A Preponderance of the Evidence

In certain circumstances, a legal verdict will be based on "a preponderance of the evidence." That is, when some facts support one conclusion and others point to a different conclusion, the decision ultimately rests on the sum total of available evidence.

Arguably, this method would seem to be the best approach to use when trying to ascertain the overall health of an economy, especially one as large and as complex as ours is, where even if the overall picture seems noticeably good or bad some parts might be doing better (or worse) than others.

With that in mind, anyone who believes that the reason for the big drop in new business start-ups detailed in the following Real Time Economics post, "Small-Business Formations Decline," stems from improvements in the job market -- one possible reason for the development -- rather than from the fact that economic activity remains depressed and credit markets are still in a heap of trouble, is doing a pretty poor job of weighing up all the evidence:

The activity of new entrepreneurs plunged in the first half of 2010, falling to the lowest rate in more than two decades as more workers found employment or were driven away from start-ups by a feeble economy.

Start-up activity fell to an average 3.7% in the first two quarters of this year, down from 7.6% in the first half of 2009 and 9.6% in the second half, according to a survey of about 3,000 job seekers by global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc. Many of those surveyed are former managers and executives.

“It is difficult to pinpoint the exact reason behind the decline in start-up activity among former managers and executives,” Challenger Chief Executive John Challenger said in a statement Monday. “On one hand, it could be that the job market has improved to the point that many do not feel compelled to take the risk of going it alone. Then there is the fragility of the recovery and the uncertainty that comes with it. Many small business owners are increasingly pessimistic about business conditions and still find it difficult to get a loan.”

The 3.4% first-quarter start-up rate and the 3.9% in the second quarter mark the lowest first-half since Challenger started recording data in 1986. The highest half-year start-up rate was 21.5% in the first six months of 1989.

While the economy recovers but remains fragile, entrepreneurism drops as fewer job-seekers look to start their own businesses and secure employment. Those already self-employed are less confident about their outlooks — a small business optimism index fell to 92.2 in June from 89 in May, according to the National Federation of Independent Business.

The annual average rate of job seekers starting a business fell with the onset of the recession — from 8.1% in 2007 to 5.1% in 2008. The number of self-employed workers peaked at more than a seasonally adjusted 9.7 million in June 2007, just before the recession, but fell to almost 8.9 million in June 2010, according to the Bureau of Labor Statistics. The rate of new entrepreneurship dropped steadily through the first six months of 2010 from 9 million.

The Challenger survey shows an increase in new entrepreneurs in the third and fourth quarters of 2009 — 11.8% and 7.3%, respectively. The total number of self-employed workers jumped almost 3% to more than 9.1 million in December 2009 from just under 8.9 million that June.

Meanwhile, as fewer people looked to self-employment in the first half of 2010, the number of payroll workers increased by a seasonally adjusted 1.3 million between December 2009 and June 2010 in nonagricultural industries.

Comments

[John]

As someone who ran a small business, I can tell you one of the reasons people fail in small businesses. The State government burys you in non esential paperwork and regulations that have NOTHING go do with running a business and turning a profit.
In the decade that I ran a business, the amount of surveys, recc. compliance, immigrant compliance, sales tax on out of state purchases compliance, etc. would be a stack of papers at least 10 feet high.
State government does not create jobs. Instead, they do everything they can to kill jobs. You would have to be half crazy to start a business today.

[kevinearick]

many incorporated areas have made it unlawful to walk through their jurisdictions … the Internet utilities & portals are already “managing” the news … freedom of speech is not free; someone has to build the platform/portal …

Time Machines / AC Community Portals / Re-Cap

So, humanity is a circuit and the planet is a circuit, within another circuit (helices). The planetary economy self-corrects by balancing its fulcrum of fulcrums, the distance / gaps. It is not sufficient to increase the diversity of commercial products. Those products must increase the diversity of planet products. Relativity, the potential difference, the ability to do work toward that end, is what sets the gaps and makes the current flow through the symbiotic circuits. Energy U is neither created, nor destroyed; it is simply transformed.

We can tap the planetary circuit at will, but the return parallels must feed the planetary symbiotic relativity circuit with increasingly productive diversity to complete the circuit. Once we get that down, we will have a platform from which to explore space in numbers. In the meantime, humanity is shorting itself out, by creating too much distance (dissonance) from nature, and the planet’s natural response is replacement, through the resulting feedback parameters, to create a new balance, collapsing the human fulcrum, triggering a chain reaction of stack pops, to free up the required energy.

DC markets could care less about future generations, except to efficiently enslave them to the past, to pull revenues forward, and push costs back. That process has run its course, and humanity’s gap has hit the planet’s limit switch. Meanwhile, the kids have adapted to hide their electrons accordingly, systematically cutting the dc bus off from the source of its addictions, and moving forward with analog technology, beyond the “knowledge” of the digital economy, closing its NPV window, and rendering it insolvent, leaving it one choice, link to the AC inverter or perish.

In net, the digital economy is now making a run on its own currencies, in a recursive loop, because it can only replicate, moving it further away from the planetary supply with each iteration, paying itself for symptomatic relief, with increasing addiction, rendering itself into a gravitational black hole.

Technology development requires an understanding of History. If you bought a machine that you did not understand, would you install a program to bankrupt the machine developer? If you were the developer, what’s your first concern? By all means, the dc bus will shop till it drops, following the multinational imperative to attack the machine developers, which it naturally views as a threat to the status quo.

