Monday, August 10, 2009

The myth of the American Small Business Dream

Much is said and written about Obama’s healthcare plan. Sometimes described as ‘communistic’ or socialistic-old European style, which doesn’t leave much space for entrepreneurship, when implemented, in the USA as some people said. Those people who opponents Obama’s healthcare plan also complain that the democrats likes to spent tax money like-no one’s-business, but in reality are supporters of a government who really like to spent money for big government like under Reagan or George W. Bush (of course to spend money on warfare).

Here some real facts and figures regarding Obama’s healthcare plan. In fact it’s strange that a country which brags about itself as the oldest democracy in the world (wrong, that’s Iceland and some other European countries) the largest democracy (wrong, that’s India) still is backwards regarding healthcare as some third world countries are. And the argument that Obama’s healthcare plan makes it impossible for people to start their own business is a fake argument and a 100% lie.
Dean Baker in the Huffington Post wrote it well down. Here some excerpts.

The right tells us that the sort of tax/mandates that President Obama wants to impose on small business will stifle entrepreneurship and make the United States more like Europe. John Schmitt, my colleague at the Center for Economic and Policy Research, just did a short study compiling evidence from the OECD on the relative importance of small business in the U.S. and Europe. It turns out that by every available measure, the U.S. is way behind when it comes to the relative importance of entrepreneurship and small business.
We all know that everyone in America wants to run their own business. 7.2 percent of the workers in this country actually do. That puts us ahead of Luxembourg's self-employment rate of 6.1 percent, but behind everyone else. France has a self-employment rate of 9.0 percent, Germany 12.0 percent, and Italy 26.4 percent. Here the FACTS.
How about the share of small firms (fewer than 20 employees) in manufacturing employment? Well, our 11.1 percent share again beats out Luxembourg, and also Ireland, but it trails all the other countries for which the OECD has data.

Maybe 20 employees is not the right cutoff for a definition of small businesses in manufacturing. How about 500? By that measure, the U.S. comes in dead last. France's 63.7 percent share beats our 51.2 percent share by more than a dozen percentage points.
Perhaps we should just ignore manufacturing, that's old economy stuff. Surely the U.S. stands out for its vibrant computer upstarts. The 32.0 percent small firm employment share in computer related services beats Spain's 27.0 percent, but is well behind everyone else. Belgium, the capital of Old Europe, more than doubles our small business share, with 63.0 percent of its workers in this sector employed by establishments with less than 100 employees.

For more devastating facts, read herreeee.

Day Opening - August 10

Beach art
By Daniel Buran, Belgium
photo by Batikart