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By Marshall Kirby, Public Policy Analyst

There has been a lot of media attention paid to the plight of cities in the Midwest, Rust Belt, and other areas which have experienced the economic hardships which come with deindustrialization.  The recession has hit these areas hard, and has increased the hardships faced by their residents with increased unemployment, lower wages and incomes, higher poverty rates, and increased reliance on public assistance programs.

However, there has not been a lot of attention paid to the Sunbelt – or the region of the country which was supposedly where jobs and economic growth were most stable.  However, in many cities and counties across the Sunbelt, which stretches across the southern US from east to west, the poverty rate has jumped faster and more significantly than any other region.  The Sunbelt is not alone as areas which were experiencing rapid growth like the Mountain west and the Pacific Northwest have experienced similar trends.  While poor inner cities in the Midwest like Detroit and those in the Northeast like Buffalo and Newark still have higher poverty rates, the trend is definitely noticeable and trickling out into once booming suburbs in the south and west.

Some explanations of this phenomenon can be seen as specific to the particulars of this recession.  For instance, those who have studied this note several concurrent and related problems with areas in the Sunbelt and the west.  Both areas have seen a significant fall in property values, and the current economic climate has impacted suburban areas due to fewer opportunities available to them (compared to major cities).  The major trend is that these areas developed and grew from the housing bubble, which fueled not only the construction industry in these regions, but also service sectors. Read the rest of this entry »


By Marshall Kirby, Public Policy Analyst

Almost everyone knows America is facing a fiscal and budget crisis.  Years of spending more than was brought in have now caught up with us, with some help from a recession.  You’d be hard pressed to find an economist or policy analyst who would argue that this is not a major concern for the economy and nation as a whole.  However, you do find debates in the policy solutions legislators propose.  Should we make serious cuts in budgets to reduce the deficit, or do we make gradual cuts given that we still are in the midst of high unemployment and economic uncertainty?  There are serious and sound arguments that each side can make.  But when it comes down to it, there needs to be a sound strategy of what we can realistically cut without producing negative short, mid, and long term implications for the economy at large.

This is where many people get frustrated (including myself).  There are a lot of things that the government spends on that are wasteful, just as there are many valuable programs that promote growth and important social causes.  However, this does not help in quantifying these areas – in fact we live in a highly partisan time and each party’s anathema is the other’s idea of a successful program.  However, it seems in the past few weeks that Democrats and Republicans have found some bipartisan common ground – albeit with a frightening proposal.

Senators Mary Landrieu and Olympia Snowe both on the Senate Small Business Committee, have formed a cross party alliance and have drafted a letter already sent to Small Business Administration head Karen Mills.  The leaders request that Ms. Mills come up with programs which can be “cut” or “eliminated” without hampering the ability of the SBA to operate and serve the Small Business Community.  Both Senators in the past have been avid supporters of the SBA and of promoting small business interests.  It seems even stranger in that the previous decade was marked with reductions in the budget.  In 2006, the budget was $440 million, down from 2001 when it was $674 million.  To President Obama’s credit, he restored some of the SBA’s funding in 2010 bringing it $687 million (this is a nominal increase, but when accounting for inflation, it represents still a lower proportion of funding than in 2001).  The stimulus bill did provide additional money for small business loans, but with that funding drying up, the future is uncertain for the types of programs and loans it will be able to deliver to business owners and entrepreneurs. Read the rest of this entry »

Although this is an old article, it deserves a reprint as it show the over-burdened regulatory environment of small business and the implications for future growth.

as posted here :

Washington, D.C. Federal regulatory costs on U.S. business grew to $497 billion in 2000. Furthermore, these costs fell disproportionately on small business. These are the primary findings of a study released today by the Office of Advocacy of the U.S. Small Business Administration (SBA).

The report, by W. Mark Crain and Thomas D. Hopkins, entitled The Impact of Regulatory Costs on Small Firms, examines the cost of regulation on small versus large firms across four broad industrial sectors – manufacturing, trade (wholesale and retail), services, and other.

“These research results are very disturbing,” said Office of Advocacy Acting Chief Counsel Susan Walthall. “This new study shows that the cost of federal regulation continues to increase on business and that as this regulatory burden grows these costs disproportionately hit small business.” Read the rest of this entry »

Every entrepreneur in the country is hoping that our newly sworn-in Congressmen are going to make a less bureaucratic, more stable economic environment for innovation and small business growth.

