Saturday, August 6, 2011

Dark Clouds Linger for U.S. Economy - Barrons.com

ANOTHER TAKE ON BIG BUSINESS, SMALL BUSINESS AND OUTSOURCING IN THE US: Dark Clouds Linger for U.S. Economy - Barrons.com

An interesting take on some things, which I haven't seen, is a relationship between the supposed 'successful' sectors of the economy and those that are more moribund - i.e. big (read: multinational) and smaller (domestic) businesses.

It makes sense that after the arrival of the platform economy that things would be outsourced. And, we all know about foreign outsourcing.

Another take on the Obamanomics approach to regulatory control and government benefits (read: Obamacare, Dodd-Frank, etc.)is that the people really hurting are small business. Sure, $250,000 sounds like a big income until you start to look to buy plant and equipment.

So, if the bigger business is looking to outsource and to keep prices competitive, it has to look for low-cost suppliers.

By making it more expensive and difficult for US small business to build equity, keep costs down on labor (and please no unions), have access to bank credit, maybe go public (think Sarbanes Oxley), there is a lot of headwind for American small business as an outsource supplier.

The logic of their difficulties would appear to reflected in the commitment of small business entrepreneurs to risk in this economy. If the business plan doesn't work (costs too high, returns to low, regulatory risks too great, etc.), then sit this one out.

The Democrats have shown an utter disregard for small business and only moan about some wonderful benefit being cutback.

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