Government Meddling Is The Death Of Entrepreneurism
That's certainly my belief. It's at least lessened the number of Americans going into entrepreneurial ventures.
Ben Casselman writes in the WSJ:
Maxim Schillebeeckx is the kind of ambitious young American who has long propelled the U.S. economy. A 28-year-old doctoral student in genetics at Washington University in St. Louis, Mr. Schillebeeckx also has a graduate degree in economics. He helped create a student-led consulting firm to provide scientific advice to local startups.But despite his enthusiasm for entrepreneurship and his experience in startups, Mr. Schillebeeckx said he planned to look for the safety of work in consulting or private equity, rather than launch his own company or work for a new venture.
"I'm pretty risk averse, personally," Mr. Schillebeeckx said. "On the entrepreneurial side, you have to be willing to jump off the deep end."
Mr. Haltiwanger and other economists said this decline in risk-taking--both by companies and individuals--has coincided with a broader slowing of the U.S. economy, particularly for new jobs.
But also taxes, regulation, and Obamacare raise the ante to a point where taking a risk opening one's own business may not seem worth the tradeoff -- or a safe bet at all.
More from the article:
Companies, too, are taking fewer risks. Rather than expanding payrolls, for example, they are keeping more cash on hand--5.7% of their assets at the end of 2012, up from under 3% three decades earlier, said the Federal Reserve, a rise that accelerated after the recession. Workers are hired more slowly, particularly at newer companies, Labor Department data show....Economists aren't sure what is behind the decline in risk-taking. Among the possible explanations are the rising cost of health care, which makes it riskier to quit a job and more expensive to hire more employees; increased state and local licensing requirements that serve as barriers to newcomers--one recent study found that roughly 29% of U.S. employees required a government license or certificate in 2008, up from less than 5% in the 1950s; and immigration rules that deter would-be entrepreneurs from other countries.
I can list two dozen things I wish the Feds would do to encourage entrepreneurship, but Ben Casselman quoting some dude that tells you he is risk averse and then saying but for the government this guy would be creating a company seems a bit silly.
The mantra of startups these days is
https://www.google.com/search?q=fail+early+fail+often
The guy is risk averse, he is not going to be starting any companies for quite some time.
If Casselman can pull himself out of his office, he should speak to the hackers reading Hacker News, most of whom seem to be students or recent alums insisting they never want a job with the Man, they want to create their own. Ask them what the government could do to make it easier to start new companies.
In that vein, I look forward to Obamacare and its role in entrepreneurship. Right now I know many people, including myself, that are almost literally forced to work for large companies in order to get health insurance. With Obamacare and the elimination of pre-existing conditions, and easier to access health exchanges, it should eliminate one huge barrier to the creation of new companies for many Americans.
And if Obamacare can unlink health insurance from employment in general, so much the better for American business who will be able to play on a much more level playing field with foreign firms.
jerry at June 2, 2013 11:35 PM
Hmm. "Entrepreneurship."
Lovelysoul has a marina down in Florida. My family did, on the Intracoastal Waterway. As time went by, it became harder and harder to do anything with one's own property. To replace a single dock piling by the letter of the law, one had by 1979 to get approval from 16 different agencies, even if the approval was a letter of "no interest".
Can you tell me what motivation a public "servant" has to produce such a letter when they get paid the same to ignore the situation?
The legal environment finally forced a sale when it became apparent to our insurers that a total idiot could trespass, commit a crime, and then claim a fortune in a suit.
The property is now condos, and the builder took every marina feature out because the liabilities could not be overcome, even with dockage at $1000 per month per vessel. They had enough money to pay agents to approve modifications to seawalls and the removal of mangroves we were forbidden to touch.
$$$$. That's all they care about. County commissioners are cheap, too.
Radwaste at June 2, 2013 11:50 PM
Amy Alkon
http://www.advicegoddess.com/archives/2013/06/03/government_medd_3.html#comment-3730579">comment from RadwasteAs time went by, it became harder and harder to do anything with one's own property. To replace a single dock piling by the letter of the law, one had by 1979 to get approval from 16 different agencies, even if the approval was a letter of "no interest".
This is precisely what I'm talking about.
Amy Alkon at June 3, 2013 5:59 AM
Jerry, are you new here? Because (I'm reading backwards) this is your second asinine comment on two posts in a row, after the one in which you asserted that the TSA was somehow right in re-screening an entire airplane full of people because a stray .22 round was found aboard the aircraft. Now you're thinking that a new round of stifling government regulation will somehow encourage entrepreneurialism. I suppose it might, if you think that reducing the economy to something resembling 18th-century Sicily is "entrepreneurial."
