U.S. Businesses are Being Destroyed Faster Than They’re Being Created
Here were recent headlines at the Drudge Report:
STUDY: Businesses being destroyed faster than created…
America less entrepreneurial than any point in last three decades…
They both linked to an article at the Washington Post by Christopher Ingraham, who is “a data journalist focusing primarily on issues of politics, policy and economics.” Here is the opening of his article:
The American economy is less entrepreneurial now than at any point in the last three decades. That’s the conclusion of a new study out from the Brookings Institution, which looks at the rates of new business creation and destruction since 1978.
Not only that, but during the most recent three years of the study — 2009, 2010 and 2011 — businesses were collapsing faster than they were being formed, a first. Overall, new businesses creation (measured as the share of all businesses less than one year old) declined by about half from 1978 to 2011.
The authors don’t mince words about the stakes here: If the decline persists, “it implies a continuation of slow growth for the indefinite future.” This lack of economic dynamism, particularly the steep drop since 2006, may be one reason why our current recovery has felt like much less than a recovery. As Matt O’Brien noted on Wonkblog last week, annual job growth rates have stubbornly refused to budge above 2 percent for the duration of the recovery.
Another success by the Obama Administration on the road to fundamentally transforming America? It would appear so.
Read more: Washington Post
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