Small Businesses Folding?

ADP tracks employment in USA and is of course more reliable than the government job tracking, and they are reporting on small business layoffs. Here is their current report.

Summary for November, with small business defined as fewer than 50 employees.

Total small business employment: -79,000
Goods-producing sector: -47,000 small business jobs
Service-providing sector: -32,000 small business jobs

Now this does not necessarily mean a business is folding, it just means that business is slowing down. And with the layoffs comes lower wages, which is a very good thing. As costs of gas and travel and 42 inch plasma tvs and wages and everything else goes down, USA becomes more competitive

Lobster fishermen are afraid of lower prices. But why? If Lobster prices drop, gas prices from, HELOC payments drop, gas drops, trips to Aruba drop, if all prices drop, who cares? If everything you would spend money on is cheaper too, so what? Where is the problem?

The only problem is if you are so loaded up on debt, and prices drop, so then paying back that debt becomes impossible, then you have a problem. This is who is in trouble today. Those small businesses shedding employees who have no debt, or debts they can handle even in a slowdown, will survive. Those who cannot handle the debt will fall. In whatever field you love, if you start your business now, you will be debt free competing against some who are breaking under the debt they took on. When these competitors do break, you will get a chance to take their customers, if you compete on design.

Folding businesses leave unused production capacity upstream, which is to say, suppliers overseas. If you show up in those factories and say, "I have no debt, but I have thriving USA customers who say "good idea and does not exist" to my designs, ... then you will be on your way.

Ocean freight is cheap again (always was, but back down to nothing), travel is cheap, and there are enough people who know what they are doing and you can associate with for you to launch a successful company. Never mind about credit or finance... the suppliers minimums will be so low you can finance it yourself. (Come on, you can say "would you like fries with that?" for six months on your way making your dreams come true...?) I am dead serious, there is no reason you cannot deliver pizzas for six months while you do the time-consuming prep work on the way to a thriving business... work part time as you do the essentials. I promise you, there is nothing that quite focusses the mind and motivates action as putting on a hairnet at six AM five days a week.

But the cost of management in USA must come down. Problem is the govts are bailing out high cost management. And they must. The politicians are trapped. If they do not bail out their system, it will fail. if their system fails, then who needs them..?
(Always remember they are bailing out A system, not THE system. THE system, upon which all other systems are necessarily based, is called a free market.) Big govt and big biz are one and the same. The side we don't like is the political side and their wicked, if entertaining, players. The side we like is big biz and the cool cars and big TVs and raunchy movies and ersatz education and medical care they give us. If the part where we get cool things fails, then who needs the govt? Politicians know this. So in reality the politicians are bailing themselves out with our money... they are not bailing out us, the consumer, or for that matter big biz really. The politicians are bailing themselves out.

And just in case this gets out of hand, the politicians are moving combat troops into the United States to be on standby in case there is trouble. (Think Soviet Union, August 1991)

Congressman Dodd is in a huff because the the first 350 billion of bailout money did not go where it was promised (surprise!). Never mind that we were told their system would fail if this emergency money did not get handed over immediately... that was then this is now. Where it went was into the pockets of wall street and politicians and who knows where else. the actual distribution is secret, there can be no challenges in court, so what did Dodd expect?

I expect things to work out as well for we in the USA as they did for the people in Russia. Time to start a business now!

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