The Brookings Institution reported on Monday that the American economy is less entrepreneurial than at any point in the last three decades. See chart below:
The report continues:
…recent research shows that dynamism is slowing down. Business churning and new firm formations have been on a persistent decline during the last few decades, and the pace of net job creation has been subdued. This decline has been documented across a broad range of sectors in the U.S. economy, even in high-tech… if it persists, it implies a continuation of slow growth for the indefinite future, unless for equally unknown reasons or by virtue of entrepreneurship-enhancing policies (such as liberalized entry of high-skilled immigrants), these trends are reversed.
Given the Bush and Obama administrations’ insistence on trickle-down, faux-recovery policies that inflate asset prices at the expense of small-time entrepreneurs, these results are not surprising. But the authors of this report don’t seem privy to this elementary insight when they write:
Whatever the reason, older and larger businesses are doing better relative to younger and smaller ones.
“Whatever the reason”…not that a steady piling on of regulatory compliance costs (a la Obamacare) has anything to do with keeping young firms out of the market. But of course, these authors don’t cite such costs a single time in their report. Instead, they blame tough immigration laws (go figure). If only we had more entrepreneurial immigrants, they say, our problem would be solved. But of course, this doesn’t address the problem — it’s like your mechanic proposing a new car as a fix for your broken old car, which shouldn’t be broken in the first place.