Wall Street is Doing Fine in the OWS Economy…Main Street, Not So Much
Nearly all of the policies Occupy Wall Street wanted are in place: more regulations, businesses forced to give their employees more benefits, higher taxes on the rich, endless government spending and just printing money to make up for it. All of this is designed to help the little guy and bring down the evil rich. So then why is the overall economy still in such terrible shape while the DOW has reached new highs and Fortune 500 companies are seeing record earnings? Unemployment is still 7.7% (10.8% if you count the people who have given up looking for work), January saw the biggest drop in personal income in 20 years, and the overall economy is only growing at 0.1%.
The reason is that large corporations are the only ones that can afford all the new regulations, business costs and healthcare requirements. Well, they can’t actually afford it. For instance, of the 1.4 million total net new jobs since Obama’s inauguration, 1.2 million are part time jobs. Due to the Obamacare requirements, nobody will hire full time employees. They tried to help lower income people by forcing employers to give them benefits, but all they accomplished was getting their hours cut. And if that 1.4 million seems like a lot, there are ~5 million more working age adults due to population growth. So the job growth, which is almost completely part time jobs, is not even close to keeping up with population growth.
However, the ones having the hardest time in the Occupy Wall Street economy are small businesses. According to the Intuit Small Business Employment and Revenue Index, small business revenue has declined for 11 months in a row. And according to the National Federation of Independent Business, only 13% of small businesses are reporting increasing profits, while 43% are reporting falling profits.
Small business optimism is still below recession-levels. During the downturns of the early 90′s and 00′s, the drop in optimism rebounded within a year. We’re now 5 years into this downturn and optimism is still below the lowest points of the early 90′s and 00′s.
As of 2011 – the most recent information available – new business start ups have declined every single year under Obama. 2011 was worse than 08 and 09, when the financial crisis actually hit.
Small businesses and start up businesses are still declining. This is supposed to be the height of the recovery but their profits are shrinking and it’s becoming more and more difficult to start a new business. Unfortunately, many large companies support new regulations for this very reason. They know their smaller competitors can’t afford it. This isn’t all, or even most large companies, so don’t think I’m railing against corporations or anything.
This will eventually hurt everybody. Less competition leads to higher prices, lower quality products, less innovation, and fewer future jobs and profits. If business start ups stay this low, the future is extremely grim.
On the bright side, all those who supported Occupy Wall Street can feel good about their “noble” intentions. Daddy can just pay for a few more years of grad school so they don’t have to face the consequences of their economy. And while they may be crippling the very people they claimed to represent, at least Wall Street seems to be doing ok.