Barack Obama certainly has no plans to reduce the size and the power of the government.  Since he was elected, an average of 101 new federal employees have been added to the government payroll every single day…

In the 1,420 days since he took the oath of office, the federal government has daily hired on average 101 new employees. Every day. Seven days a week. All 202 weeks. That makes 143,000 more federal workers than when Obama talked forever on that cold day in January of 2009.

And if nothing is done, the monolithic predator corporations that dominate our economy will just get even larger and even more powerful.  Meanwhile, hundreds of thousands more small businesses will close up shop all over the country.

Unfortunately, most Americans seem totally apathetic about these issues.  They seem content to wear “meggings“, watch “Honey Boo Boo” on television and let our government and corporate overlords run everything.  Most of them have even been brainwashed into believing that this is the American way of doing things.

So where do we go from here?

Well, this nation will probably continue to keep doing the same things that it has been doing, and it will continue to get the same results.

The death of small business in America is happening right in front of our eyes, and everybody can see it happening, but very few people are doing anything to stop it.

  • MichaelfromTheEconomicCollapse

    I am interested to see how the discussion about this article develops. I think that I have raised a lot of issues worth exploring.

    I have also posted another article that many of you may be interested in checking out. It is entitled “20 Outrageous Examples That Show How Political Correctness Is Taking Over America” and you can find it here…


    • MichaelfromTheEconomicCollapse

      Also, I wanted to mention that I have changed the settings so that guests should be able to instantly post comments without registering with Disqus first. Hopefully this will help alleviate some of the problems that people have been experiencing.

      However, I have also tightened up the profanity filter. So a lot of comments will still go to the moderation que and will need to be approved by me later.


      • richard


        • MichaelfromTheEconomicCollapse

          That is good to hear Richard. I think this commenting system works well and it will allow for more free-flowing discussions.


      • liberranter

        Thank you, Michael. Your initial setup requiring Disqus registration seemed to lock me out of the site, even though I’m a registered Disqus user (there appear to be some real bugs with their registration and account set up processes). Your current arrangement has indeed solved this problem.

        • MichaelfromTheEconomicCollapse

          This is very good to hear. I tried to adjust things based on the feedback I was getting. Hopefully this will make it much easier for people to post comments now that they don’t have to go through Disqus.


          • 2Gary2

            michael–the conservatives are slow learners and I can see why you had to dumb down the disqus process to accommodate them.

          • 2Emelia2

            The leftist liberal Obama slaves are slow learners and it’s obvious why Michael had to dumb down the disqus process to accommodate them.


      • 2Gary2

        Michael–why do comments need to be moderated if a link is included?

  • Virgil Bierschwale

    A lot of it is true, but there is more to it.

    Take me, for instance.

    Worked in technology all of my life, but I can no longer find work at 55.

    Normally, not a problem as I would start a business.

    However, after a decade worth of my work being sent offshore, or farmed out to the likes of Infosys here in America, I can no longer work and save my money to start a business.

    And a bank sure would not lend me any money at this point.

    I’ve got plenty of ideas as you can see here. – combination of facebook, google maps and google + for the mapping of the worlds cemeteries and for genealogy purposes – homes built using rainwater, solar, etc. with a focus on getting the client to as close to zero monthly utilities as humanly possible – Solar Powered Cars with Batteries and Wind Energy for long distances. – Doing what sites like,, etc. should be doing by physically matching jobs with people – The higher paying countries support the lower paying countries and this game of musical countries has destroyed that balance which is why the world is in a race to the bottom with austerity and other crap.

    Taxes and regulations have never crossed my mind though which is why I decided to comment on the rest of this.

    Traditionally there are several ways you can start a business.
    1. Work and save your money
    2. Borrow the money
    3. Find a investor

    I think the real reasons are these three, for what its worth.

    • Ralfine

      Most of your links don’t work.

      A engineering friend of mine saved his money in form of a farm. There he has a fruit orchard, a pig sty, a field of farmed fish, and uses the pig sh** to make methane and the methane to power gas lamps.

      Now he is tinkering with using the methane to power a tricycle (motorbike with sidecar) for transport jobs.
      And he is still working as a business consultant.

      He just started with buying the land.
      Then he planted trees and let them grow.
      So with time and the help of his family they grew.

    • Hambone

      I hear you on the IT jobs… and I have been someone who was forced (by upper management) to use Infosys as an IT body shop. They are TERRIBLE.

  • MeMadMax

    Regulations are also used as tools by big companies to wage war on their competition. We saw the first instance of this in Chicago where the ma and pop butcher shops were decimated by big cattle companies back in the early 1900’s… Ever since then we have had a quagmire of lobbyists doing battle in our government. Other casualties of this crap would be small oil companies(big oil using the EPA to monopolize the oil industry), auto companies(hudson packard), death of the trolley(GM destroyed trolly system starting in Los Angeles)… and the list goes on and on and on… So, in the end, it’s actually lobbying that is really screwing our small business economy, government is a paid enforcer of those policies…

  • Mondobeyondo

    My last employer was a small business. It was a wholesale print shop started in 1984 by my former boss’s father. There were 20-25 employees working there when I was hired in 1994, and we were all loyal and supportive of the business, even though we weren’t making much in the way of wages. We were dedicated. Some of my fellow employees put in 12 and 13 hour days (yes, even me!) As a typesetter, I would come in at noon and leave at 1:30 am the next day, on several occasions Especially if someone in the office was sick or on vacation.