The only remaining question is, are you educable, or hopeless? (I suppose "troll" is an option, too.)
Grey Ghost at June 3, 2013 6:12 AM
Amy Alkon
http://www.advicegoddess.com/archives/2013/06/03/government_medd_3.html#comment-3730599">comment from Grey GhostWalter Russell Mead had this to say about risk aversion and entrepreneurialism:
http://blogs.the-american-interest.com/wrm/2013/06/03/spare-the-risk-spoil-the-child/
Amy Alkon at June 3, 2013 6:17 AM
And if Obamacare can unlink health insurance from employment in general
It doesn't do that. All it does is add 7 feet of new laws and regulations to the system.
I R A Darth Aggie at June 3, 2013 6:19 AM
Amy Alkon
http://www.advicegoddess.com/archives/2013/06/03/government_medd_3.html#comment-3730608">comment from I R A Darth AggieExactly, I R A Darth Aggie. So, it didn't solve a major problem, vis a vis how we live and work now, which is not by staying for a lifetime in a single job or even a single place.
Amy Alkon at June 3, 2013 6:22 AM
This is just 1984, 29 years late, but here it is. Big Brother Government has its fingers in damn near every pie now, and it will only get worse before it gets better.
If it gets better.
The only way I see that happening is a complete and total overhaul of the House and the Senate - NO repeat offenders, gotta be ALL NEW. And a totally NEW SCOTUS and all those assholes in the White House needs to go. NOW.
These people need to be replaced with people like us. Problem is, we're smart enough to know we don't want the job. Sad thing is, we're probably the ones who would do it right, as opposed to the idiots that were elected to do it.
Flynne at June 3, 2013 6:56 AM
"I look forward to Obamacare and its role in entrepreneurship"
Oh, you're cute. Down right adorable.
Obamacare is *terrifying* to small business owners. The "you must provide healthcare to employees who work more than thirty hours a week" is going to cause so many more sleepless nights for a company with 45 employees that feels the need to expand. The expense there is astronomical. Of course you could always just tell everyone they are part time now.
And there's no way Obamacare is going to do anything but cause people to cleave even tighter to the jobs they already have that provide insurance. Rates are going up by leaps and bounds. And the tax penalty for not having health insurance is going to be a real kick in the pants.
There is *nothing* about Obamacare that encourages entrepreneurship.
Elle at June 3, 2013 7:56 AM
For @grey ghost, yes, I am new here. You in particular should assume I am a troll, and don't feed the troll grey ghost, just ignore me.
"And if Obamacare can unlink health insurance from employment in general
It doesn't do that. All it does is add 7 feet of new laws and regulations to the system."
That's not clear. Indeed, one of the complaints is that Obamacare is subterfuge intended to sink the insurance industry, requiring public health care.
As I've mentioned before, given my dealings with the industry, given that the Constitution does not protect any industry apart from the press, given that (as I think Radwaste agrees) insurance for everyone from day zero is not insurance but a form of prepaid benefit, then to hell with the industry, they deserve what they would reap.
But even if it doesn't destroy the industry entirely, Obamacare should make it much easier for employers to provide insurance and individuals to obtain their own insurance.
As one data point, dotcom millionaire Philip Greenspun says:
"philg May 31, 2013 @ 6:20 pm
Thanks, Timothy. I think Obamacare makes my life as a small employer better because I don’t have to arrange for some sort of group health policy. Whereas in the old days it would have been hard for an individual to buy health insurance at a reasonable rate, now the government forces the insurance companies to deal with small customers that they previously wouldn’t have wanted to talk to. (Not a great example of the free market, obviously!)"
Obamacare may be hard on the insurance industry, but it looks like an enormous win for start ups, their founders and employees.
Anyway Grey Ghost, yes, very new here, just a day or so, came from the Kos Glenn Beck Tard network, you should just ignore me, k? Thx, bye.
jerry at June 3, 2013 8:06 AM
I think what Walter Russell Mead says about risk averse kids is true. Toss in a large helping of what Lenore Skenazy says about the virtues of free range kids.
But I don't think all is lost entirely, reading Hacker News I get the impression no one from Stanford or MIT is taking jobs in the Fortune 5000 and they are all starting their own.
That's clearly not true, but it's a good sign.
