The Stimulus Seems to have failed

[YoPopa]

Oddly enough, the actual empirical data suggest that "confidence" is actually a negative factor in starting businesses. (Here's another source saying roughly the same thing.)

Wow, how to misinterpret data! The "confidence" of which we speak is consumer confidence, right? That has a direct impact on how many new businesses succeed, not in how many new businesses start up. It's those customers of which you spoke in an earlier post which will decide whether the time is right to spend and whether the new businesses are able to survive. The actual empirical data suggests that most of those new businesses will fail.
Loaning them lots more money is your solution?

There is an alternative to pumping $ into these deadend startups. The alternative? Get out of their way. Let a lady braid hair without a cosmetology license. Let a few monks build handmade wooden caskets without a full morticians license. Let kids sell a few halloween pumpkins without a vendors license.

 

[YoPopa]

Shrug. IMO the businesses that are most likely to be successful are not the ones judging demand by their gut feel of what effect government action will do.

Unfortunately that is not always true. I wish it were but decades of big gov. and big biz being joined at the hip say otherwise. Or perhaps you meant to discount gut feelings in favor of corrupt lobbying?

Rather, the businesses that are most likely to succeed are the ones that can actually measure their sales and respond to the trends that are actually happening in the marketplace.

This is true but not always sufficient. Onerous regulations a tax burdens can put you out of business before you even start.

 

[lomiller]

Onerous regulations a tax burdens can put you out of business before you even start.

How much tax does a business that earns nothing pay?

Taxes don't make a business profits go negative so the notion that they can kill a business seems like a stretch. At most they move you're price point with some smallish effect on sales. If this is what's making you decision for you, chances are your business was marginal to begin with.

 

[lomiller]

Unfortunately that is not always true. I wish it were but decades of big gov.

Yeah it pretty much is always true. The business that succeed are the ones that can quantify their market and sales and margins. Vague ideological ideas about what government is doing do not help you do this, what does help you is looking at your current numbers.

 

[drkitten]

Wow, how to misinterpret data! The "confidence" of which we speak is consumer confidence, right? That has a direct impact on how many new businesses succeed, not in how many new businesses start up.

That's right. Which means it's not necessarily the task of government to encourage the creation of new businesses (that will happen by itself), but encourage them to succeed, by putting more money in the hands of consumers, making them customers of the new businesses.

People don't pay businesses in "consumer confidence"; they pay them in "money."

The actual empirical data[/URL] suggests that most of those new businesses will fail.
Loaning them lots more money is your solution?

Yes, actually. The single biggest reason for small business failure is insufficient access to capital, a problem made worse during recessions because venture capital firms have a tendency to make fewer investments and banks tighten lending standards.

 

[YoPopa]

.....
People don't pay businesses in "consumer confidence"; they pay them in "money."

Without confidence consumers hold on to their money. They don't pay their money out when their confidence is low. What part of that is confusing?

Yes, actually. The single biggest reason for small business failure is insufficient access to capital, a problem made worse during recessions because venture capital firms have a tendency to make fewer investments and banks tighten lending standards.

Governments first add to the cost of starting up a small business and then because most of the new startups are going to fail (which the pros already know, being venture capital firms and banks) it is now the governments proper role to invest in firms that are going to fail. Incredible that anyone can hold that view but you continue to surprise me.

 

[drkitten]

Without confidence consumers hold on to their money. They don't pay their money out when their confidence is low. What part of that is confusing?

The part where any of it is supposed to be true. Are you seriously suggesting that people don't get hungry when their confidence is low?

Now, it's certainly true that people will try to save money when their confidence is low. But that's exactly where business opportunity lies, by providing people with an opportunity to solve problems better and more cheaply than their previous choices.

Governments first add to the cost of starting up a small business

Again, what part of this is supposed to be true?

and then because most of the new startups are going to fail (which the pros already know, being venture capital firms and banks) it is now the governments proper role to invest in firms that are going to fail.

Nope. It's the government's role to create an economic climate where it's more profitable for the professionals to invest in risky startups than it is for them simply to hold onto their cash. Hence the need for economic stimulus.

But I think we're done here; I think I've made my point to the assembled readership that there's no coherent opposition to the stimulus.

 

[BeAChooser]

I think I've made my point to the assembled readership that there's no coherent opposition to the stimulus.

LOL!

http://www.realclearpolitics.com/ar..._care_have_democrats_on_defensive_106845.html

The 2009 stimulus package is so unpopular that Democrats have banned the word from their campaign vocabulary. "I'm not supposed to call it stimulus," Rep. Barney Frank told the "Daily Show's" Jon Stewart. "The message experts in Washington have told us that we're supposed to call it the recovery plan."

http://www.politicsdaily.com/2010/10/21/obamas-approval-ratings-at-the-lowest-ebb-of-his-presidency/

President Obama's average job approval rating for the seventh quarter of his administration has dropped to the lowest point and ranks him near the bottom of the list of other modern presidents at this point in their time in office, according to Gallup polling conducted July 20-Oct. 19.

http://thehill.com/blogs/on-the-mon...backed-bailout-stimulus-face-tough-reelection

10/20/10

A new poll from Ramussen Reports shows votes on the auto bailout and stimulus bill are fueling voter opposition toward incumbents.

http://www.publicbroadcasting.net/k...84/KPLU.Local.News/Poll.Public.View.of.Stimul

The federal stimulus - did it work or not? - has emerged as a key issue in Washington's hyper-competitive US Senate race. Now a new poll shows nearly two-thirds of Northwesterners believe federal stimulus spending didn't work.

http://www.unitedliberty.org/articl...timulus-created-jobs-7-believe-elvis-is-alive

Poll: 6% of Americans believe “stimulus” created jobs, 7% believe Elvis is alive

 

[drkitten]

LOL!

And exhibit A for "no coherent opposition" steps forward with more linkspam.

 

[BeAChooser]

And exhibit A for "no coherent opposition" steps forward with more linkspam.

LOL! You are going to see "coherent opposition" on Nov 2nd, dk.

 

[BeAChooser]

http://marathonpundit.blogspot.com/2010/10/stimulus-failure-shovel-ready-or-spin.html

FLASHBACK: DEMOCRATS PITCH “SHOVEL-READY” STIMULUS

... snip ...

SEN. BARBARA BOXER (D-CA): “Local People Are Saying To Us, Please, Senators, Do Something To Help Us Get Out There, Spend The Money On These Shovel -Ready Projects--the highways, the bridges, the transit systems, the sewer systems, the safe drinking water issues. Help us do it.” (Sen. Boxer, Congressional Record, S.1383, 2/3/09)

.. snip ...

SEN. DIANNE FEINSTEIN (D-CA): “We Need To Repair This Infrastructure, And The Beauty Of Doing It As Part Of This Package Is That It Puts People To Work Immediately On Projects That Are Shovel Ready.” (Sen. Feinstein, Congressional Record, S.1380, 2/3/09

So how'd those shovel ready jobs that Obama now says don't exist work out, dk? Last I heard, unemployment in the US is up significantly from back when the Stimulus was passed, despite promises to the contrary. In fact, I hear it's now over 12.5% in California. In fact, in eight of California's counties it's over 20%. Guess Obama was right … there wasn't any such thing as a shovel ready job … at least in the public sector where most of the stimulus money went ... despite all the promises to the contrary.

And sadly, California's democrats appear ready to demonstrate they are dumber than dumb ... by putting the man who laid the foundation for California's economic woes into the Governor's office, and by reelecting a woman who is about as far left as they come in the Senate and who has accomplished next to nothing over her 27 years in Congress. You would think the fact that Boxer's still claiming the Stimulus was "very successful" would give people a clue. But apparently not California democrats. SOS.

 

[YoPopa]

...
Governments first add to the cost of starting up a small business..

The part where any of it is supposed to be true. Are you seriously suggesting that people don't get hungry when their confidence is low?

You really don't know any of the ways governments raise the costs of starting new businesses? Sad, very sad.

The list is incredibly long but here are a couple.

Suppose you want to sell your homemade jewelry on the streets of Miami:
quoted from the Institute for Justice:

"Miami limits vendors to selling only food or flowers, and the application process is difficult and expensive and, worse yet, the applicant must secure all government-issued permits and insurance before applying and then endure a yearly “lottery” to see if he or she will actually receive a permit after having spent so much time and money."​

Or you are living in Louisiana and wish to use your cabinetmaking skills to provide wood caskets at a reasonable price.

"Under Louisiana law, it is a crime for anyone but a licensed funeral director to sell “funeral merchandise,” which includes caskets. To sell caskets legally"​

This is one I'm familiar with because I have actually made a few caskets and I can assure you there was no need for me to serve a one year apprenticeship learning to embalm human remains.

Read more: http://stossel.blogs.foxbusiness.com/2010/10/26/government-kills-businesses/#ixzz13bstbwvx

 

[Tricky]

This thread has gotten quite uncivil and is marked by a number of taunting, baiting, and downright blatant insults by several members on various sides of the issue. But many of those posts also contain a lot of topic-relevant material which we are loath to remove en masse. So what we've decided to do is let the thread stand as is, including some very questionable posts, but to warn you to cut out the bickering, incivility, and personal attacks in your posts subsequent to this mod box.

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Replying to this modbox in thread will be off topic  Posted By: Tricky

 

[kookbreaker]

You really don't know any of the ways governments raise the costs of starting new businesses? Sad, very sad.

The list is incredibly long but here are a couple.

Suppose you want to sell your homemade jewelry on the streets of Miami:
quoted from the Institute for Justice:

"Miami limits vendors to selling only food or flowers, and the application process is difficult and expensive and, worse yet, the applicant must secure all government-issued permits and insurance before applying and then endure a yearly “lottery” to see if he or she will actually receive a permit after having spent so much time and money."​

I cannot say that I am crying too much for folks who want to sell on the street. Vendors without any regulation have been known to set up anywhere they please, never report the income and make a hash of foot traffic on crowded areas. When South St. was in its heyday in Philly there were lots of vendors making it a pain to move around so they could sell their bootleg videotapes and other junk. The stores they put their tables in front of were often threatened, and it of the police showed up it was just enough wares to throw into a garbage bag and run.

I watched the video and there were a lot of points,some legit but I also know why some of those alleged 'roadblocks' are there - the Interior Designers in DC (note that they said Interior DESIGNERS not Interior DECORATORS, but then go on discussing the job description of an Interior Decorator, not the former position which actually requires an Architecture degree -which is it guys?).

For a similar situation to DC, you can look at Electricians in New Jersey. Used to be that they had a licensing system for starting up an electrician's job. It wasn't easy: you had to pass a rigorous test so that, y'know, your wiring job didn't set houses on fire. There was a recent lawsuit and those regulations got dropped dramatically. Now almost anyone can start an electrical business. Good yes? Well not really. Now there a hundreds of fly-by-night contractors around and you simply cannot earn a living as an electrician in NJ. I know a couple of electricians in Jersey and they have both been laid off, partly because of the economy but also because their bosses have to do the same jobs with fewer people to remain competitive. The 'boon to consumers' you may think would have come with all this competition hasn't really panned out either. I've had discussions with businesspeople in Jersey who say they are now paying only about 10% less for electrical work and they have a much lower gauge of the electrician's competence. For DC, perhaps they wanted people who are determining where the electricians will put the wires to know what they were doing.

This is not to say that government doesn't make laws that make it hard for business owners. But at the same time some laws actually can make sense. The video harps on Houston outlawing advertising balloons without considering that maybe the nice people of Houston don't want their cityscape filled with ugly, oversized balloons. I don't consider this a detriment to starting a business - merely a limit of abuse of advertising. I'm not allowed to put up a gaudy neon sign on my store (not that I would want to) - I don't consider that to be the government interfering with me starting a business but more a case of the neighborhood not wanting to turn a historic street into a tacky Rt 1.

But more often, the interference is not the government. Ask me what the biggest problem to new businesses is where my store is located.

 

[drkitten]

But more often, the interference is not the government. Ask me what the biggest problem to new businesses is where my store is located.

Tell us, kookbreaker,... what is the biggest problem to new businesses where your store is located?

I'm sure that some of the Libertopians and TeaBaggers on this thread will somehow manage to make this ultimately the fault of an omnipresent government as well.

 

[kookbreaker]

Tell us, kookbreaker,... what is the biggest problem to new businesses where your store is located?

The Manayunk Neighborhood Council. These folks didn't give me any grief when I started up but then I am the sort of store they want to have all over the place with nothing else. Trouble is, for Main St. Manayunk to be a destination area it needs to have restaurants & bars. They have given these sort of business a colder shoulder.

The problem stems from the restaurants wanting to have their bars open until 2AM (Philadelphia closing time) - the locals don't want them and cite 'problem bars' that result in drunks being on the streets. As a result there have been several restaurants with famous chefs that have gone nowhere, and the empty storefronts remain empty. But it also means that there are no new faces on the restaurant scene and thus less reason for shoppers to come down.

We have other issues as well: the parking situation is awkward and most folks have seen what the PPA is like from 'Parking Wars'. It is no exaggeration. Some folks have out and out stated that all of the street parking should be free, but that is classic setup for the tragedy of the commons. This is an area where cities end up losing to Malls or look like Houston.

Now one could say that the MNC has too much power but is it really fair for people to have no say what goes in their neighborhood?

One of the things the video complained about in that video that was posted was that the person starting the computer repair business in his garage and had restriction on what he could do - I have to say: "well *duh* it is zoned as a residence!" Your neighbors don't want you hanging out huge signs or (as has happened in Philly) recycling tires on the sidewalk. Get real folks! There have always been residential and commercial zoning rules, and they weren't just made up to annoy new business (although they can do that at times).

If you want to see some of the local griping and arguments here is a thread about the street I am on.

http://www.philadelphiaspeaks.com/forum/manayunk-roxborough-east-falls/16302-new-blood-main-st.html

 

[BeAChooser]

http://www.realclearmarkets.com/articles/2010/10/30/2_just_wont_do_98733.html

The economy grew at a 2% rate in the third quarter, bringing a sigh of relief from those who feared a worse performance. Sorry, but with unemployment at 9.6%, GDP growth of 2% just doesn't cut it.

… snip …

While real GDP grew by an annual rate of $66 billion, nearly two-thirds of that - $47 billion - came from businesses restocking depleted inventories. And while it's true that consumer spending increased at the fastest rate since late 2006, all that demand was satisfied entirely with imports, adding little to U.S. output.

… snip …

The fact is, for us to climb out of our economic hole, the U.S. must grow 3% or more for a number of years. We didn't make that number up; it represents the nation's long-term growth potential - defined as work force growth (about 1%) plus productivity growth (a bit over 2%).

So growth below our 3% potential means America's army of unemployed - now 15 million - will grow. … snip …

There's a way to end this stagnation. Germany is booming, with its jobless rate falling to the lowest level in decades, and Britain just announced a "surprise" jump of 3.2% in GDP at an annual rate.
Why? Both have slashed government spending and are reaping the benefits in private-sector growth.

When will you folks wake up to the fact the Stimulus Failed?

 

[oggiesnr]

The cut's in UK Government spending have been announced but haven't yet been implemented, it has had no effect on the UK's current growth figures.

Steve

 

[joobz]

http://www.realclearmarkets.com/articles/2010/10/30/2_just_wont_do_98733.html



When will you folks wake up to the fact the Stimulus Failed?

I encourage you to keep making posts like this. It helps support your position.

 

[BeAChooser]

http://www.zerohedge.com/article/labor-force-participation-rate-drops-25-year-low-645

The above source notes that "labor force participation has now dropped to the lowest rate it has been since 1984, at 64.5%." And points out that if the labor force participation were to be what it has been previously, 66% (see the figure at the link), then that translates to a current unemployment rate of 11.6%. As the author states, "Maybe someone can ask the president during his imminent press conference what happened to the unemployed population"? Because the Stimulus certainly hasn't helped them.