    When the original owner passed away in 2000, his son and daughter took over the business. Things went well until the recession hit, and by early 2009 they just couldn’t hang on any longer. When you add in the costs for paper, ink, machinery, paper clips and pens, employees, toilet paper, Social Security, rental space, etc…you can see why. It’s no picnic running a small business. Customers stopped coming into our retail and independent clients, and that in turn affected us, as we were a wholesale company supplying retailers with the services they could not provide themselves. So my former company went out of business in June of 2009..

    More regulations and taxes are not going to help. No way. Just further incentive for potential entrepreneurs NOT to start up a new business. In the current economic environment, it just isn’t worth it.

    Would I try to start up my own business? Well… ya know…
    First of all, I don’t have the capital to do that right now.
    Second – most small businesses fail in the first 5 years or so.
    But if I could – I’d give it a try, sure.
    Ever heard of Sara Blakely? She was a lonely housewife whose pantyhose got caught in a bunch one day. She had an epiphany. She created Spanx. Now she’s a millionaire.

    • It is a scientific (and indisputable) fact that Americans are a bunch of stupid animals easy to manipulate and subdue; these slobs are extremely gullible and incapable to think for themselves (trained not to think). Moreover, these brutes are lovers of wealth and pleasure; they are selfish, slothful, indolent and can be inspired to raise above their brutish existence only by fear of impending death or catastrophe.

      • 2Gary2

        you must be referring to republicans/conservatives and I agree with you if that’s the case.

    • sharonsj

      So it wasn’t the regulations or the taxes–it was that customers stopped coming! This is what you’re all missing. People don’t have any money once they have paid the bills. The government and the media have lied about or just ignored price inflation.

      I estimate that since the 2008 crash, cat food is up 100%, dog food is up 50%, sugar is up 40%, the candy I used to buy is up over 100%, and so on. Cereal boxes are 25% smaller. Tuna went from 6 oz to 5.5 oz and the price is up by 50 cents. My utility bills are skyrocketing. And while the cost of everything is rising, wages are flat or going down. We are screwed as long as the country’s money goes to the banks and giant corporations.

      • Ralfine

        Save on utilities.

        Forget the global warming discussion. Save on energy use for the plain and simple reason that it saves you money.

        It’s freezing outside. We switch on the heater occasionally so that the pipes don’t freeze. I get warm in the morning by walking to the supermarket.

        But our energy bill is way below average.

    • ZipR22

      Small Business is all but gone. Also we are losing so many small and big business daily.

      Pretty crazy

      Check: Dailyjobcuts com

  • As you point out, local government is also crushing small business. They do this with local property taxes and regulations. Frankly, it is amazing how government at all levels is metastasizing. I think this is caused by liberals who want to force their ideas on everyone. After all, they know best and their intentions are good. They vote for controlling liberal politicians. They support suffocating regulation in their towns. They run for local boards to further impose their will. Only an economic collapse will stop them.

  • markthetruth

    Well according to my Doctor his accounted told him he probably have to go out of business in the coming months. He losing money due to Obamacare . He predicts that soon there will be just Government Clinic’s with
    doctor’s from abroad ,India ext. And we will be treated by doctor’s we can’t communicate with. So we will walk out of the office without having a clue of what are medical issue is. Also they will make it impossible to sue these doctor of any malpractice just like workmans comp.

    the end.

    • Ralfine

      I don’t think all the rich people will go to government clinics.

      • Mark

        They will fly to another country where there is still freedom for doctors.

        • Ralfine

          Yes, but even the poorer go to Thailand. Once because it is cheaper there and because the care is better, and the nurse actually smiles at you.

    • Hambone

      Go visit some local clinics… that journey has already begun.

      • markthetruth

        Tried to call DR, ANSHUMAN PrakabashABHINAV ADHIRAJ . but nobody new who or what i was talking about.

        the end.

  • Mark

    I have a small ranch, a few hundred acres.Most of the land is in timber. I have a mile of creek running through the property. As I read about different farmers and ranchers being taken to court for the clean water act requirements, it makes me want to quit raising cows. They have gone after ranchers even when their property is about 5 miles from a stream. There are so many regulations on the books now that any time you do something you are breaking the law. It all comes down to when they want to come after you for enforcement action. Lots of these regulations stink of Agenda 21. I have followed Agenda 21 now since in the middle late 1990’s. This power grab by the UN and their supporters increases little by little every year. I just read Glenn Beck’s book Agenda 21 and I really felt angry and depressed by the story line. Control freaks really suck!

    • Ralfine

      What’s the problem with your cows? Can’t you collect their dung and make methane out of it to power a small generator?

      I think farmers shouldn’t have to pay when they pollute the water. Instead they should be forced to drink that water. How else would they learn?

      The same goes for the city folk and factories, of course.

      • liberranter

        Government at all levels sees businesses as nothing more than cash cows to bully, extort, rape, and exploit. Have you ever noticed that, whenever a local TV news station or newspaper announces, with great fanfare, the opening up or relocation of a new business to the local area*, the very first thing they observe, in addition to the creation of local jobs (i.e., more tax cash cows for the local nanny thugs to exploit) is that the business will “bring more tax revenues to the city/county coffers?” No one ever observes that the businesses are providing a good or service that the buying public wants and is willing to purchase with its own money, thus creating local economic growth for its own sake (and thus enhancing individual freedom of choice and overall well-being); it’s that businesses are contributing to (usually defined as “giving back to,” a sickeningly collectivist term) that ill-defined and nonsensical “community.”

