I'm seeing more and more small business owners announcing they are selling their business, cutting back on hiring, and laying off workers in preparation for a long and sustained downturn.
The name John Galt keeps appearing, and with the pseudo-debate over the stimulus (Obama has made it clear he's going to whatever he wants, because he won, and that trumps everything), hitting the airwaves, it's clear the only path many taxpayers see is refusing to participate in a rigged game.
Check out these comments from people at PajamasMedia, and if you read a lot in small business circles, you'll see the same kind of sentiment.
I sat down with a gentleman a few months back who layed off 10 people and works alone now with some part-time help. He makes more net profit and works less.
If you're talented and have connections, it's relatively easy to make a few hundred thousand dollars a year. You'll pay a lot in taxes, but if you already have a good cash reserve, life can be pretty easy just taking care of yourself. Putting yourself at risk of losing everything by hiring employees (every time you hire as a small business, you're putting your company at risk) just doesn't seem like a good idea. And with dividend, estate, and income taxes likely to rise, there is a point where the risk doesn't justify the reward.
Why work harder for marginal returns? Those are jobs that don't show up on official documents. I run a small business, and if I take the risk, I could hire 5 people this year. The problem is a simple one - if I hire 2 people, I'll have to keep growing. 2= 5= 10 very quickly, and the next step is 50. When I'm running a firm of 50, I'm now a manager, and paperwork from the government is most of what I'll spend my time on. The other option is building up a number of businesses that don't require many people. With a team of just 3, I can restrict my growth and still have a lot of time to spend time with my family. I'll be rich, but then again, I'd be rich no matter what the government does.
I'd prefer to hire 50 people and help teach them how to do the same. My preference is to be a valued member of the community, providing jobs and being able to manifest abundance to those around me - giving more time and money to charities and local events. That desire is greatly dampened by a mood in the citizenry that executives and business owners are greedy, and workers noble.
We'll see how far that nobility goes when you're no longer working. Freedom and prosperity are not a given. They require hard work, risk, and a common culture that celebrates innovation. My fear of the Obama administration is that massive spending (dwarfing Bush's profligacy) will make a majority of my fellow citizens slaves, dependent on crumbs falling from the stuffed mouths of government.
I am told to give Obama a chance. A chance to what? If he succeeds in taking money from the productive and giving it as a bribe to the masses - the productive will focus their time and energy elsewhere. They're already doing it.
Part of the problem is the type of wealth that has been created in recent years. People like Jared Polis, the new Colorado congressman who made his money selling a overvalued company with little in the way of assets (Blue Mountain) for $700 million, and then used that money to buy his way into politics. His luck in selling the company right before before it was auctioned off at a $500 million loss is emblematic of the new economy. The goal is to convince some large company to buy something off perceived value, rather than spending the time to build a solid company that lasts.
Our smartest lawyers and Ivy League grads went into finance because obscene money could be made quickly. The dotcom dream of building a company and taking it to IPO is dead - Sarbannes Oxley killed the weak companies and made it not worthwhile to take a company public. Building a company over time is foolish - there's too much risk in counting on American employment law to treat you fairly.
There are tipping points in civilizations. We are reaching some change now, and the question will be if the citizens of the US have the iron in their spine to prevent the robbing of the productive class by the government. The difference between the government and a thief is courage. A thief at least has the courage to steal directly from an individual. The government, and voters who keep demanding more from the government, are thieves in spirit. They simply lack the courage to take from you directly.
Sir--
you scare me. I hope you're wrong, but I suspect you're right. What angers me most is the role the media
plays in portraying this picture to us simplistically
and incorrectly. I will pray God's guidance on the America of tomorrow. Dave Clark
Posted by: Dave Clark | 01/25/2009 at 05:15 PM