I would like to see government and schools do more to encourage entrepreneurship. There are tax disadvantages that can be eliminated for small businesses, and yes, a universal health care plan would do wonders to free up the young, the young and married, and us old farts with one or two pre-existing conditions to throw off the shackles of our oppressors.
jerry at June 3, 2013 8:15 AM
Most people don't have anything they can risk losing. If you've got an extra million lying around, you may be perfectly willing to risk it starting a business. If you don't already have money, and would have to go in debt to start a business, failure could result in bankruptcy.
Pirate Jo at June 3, 2013 9:29 AM
Jerry is correct, the Constitution does not protect any given industry.
The politicians and wealthy judges do that.
Gog_Magog_Carpet_Reclaimers at June 3, 2013 1:16 PM
Flynne:
The only way I see that happening is a complete and total overhaul of the House and the Senate - NO repeat offenders, gotta be ALL NEW.
Not going to work. New people arrive all the time, they are co-opted as fast as they come in.
And a totally NEW SCOTUS
They're appointed for life, probably not a good idea to change that.
and all those assholes in the White House needs to go. NOW.
Problem is, those are the ones that are the most successful competitors.
kenmce at June 3, 2013 4:25 PM
@jerry
Obamacare is not the free healthcare for all you are making it sound like, maybe you should read what they were willing to post online (906 out of 2700 pages) http://www.gpo.gov/fdsys/pkg/BILLS-111hr3590enr/pdf/BILLS-111hr3590enr.pdf
In summary any business with 50+ employees is forced to provide healthcare to full time employees (30+ hours a week) or face a penalty. It forces the people to buy health insurance or, again, pay a yearly penalty.
We are not talking about big business $12/mo insurance we are talking about more than I can afford and I still have to pay out of pocket for a lot of things, many if not most clinics are not qualified to accept ACA backed exchanges because they are independent so it does not matter that they are cheaper for the same care. If I join, by their rules, I will either have to pay full price for my family doctor and specialist or drop them.
I am not against affordable healthcare, it would be great, this simply isn't it.
NakkiNyan at June 3, 2013 6:55 PM
Interesting article on healthcare costs in the USA vs, well, everyone else:
http://www.nytimes.com/2013/06/02/health/colonoscopies-explain-why-us-leads-the-world-in-health-expenditures.html?src=me&ref=general
Gog_Magog_Carpet_Reclaimers at June 3, 2013 9:18 PM
From CNSNews:
Jim P. at June 3, 2013 10:02 PM
Yeah, I know about that all too well. PCIP stopped taking apps back in February.
Start of the year though, there will be no such thing as being turned away due to a pre-existing condition, which should make financial sense when people are covered from birth to death.
And then people like me, with about as mild a pre-existing condition as can be found will no longer be wedded to large onerous companies for employment.
There are many aspects of Obamacare that I have my doubts about, but eliminating pre-existing conditions and so allowing people to get health care that want to pay for health care is a good thing.
jerry at June 3, 2013 11:23 PM
"Start of the year though, there will be no such thing as being turned away due to a pre-existing condition, which should make financial sense when people are covered from birth to death."
"Financial sense"? To whom?
So many are talking about the Affordable Health Care Act as if it were free. It is not.
And they are entirely blind to the basic requirements of health care. The addition of a huge bureaucracy, beholden to interests OTHER THEN THOSE BEING TREATED, cannot lower costs in any reality.
"Covered" means "Paid for by other people". That's all.
Since when do I have a duty to pay you for contacting adult-onset diabetes because you can't put the Coke™ down?
Radwaste at June 4, 2013 2:32 AM
Amy Alkon
http://www.advicegoddess.com/archives/2013/06/03/government_medd_3.html#comment-3732172">comment from Radwaste"Covered" means "Paid for by other people".
Exactly. My reward for paying into the system directly since my early 20s is that I now have to pay for all the jerks who decided to gamble and go without and then came down with some expensive-to-treat disease.
Amy Alkon at June 4, 2013 5:00 AM
Obamacare should make it much easier for employers to provide insurance and individuals to obtain their own insurance.
No it wont.
Obamacare says most of your premiums have to be spent on you - meaning they cant be spent on other people. Meaning those with pre existing conditions will have to pay more
Obamacare says those with preexisting conditions cant be charged more than those without, meaning the healthy will have to pay more
Obamacare says you have no chice but to buy menaing insurance companies no longer have to worry about trying to undercut each other, meaning people will have to pay more
lujlp at June 4, 2013 6:07 AM
Don't worry, Jerry, you'll be pretty easy to ignore until you say the next egregiously dumbass thing.