        No wonder no one is launching new businesses above ground, in the “legitimate” economy. Only a complete fool would even dream of doing so under current conditions.

        (* The fact that the opening or relocation of even small businesses [i.e., those of under 500 employees] gets front-page or breaking news coverage by local media mouthpieces in a major metropolitan area serves as evidence of just how little is left of, and how irretrievably broken is our “private sector economy.” PATHETIC!)

        • That’s right. So everyone criticizes the greedy oil companies but the pussified tree huggers would be wringing their hands in frustration if they couldn’t buy gas to get to their “women and minorities as global warming empowerers” seminars. Guys like you and Mark the rancher get it. Too bad so many of our American Bretheren and Sisterns (Yeah I know) think anyone in business is flush with cash and ripe for the fleecing.

      • Ralfine: You, and people who think like you, should be required to grow your own food. Then, we wouldn’t need those polluting, greedy farmers, right? Moron.

        • Ralfine

          My current garden has just 30 square meter. To feed one person you need 2500 square meter (1 acre).
          But we still grow any food that’s possible. We used to grow herbs and tomatos on our balcony in China.
          If I could, I’d cut down the thuja in the back yard and replace it with an apple tree. But we are only tenants. We just forage berries in the wild.

        • davidmpark

          Can I be required to be self-reliant, too!? PLEASE!? Everyone, support legislation that frees up a lot of land and resources for real men to act like men!

    • Ralfine

      “Small” is just a matter of definition. A few hundred acres isn’t small. With one acre feeding one person, a few hundred acres could feed a few hunded people, or a small village.

      • Mark

        Ralfine, your knowledge of farming is zero. As I wrote in my post, most of our land is in timber. The soils are poor and the land is steep. It grows great lumber and firewood and is a great watershed for my springs. My bottom land is good, but most is very wet. It grows great hay for the most part. Ours soils here, since we recieve so much rain tend to be washed out of some minerals. Another point about farming is that you need water at the right times. The control freaks in the government pass laws a little bit at a time to control the water. They even came up with an idea to fence the streams 60 feet from the center on both sides for a wildlife corridor. There goes more bottom land and they would still want me to pay property tax on the land I could no longer use. They even thought that the landowner should maintain the fences. lol Don’t you just love control freaks? As far as a problem with my cows you asked, The land needs their manure to stay in the fields in order to build up the soils. As cows eat the grass, they use up some of the food in the soil the grass needs to grow. Their manure replaces some of that. If I had the time to walk over the fields with a shovel and wheelbarrow to collect the manure for a methane digester, which I don’t, I would be robbing the future growth of the grass. Anyway, if you did all that labor, the cost of beef would rise even more. When cows cross the creeks, sometimes they have a bowel movement ( the cussing filter lol ) as do the other animals around here such as deer, bears, elk, turkeys, and all of the others that we share the space with. What do you propose to do to stop them from doing the same as the cows. Ha, even the fish have a bowel movement in their own water. Oh, I forgot to mention the beavers and they are big on nasty stream bugs that can give you the runs. Factories and sewers in cities can be controled since they are single point sources of collection, but runoff from the rain on fields is not so easy and none of you would be willing to see the cost of food go up to pay the huge costs to do so. The government would not issue you a permit to change the land to make that happen anyway. As the government continues to pass regulations limiting farming, logging, and mining for the resources to make the products that you folks in the cities want you will not be able to afford these things , except for the very wealthy and powerful. You will all be serfs soon enough as the elite will need you to walk your power boards. lol ( read Beck’s book )

    • primrose

      I feel your pain, even though I only have a ten acre homestead. Just read something about some proposal about “rain” and Eminent Domain so they can confiscate your land for ecological reasons. Yeah, right. I’ve followed Agenda 21 since the 90’s too and just finished Glenn Beck’s Book ~ and like you it was surreal and depressing, even though I know it’s what’s in the works for us. It’s really sad how we have frittered away the heritage our founders fought and died for.

    • 2Emelia2

      The Pacific Legal Foundation has been suing the EPA and other repressive governmental agencies for such actions.

  • Makati1

    It’s difficult to control a million small businesses, but easy to control a dozen Walmart type businesses. More proof that they are deliberately destroying the middle class in the Western countries. 3rd world anyone?

    • Hambone

      Be careful what you wish for. If you give big brother permission to dismantle Wal Mart, you establish a precedent, giving the government yet more power it ought not have. Remember Palpatine.

      I despise Wally World, but I am not willing to give Barry Obama (or anyone in that office) the right to embargo a domestic company.

      What’s really needed is a grass roots effort to create more balance in our spending patterns. Buy more American-made products. Shop less at Wally World, for those who do. Support local businesses. Target the purchase of locally grown/made products.

      And, as this article suggests, loosen the reigns on small businesses to encourage their growth.

      • Ralfine

        American Airlines? And wasn’t there a telephone company too, that was dismantled?

        • pdxr13

          Do you mean THE TELEPHONE COMPANY, Ma Bell, who invented/installed/serviced the finest telephone network on the planet until 1984? Sure, it was a monopoly, but it worked and everyone talked.

          • Ralfine

            1982: AT&T

      • SickNTwisted

        The quickest way to dismantle Wally World is make it employee owned….

  • Makati1

    I might add, here in the Philippines, there are about 90 million people and, from my observations, there are probably 40 million small businesses. I walk 3 blocks to a mall. I pass lots of store front businesses along the way. I also pass about 12-15 food kiosks, 5-8 people selling newspapers, cigarettes, penny candy, gum, belts, wallets, etc. 6-8 trikes hauling passengers, jeepneys, etc. Driving in the country, we pass homes with food stalls out front selling brooms, hand made furniture, clothes, fruits, vegetables, nursery plants, etc.

