There are a number of indications of serious economic jeapardy to recovery due to the necessary role of small businesses and their owners. Obama/Dems policies, flat-out antagonistic going forward, as well as other challenges, could bring about the real jobless nonrecovery, unlike the 6% unemployment rate so-called "jobless recovery" that the media and Dems (redundancy) tried to tag Bush's rebound from 2001 with.
"Prospects for a small business-fueled employment recovery"
In a speech yesterday, William Dudley, the president of the Federal Reserve Bank of New York, identified financial constraints for small businesses as a restraint on the pace of economic recovery. Specifically, he said:
"For small business borrowers, there are three problems. First, the fundamentals of their businesses have often deteriorated because of the length and severity of the recession—making many less creditworthy. Second, some sources of funding for small businesses—credit card borrowing and home equity loans—have dried up as banks have responded to rising credit losses in these areas by tightening credit standards. Third, small businesses have few alternative sources of funds. They are too small to borrow in the capital markets and the Small Business Administration programs are not large enough to accommodate more than a small fraction of the demand from this sector."
"President Dudley's comments are even more relevant in the current recession if one considers the disproportionate effect the recession has had on very small businesses...
"Looking ahead, it's not clear whether small businesses will continue to play their traditional role in hiring staff and helping to fuel an employment recovery. However, if the above-mentioned financial constraints are a major contributor to the disproportionately large employment contractions for very small firms, then the post-recession employment boost these firms typically provide may be less robust than in previous recoveries...
The whole article with links and charts: http://macroblog.typepad.com/macroblog/2009/10/prospects-for-a-small-business-fueled-employment-recovery.html
"
No comments:
Post a Comment