Oh, wait - Start of the year though, there will be no such thing as being turned away due to a pre-existing condition, which should make financial sense when people are covered from birth to death.
There it is! That didn't take long.
Do you understand how real insurance is priced? Do you get that Obamacare is essentially not insurance, and that it's not a blow to the insurance companies, but rather the biggest windfall the insurance companies have ever seen since they get a government-mandated rush of new business?
Do you understand that small employers (defined by the Feds as "less than 500 employees," which is a pretty damn big business) will immediately reduce the number of full-time employees as low as they possibly can to lessen their financial burden, thereby making things worse, not better, for American workers?
No, I'd bet you missed all of that.
Grey Ghost at June 4, 2013 6:37 AM
'"Covered" means "Paid for by other people". That's all.
Since when do I have a duty to pay you for contacting adult-onset diabetes because you can't put the Coke™ down'
Put the coke down?
In the real world, I had a birth defect, common to about one to two in every hundred people that leave us basically healthy but with a pre-existing condition -- a bicuspid aortic heart valve that as we get older will require, get this, maybe a pill or two per day, and maybe a one time operation.
But this is the same debate as whether people should pay for schools they don't use, airports they don't use, street improvements they don't use.
In this case, it's not a firefighter coming to my house, it's me being able to even obtain insurance.
"Covered" means "Paid for by other people".
Exactly. My reward for paying into the system directly since my early 20s is that I now have to pay for all the jerks who decided to gamble and go without and then came down with some expensive-to-treat disease."
Amy, think again about how insurance works.
We all pay for other people. Where has your insurance payments gone? Into your care?
And yet, this wasn't a case of my not having paid into insurance, or willing to pay a *higher* rate, it is a case of even being able to *obtain* insurance, regardless of the rates.
jerry at June 4, 2013 8:51 AM
lujlp,
There's a lot I dislike about obamacare, including various payment provisions, and I've said that, but making it so that people that want to get insurance can get insurance even if they have pre-existing conditions is a good thing.
And if people dislike how it came about, well it certainly hasn't been the case that the health insurance industry was busy coming up with any plans of their own.
It's not even clear what Amy wants. She has long wanted everyone to get insurance, and stated she has had insurance since her 20s, and she has long wanted insurance to be separated from employment.
Obamacare should result in both of those things.
Will we have to pay for someone else's costs and stupid life styles?
We do know when we pay for firehouses, school houses, car insurance, and many sorts of insurance and/or other taxable items.
But leaving people out of health insurance that would love to have insurance and need it is just wrong.
If you want to dislike how it is paid for, or whether it should be called insurance at all, I will probably agree with much of what you have to say.
jerry at June 4, 2013 8:58 AM
Oh, and of course, Amy, you already pay for the uninsured's health care costs in the form of taxes to pay for medical bills at an emergency room, and medicaid contributions that go to insure the poor, elderly, young or disabled.
jerry at June 4, 2013 9:00 AM
Great. Fantastic. You can now be covered for your bicuspid aortic heart valve if there are funds for it:
I really wish I could live in your world where my rates haven't gone up and I never have to worry about changing jobs.
Jim P. at June 4, 2013 10:10 PM
Jerry the reason most uninsured are uninsured was the cost. Now we can have the argument about buying insurance vs eating out rather that at home everynight, but the ACA results in people who could afford insurance being priced out due to rising costs, and then fines them for being too poor
lujlp at June 5, 2013 7:33 AM
"Oh, and of course, Amy, you already pay for the uninsured's health care costs in the form of taxes to pay for medical bills at an emergency room, and medicaid contributions that go to insure the poor, elderly, young or disabled."
Look closely, and you will see that this is not corrected by "Obamacare".
Look closely, and you will see that your claim that the Act will relieve you of some costs is also wrong.
Look closely, and you will see that your wish that "government and schools encourage entrepreneurship" involves government employment which must be paid for with taxes - when all that has to happen for entrepreneurship to occur is for both to step out of the way to let the entrepreneur work.
Radwaste at June 6, 2013 2:58 AM
Here's a giggle test that ought to shine on the stupid:
Tell me you would be happy with auto insurance being "free" to others, while you pay.
Go ahead.
Radwaste at June 6, 2013 9:01 PM
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