    Everyone seems to be in a business for themselves, sometimes several businesses. Taxes? Who knows, but with a 12% VAT, everyone has to pay tax on their supplies and materials to run their business and on all the money earned when they spend it. At least this is my observation.

    • Ralfine

      Philippines? Interesting country. The land is owned by a few families, who control the whole country. Dictator Marcos proposed a land reform but was ousted by popular masses supported by the church before the reform could be carried out.
      Now the Church is prohibiting birth control, even divorce is prohibited. Result: more and more babies, more and more poor people fighting to survive. The Philippines’ larges export is laborers.

      Construction workers for Taiwan, Saudi Arabia, the whoole Middle East,

      housekeepers for Hong Kong, Singapore, Saudi Arabia, Dubai, the whole Middle East,

      Nurses and care givers for Hawaiii, Ireland, Canada, USA, Australia, England.

      Singers, musicians and dancers for all the bars and hotels in South East Asia. And all of them send money home. So that their family can go to university to have a better life – and end up opening a small grocery shop at the highway because there are just not enough jobs for lawyers, teachers and doctors and nurses in the Philippines. Or they are paid so little that doctors quit, take a nursing course and emigrate to America.

      • liberranter

        Yes, the Philippines does represent a very interesting economic case study. I’ve always considered it “the Mexico of Asia.”

        • Ralfine

          The Philippines were once a colony of the USA. But the difference is, America is mostly protestant-ruled, and the Philippines catholic-ruled.

          Other catholic ruled countries are Latin America, Spain, Italy, Ireland.
          The mafia is rather catholic, too.

          If you can get away from Catholicism, the better it is for business.

          Best for business is Hong Kong, where you have every religion of the world, but the ruling factor is money. Nobody over there cares for your religion, except maybe your family and your future parents in law.

          • 2Emelia2

            China seems to be putting further controls on Hong Kong to control them and insure that they follow the Communist Party line since dissent is not allowed. Communist indoctrination has been introduced into the school system to insure that the children are brainwashed just like they are on the Chinese mainland,

          • Ralfine

            Yes, and there have been immense demonstrations in Hong Kong against this indoctrination. 10% of the population on the streets.

            The problem in Hong Kong are Hong Kong’s leaders. They are crawling in front of their Masters in Beijing, while the governors of Chinese provinces usually do their own thing and let Beijing be Beijing.

            “The sky is high, Beijing is far.”

            Now Hong Kong has a big problem.

            The real estate market is flooded with money from China.

            People in Hong Kong are not able to buy property anymore. 55% of mid30s are still living with their parents. Expats and minorities are looking elsewhere, like Singapore or Vietnam, because they too can’t afford the high housing prices.

            There will be a crash within the next 5 years. Many houses constructed within the last few years are still empty.

    • Hambone

      It was years ago, but John Stossel did a special on starting a business in India, America and Taiwan. In India, it was much worse than here, and in Taiwan, he actually started a business in a day and opened up shop. The US was somewhere in between the two.

      I’d like to see him go back and see how America has changed.

      • liberranter

        I just can’t imagine that starting a business in India today could possibly be more onerous than staring one here in Amerika. Can anyone in India who is a small business owner enlighten us?

  • Gene Colburn

    What we are witnessing is a small business
    rebellion. The small business person has lost all desire to feed the machine
    that is stealing their productivity and wealth, as they watch the world
    around them gaming the system they work to support.
    The American dream has become “what can I get from the government?”. Bailouts to banks, corporate welfare, extravagant government
    expenditures, all entitlements in general, and now Obamacare fully
    entrenched. The small business owner can barely afford their own health care
    policy let alone new tax policies that will no doubt steal their accumulated wealth built for their retirement. Why in the world would any
    small business owner work their but off eight days a week to support
    that which is consuming them? There is no optimism thus few if any new
    potential for growth and jobs from that sector of the labor market. I
    know as I am one and I do not see this changing…ever.

  • chilller

    Large corporate entities migrate into government in order to quash their competition and further their agenda. They’ve stacked the deck to tax and regulate the little guy into oblivion while they get off Scott free. This will continue until the greedy are overthrown and our corrupt way of doing business is reset. And as most know, that process will not be subtle, easy and without hostilities. Already you have corporations like Monsanto hiring shadow armies like Blackwater to protect them. If what you’re doing requires an army to protect you from the masses, then you are definitely doing something wrong. And once the masses finally do respond, all the Blackwaters in the world won’t help you or stop them.

    • 2Emelia2

      It’s called crony capitalism or fascism, is it not? Picking winners and losers. One example is the Obama Administration’s involvement with Solyndra in which the Dept. of Energy provided the solar company with a $535 million loan guarantee in exchange for campaign donations. The company subsequently failed in 2011 and taxpayers were saddled with the loss.

  • Ralfine

    Continued mergers up to building monopols is nothing new. And remember, this is called capitalism. If you don’t have the capital, you are out. You can’t found a business and you can’t expand.
    And then add the reduced income of the masses. To get to their money you need to spend more and more in advertising and scamming schemes to approach more people.
    The only way to get capital is to make debts. And pay interests and hope that business will be better tomorrow. But how? The income of your customers continues to fall, resources become more scarce, prices go up, profits get squeezed.
    You either start buying up smaller competitors and get their customer base, or become more efficient.