A machine cannot replace an intelligent human being, but it can replace human ignorance as the dc bus. Knowledge is not power; it’s just a temporary bridge, one that fails every time, when the last fool enters. The trick to detonation is the ability to travel through time, and the trick to that is understanding the difference between quantum and machine statistics.

A time machine is not what it appears to be. A portal is required on the other side, someone needs to build that portal, and the dc bus may only go to that portal. The analog economy is always two steps ahead of the digital economy, and the digital economy may be relied upon to liquidate generational relationships, shorting its own chain. That’s History, but the dc bus sees only itself, and nothing between the portals.

The multinationals, the empire, can only operate on accounting profit. They produce a large economic loss, that is born by communities in return for product diversity. To bear the, communities must produce an economic profit, surplus above self-sustained coupling with the local ecological economy. Communities require their own accounting systems to make the translation. They also require religious marriage in addition to civil marriage, as a sanctuary boundary beyond which no institution may go, to hide the electrons. Non-participants need not believe in religious marriage; they just need to respect the boundary. It’s a choice.

The analog technology phase is not dependent on a particular empire choice. Whether they realize it or not, Americans are currently debating whether they wish to continue housing the dc empire. Either way, the dc bus is already global, playing nation against nation, and state against state, because communities are not organized to create economic profit, and the planet is just beginning to weigh in on the liquidation side of the scale.

As the overhead of the empire has become transparent, it has migrated into the price of oil, which is embedded in all community costs. It’s the dc rough adjustment dial. All analog technology will be rolled out of small family businesses within community development, once family law is corrected. Do you want to keep the existing dc bus, the devil you know, or start from scratch? No decision is a decision to start from scratch. Communities need to take a look at all the different ways they are being charged for oil consumption, and how much of the empire they are willing to cut, to re-boot community development, and re-fill the economic pipeline.

DC parents attempt to replicate themselves in their children and give them a comparative advantage, toward the end of their own retirement. AC parents encourage their children to be whatever nature intended them to be, and give them an advantage by giving all children in the community an advantage. Written history is just the history of the dc bus, which must be replaced regularly, because all it can do is replicate. Planning a path to the future is pure mythology.

Naturally, the dc bus seeks to confiscate children from the analog community, to mitigate its insecurity, increasing its insecurity and creating the black hole, as the analog kids swim out. For every force of inertia applied over time, there is a quantum jump. For the analog kids, it’s about the venture, not the destination. In the digital world, time is absolute. In the analog world, time is relative, which is why the dc solution to the traveling salesman problem is efficient, but ineffective. On the first step, the salesman’s own action begins to change all the data. All dc assumptions are invalid outside the machine world.

Raising children is not a simple matter that may be adjudicated by a politician in a robe, sitting on a pedestal, with yesterday’s laws, being paid in yesterday’s money, to confirm dc decrees, which were made up out of thin air, to appease a mob, created by the same process. A multinational merger is simple compared to effective parenting. The economy is entirely dependent on the latter, and not the former, which is why the rules for the former were left to government, despite any mythology to the contrary.

Empires have a competitive knowledge advantage, requiring communities to have a cooperative learning advantage, to balance the system, and set the foundation for growth. Growth is a function of balance, circulation, and relativity – relevance. State, federal, and multinational symptoms are a function of community. Communities require healthy small businesses, which require durable new family formation. The Internet, as it is viewed through retail portals, naturally favors the multinationals. The AC community portal is a different way of thinking, which is why the dc bus cannot see it. The dc bus seeks the electron; the ac bus hides it, in net orbit.

Good guys / bad guys is the dc bus. Single phase Ac works 4x as hard. 3 phase works 12x as hard. The number of participants in each changes over time, and the majority prefers to compete for yesterday’s money in the dc bus. The dc bus is the past, single phase ac is the present, and 3 phase ac is the future, which is why the system jumps. The trick to 3 phase ac is effective application, resisting the urge to take the expedient short-cut, which the dc bus may be relied upon to do every time. Evolution is building virtual communities, on its way to space.

The community portal is a key, with its own parameters, that travels through the Internet, randomly compiling the AC wave, which is returned to the dc bus, beyond the knowledge of the dc bus. Kids design most of the technology now. The multinationals are vegetables, on government life support, resting on a structure never designed to carry their dead weight. If the multinationals do not want to pay the market clearing price, that is their business, and the business of everyone attached to them.

…what’s the pressure on that well?

[Rahul]

Most small businesses are in Retail, Construction or Maintenence, Various kinds of services (Which are also kind of retail), People on commission (Brokers, real estate agents, insurance sales, financial advisors) etc. These are the sectors where the bubble was and fresh opportunities have dried up while existing businesses are going belly up. Credit is not available because a lot of formerly thriving businesses are no longer creditworthy so despite banks wanting to lend, there is nobody to lend to. When the bubble was expanding, small businesses were expanding because the bubble was pumping money in the sectors where small businesses operate and large businesses were stagnant because of the uncompetitive structure of a ponzi economy. I think rather than bemoaning the dearth of small business startups or the lack of availability of credit, we must understand why the real economy stagnated and the ponzi economy took off and what can be done to revive the rel economy.

[roger]

Not by money alone,or why the real economy stagnated.
A healthy plant needs more than water for growing,
several other nutrients must also be present in the ground.
The Economy is not much different, aside from financing
many other components must be present.
At the end of world WW2 the US was the Banker,the research
laboratory and the factory of the global community,this was
a very rich ground of nutrients, not so anymore!competition
comes now from every corner of the world in all things and
matters "made in USA" is no longer needed, and Mr. Banker
USA is no longer trusted. This is why we have Financial/Economic
stagnation errr..collapse.