Tag Archives: small business

99.9 % of What you Need Equals Zero, by Nickelthrower

As if the lockdowns weren’t bad enough, the monetary response to Covid is killing even more small businesses. From Nickelthrower at theburningplatform.com:

As of the last census, 444,000 Americans owned a small business that was involved with manufacturing. These small businesses employ about 3% of the total workforce. Of course, you’d have a much greater chance of running into a doctor (985,000), lawyer (1,300,000), or real estate agent (1,300,000) than someone the produces things. That means that just 0.0013% of our current US population finds themselves in the same position that I find myself – the owner of a small business that manufactures real-world items.

Manufacturing real-world items require real-world inputs. As for myself, I need steel for the housings, epoxy and dyes for the knobs, aluminum for the face plate, copper for the circuit boards and wire, plastics, diodes, resistors, capacitors, LED’s, relays and on and on and on and on right up to and including various semi-conductors.

Luckily for me, I invested a decade and put in place a system where everything from hand-wound transformers to the cable harnesses materializes within a few days of each other and then the precision tools that I designed can be assembled, tested, and shipped. To make sure this system works, no one that supplies me anything gets paid until the finished product ships and I have the tracking numbers because, well, that is when I get paid.

When working, this just-in-time way of doing business is a wonder to behold. Watching how quickly it all fell apart is also a wonder to behold. 99.9% of what you need is zero.

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Why the PRO Act is ANTI-Small Business, by Eric Groves

The Democrats are quietly advancing legislation that would torpedo a lot of independent contractors and small business owners. From Eric Groves at alignable.com:

For the first time in months, you’re feeling more optimistic about your post-COVID future, according to recent poll results. And while that is something to celebrate, there’s also a new bill popping up in Washington that might put a damper on that hope.

It’s called the PRO Act and it comes with some serious implications for small business owners, ones that may be as or more dangerous than the COVID virus.

So what is the PRO Act and how could it affect your business? Let’s take a look at the details of this proposed law including recent data that shows just how big the impact could be and how you can raise your voice.

What is the PRO Act?

The PRO Act 2021, or Protecting the Right to Organize Act, focuses on reducing the barriers for employees to unionize. Based on a version of a similar state law that passed in California (AB5), it makes it easier for workers to form a union with the aim of protecting them from unfair working conditions.

But unions aren’t the issue—what comes along with the bill is where things get ugly.

If this legislation passes, there’s a provision within it that could act as a virus that would target the dreams of freelancers and independent contractors who depend on contract work for survival.

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8 Million More Living In Poverty, 9 Million Small Businesses In Danger Of Closing, 10 Million Behind On Rent… by Michael Snyder

The numbers aren’t looking too good for the American economy. From Michael Snyder at theeconomiccollapseblog.com:

The economic downturn that we are currently experiencing is making the last recession look like a Sunday picnic.  Yes, 2008 and 2009 were bad, but they weren’t anything like this.  Unprecedented intervention by the Federal Reserve has allowed the rich to get even richer during this crisis, but meanwhile millions upon millions of ordinary Americans are deeply suffering.  Unfortunately, what we have gone through so far is just the beginning.

As a child, I was a big fan of Sesame Street, and one of the characters that really stood out to me was Count von Count.  I loved the fact that he was always counting things, and that is what I am going to do in this article in order to illustrate how bad economic conditions have now become.

Let’s start with the number 7.  According to the Congressional Budget Office, approximately 7 million more Americans would have jobs right now if the COVID pandemic had never happened

But in fact, what the CBO is projecting is dire: around 7 million people out of work in 2021 whom CBO thought before the pandemic would be working. That’s dire – and a call to immediate action, not calm, not wait-and-see.

Personally, I think that estimate is way too low.

In fact, the Federal Reserve says that 152 million Americans were working before the pandemic started, and only 142 million Americans are working now.

So the CBO estimate appears to be off by about 3 million.

Count von Count would not be happy.

Let’s try another number.  According to Bloomberg, the number of Americans living in poverty has risen by 8 million during this crisis…

Support is rising among policy makers to address America’s child-poverty crisis, which is getting worse as the pandemic drags on.

More than 8 million Americans — including many children — fell into poverty during the second half of last year, exacerbating the racial and income inequalities that are holding back the U.S. economy.

In this case, I think that this is a reasonable estimate, but that number will inevitably keep growing in the months ahead.

One of the big reasons why it will continue to rise is because hordes of small businesses will be collapsing, and that brings us to our next number.

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Government, Not Coronavirus, Is Killing Small Businesses, by Ron Paul

Increasingly, small business is starting to fight back, a fight in which they should be supported. From Ron Paul at ronpaulinstitute.org:

A video of a confrontation between Ventura County, California health officials and restaurant owner Anton Van Happen has gone viral. The health officials were ordering Mr. Van Happen to close his business because he allegedly violated California’s ban on outdoor dining. Mr. Van Happen asked the health officials if the government will pay his employees and his rent while his business is indefinitely closed.