    In the company I worked for managers didn’t want to spend a cent in getting more efficient, they’d rather spend thousands to pay for overtime and millions to buy competitors.
    And then they fired the most experienced guys that also had a higher salary than newcomers – to save money.

    • Are you saying this is all the fault of capitalism and therefore we need bigger government? We’ve been growing government for years, and look what it has done to the economy. We no longer have a capitalist economy. We have crony capitalism, which was called fascism until Mussolini made the term unpopular. That’s where there is the facade of a private sector, but government is pulling the strings.

      • liberranter

        You’re absolutely right, Paul, but it seems like a waste of energy, bits, and breath to repeat this fact. Most people out there just don’t get it and probably never will. That’s why I no longer waste my time trying to educate anyone.

    • Hambone

      Sad, but true. I worked for a manufacturing company from 2002-2010, and I was in mid-management. Whenever there was a layoff, I was astounded to see the powers that be deciding who gets let go. It was always disproportionately weighted toward the rank-and-file workers, those directly on the value chain. If we had 1000 assemblers and 500 support people, they would lay off 100 assemblers and 10 support folks. It made you wonder… who is going to make the product?

      Every time, without fail, there was a theme of “leaning out management, reducing layers of management.” It usually meant letting one manager go, almost as a token to say, “See, we did it.” Ignore those 100 shop guys in the unemployment line.

      At this rate, I project in 10 years this company will have 2 managers for every one non-management employee.

  • It is really very interesting article i get from here. It is really good to know the reason why small business fall down in America. There are many factors are affected to the small business and economy is one the main factor of them.

  • survive2balive

    “Meggings?” Never heard of them before reading this and after checking out the article I was wondering if they came in camouflage. What the heck has this country become?

    The destruction of small business will continue. Our “leaders”, red or blue, do not have the motivation or the will to stand up and do what’s right for this country and her citizens. Expect to see more empty store fronts and a continued decay of what we once understood as the American way of life

  • Michael:

    I think you are partially wrong….in my area small business are opening but they have one thing in common..English is NOT their first language. A blueprint commercial printer went out of business been there 27 years replaced by a Bangladesh food store Halal….time empty maybe a month.

    • liberranter

      And you can bet that most of these Third World newcomers aren’t “playing by rules” that the rest of us (i.e., non-minority native-born Americans) are forced to endure.

      • Ralfine

        They are survivors. In their home country they couldn’t have survived if they had played by the rules.

        The real question is: how many rules are really necessary? And which ones?

        What is a native-born American? Apache? Cherokee? Or the descendents of German, French or English refugees / immigrants?

        • 2Emelia2

          The answer is to become an illegal since they seem to have special privileges and rights that aren’t available to U.S. citizens. In fact, both political parties will pander to you if you’re an illegal trying to win your vote even though you are supposedly not eligible to vote. California is especially welcoming to illegals since the state will provide you with sanctuary and health and educational benefits. However, being an illegal appears to only be acceptable if you are race or ethnicity other than Caucasian.

          • Ralfine

            Go to China.

            In China only caucasian foreigners seem to get privileges. Chinese are obsessed with whites. They even use skin bleach to appear white.

  • wootendw

    “…but the number of “startup jobs” at new businesses has fallen for five years in a row”

    One reason most people do not see this is because there is no lobby or association representing “would-be” businessmen, that is, people who would like to start a business but don’t for whatever reason. Surveys of existing business people indicate that businesses don’t mind regulations or taxes. That’s because, having already been established, they have cleared the legal tax and regulatory hurdles. Many existing companies probably like taxes and regulations because they keep out newcomers (start-ups) that create the most jobs. Eventually, however, there will be a revolt, violent or electoral, that will force big changes. Hopefully, those changes will be good ones.

  • Syrin

    The way to fix this is to take MORE of their profits in the form of higher taxes and give it all to GARY, then raise the cost of doing business through the roof through regulation. Then people will create businesses all over the place and hire people for $1000/hr. Just ask GARY or any other liberal moron who has no grasp of economic reality.

    • davidmpark

      Test the dollars for cocaine residue afterwards.

  • davidmpark

    I closed down my business in 2009 for these reasons and some that’s not mentioned here. My biggest reasons were that I was treated like an ATM: I was in business to make money for ME – not for the Feds, State, Local govs, teamsters, Left-wing non-profits, and some teens that had no work ethic. I didn’t get paid: not once!

    Why should guys like me bother going into business? Without incentives to me, why should I put up the money and time that’s better spent elsewhere with things that profit my family and I.

    • liberranter

      Yep, exactly. See my previous rant on this subject (which, for some reason, disqus misplaced in the comments cue rather to whom I was responding).

      The People’s Socialist Demokratik Republik of Kalifornia is probably the worst state in this regard (I cannot imagine why ANY business owner continues to operate there), although the other 49 are rapidly degenerating to levels just as horrific.

    • 2Gary2

      do you want any cheese with your whine??? STFU and pay your fair share d-bad

      • 2Emelia2

        Instead of always whining about taxing the rich, 2Gary2 should start his own business and see how difficult it is to make a profit and pay taxes. It’s time for him to stop being an Obama slave on the Democrat plantation waiting for entitlements that are paid for by taxpayers.

      • SickNTwisted

        A real sign of his lack of education…businesses are taxed 40% by the government then Unemployment gets theirs. Then if you pay for any employee insurance (still on the rise) you are left with enough to pay your local taxes and any frivolous law suits from your more unscrupulous…employees! It isnt worth opening a business….then while trying to hire at a wage you can afford to pay for labor you get to compete with an unearned weekly government check and child care paid for by your tax money…..

