Wednesday, September 19, 2012

The Collapse of Startups Under Obama

Tim Kane from the Hudson Institute has a very interesting paper which suggests that the reason we have had such a prolonged weakness in the job market is because of an unusually low number of new startup jobs.  As you can see from this chart, startup jobs are usually adding quite a bit to our economy in both recessions and booms, while existing firms tend to be net negative in terms of job creation:

So as startups either no longer start or just hire a minimal number of people now due to Obama's expensive and expansive regulations, we are seeing an unusually sluggish employment situation for an extended period of time.  On a per capita basis, the startup job creation rate under Obama is far less than it was under the previous few Presidents (and no doubt under Reagan and Carter as well):

New business creation is what keeps our economy moving forward, when that slows down, we can see all around us what happens.  It looks like someone with venture capitalist experience is exactly what we need in this economy, rather than someone who was a lawyer and community organizer who is married to a former diversity consultant.

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