Mr. Van Happen is hardly the only small business owner worried about how to pay bills during the lockdowns. Many small businesses operate on a narrow profit margin, so being forced to “temporarily” shut down or limit the number of customers they can serve is a virtual death sentence.

The lockdowns have already caused as many as 200,000 small businesses to permanently close. Lockdowns, by shrinking the number of employers, lead to long-term unemployment or lower wages for many workers.

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The Viral Assault On Small Businesses, from MN Gordon

Covid-19 measures have absolutely screwed small businesses, to the delight of large businesses. From MN Gordon at economicprism.com:

This year, fear of a deadly pandemic triggered the ruling class to spread authoritarian lockdown orders.  The god of science, like a burning bush, told them to remove their sandals and deliver policies of regression.  A paranoid public was quick to comply.

Humans have been battling viruses since well before the wheel was invented.  According to archaeologists, a fast moving epidemic roughly 5,000 years ago wiped out a prehistoric village in what is today northeastern China.  Dead bodies were stuffed inside a dwelling – the Hamin Mangha – that was later burned down.

Another mass burial, the Miaozigou site, took place about the same time and in the same general area.  Together these discoveries suggest there was a rapid outbreak of an acute infectious disease.  An epidemic ravaged the entire region.

The viral spread of submicroscopic pathogens has the potential to alter the flow of history.  Soldiers returning to the Roman Empire after war against Parthia in 165 AD brought back more than the spoils of conquest.  The Antonine Plague, which is suspected to have been smallpox or measles, claimed an estimated 5 million lives.  The epidemic had devastating consequences throughout the Roman Empire; perhaps bringing forward the demise of Pax Romana.

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The Plot Against the Small Businesses. By Ash Staub

The Covid-19 lockdowns are killing small businesses and rewarding large, politically connected ones. From Ash Staub at humanevents.com:

How pandemic policy has benefited the corporate elite.

f one were to consider the upward transfer of wealth and market share to Big Business since the start of the COVID-19 pandemic, one would think such economic changes were intended. After all, it’s no secret that the interests of politicians and the corporate elite align more often than not.

As we near a year of lockdowns and sheltering in place, the long-term effects of pandemic policy on the economy are becoming clearer. Almost every piece of legislation ostensibly designed to curb the spread of the coronavirus and protect workers has wreaked devastation on small businesses—while benefiting the largest corporations. Roughly 100,000 small businesses have permanently closed due to COVID-19, while big-box retailers, tech giants, and pharmaceutical manufacturers have seen record profits.

America’s small businesses currently face an attack on all fronts. First, there are the more visible policies (e.g., lockdowns, mask mandates, and social distancing requirements) that strongly discourage people from patronizing brick-and-mortar retailers and restaurants. These policies impact small businesses more than large chains and corporations. Small retailers, for example, may not have the space to effectively implement social distancing policies, and often lack an online infrastructure to support curbside pickups of retail goods.

Second, the cost of complying with health and safety guidelines, and the corresponding fines if businesses don’t comply, have forced businesses to incur additional expenses while their revenue declines. According to the Small Business Administration, the cost of compliance disproportionately impacts small businesses, who lack the funds and infrastructure of large corporations to adapt to new regulation. Overhauling a business to accommodate remote work, for example, requires a flexibility and an investment of resources that many small businesses simply do not have. For dine-in restaurants, the vast majority of which are small businesses, switching to outdoor dining is often not even possible given the business’s location.

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The Numbers Tell Us That The ‘Economic Recovery’ Is Dead And Businesses Are Failing At A Staggering Pace, by Michael Snyder

Notwithstanding Wall Street’s fervid illusions and delusions, the economy is not bouncing back anytime soon. From Michael Snyder at themostimportantnews.com:

Even though economic conditions were absolutely awful, during the month of June the mainstream media kept insisting that the U.S. economy was “recovering” and the stock market kept surging on every hint of good news.  But now the “economic recovery” narrative is completely dead, because the numbers clearly show that the U.S. economy is rapidly moving in the wrong direction.  On Thursday, the Labor Department announced that another 1.416 million Americans filed new claims for unemployment benefits last week.  Prior to this year, the all-time record for a single week was just 695,000, and so we are talking about a level of unemployment that is absolutely catastrophic.  But what is really alarming many analysts is that the number for last week was quite a bit higher than the number for the week before.  Many states are rolling out new restrictions as the number of confirmed COVID-19 cases continues to surge, and this is having a huge impact on economic activity.  For months I have been warning that fear of COVID-19 would prevent economic activity from returning to normal levels for the foreseeable future, and that is precisely what has happened.

Overall, more than 52 million Americans have filed new claims for unemployment benefits over the past 18 weeks, and that makes this the biggest spike in unemployment in U.S. history by a very wide margin.

In fact, this dwarfs all previous spikes by so much that the others are not even worth mentioning.

Of course it isn’t just the employment numbers that are depressingly bad.  According to Jefferies, in late June 19 percent of all U.S. small businesses were closed, but now that number has risen to 24.5 percent

As of Sunday, 24.5% of small businesses in the United States were closed, according to Jefferies. That is worse than late June, when only 19% were closed. Jefferies pointed to “particular weakness in COVID hot spots” and noted that small business employment had dropped to levels unseen since the end of May.