      • Openminded

        I smell a troll.

  • The unemployment numbers will decline mostly because of people dropping out of the work force.

  • dave

    well, americans just want things for free now. how can you convince people that get things for free, to decide to WORK to get things? wouldn’t everyone get it for free?

    that’s the whole problem with the latest administration, they are actively promoting they can replace your parents, and subsidize your life. why would anyone want to work?

    the only reason some individuals would be propelled to work in this climate, is if they wanted to make MORE than the state-subsidied people can make (i’ve heard estimates of $40k/year from people just getting government handouts).

    i am almost propelled NOT to work, and every time i talk to people that ARE NOT working, i hear the same thing.

    actually, i am PENALIZED for working, if i could just get fired, perhaps i could take advantage of all these gov’t programs – mortgage reductions, food stamps, unemployment, i’m sure there is more i could take advantage of, the White House is activally promoting people take advantage of gov’t assistance rather than going to their families, or friends, or churches, for assistance.

    it seems our current gov’t is actively trying to ENSNARE the public, which is a really good tactic if you are a democrat president. democrats number less than republicans, so to get “converts”, it is “easy” to give away tax-payer dollars to buy “obama-phones” for the homeless (i know this happens, i personally know homeless people that have free phones. search youtube and you will find many people that are very happy getting a free phone from our current president).

    just take a guess who THEY will vote for in the next election — that’s right … the person that gives them a FREE PHONE! woohoo!

    meanwhile, someone who votes with the ENTIRE COUNTRY’s benefit in his mind, is marginalized and beaten down, and called “radical”.

    actually, “radical” is a word i like. “radical” means that you “get to the root” of the issue, a TRUE radical is someone who understands the issue and can boil it down to the root cause. this is a good thing. i WANT to be a radical, because that is the only way things will change.


  • liberranter

    There is anecdotal evidence that the U.S. policy environment has become inadvertently hostile to entrepreneurial employment.

    There’s no “inadvertent” about it – this is a process of DELIBERATE DESTRUCTION of small American businesses! The Marxist Left, represented by academia and the current sepia-skinned sock puppet-in-chief, hates entrepreneurial capitalism. The Fascist Right, represented by the neocon MIC/bankster establishment, sees the small business owner as competition and a bone in the throat of their centralized fascist “dream regime.” Either way, whether it’s the Marxist Left of the Fascist Right, totalitarianism is hostile toward entrepreneurial capitalism because it represents the triumph of individual ability and self-ownership over the collective – something that neither Marxists nor Fascists can abide.

    • Ralfine

      I think you are a bit brainwashed. To Marxists, there is actually no difference between the worker and the self-employed entrepreneur. Both classes are exploited. One by the capitalist the other by themselves.

      And if you read some marxist literature then you will see what will happen and what is meant by Imperialism.

      In fact, in communism everyone is an entrepreneur. As in communism there will be nobody who does not own means of production, like the proletarier of today, who owns only his body, and who can only sell his ability to work.

      Marx calls the proletarier double-free wager earner. Free of landownership and free of capital ownership. He can only sell his body (and his soul) to make money.

  • JoeD

    I’d be interested to know what % of businesses created over that period of time were in retailing.

    The mass proliferation and subsequent domination that big box outlets have had on the retailing sector has made your run of the mill mom and pop store a thing of the past. For example you would have to either be a fool or hellbent on committing financial suicide by opening something like a hardware store these days. There is simply no way to compete against the Walmarts, Home Depots and Kohls of the world let alone online retailers such as Amazon. As such the opportunities for entrepreneurship for many have been reduced. This is not to say that new areas for potential growth and opportunity have not been created, merely that it is just that much more difficult to become a small business owner because one of the ways many did so in the past is no longer a viable business model.

    Of course now that the national retailers have a stranglehold on the this sector they sure aren’t going to give it up without a fight and have seemingly endless resources to make sure the regulations and tax laws are skewed heavily in their favor to stifle the competition and to keep the desperate workers they employ (many on public assistance because the pay is so low) from ever organizing. One thing to think about: I recently read where the average Walmart Supercenter generates $70 million in revenue. These large stores are like vacuum cleaners that suck money out of the local economies they serve. Only a fraction of the revenue those Walmarts generate stays behind in the form of insultingly low wages and maybe a couple $10K donations to local charities, but by and large that money leaves for faraway destinations, never to be seen again.

    This is not a sustainable business model. The takers, the large blood-sucking multinationals, can only make their max profits by taking as much revenue as they can while mercilessly cutting costs for so long. There’s only so many people they can force onto public assistance by destroying American industry and paying low wages and only so many of those dollars that can be spent in their stores before it all falls apart. The bane of our capitalist society is the priority we’ve placed on “maximizing shareholder wealth”. To heck with the future as long as we can take as much as we possibly can today.

  • davidmpark

    Wonder how things are on the black market? They don’t have to pay taxes nor follow regulations. Whenever the gov bans or overtaxes anything; the black market will have it for a cheaper price. They can’t stop it. It’s how things are.

    Black market is how many of these politicians got rich before entering office; the Kennedy’s, for example, were well known for their bootlegging.

    Over-regulation and government protections are in place to keep people controlled and impoverished. And this is what people want… that’s just sad.

    • Anon76

      System D works just fine. You need something or want something done? Find an operator. Pay in PM or bitcoin.

  • Dean Striker

    The death of small business is simply part of the refutation of pure Liberty. It will go away as governments become the victims of their own folly.



