tag:blogger.com,1999:blog-6926413038778731189.post1078461830763462153..comments2023-10-16T07:13:12.123-05:00Comments on A plain blog about politics: The Conservative Freak-Out Theory of UnemploymentJonathan Bernsteinhttp://www.blogger.com/profile/15931039630306253241noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-6926413038778731189.post-8529144980611857162011-06-04T13:45:37.962-05:002011-06-04T13:45:37.962-05:00I've been a business owner for 20 years. I spe...I've been a business owner for 20 years. I spent the previous 20 years in marketing and advertising working with many different kinds of businesses; small, medium and large, local, regional, national and global. <br /><br />The absolutely most important thing that inspires business action is demand. When you write a business plan, the first thing you have to demonstrate is demand; who will want or need your product or service, how many, how often, what do you expect to happen to demand over time, etc. Government regulation provides a context within which a business must act, but that context is more likely to be beneficial, frankly, than otherwise. And, of course, it is usually accompanied by a great deal of government support.<br /><br />The theory that the business community is terrified of government action is ridiculous. Yes, businesses want less regulation, except, of course, when they believe more will serve their specific interests. And no one, of course, wants to pay taxes. But, there isn't a single industry that hasn't gone to and isn't willing to approach government to "interfere in the economy" when they think it suits their purposes.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6926413038778731189.post-26535076100646813152011-06-04T13:07:41.520-05:002011-06-04T13:07:41.520-05:00What BrianTH said. Small businesses cite low dema...What BrianTH said. Small businesses cite low demand as their main obstruction to growth. See: http://economix.blogs.nytimes.com/2010/09/14/whats-holding-back-small-businesses/<br /><br />The Republican Party has abandoned policy beliefs for resentments and conspiracy theories.reflectionephemeralhttp://poisonyourmind.comnoreply@blogger.comtag:blogger.com,1999:blog-6926413038778731189.post-39498463741869852402011-06-04T11:58:52.788-05:002011-06-04T11:58:52.788-05:00The businessperson who was actually rational would...The businessperson who was actually rational wouldn't have to look very far or very closely to understand that the Republicans have enough power in Congress to emasculate any and all "liberal regulations" before their birth into actual legislation, and to de-fund any regulations and filibuster any appointments of competent regulators if they do gat into legislation, and to hold hearings on repeal of the regulations if the previous 3 types of actions haven't made said regulations toothless and worthless. <br /><br />Look at the examples of Massie Coal and BP oil -- does business actually have any real reason to fear regulation in the current Fox News/GOP lemmings-off-the-cliff political environment?philosophical-ronhttps://www.blogger.com/profile/04329015177186261224noreply@blogger.comtag:blogger.com,1999:blog-6926413038778731189.post-10989349783433724192011-06-04T10:16:09.371-05:002011-06-04T10:16:09.371-05:00If you're a small business owner, and you'...If you're a small business owner, and you're currently giving $0.35 out of each before-tax dollar to Uncle Sam, it sucks to increase that to, say, $0.40. No doubt. What would you do about it?<br /><br />Possibly...nothing. If your salary is in the SG&A line of the P&L, and your small business is closely held, the 'only' impact of the tax change may be that your residual wealth declines somewhat from lower retained earnings. But that won't necessarily cause you to operate differently.<br /><br />But many small businesses are operationally impacted by lower retained earnings. How do they make themselves whole? Some will no doubt fire/not hire employees, as Fox News breathlessly reminds us in every tax discussion. Others, though, will make themselves whole by hiring more 'line-type' staff (e.g. salespeople) to goose the topline and regain their earlier earnings level. Eventually those revenue increases will lead to a larger organization and more staff-type (back office) jobs. <br /><br />I'm not familiar with the mix of small businesses that a) shrink staff in response to higher tax rates, b) grow 'line-staff' in an attempt to offset higher taxes and c) ignore higher taxes. But there must be some of each, no? By contrast, it stands to reason that virtually all large, publicly traded companies would respond to higher taxes by cutting staff, since a) lower profits absolutely matter to every publicly-traded company, and b) the opportunity to offset lower after-tax profits with greater sales should be lesser in bigger companies.<br /><br />If its true, as everyone agrees, that small business jobs are the engine that drives the US economy, perhaps this explains why Democratic administrations have better economic performance: the threat of higher taxes ought to cause some small businesses to staff up, while virtually every large company will shed jobs under such a threat. I'm curious whether anyone has studied this, but I could be convinced that tax stigma associated with the political left correlates with a positive migration of jobs toward small business (contra every breathless rant on Fox News).CSHnoreply@blogger.comtag:blogger.com,1999:blog-6926413038778731189.post-17999773478086250702011-06-04T07:06:11.050-05:002011-06-04T07:06:11.050-05:00Surveys of small business owners indicate their ma...Surveys of small business owners indicate their main concern right now is weak sales.<br /><br />So it isn't that business owners are blaming the wrong things. It is pundits doing it on their behalf.BrianTHnoreply@blogger.comtag:blogger.com,1999:blog-6926413038778731189.post-28112841019625721862011-06-03T17:37:10.139-05:002011-06-03T17:37:10.139-05:00I'm also skeptical of Wilkinson's theory (...I'm also skeptical of Wilkinson's theory (heaven help us if partisan propaganda actually is driving the economy). The business climate is uncertain because we continue to pursue policies, fiscal and monetary, that manipulate the economy with the aim of artificially propping it up -- even with the explicit intent of keeping housing prices from falling further. Businesspeople reasonably conclude that we're not at the bottom of the market and there're still significant adjustments to come. So even where market indicators look good, they're assumed to be unreliable. Looking down the road, there's probably also some uncertainty about the austerity that will be necessary to deal with the debt, deficit and entitlements. We've seen European countries deal with this recently and the longer we put it off, the worse we can expect the austerity to be.<br /><br />Source: http://www.youtube.com/watch?v=GTQnarzmTOc<br />(Hayek FTW!)Couveshttps://www.blogger.com/profile/00926561539205771774noreply@blogger.com