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What is really wrong with our economy in the United States? Chime in!

By Adam Cox posted 09-15-2014 15:23

  
It has been over 6 years since the financial crisis hit and we lost Lehman Brothers and probably should have lost one or two other "too big to fail" banks.  In Texas, admittedly we are very fortunate to have a more robust economy than most places, and this is largely due to the oil and gas industry.  This also applies to pockets in Oklahoma, Pennsylvania, North Dakota, and a few other places with oil and gas shale plays that are pumping up local economies.  

But what about the rest of the country as it relates to small business?  I mean after all, we seem to jump up and down and say hoorah when we see monthly job numbers that indicate we have added anything north of 200,000 non-farm jobs to U.S. payrolls, right?  Most legitimate economists will tell you that the OLD rule of thumb was that if we are not adding north of 250,000 jobs per month, then we are not keeping pace with a growing economy of any sort.  Just scroll through D&B's regurgitated economic data (http://investor.dnb.com/releasedetail.cfm?ReleaseID=868417) and you will be hard pressed to find a month over the last 6 years that is north of 200,000 new non-farm jobs, let alone 250,000.  So if we are not adding enough jobs to get the U.S. economy out of the ditch, what is the root cause.

Small businesses have always been the foundation of job creation in the U.S.  Frankly, it will always be that way.  But wait, our small businesses are really NOT creating enough jobs to get unemployment back to the 3-4% that we would all like it to be.  You would think that with this many people simply dropping out of the job market (the highest number in four decades ((http://www.bloomberg.com/news/2014-05-02/workforce-participation-at-36-year-low-even-as-more-jobs-beckon.html)) the unemployment rate would have to be lower than it is.  This is called the labor participation rate, and it is partly to blame for the ditch we are in.  Granted, it has helped lower the unemployment number for now, but what if these people want to start looking for work again?  Even worse, what if these people never want to work again, and just feel it is easier to draw unemployment, welfare, food stamps, disability, medicade, etc., etc.  That brings us back to the fact that we are not adding the 300,000 to 400,000 jobs per month that a true (small business) jobs recovery looks like, so it really doesn't matter for many of them because it is easy for them to just say the jobs are not there.  

So why is this not getting more coverage in the media as to what the real problem is here?  Why are small businesses not popping up at the same pace that they once did in yesteryear?  Why do larger banks not want to lend to small businesses?  Are there enough local and regional banks to satisfy the demand for small business loans?  

These are all closely connected questions that really get intertwined in a combination of government regulation (local, state, and Federal), and a general environment that greatly favors big business.  What I mean by that is that Joe's Trucking, Inc. has the same payroll, unemployment & workers comp, DOT compliance, liability insurance requirements, training costs, (there are other costs I've left out) etc.... as Exxon Mobil. Does this really make sense?  Probably not.

What is your idea as to how we may be able to give a break to small businesses throughout this country and enable entreuprenuers to thrive?
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