    • MichaelfromTheEconomicCollapse

      You are welcome. Hopefully the current settings will work very well for everyone. 🙂

  • I wish I could share your optimism.

    We are not just witnessing the death of small business in America: We are witnessing the death of everything Thomas Jefferson hoped America would become – but in all honesty, feared it might not.

    I have land in West Texas that hasn’t had the water supply ruined by fracking – yet – and I’m heading there soon to break ground for my grandchildren.

    Good luck to you and yours…

  • frank1569

    ‘The economic environment for small businesses in America has become incredibly toxic.’

    According to the BLS and the Small Business Assoc., nearly as many ‘small businesses’ start up as go bellyup every year, no matter who is POTUS. The truth is, small businesses are basically zero-net job creators – and the vast majority are short-term, since the average small business opens and closes within 2-5 years.

    The real problem with starting ‘small businesses’ is this: we’re inundated with them. How many more nail salons, and taco huts, and dry cleaners do we need? Sure, a few innovators will open necessary small businesses that fill tiny niches, but aside from that, the era of the ‘small business’ is over.

    Adapt accordingly.

    • Carl

      Yes, adapt to our capitalist inspired, third world fascist status where the vast majority aspire to earning their daily bread but most will go hungry.


    THEY HAVE BECOME ONE AND THE MYSTERY IS OVER!!!At the end of this present age, when iniquity has reached it’s fulfillment, the Romish/Babel like kingdoms of this world and the church/harlot are ONE. They are virtually indistinguishable from each other. The perfect union between a harlot and her lover, behold a MYSTERY, they are one in spirit.

    And this has why it has been it so very, very hard to clearly differentiate one from the other and why you will still find many saying she is this or she is that, for actually, she is both and yet ONE.

    Mystery, Babylon the Great, the mother of harlots and abominations of the earth!!!!!!!!!!GOOD BYE SMALL BUSINESS!!!


    WHAT IS THAT CHURCH A 501 3 C???WTH?Only a company that has been formally incorporated according to the laws of a particular state is called ‘corporation’. A corporation was defined in the Dartmouth College case of 1819, in which Chief Justice Marshall of the United States Supreme Court stated that ” A corporation is an artificial being, invisible, intangible, and existing only in contemplation of the law”. A corporation is a legal entity, distinct and separate from the individuals who create and operate it. As a legal entity the corporation can acquire, own, and dispose of property in its own name like buildings, land and equipment. It can also incur liabilities and enter into contracts like franchising and leasing. American corporations can be either profit-making companies or non-profit entities. Tax-exempt non-profit corporations are often called “501(c)3 corporation”, after the section of the Internal Revenue Code that addresses the tax exemption for many of them….IS THAT THE WHORE RIDING THE BEAST?

  • Ralfine


    • El Pollo de Oro

      Here in Philadelphia (and other parts of the Banana Republic of America), small businesses get the worst of both worlds: they pay taxes upon taxes and fees upon fees, but they still have to buy their own health insurance (that is, if they can afford it). I once knew a guy from France who ran a small business in the BRA but ended up moving back to Paris after 30 years (and taking his jobs with him) because he couldn’t get health insurance due to a “pre-existing” condition. Moving back to Paris literally saved his life. This country is a disgrace.

  • Orange Jean

    OK Michael, I’m testing your new way to comment (as I don’t care to register with DISQUS). I’ve been having problems with my computer (a few days ago I got a message while online that “Windows installing” – which should never happen, I had to shut down via power off and then ended up having to do a system reboot – can’t get onto the Microsoft update anymore now – anyone else see this?) ANYWAY…

    This is an interesting topic. I’ve got good marketable skills EXCEPT no skills in selling – so the start your own business was never a good choice for me… but I can sympathize with what people are saying here. I am noticing especially a number of doctors in my area are either cutting way down on hours or thinking possibly of quitting the doctor business… which will not be good for the rest of us – but I can understand why they would.
    Take care now! ~Orange Jean

  • 2Gary2

    stop crying and pay your fair share–another selfish conservative who thinks they made it on their own.

    • 2Emelia2

      When is 2Gary2 going to stop being an Obama slave and get off the Democrat plantation? He sounds like a bitter, hateful man who blames everyone but his Democrat masters for his failed life. He needs to take his chains off and start his own business that will earn an income which will allow him to have respect for himself as a productive member of the community. He will learn how difficult it is to run a business with all the government regulations, fees and taxes that are imposed by a repressive government that always wants more taxes.

  • 2Gary2

    with out the war on poverty programs things would be much worse. SSI alone reduced elderly poverty by 90%. Food stamps keep people from literally starving in the streets. This is simple common sense which you obviously lack. Your lack of any grasp on reality is astounding.

    • 2Emelia2

      The War on Poverty has only created more poverty and even more people who are totally dependent on the whims of a bankrupt government.

  • 2Gary2

    small business also looses the most jobs as well as creates the most jobs. This is always left out as people deify small business.

  • sn

    As an IT professional who could “put out a shingle”
    if he wanted (but would be insane to in Obama’s
    amerca) let me me give just one example of the
    tax insanity you face….”estimating your income”
    and paying the IRS thugs what you THINK you
    might make. This alone must drive millions of
    productive americans right into the underground
    enconomy. Yes, there are fewer “legit” businesses
    but everyone still wants to make money.