A recent article posted here, discussed how one congressman, Darrell Issa (R-CA), is dead-set on cutting federal red tape.   In an effort to find out which federal policies are the most burdensome to business owners, he has sent out letters to 150 businesses, trade organizations, and think tanks, requesting feedback on which policies are hurting the economy the most.  However, the letters may be missing the connection with the small business sector.

So what we would like to hear from you is which regulations do you think are the most burdensome to small business? After compiling our results and adding our own thoughts we are going to send them to the current Congressmen.

by: Michael T. Schaper, PhD

as posted by the International Council for Small Business:

Small businesses face an interesting, two-edged sword when dealing with the marketplace. On the one hand, free markets are essential to entrepreneurial success – they provide the means by which new ideas, new products, innovations and original business models can be introduced and, if they are effective enough, succeed.

At the same time, though, SMEs often have less capacity than their larger counterparts to succeed and thrive in an arena of open competition. They have smaller market share, less money, fewer in-house marketing skills and market data, and less access to professional advisers to help them fight back effectively, to name just a few comparative weaknesses (see table). Read the rest of this entry »

By Carol Tice
If you’ve been feeling that our country isn’t as hot a place for entrepreneurs as it once was, it’s not your imagination. A new study from the Small Business Administration’s Office of Advocacy shows the U.S. has sunk to third place when it comes to fostering entrepreneurial creativity. Researchers for the SBA took a look at the Global Entrepreneurship and Development Index, which looks at more than a dozen primary attributes for supporting entrepreneurial effort. The upshot: The U.S. now ranks third behind Denmark and — brace yourself! — Canada.

Where are we going wrong? The study found America strong in competitiveness, startup skills, and new technology, but we fall short in cultural support for entrepreneurs Read the rest of this entry »

Why the small business jobs bill won’t create that many jobs.

By Jill Priluck, posted at Slate

It’s rare for small business to drive headlines, but the Small Business Jobs Act, passed by Congress last week, has brought the sometimes yawn-inducing and often misunderstood sector to the front pages.

Heavy on lending and tax provisions, the legislation has been touted as a means to spur job growth. But the bill is actually a Cash for Clunkers-like Band-Aid for the intertwined scourges of chronic joblessness and stymied growth. While the aid package will help many small businesses, it won’t create many jobs because it will benefit more established firms, rather than the young ones that do the bulk of hiring. Read the rest of this entry »

In a recent excerpt from an article by the WSJ, Mr. Carl Schramm, President of the Kauffman Foundation, makes comments about investments in Minority Entrepreneurship:

Finally, the foundation goes out of its way to support minority entrepreneurship. Mr. Schramm doesn’t use any social-justice lingo to explain the program, but reverts to a kind of charming nerd-speak. He says that after a lot of analysis, Kauffman has found that there is “the greatest delta among black males.” In other words, for a given amount of entrepreneurial investment, Read the rest of this entry »

It’s a stretch, but some would argue that if funds were directed from programs that fight the drug war against marijuana to programs designed to promote job creation and entrepreneurship, we will be much better off. Of course, the premise behind this argument is that we won’t be worse off (some say minorities would be especially impacted) by allowing people to use cannabis at their leisure.

Certainly it is unwise to make any drastic decisions based on our desperation for economic growth, however, both sides do have interesting arguments.

What do you think?  Take our poll to the left.

A recent article by Reuters brought the issue to our attention:

In drug war, the beginning of the end?

Between 1971, when Richard Nixon launched the war on drugs, and 2008, the latest year for which official figures are available Read the rest of this entry »

The Harvard Business Review‘s take:

Most business executives likely have never come across the concept. Yet despite its limited reach to a small audience of policy wonks, President Obama made it a campaign issue in 2008, the Federal Communications Commission (FCC) is determined to make it the law, and industry analysts are concerned that its passage would undermine investment by Internet service providers (ISPs). A recent pact on the subject between Google and Verizon — the largest representatives on both sides of the debate — made the covers of the nation’s major newspapers this week. What’s the fuss over this thing called “net neutrality“?

At its core, net neutrality seeks to ensure that ISPs (like Verizon) do not advantage one content provider (like Google) over another (like Yahoo!). But instead of looking to the widely accepted and proven non-discrimination provisions in other areas of communications (such as cable programming), the FCC has crafted a brand new concept of non-discrimination. Read the rest of this entry »

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