Ominous Consequences

The Washington Post reports:

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 [generally Left-leaning] 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 reasons for this ominous news are complex and Brookings doesn't attempt to attribute a cause. They note that further study is in order. I agree.

However, it's reasonable to posit that a combination of higher taxes, increased regulation, healthcare mandates and the Obama administration's relentless class warfare stance certainly can't help. In addition, true banking reform has not been achieved, even 5.5 years after the crash. Therefore, money remains tight, discouraging new business formation.

In the late 1970s Jimmy Carter famously noted that the country suffered from "Malaise." When Carter was not elected for a second term and the country was placed in steadier hands, a strong recovery began. Unfortunately, Barack Obama was re-elected in 2012, and the malaise that existed during his first term in office continues into his second term with little chance of abating.

Elections have consequences ... in this case ominous consequences.