US economic myths bite the dust

[justjones]

US economic myths bite the dust: America is not the internationally competitive land of small businesses that politicians love to tout

Source: guardian.co.uk
By Mark Weisbrot, Thursday 13 August 2009 20.00 BST

The Great Recession is allowing some widely held beliefs about the US economy – which were the source of much evangelism over the last few decades – to run up against a reality check. This is to be expected, since the United States has been the epicentre of the storm of policy blunders that caused the world recession.

This month my CEPR colleagues John Schmitt and Nathan Lane showed that the United States is not the nation of small businesses that it is regularly dressed up to be for electoral campaign speeches and editorials. If we look at what percentage of our overall labour force is self-employed, or what percentage of manufacturing workers or high-tech workers are employed in small businesses – well, the US ranks at or near the bottom among high-income countries.

As economist Paul Krugman noted after reading the study: "One more American myth bites the dust." Indeed it has. And as both the authors of the paper and Krugman note, there is a plausible explanation for the US's low score in the small business contest: our lack of national health insurance. There are enough risks associated with choosing to start a business over being an employee, but the Europeans don't have to worry that they will go bankrupt for lack of health insurance.

A number of other alleged advantages of America's "economic dynamism" are also mythical. Most people think that there is more economic mobility in America than in Europe. Guess again. We're also near the bottom of rich countries in this category, for example as measured by the percentage of low-income households that escape from this status each year.

Read more: http://www.guardian.co.uk/commentisfree/cifamerica/2009/aug/13/us-economy-healthcare-productivity

[robcon]

1. Who thought the U.S. is a "land of small businesses"??????

I've never heard of such a characterization.

[BR_Parkway]

2. Like the standard cry of "protecting the children" our politicians, on both

sides of the aisle, constantly talk about small biz. But most of the programs they come up with benefit the big biz, not the little one's like me

[unpossibles]

5. I hear wingers talk about that all of the time

saying how this program or that will kill small business owners (like Not Joe The non-Plumber), as well as the economic mobility idea. It fits into their bootstrap-pulling mythology quite nicely.

[BR_Parkway]

8. Serious healthcare reform would be the biggest boon to small biz

that the gov't could actually do at this point. And without the fear of losing everything without a company health insurance program, I think you'd see many more innovative people actually make the leap into starting their own small companies and living their passions

[unpossibles]

12. Oh, I totally agree!

As someone who's worked FT without insurance, contracted/freelanced, had to switch carriers at a job, changed jobs, etc., I think having insurance tied to employer is stupid for both the employee and the employer, financially and otherwise.

Also, as someone who has done the above, it irritates me to no end when birther teabag idiots say that "only lazy people don't have insurance" as if they are unaware that many people who bust their asses all day every day don't have it. It's so ignorant and condescending.

[redqueen]

3. LOL... already unrec'd... hilarious.

K&R

[rfranklin]

4. Having single payer would eliminate that problem for all businesses...

whether large or small. The only businesses the current system benefits are the health insuranc companies. I am a small business owner and I would not be in business if I had to buy health insurance for my employees.

[Abq_Sarah]

14. Insurance needs to be completely divorced from employment

Your insurance shouldn't be dependent upon where you live or where you work. Congress isn't going to come up with a plan that excludes business because they're depending on us to pick up a sizable portion of the tab.

[redqueen]

6. ...

:kick:

[bemildred]

7. More like "dogma" than "myths", but OK. nt

[Quantess]

9. .

[TheKentuckian]

10. I wish they were really biting the dust but here in the US of A

A near majority, if not an actual one, is desperately trying to find a way to hang onto everything that has failed.

[HughBeaumont]

11. Hee Hee Hee. K + R. But don't get any Reaganite/right-leaning libertarian to read this.

You'll get ten-page screeds on the greatness and still-enormous possibility of free enterprise, how free markets unchained us from the brutality of totalitarianism and how they didn't function properly in the past 28 years because they weren't allowed to be "free enough" :wtf:, how Horatio Alger is something to be valued, how liberals have "the victim mentality" ( :eyes: :eyes: I have always freaking HATED that canard), how there's no such thing as bad luck, that the "rich have a different set of rules" is a fantasy and that our lot in life is simply due to just not working HARD enough.

Or, you might just get that from some DU'ers in my Red X cesspool, sorry to say.

[Statistical]

13. Single Payer would be largest playing field leveler for small business ever.

Insurance is prohibitive for small business.

So small business has two choices
a) offer insurance which raises costs relative to large business
b) don't offer insurance which makes attracting workers (talent) difficult

either way it is a lose-lose for small business.

Single payer would eliminate that completely. It would help all business but it would help small business the most.

[laughingliberal]

15. Never saw a Republican policy yet that benefitted small business

My husband has been in business for himself since 1982 and I have never seen one proposal from a Republican that helped us even a little bit. We were covering our health insurance through my job until I became unable to work about 2 years ago. We paid for COBRA for as long as we could but it was dreadfully expensive. Employer based health insurance feels like enslavement to me. How many of us can change to a job we would like more or be more productive at without worrying about the medical plan? How many of us can strike out on our own to start a small business due to the need to hold on to the medical benefit plans? How many lives are spent in dead end jobs and how much innovation has been stifled due to the need to hold on to our employer based health insurance? How many raises are squelched because your employers' health premiums went up again this year? Our current system is not benefiting anyone except the medical industrial complex.

[Selatius]

16. Good riddance to rubbish propaganda.

This nation sucks for small businesses. It's a good country if you're a gigantic corporation, though.