Taxes, regs clog new biz formation in USA, CA

Taxes, regs clog new biz formation in USA, CA

An alarming new study by the liberal Brookings Institution shows business dynamism has dropped by half from the Reagan Boom of three decades ago. Look at this graph:

Business dynamism Brookings

“Firm entry” means new startup companies. “Firm exit” means the companies are gone. The two lines crossed about 2008, during the time of Republican President George W. Bush. Then “firm exits” kept going upward under Democratic President Obama, outpacing “firm entries,” meaning more businesses were being killed than created.

Partisan control of the U.S. House and Senate also flipped a couple times during this period.

So it’s a bipartisan disaster.

The Brookings study also looked at states. There’s an interactive map here.

California performed among the worst, with a 50 percent decline in new firm creation during the 30 years. This used to be the state of Intel and Apple, of HP and Fairchild Semiconductor.  Sure, we still enjoy such recent startups as Google and Twitter (Facebook started in Massachusetts). But the overall number of startups has gone down.

Yet other states have done but little better. Arch-rival Texas had 36 percent fewer startups. So they can say, “We were terrible, but not as bad as California.”

The “best” state was New York, a high-tax and high-regulation state like California. But its startups dropped “only” 18 percent.

California could lead the way back to leadership in startups by slashing taxes and regulations, by getting rid of zoning to make housing and business property more affordable, by putting a welcoming mat down to business and jobs creation — by all around being friendly toward business instead of clubbing business on the head.

Will it?



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  1. S Moderation Douglas
    S Moderation Douglas 7 May, 2014, 12:09

    “California could lead the way back to leadership in startups by slashing taxes and regulations”

    To be fair, you should make it clear that this is YOUR opinion; a Seilerism, as it were.

    Nowhere in the Brookings Institute study do they state any reason for the decline. They SPECIFICALLY state “the reasons explaining this decline are still unknown,”.

    They also make it clear that this is a NATIONAL trend: “Moreover, the performance of business dynamism across the states and metros has become increasingly similar over time.”

    If “taxes and regulation” were a significant factor, wouldn’t one expect more differences between states?

    Reply this comment
  2. Barackus the First
    Barackus the First 7 May, 2014, 13:29

    Who cares? Capitalism is the problem. Long live Federal and State “workers”, and people on public assistance.

    Reply this comment
  3. Donkey
    Donkey 7 May, 2014, 15:52

    It is quite easy for a layman to finger why “business dynamism” fallen, regulation by RAGWUS feeders and the cost of government. I saw it in my business and in the people I worked with in aerospace. Just like Toyota, Goodyear, Firestone, Uniroyal, GM, and a lot of Areospace companies the cost of doing business in California is abusive at best by the hands of little money grubbing RAGWUS bureaucracies.

    As for S&MD’s observation, other states are booming, California is being crushed by the weight of a RAGWUS feeding monster. 🙂

    Reply this comment
  4. Donkey
    Donkey 7 May, 2014, 16:02

    I don’t know how many citizens have been to a negotiation with a public employee union, but if you have a chance you should suffer through one. The RAGWUS is only concerned about raising more revenue for their already agreed upon raises, perks, and pension payments that were done behind closed doors. Really when they come out of the closed negotiations it is just for the council to rubber stamp their greedy contract. The effects upon the entity can be seen by viewing the crumbling streets, rusted fences, and weeds growing everywhere. Take a look at your local police station or firehouse, then take a look at your local public areas, it is easy to see where the money is being spent. 🙂

    Reply this comment
    NTHEOC 7 May, 2014, 18:11

    Donkey, I have been reading your posts for a while now and it really seems to me that you are showing more and more anger in them. I wouldn’t say violent just yet, but the signs are starting to be there of someone I would not like to run into on duty in a uniform. We have all heard and delt with people who just “snap”. Every time there is an active shooter situation I just wonder if it could be you? I hope I’m wrong about you.

    Reply this comment
    • Donkey
      Donkey 7 May, 2014, 20:44

      Ntheoc, it is not freedom seekers you should be worrying your little heart about, but thanks for your satirical post anyhow. I mean in reality it is the leftist/progressives that harbor the will to hurt others. I mean where do we start?

      How about Lincoln: Killed by a Democrat

      Garfield: Murdered and a leftist commie

      Kennedy: Murdered by a leftist commie

      Kaczynski: Left wing nut job/eco freak that liked bombs

      Amy Bishop: Lefty Obama lover, murdered three University Professors and was suspected in a 1993 bombing, also shot her brother in 1986.

      Bill Ayers: For you Ntheoc: “Kill all the rich people. Break up their cars and apartments. Bring the revolution home, kill your parents, that’s where it’s really at”
      –Bill Ayers (1970), quoted in New York Times, September 11, 2001:

      Joe Stack: Joe Stack flies small plane into an IRS building. Anti-tax TP rhetoric blamed. (He quoted from the Communist Manifesto.)

      Fred Phelps: Let us all remember he was a progressive Democrat, the founder of hate church/cult Westboro Baptist Church who kicked the bucket today ran for public office as a Democrat FIVE times.

      Seung-Hui Cho: Anti-Christian and Anti-Rich, hated his parents beliefs.

      James Holmes: Occupy Wallstreet worker lefty

      Jared Loughner: Was angry with Giffords because she voted against Nancy Pelosi, spent quite a lot of time posting on the Daily Kos, with a leftist tone.

      It’s the lefties that are a threat Ntheoc, along with their progressive RAGWUS followers. By far most of the military shooting are by lefties or demonrats, or both. 🙂

      Reply this comment
    • Donkey
      Donkey 7 May, 2014, 20:48

      Ntheoc, just asking, but how many people would you be willing to kill to keep your bloated RAGWUS pension? 🙂

      Reply this comment
    • Donkey
      Donkey 9 May, 2014, 19:00

      Ntheoc, is Orville “Moe” Fleming a friend of yours. Looks as if he just couldn’t take it anymore, was it too much porn and time on his hands? Public employees are dangerous indeed. 🙂

      Reply this comment
  6. Leotis Ahmad Jones
    Leotis Ahmad Jones 7 May, 2014, 20:21

    How many cops and firemen(these dudes got hose envy around me and my bros) are starting up companies, nada amigo! Only creative cheatin on their wives, ok here, had a few of those. Mmmm good.

    Reply this comment
  7. Queeg
    Queeg 8 May, 2014, 08:48

    Hail Barakus!

    El Pluto liberium unum no mas whatever!

    Reply this comment
  8. Queeg
    Queeg 8 May, 2014, 08:51

    Donkey you should be ashamed…..this is a dignified site run by decent people. Have some respect. They enlighten and bring lots of enjoyment to us.

    Reply this comment
  9. Queeg
    Queeg 8 May, 2014, 08:53


    His little white coat is getting tight around the neck….shame…he once showed great promise for conversion to fair and balanced.

    Reply this comment

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AppleBrookings InstitutionIntelJohn Seiler

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