I think this is the sad reality of the world we live in today. The job market sucks. Salaries are consistently dropping. People are being squeezed from every direction. And there's no such thing as a long term job anymore. The market is basically telling every highly skilled worker to start their own business or get in line at the welfare office.
"Sad reality"? I see the biggest opportunity for US growth since the Great Depression. When that struck, people became reflexively wary of investing in markets, blaming Wall St. and scorning robber barons. So, they sold apples on the street, or built scrap metal businesses, or little collective cottage industries, or invented the better mousetrap or dish detergent or soda or milk delivery service.
The Obama administration has the chance to change the narrative away from the WPA-type government works, consumer stimulus and all these other FDR/Keynesian tricks that tea partiers liken to Soviet Russia and instead focus on the biggest driver of employment and b2b consumption: Small business.
I think it's well passed time for us to really soak corporations who in the early 2000s took every tax break and still continued outsourcing, offshoring, right-sizing, and "pivoting toward core competencies" or whatever that hell the new PHB term is today. Tax the s--t out of them. What are they doing with that cash, anyway? They're definitely not hiring here and they're not reinvesting except outside of the US, where the growth is larger and the market less stagnant. Tax them until they hurt or move to Dubai or wherever the hell they go nowadays. Don't believe their narrative in the press that they're the biggest driver of employment. SMBs have _always_ been the big hirer; larger than the Fed, larger than the megacorps.
Obama's administrative focus should be almost laser-like on small business and entrepreneurship, and not just Green ones. ALL of small business should get every damn tax break his administration can give. That, added with tax incentives for SMB purchase of health care, can make working for an SMB even more attractive to potential hires.
This is the moment for the SBA to become one of the most important departments in the Government during this recession. They should be flush with cash, doling out loans at-cost or at lower rates than the stingy big banks that won't lend to Main St. anymore. Let them sit on the sidelines while the government guarantees the survival of the US economy. They'll come around eventually and drop their CDO and leveraged funny money games and start focussing on lending money to fuel growth industries again.
Me too, but the problem is starting up. There is no cash to start. If you've got an idea and it takes some capital to bring it from PoC to finished product, you're stuck because banks _are not_ lending to small business, full stop.
That's why I see the SBA coming to the forefront with direct microlending and guaranteed super-low interest rates for mom and pop loans.
Not everyone has a business idea that can get the attention of YC or TechStars. It sometimes takes a nudge to get things going. It's a big country, with people that have varied skillsets, education levels, and means of opportunity. If we want to encourage entrepreneurship, we need to either empower them directly with tax dollars, or we give those dollars to banks who may or may not do it for us.
What we obviously can't do is cut taxes for the rich and corporations and hope they hire the unemployed, because I'm sure you'll agree that it obviously hasn't happened.
I am not sure if I want to use coercion to achieve said goal of encouraging small business and entrepreneurship.
I prefer the method of cutting down regulations and coercions put out by government then see if it help small business stack their advantages against big business' disadvantages.
I also dislike favoring anybody, even the little guys.
Well, in a fair world, we'd have zero regulations or need for taxes or government at all (except for enforcement against personal abuse like murder, rape, theft and invasion), and as an example, oil companies wouldn't ever have spills because of the extremely high potential to be sued by the people living in the regions where spills occur and actually _lose_ these lawsuits, which effectively means going bankrupt and forced out of business paying back all the damage awards. That's the ideal Libertarian solution to the outsized hand of big business on both market and customer. It's similar to the Xeer stateless government, as adopted in Somalia. Maybe it can scale to a country of 305 Million, but that truly is a "grand experiment" likely left as a thought exercise for now.
In reality , though, the solution is a simple matter of tax revenue arbitrage. Instead of providing tax breaks to the lethargic corporations that will take those tax breaks but won't hire anybody anyway, give it as a guaranteed loan to a small business who will use it to directly hire workers and consume products and services expressly for business continuity and growth. Spread thinly enough, while the failure rate outpaces the successes, the succeeding companies have the potential to hit it _really_ big, spurring ancillary and supporting feeder companies sprouting around it and possibly creating a new industry.
1) Punitive taxation will result in layoffs and makes no sense if you're trying to revive the economy
2) Many small businesses want to be big someday. Whatever threshold you set at which "good" small business/startup morphs into evil megacorp, it will be arbitrary and result in a piling up of businesses near that line, staying at 199 employees (or whatever) to avoid the fist of the state. In other words, putting the brakes on the rapidly growing startup
3) Finally, any big biz worth it's salt can afford platoons of tax lawyers to set up LLCs and shell corps which each have 199 employees.
