The latest from Charles Hugh Smith…
Pundits and politicos promote a magical myth: a coming small business hiring boom. That fantasy is completely disconnected from the harsh realities of private enterprise.
Regardless of their ideological persuasion, pundits and politicos reliably repeat the mantra that “small business is the engine of jobs growth.” The mantra is followed by the pundit-politico’s belief that a “small business jobs boom is right around the corner.”
I have news for the pundits and politicos: ain’t gonna happen. Why? The answer cannot be found in the manipulated and massaged Bureau of Labor Statistics numbers (have any real jobs been created, net of jobs lost, in the past year? Who knows?) or in the punditry’s Cargo-Cult-like belief in a mythical “small business jobs machine” that they have never experienced and know nothing about.
While a handful of the new crop of politicos are entrepreneurs, most Washington denizens are attorneys, the offspring of wealthy or politically connected families or people who have lived off the government at some level their entire lives. Most have never had a customer or client or had to borrow off a credit card to make payroll. (I have; any pundits who can honestly raise their hands for that one?)
Pundits come in two flavors: the academics, happily making mud pies in the moat surrounding their secure Ivory Tower, and the loud-mouths who have screeched louder and longer than the other media-monkeys. All know less than zero about actual small business.
To understand why small business isn’t hiring and won’t be hiring, you need to understand the psychology of this era and the systemic pressures on all small businesses which don’t live off Federal government contracts. In a very powerful sense, those businesses which live from one government contract to the next are not private businesses at all: they are merely proxies or extensions of the government. Their non-governmental work is either trivial or non-existent.