  • Carl

    What we’ve been witnessing is the death of Free Enterprise, killed by government licensed and favored, Corporate Capitalism. We were a Free Enterprise, Free Market economy, now we are a Capitalist Controlled economy, steady on the path to totalitarian fascism. People really need to stop conflating free enterprise, which builds free market economies, with the market function of capitalism. A good start to restoring Free Enterprise in this country would be to revoke Corporate Personhood and apply tariffs.

  • 2Gary2

    As we’ve reduced taxes on the rich and exploded our debt in the last 30
    years, it hasn’t trickled down. The top 2%’s incomes have skyrocketed
    and the middle class’s income has been stagnant or declined. It has
    nothing to do with jealousy. It’s about maintaining what made our
    country great…..a strong middle class.

    • 2Emelia2

      If only Oprah, one of the richest women in the country and Obama’s good buddy, would only pay her fair share? If only Warren Buffett, one one of the richest men in the country and Obama’s good buddy, would only pay his fair share? The problem is that the debt has has absolutely exploded in the last 4 years and there aren’t enough people on the planet to possibly pay off the debt that has accumulated. The middle class is doomed.

      • 2Gary2

        Yes tax oprah and every rich liberal. I am an equal opportunity tax the rich.

  • 2Emelia2

    As Margaret Thatcher said, Socialism is great until you run out of other people’s money. The U.S. is running out of other people’s money and the Fed is printing mounds of it!

    • Ralfine

      Communism was never tried.

      You see, communism comes AFTER capitalism. That is After capitalism reached its highest state. The US is probably furthest on the way to communism with capitalism on its way to total control by financial institutions who have no relation at all to the products they produce. These banks and finance investors are as far removed from the production process and the producers as possible.
      But now we also need to bring countries as Iran, North Korea and Mali into capitalism, so they can develop.

      And in the end all together we can decide to get rid of the parasitic shareholders who do nothing but get paid.

      You see, you can’t try communism in one country. Communism is the absence of classes, states and borders.

      Those who took power in weak, war ravaged countries, like Lenin in Russia, didn’t quite grasp the concept. And they didn’t want to wait another 500 years.

      You see, we have capitalism for a few hundred years already and there are still immense problems. So, would you say capitalism doesn’t work? It failed?

      No, it didn’t fail. What we experience now is an essential part of capitalism.

      It’s like with the weather. You can’t have 30 degreees here and then minus 20 degress the next village. There will be adjustments if the differences are too great. In weather this adjustment is called storm.

      If you want to read more, read Marx: The Capital.

  • hotstiks

    I know the owners of a “small business” in California. They are currently trying to sell to a Chinese firm for $1.5 billion. They are crooks (my relatives), whose patriarch mastered the art of bribery and corruption to build his empire. He borrowed money from his own mother, and never repaid the debt. When his elder son can no longer squeeze enough from his illegal and non-union workforce to sustain a $3-5 million yearly household budget, you know times are rough. The younger son had to sell his Ferrari and Mopar muscle cars, due to an IRS audit which questioned said vehicles being listed as corporate assets. Good luck on an even moderately honest businessman trying to survive, when the ruthless are having a rough go of it.

  • Resurrector

    It’s guys like you, Ralphieboy, that can make this country great again. I’m on board, and working to leverage the opportunities that are presented. Thanks for your post and the motivation it provides.

  • JJ

    My dear libertarian friends…I own a small corporation (about $600k/year) and I can assure that you’re barking up the wrong tree. My “tax burden” is far down on my list of concerns. Likewise, regulations are a mere hindrance (and I work in a highly regulated industry–veterinary medicine) compared to the real problem facing small business: LACK OF CUSTOMERS.

    I do understand that libertarians want to blame “the government” and “socialism” in general (root word: society–what have you got against We The People anyway?) for all of our ills. The problem is outsourcing and the near elimination of tariffs (which worked just fine for the U.S. for about 200 years until Reagan/Bush/Clinton started pushing for “free trade”).

    Actually, now that I mention Reagan, you do know that his administration oversaw the largest peacetime tax hike in history, right? Reagan did more to destroy self-employed business people than anything Obama has ever done or threatened to do.

    American workers have been screwed by every administration since Reagan. Our golden growth years were during the post-war boom, when top marginal tax rates were 50, 70 or even 90%! Top marginal tax rates have almost nothing to do with business growth. But a rapidly dwindling middle class–thanks to outsourcing of jobs, the ditching of benefits, and near zero real wage growth rate for 30 years, has guaranteed small businesses like mine far fewer and less affluent customers.

    Bottom line: you give me a tax break and that goes straight into my bank account. I will *never* hire another worker because of a tax cut. No competent owner would. I am not a job creator. My customers create jobs by demanding my product.

    You want to fix the problem? Reinstate tariffs and tell the Chinese to go screw themselves. Hire people to repair our failing bridges, crumbling streets and educational system. Give preference to American made products. Give amnesty to students drowning in debt and go back to the era where CA universities were subsidized (where my dad learned to be a doctor). And, yes, raise minimum wage to a living wage. Invest in Americans. Take the money subsidizing the military industrial complex’s weapons of mass destruction and spend it on educating our own people and providing health care for kids.

    That would be a start. But complaining about taxes and regulation is an utter waste of time. You’ll still have all the problems we currently have even if you’re paying *zero* taxes and have no red tape. Only then, we’ll be living in total anarchy…which, come to think of it…might be what libertarians want anyway? Nah, that’s too crazy. Isn’t it?

  • DT

    You can’t compete with Walmart

  • michael

    I really love this content quite interesting.

  • xpdAnonymous

    Find The.Luciferian.Doctrine.pdf

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