Business Failures and Startups Have Been Engaged In a 30 Year Battle

Business Failures and Startups Have Been Engaged In a 30 Year Battle

VIA “” by Michael Hausam

 Gallup has just revealed a stunning statistic that you probably haven’t heard anywhere before: Business failures now outnumber business startups.

Despite data that lags by two years, take a look at this trend:

Business StartUps VS Closures

Here’s a look from a different perspective:

Business Start Up Numbers

Gallup’s CEO Jim Clifton explained in the article why  no one is talking about this:

My hunch is that no one talks about the birth and death rates of American business because Wall Street and the White House, no matter which party occupies the latter, are two gigantic institutions of persuasion.

The White House needs to keep you in the game because their political party needs your vote. Wall Street needs the stock market to boom, even if that boom is fueled by illusion. So both tell us, “The economy is coming back.”

Fuel the illusion, indeed.

Clifton also identified what he sees as the real problem:

It is catastrophic to be dead wrong on the biggest issue of the last 50 years — the issue of where jobs come from. Our leadership keeps thinking that the answer to economic growth and ultimately job creation is more innovation, and we continue to invest billions in it. But an innovation is worthless until an entrepreneur creates a business model for it and turns that innovative idea in something customers will buy.

Yet current thinking tells us we’re on the right track and don’t need different strategies, so we continue marching down the path of national decline, believing innovation will save us.

Incentives matter. The fundamental motivation for starting a business is to profit from an identified opportunity in the marketplace. If the expected return on time and money invested is insufficient motivation, the startup will never occur.

Until federal and state governments realize that burdensome regulations, red tape, complex and sky-high tax rates all act as significant disincentives, increasing business failures and a lack of business startups will continue.

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