On Tuesday – in a rare-act of bipartisanship – the Senate passed the Small Business Jobs and Tax Relief Act. The legislation is aimed at giving some much-needed stimulus to America’s entrepreneurs – by giving any small business that hired more workers in 2012 a 10% tax credit. It also gives away new tax credits for small businesses that invest in new major equipment. It’s no secret that small businesses have taken quite a hit following the Bush Great Recession. But there’s new evidence out now that suggests American entrepreneurial class has been suffering for a long time before Barack Obama – or even George W. Bush – moved into the White House. In fact – the evidence shows that American entrepreneurs have been getting pummeled for more than thirty years now. According to a new study released today by the New American Foundation, the number of entrepreneurs per capita has dropped by 53% since 1977. And since 1991, the number of Americans who are self-employed has dropped by more than 20%. In other words, Americans who use to be able to start their own businesses are increasingly being forced to join the ranks of the working poor. Our nation – quite frankly – has forgotten how to foster an entrepreneurial class over the last thirty years. So why is that?
Could it have something to do with massive tax cuts for the wealthy and for transnational corporations that have made rich even richer and big corporations even bigger to force small businesses out of the marketplace? Or maybe it’s because we no longer enforce the Sherman Anti-Trust Act and have jumped head-first into so-called Free Trade either, which has given way to giant transnational corporations that small business upstarts simply can’t compete with. Not only that, we’ve destroyed the social safety net in the country, which used to give Americans a chance to take risks and try new jobs because they had a net of security to fall in if they failed. Today if they fail, they’re condemned to indefinite poverty – so no one can afford to take risks to start small businesses. So what’s really behind the death of the entrepreneur class in America – and how do we revive it? Barry C. Lynn is the author of the new study on this topic by the New America Foundation, as well as the author of the brilliant book “Cornered: The New Monopoly Capitalism and the Economics of Destruction” and joins Thom.