Just think about that number for a minute.

Nearly a quarter of all small businesses in the entire country are closed.

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Open Letter to Small Businesses, by Eric Peters

What do small businesses risk if they challenge government closure orders, the government shutting them down? From Eric Peters at ericpetersautos.com:

My gym – like thousands of small businesses around the country – has been out of business for more than a month now. Not because customers aren’t coming – but because customers are not allowed to come. 

What follows is an Open Letter to the owner of this business, urging her to resume doing business – on the theory that in a free country, people have that right and that government has no right to say otherwise. 

Dear Patsy –

I and many others are more than willing to take the chance we might get sick in exchange for being able to live again.

This includes being able to work out at Crunch. 

We believe in what used to be a given in America – free association. That you – as a business owner – have the right to open your business and that we, as free Americans, have a right to choose for ourselves whether to do business with you.

We fully support the right of those who are “at risk” of contracting the Corona virus or the ordinary flu or the common cold or whatever they’re “concerned” about to take whatever steps they consider appropriate to reduce their risk. 

But we dispute their right to use force to compel others to adopt these measures for the same reason that we would object to the use of force to “flatten the curve” of ordinary flu, which as you may already know routinely infects millions of people each year and – according to the CDC – causes or contributes to more than 30,000 deaths every year (generally, of older people – from pneumonia and so on). 

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Huge 2,2 Trillion Dollar Bill Fails Most Small Businesses, by Bruce Wilds

It’s an amazing coincidence, but most of the businesses that have been declared essential are big and spend a lot of money on lobbying. The smaller businesses that can’t afford lobbyists and are shut down aren’t going to be helped all that much by the recently passed legislation. The best thing that could happen to small business would be to lift the lock downs, but for many that will come too late. From Bruce Wilds at Advancing Time, brucewilds.blogspot.com:

The massive 2,2 trillion dollar bill that was signed into law fails most small businesses but the devil is well hidden in the details. There is so much disinformation and bullshit floating around about this program that it is difficult to get the details. As a landlord and small business owner, I can tell you that as of Thursday morning the way the program is structured it will be of little help to most small businesses. While the government continues to slam expensive legislation through it seems they have no idea of the damage they are doing and how it is causing hundreds of thousands of businesses to close their doors forever. Washington has become so attuned to dealing with lobbyist from mega-companies it has lost sight of the fact small is small, and when this comes to business, this means usually under twenty employees, not hundreds. 

90% Of Businesses Are Small (click to enlarge)

It now looks like this bill will allow for a rapid maximum loan amount of two and a half times a company’s average monthly payroll expense over the past 12 months. This loan would turn into a grant and be forgiven if they keep their employees on. This fails to take into consideration that not all small businesses are labor or payroll intense. Some businesses with large or expensive showrooms are getting hammered by rent, others by inventory, or things like taxes, utilities, or even by having to toss products due to spoilage.

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They Are Killing Small Business: The Number Of Self-Employed Americans Is Lower Than It Was In 1990, by Michael Snyder

You have to throw tons of sand into the gears to really screw up the American economic machine, but our government (Michael Snyder blames “leftist politicians,” but they’ve had plenty of help from the right) has done it. From Snyder at theeconomiccollapseblog.com:

After eight long, bitter years under Obama, will things go better for entrepreneurs and small businesses now that Donald Trump is in the White House?  Once upon a time, America was the best place in the world for those that wanted to work for themselves.  Our free market capitalist system created an environment in which entrepreneurs and small businesses greatly thrived, but today they are being absolutely eviscerated by the control freak bureaucrats that dominate our political system.  Year after year, leftist politicians just keep piling on more rules, more regulations, more red tape and more taxes.  As a result, the number of self-employed Americans is now lower than it was in 1990

In April 1990, 8.7 million Americans were self-employed, but today only 8.4 million Americans are self-employed.

Of course our population has grown much, much larger since that time.  In 1990, there were 249 million people living in the United States, but today there are 321 million people living in this country.

What this means is that the percentage of the population that is self-employed is way down.

In fact, one study found that the percentage of Americans that are self-employed fell by more than 20 percent between 1991 and 2010.

And if you go back even farther, the numbers are even more depressing.  It may be hard to believe, but the percentage of “new entrepreneurs and business owners” declined by a staggering 53 percent between 1977 and 2010.

Sometimes I like to watch a television show called Shark Tank, and on that show they make it seem like entrepreneurship in America is thriving.

But the exact opposite is actually the case.  In a previous article, I discussed how the number of new businesses being created in the United States has been steadily falling over the years.  According to economist Tim Kane, the number of startup jobs per one thousand Americans has been declining for several consecutive presidential administrations

Bush Sr.: 11.3

Clinton: 11.2

Bush Jr.: 10.8

Obama: 7.8

To continue reading: They Are Killing Small Business: The Number Of Self-Employed Americans Is Lower Than It Was In 1990