No Job Growth for Small Business Spurs Recovery Doubt

[OhioChick]

Source: Bloomberg.com

Feb. 8 (Bloomberg) -- Small businesses are becoming the Achilles heel of the U.S. recovery by limiting growth and job creation.

Companies with fewer than 500 employees, such as Phoenix Technologies Ltd. and Sonic Corp., helped lead the economy out of the four recessions since 1980. This time, they continue to cut capital spending and dismiss workers, eliminating 3,000 jobs in January, according to Roseland, New Jersey-based Automatic Data Processing Inc., the world’s largest payroll processor.

Improvement in the unemployment rate, which fell to 9.7 in January from 10 percent in December, may stall later this year if these firms aren’t hiring, and growth likely won’t meet the median 2.7 percent annual rate forecast for 2010 by 67 economists in a Jan. 14 Bloomberg News survey.

“Will you have a sustainable recovery a few years down the road without getting some small-business spending? No,” Cary Leahey, senior managing director at Decision Economics Inc. in New York and a former White House economist, said in an interview. “Wall Street gets it.”



Read more: http://www.bloomberg.com/apps/news?pid=20601109&sid=apZULWyXpqhE&pos=10

[peace13]

1. Small business is all that has kept this country going for years.

Why do these guys think that small business should borrow to spend while the big wig bankers are raking it in? That is what has been cracking me up. We have a small business and the day I have to borrow to stay in business is my last day in business. The wealthy folks don't put a dollar in when the going gets tough. I have seen it my own community. They take the tax cuts and the write offs and then they are out of here. I have one friend with a small business who has mortgaged the house to pay his employees, something that is very dangerous. The guys with deep pockets have retired and are counting their loot.

[avaistheone1]

2. I thought the purpose of the bank bailout was to loosen credit for small

business to keep that engine going. However the bank bailout was never used that way.

[Hulk]

3. Ever wonder what percentage of "small business" are registered repukes??

I say this...because EVERYONE I know in small business IS a repuke. Everyone in small business that I know HATES Obama.

I'd love to see some figures on this. Maybe I'm chasing a shadow, but if my hypothesis is true, then WHY WOULD A REPUKE want to hire anymore employees during this administration? I know for a fact, a friend of mine would sooner work 80 hours a week than hire anyone now.

You tell me!

[Alias Dictus Tyrant]

4. Mostly true but...

It is true in my experience that there is a Repub bias in small businesses.

That said, Obama's policies and practices have been *at best* neutral to small business and more likely detrimental. To make matters worse, there is a lot of perceived uncertainty and risk based on what may or may not be proposed next. For example, Dodd's banking reforms contained language that would have been extremely damaging to the ability of many types of small businesses (e.g. tech ventures) to obtain financing. Taking on employees is an investment, no one wants to take on employees when they are uncertain about whether or not the government will make a hare-brained policy decision next week that screws them over because they made that investment.

I have a small business but that is no reason to become a Republican; it isn't as though the Republicans do so much better for small businesses. However, from the perspective of small business operations the current administration and Congress has done nothing to encourage hiring and some of the policies that have been proposed are actually discouraging of it. I have no idea who is advising our leaders currently, but they are completely clueless about the economics and realities of small business and it shows.

Small businesses will hire, even ones run by Republicans, if the administration provides a clear, intelligent, pro-small-business policy framework that makes decision makers comfortable that hiring people won't bite them in the ass later. So far, the government hasn't done this, much to their detriment. There is capital on the sidelines that would go straight to jobs that isn't being deployed because of the wishy-washy small business policy.

[SlingBlade]

5. Tax Cuts, Deregulation and Wars do not spur Economic Growth

"Reagan, Bush Sr., And Dubya Proved That ! :toast: