by Austin Hill
Did you hear the big news from the world of small business? Jewish delis are closing in both Los Angeles, and New York City.
The trend has been a long time in the making, especially in New York City where Jewish delis’s used to number in the thousands and now total less than one hundred. Yet the Los Angeles Times reported this “news” just this past week, and the details that the report included – and the details that were ignored– point to some far greater problems.
The article, written by Journalist Tiffany Hsu, notes that the decline of the L.A. area Jewish delis “seems to be accelerating partly because of health concerns over the schmaltz-spread fare...” This may very well be the case – certainly American adults are inclined to being more “health conscious” with their dietary choices, rather than less, and food categories of all types that are perceived to be un-healthy are probably headed for a declined in consumption.
From there, the article suggests that “skyrocketing” food costs have driven some delis out of business. That may be true, too, but what has caused that to happen? The article suggests that “mass exports” of food to Japan is the culprit on the price spike. The story also blames the decline of LA-area Jewish delis on “the recession,” “too much competition” from other restaurant sectors, and the notion that younger consumers “don’t understand delis and comfort food.”
It was only one small news story in the LA Times. Bu let’s think through some of the ideas in this news story – ideas reported as “facts” – and consider what they mean from an economic standpoint. Consider, for example, the notion of “too much competition.” What exactly does this mean?
Obviously the more competitive a marketplace is, the more difficult it is for any particular business entity to survive and thrive. But how do we know when the level of competition is appropriate, and when it is “too much?”
Americans are accustomed to fierce competition in other arenas – in sports, especially, and even in the arts and entertainment. Similarly, most of us would never say “my favorite team didn’t make it to the Super Bowl this year because there was too much competition in the NFL.”
But when it comes to local small businesses, we often succumb to this vague, un-defined notion that there is this magical amount of competition that’s “just right,” and if our favorite business can’t compete, then therefore there is “too much” competition.
Yet in our free market economic system, we understand that competition is a good thing. If competition means that certain business entities or entire business categories decline because of the competition, then so be it. It is fairer and more just to allow businesses to rise and fall according to the market demands of consumers, rather than imposing artificial “limits” on the number of people who are to be permitted to participate in an industry.
But what are we to make of this idea that the delis’ failure is because consumers “don’t understand?” If a consumer chooses to “not understand” any particular business, and therefore chooses not to patronize it, then that consumer has made their choice – haven’t they? We’re all better-off if, win or lose, we honor and respect the choices of consumers, rather than presuming that they are ignorant if they make a choice that we don’t like.
And guess what the LA Times article about the delis completely ignored? The impact of government policy on small businesses. Nowhere did it reference the expansive and onerous mandates placed upon business via Obamacare, the impact on business owners of the President’s payroll tax hike, or his income tax increases on “rich people.”
No, the LA Times apparently wasn’t interested in how the President’s income tax hikes have taken money away from what the I.R.S. designates as “Subchapter S Corporations” (sometimes abbreviated as “S-corps”), and how this has effectively taken money directly out of small corporations, many of which operate small businesses. Likewise, the article made no reference to the fact California voters approved an increase in state income tax rates for “rich people” (thus leading to even less revenue in Subchapter-S Corporations) on their ballot last November, nor did it acknowledge that California has for years been on a trajectory of higher and higher unemployment insurance and workers’ compensation mandates for businesses.
It is perhaps more comfortable to pretend that our current government policies are not problematic, and blame the struggling economy on “too much competition” and consumers who “don’t understand.”
But how many more delis must fail, before we get honest and acknowledge that government is our problem?
Comments are invited!
Send feedback to: WatchDog
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Showing posts with label Small Business. Show all posts
Showing posts with label Small Business. Show all posts
Tuesday, February 26, 2013
Sunday, January 27, 2013
Equal Opportunity Destroyers: Politicians Of All Types Damage Small Business America
by Austin Hill
It’s not just an out-of-control IRS or EPA. And it’s not merely the punitive demands and restraints of the new federal healthcare law.
American enterprise is being stifled and squelched by state and local governments, in ways that most Americans don’t even see. With increasing propensity, elected officials nationwide are at times suffocating private businesses with regulations, and at other times competing directly against them – and it happens among both Democrats and Republicans.
A striking reminder of this emerged last week, when it was reported that Democrat San Francisco Mayor Ed Lee was contemplating some sort of “ban” on alcohol sales during the Super Bowl. Drunken vandals got out of hand last year in “the City by the Bay,” when the Giants swept the World Series. The same thing could happen on Super Bowl Sunday this year, with either a 49ers win or loss. So, therefore, the city should step in and try to keep the booze away from the bad guys – at least that’s how the official reasoning went.
The news first emerged with local newspaper and radio websites reporting that the Mayor was seeking a ban. By the time global publications like “International Business Times” had picked up on it, the Mayor had tempered his rhetoric a bit, saying that he was “seeking input from business owners” on how to prevent alcohol-induced vandalism.
The irony here is obvious. This is, after all, San Francisco, a place where, in terms of social and cultural “norms,” almost anything goes. It’s the city where elected officials almost did not pass a ban on public nudity for the first time last November, and yet city officials now want to control liquor consumption.
But here’s the part of the story that nobody reports: such mandates by local governments, arbitrary and unexpected as they often are, damage businesses. Restaurant and bar owners all over the country are naturally banking on steady foot traffic and lots of food and beverage sales on Super Bowl Sunday. No doubt some owners craft their monthly or quarterly budgets around an expected uptick in sales on that day. When politicians disrupt this, they hurt small business owners.
But travel northward some 1200 miles or so from San Francisco, and a less imaginable, more difficult to understand phenomena is happening with private enterprise the worse for it. The state government of Idaho has actually developed a voracious appetite for buying and owning for-profit small businesses of a variety of sorts, and competing against private owners.
Language in that state’s Constitution declares that the land originally granted from the federal government for the creation of Idaho must be managed “in such manner as will secure the maximum long term financial return to the institution to which granted.” From that language, Idaho politicians down through the ages have determined that they have a “fiduciary responsibility” to produce investment returns. So once the first of the original endowment lands were sold, a trust account was established, and state politicians have been “investing” the money in for-profit businesses ever since.
In the past four years alone, the state government of Idaho has purchased everything from a neighborhood beer pub to commercial office space, all under the leadership of Republican Governor C.L “Butch” Otter. This controversial practice came under national criticism back in 2010 when the Idaho government bought “Affordable Storage,” a small self-storage business in the capitol city of Boise, and then began telling would-be customers that “our rates are lower because we don’t have to pay taxes.” Ask residents of “red state” Idaho what they think of President Obama’s forced acquisitions of General Motors and the Chrysler Corporation, and they’ll likely tell you it was wrong. Yet most are unaware that their own state government is doing much the same as the President has done, and is competing against their business-owning neighbors.
While it’s hard to find an American politician who will tell you that they are anything short of “supportive” when it comes to small business ownership, it’s even more difficult to find one that really understands what it means to be that type of leader. The change in government policies that our nation needs won’t begin to happen, until American voters start paying attention and making better choices on election day.
Comments are invited!
Send feedback to: WatchDog
.
It’s not just an out-of-control IRS or EPA. And it’s not merely the punitive demands and restraints of the new federal healthcare law.
American enterprise is being stifled and squelched by state and local governments, in ways that most Americans don’t even see. With increasing propensity, elected officials nationwide are at times suffocating private businesses with regulations, and at other times competing directly against them – and it happens among both Democrats and Republicans.
A striking reminder of this emerged last week, when it was reported that Democrat San Francisco Mayor Ed Lee was contemplating some sort of “ban” on alcohol sales during the Super Bowl. Drunken vandals got out of hand last year in “the City by the Bay,” when the Giants swept the World Series. The same thing could happen on Super Bowl Sunday this year, with either a 49ers win or loss. So, therefore, the city should step in and try to keep the booze away from the bad guys – at least that’s how the official reasoning went.
The news first emerged with local newspaper and radio websites reporting that the Mayor was seeking a ban. By the time global publications like “International Business Times” had picked up on it, the Mayor had tempered his rhetoric a bit, saying that he was “seeking input from business owners” on how to prevent alcohol-induced vandalism.
The irony here is obvious. This is, after all, San Francisco, a place where, in terms of social and cultural “norms,” almost anything goes. It’s the city where elected officials almost did not pass a ban on public nudity for the first time last November, and yet city officials now want to control liquor consumption.
But here’s the part of the story that nobody reports: such mandates by local governments, arbitrary and unexpected as they often are, damage businesses. Restaurant and bar owners all over the country are naturally banking on steady foot traffic and lots of food and beverage sales on Super Bowl Sunday. No doubt some owners craft their monthly or quarterly budgets around an expected uptick in sales on that day. When politicians disrupt this, they hurt small business owners.
But travel northward some 1200 miles or so from San Francisco, and a less imaginable, more difficult to understand phenomena is happening with private enterprise the worse for it. The state government of Idaho has actually developed a voracious appetite for buying and owning for-profit small businesses of a variety of sorts, and competing against private owners.
Language in that state’s Constitution declares that the land originally granted from the federal government for the creation of Idaho must be managed “in such manner as will secure the maximum long term financial return to the institution to which granted.” From that language, Idaho politicians down through the ages have determined that they have a “fiduciary responsibility” to produce investment returns. So once the first of the original endowment lands were sold, a trust account was established, and state politicians have been “investing” the money in for-profit businesses ever since.
In the past four years alone, the state government of Idaho has purchased everything from a neighborhood beer pub to commercial office space, all under the leadership of Republican Governor C.L “Butch” Otter. This controversial practice came under national criticism back in 2010 when the Idaho government bought “Affordable Storage,” a small self-storage business in the capitol city of Boise, and then began telling would-be customers that “our rates are lower because we don’t have to pay taxes.” Ask residents of “red state” Idaho what they think of President Obama’s forced acquisitions of General Motors and the Chrysler Corporation, and they’ll likely tell you it was wrong. Yet most are unaware that their own state government is doing much the same as the President has done, and is competing against their business-owning neighbors.
While it’s hard to find an American politician who will tell you that they are anything short of “supportive” when it comes to small business ownership, it’s even more difficult to find one that really understands what it means to be that type of leader. The change in government policies that our nation needs won’t begin to happen, until American voters start paying attention and making better choices on election day.
Comments are invited!
Send feedback to: WatchDog
.
Sunday, September 9, 2012
Job Creation Nation: America Faces Harsh Realities In 2013
by Austin Hill
The political conventions have passed, the August jobs report is out, and many Americans are said to be “giving up hope.”
So how can we jumpstart our greatest engine of economic growth – the American small business market – and get our economy growing again?
Regardless of which presidential candidate wins this November, in 2013 Americans will have to focus on saving, and expanding, the small business marketplace. The sector of our economy that makes up nearly 60% of the entire American private sector workforce, and creates between 60 and 80% of all new jobs, has been under attack over the past few years by politicians who have created lots of bad laws.
And if Americans are serious about expanding actual employment (rather than merely expanding government welfare and entitlement programs), then we will have to make better choices at the ballot box, and hold our elected leaders responsible for making serious changes. To start, let’s consider consider this harsh reality: the so-called “fiscal cliff” is real, and President Obama’s proposed solution to it is potentially lethal.
Under current federal law, both income tax rates and Social Security tax rates are set to rise dramatically on January 1st of 2013. Along with these tax increases, a dramatic reduction in government services will take hold at the same time.
This confluence of private citizens having more of their money taken away (higher taxes), and a reduction of government services (which means that private citizens will have to fill the gap and spend more of their own money) is expected to trigger a new recession next year. As a means of preventing a “double dip,” both Republicans and Democrats in the Congress have proposed that taxation rates be frozen where they are at, and held steady in 2013.
But President Obama has insisted that taxes should be raised on so-called “rich people” next year, and has refused to do what most economists and many members of his party have said is the one thing that could save us from another downturn.
And with the President polling as well as he is, it seems apparent that millions of Americans are far more excited about his “make the rich pay” rhetoric than they are aware of the consequences of his proposals. Obama supporters may get their wish in November, but it will come at a painful price – a price that all of us will pay.
And here’s another harsh reality: Americans need to get comfortable with other people’s financial successes. Since the early days of his first presidential campaign in 2007, Barack Obama has been pouring fuel on the fires of resentment and envy towards the wealthy. As a political strategy this has worked well for the President, but as government policy this has been bad for all of us.
The President’s tax-hike push is a perfect example, as many of America’s small businesses are set-up under the I.R.S. code as “Sub-chapter S” corporations. These are businesses wherein the company profits are reported to the I.R.S. directly as personal income by the business owners and are subject to personal income tax rates – and many of these business owners are being targeted by President Obama for an income tax-hike.
If the President gets his wish, and the government begins confiscating more money from the owners of Sub-chapter S corporations, by definition this leaves less money in these corporations for hiring and expansion. Thus Americans have a choice to make – do we want to employ our President for another four years so he can satiate the hatred some of us have towards “the rich” and take away more of their money? Or would we like private business owners to have money available to employ more of us? From the way things appear right now, we probably can’t do both.
And here’s harsh reality number three: Americans have to stop Obamacare from wiping-out small businesses. A central feature of this law is the mandate that businesses provide healthcare insurance to their workers. It sounds great – workers will now be “guaranteed” health insurance – but once again, the “make somebody else pay” approach is heaping more weight on the shoulders of small business owners.
Americans must decide how serious they are about job creation – even if it means that some jobs won’t include health benefits. If we honestly want employers to employ more, we must force the Congress and the President to fix this devastating component of Obamacare next year.
And here’s yet another harsh reality: Americans must stop making small businesses a scapegoat on illegal immigration. Roughly two-thirds of Americans want our national borders secured and a coherent immigration policy, yet for over a decade Washington has refused to do the former and has scarcely attempted the latter.
Amid the frustration, businesses have become the target of Americans’ wrath. If business owners would simply quit hiring illegals -so the reasoning goes -the illegals would go away.
Mitt Romney has pledged that, if elected, he will seek to require American employers and workers to register with the federal government’s “e-verify” website, as a means of policing the problem. But this adds even more bureaucratic burdens to small business owners, and ignores our failed immigration policies and un-secured borders.
Do we want politicians who merely tell us what we want to hear? Or do we want leaders in our government who can actually enable businesses to grow? Americans must become more discerning-and face some harsh realities.
.
Comments are invited!
Send feedback to: WatchDog
.
The political conventions have passed, the August jobs report is out, and many Americans are said to be “giving up hope.”
So how can we jumpstart our greatest engine of economic growth – the American small business market – and get our economy growing again?
Regardless of which presidential candidate wins this November, in 2013 Americans will have to focus on saving, and expanding, the small business marketplace. The sector of our economy that makes up nearly 60% of the entire American private sector workforce, and creates between 60 and 80% of all new jobs, has been under attack over the past few years by politicians who have created lots of bad laws.
And if Americans are serious about expanding actual employment (rather than merely expanding government welfare and entitlement programs), then we will have to make better choices at the ballot box, and hold our elected leaders responsible for making serious changes. To start, let’s consider consider this harsh reality: the so-called “fiscal cliff” is real, and President Obama’s proposed solution to it is potentially lethal.
Under current federal law, both income tax rates and Social Security tax rates are set to rise dramatically on January 1st of 2013. Along with these tax increases, a dramatic reduction in government services will take hold at the same time.
This confluence of private citizens having more of their money taken away (higher taxes), and a reduction of government services (which means that private citizens will have to fill the gap and spend more of their own money) is expected to trigger a new recession next year. As a means of preventing a “double dip,” both Republicans and Democrats in the Congress have proposed that taxation rates be frozen where they are at, and held steady in 2013.
But President Obama has insisted that taxes should be raised on so-called “rich people” next year, and has refused to do what most economists and many members of his party have said is the one thing that could save us from another downturn.
And with the President polling as well as he is, it seems apparent that millions of Americans are far more excited about his “make the rich pay” rhetoric than they are aware of the consequences of his proposals. Obama supporters may get their wish in November, but it will come at a painful price – a price that all of us will pay.
And here’s another harsh reality: Americans need to get comfortable with other people’s financial successes. Since the early days of his first presidential campaign in 2007, Barack Obama has been pouring fuel on the fires of resentment and envy towards the wealthy. As a political strategy this has worked well for the President, but as government policy this has been bad for all of us.
The President’s tax-hike push is a perfect example, as many of America’s small businesses are set-up under the I.R.S. code as “Sub-chapter S” corporations. These are businesses wherein the company profits are reported to the I.R.S. directly as personal income by the business owners and are subject to personal income tax rates – and many of these business owners are being targeted by President Obama for an income tax-hike.
If the President gets his wish, and the government begins confiscating more money from the owners of Sub-chapter S corporations, by definition this leaves less money in these corporations for hiring and expansion. Thus Americans have a choice to make – do we want to employ our President for another four years so he can satiate the hatred some of us have towards “the rich” and take away more of their money? Or would we like private business owners to have money available to employ more of us? From the way things appear right now, we probably can’t do both.
And here’s harsh reality number three: Americans have to stop Obamacare from wiping-out small businesses. A central feature of this law is the mandate that businesses provide healthcare insurance to their workers. It sounds great – workers will now be “guaranteed” health insurance – but once again, the “make somebody else pay” approach is heaping more weight on the shoulders of small business owners.
Americans must decide how serious they are about job creation – even if it means that some jobs won’t include health benefits. If we honestly want employers to employ more, we must force the Congress and the President to fix this devastating component of Obamacare next year.
And here’s yet another harsh reality: Americans must stop making small businesses a scapegoat on illegal immigration. Roughly two-thirds of Americans want our national borders secured and a coherent immigration policy, yet for over a decade Washington has refused to do the former and has scarcely attempted the latter.
Amid the frustration, businesses have become the target of Americans’ wrath. If business owners would simply quit hiring illegals -so the reasoning goes -the illegals would go away.
Mitt Romney has pledged that, if elected, he will seek to require American employers and workers to register with the federal government’s “e-verify” website, as a means of policing the problem. But this adds even more bureaucratic burdens to small business owners, and ignores our failed immigration policies and un-secured borders.
Do we want politicians who merely tell us what we want to hear? Or do we want leaders in our government who can actually enable businesses to grow? Americans must become more discerning-and face some harsh realities.
.
Comments are invited!
Send feedback to: WatchDog
.
Sunday, July 22, 2012
“Gaffe”, When a politician is caught telling the truth
by Idaho Conservative Blogger
A lot has been written about what the media has been calling President Obama’s recent political “Gaffe.” You didn’t build that.”
Democrats complained the President has been taken out of context even though the video went viral and clearly showed the President marginalizing American inventiveness and willingness to gamble sometimes at high risk for ideas they believe in. American entrepreneurs have a long history of massive accomplishments and solid track record for creating jobs.
President Obama seems unable to grasp this appreciation. Perhaps it’s the community organizer in him that can’t seem to grasp the notion that businesses that thrive and make profits not only create jobs but also wealth for the American worker. Perhaps the Liberal/Socialist part of him is unwilling to even try.
I read recently, and it’s spot on, “Everyone knows we all get help in life. But we have always started with the individual and then worked out. It is not part of the American mindset to begin with the collective and admonish individuals for thinking too highly of their contribution. “
Over and over again President Obama says things that seem to come across to many as un-American or at least un-proud of America. Many shake their heads wondering how this man became President of a nation he doesn’t seem to be very proud of. Democrats always counter by saying he is just so much smarter then the rest of us, that we just are unable to grasp his greatness and logic. It’s just too far above the average American’s intellect. They say the “You didn’t build that” statement might have just been a “gaffe” from a President who was a little tired from running the country and busy campaigning for his second term.
I believe Charles Krauthammer is the one who got it right by saying,
“A gaffe is when a politician is caught telling the truth about what they believe.”
Comments are invited!
Send feedback to: WatchDog
.
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