7 ms·

This seems like another symptom of the widening income gap. You need money to start a new venture and the average worker no longer has much to spare. Meanwhile

This seems like another symptom of the widening income gap. You need money to start a new venture and the average worker no longer has much to spare. Meanwhile large corporations have increased power and influence acquire/stifle competition.

mhb 12y ago
Or it could be a symptom of an increasingly risk-averse society which encourages its government to promulgate ever more regulations to keep us "safe". Big/rich companies are favored by that, so the causality isn't obvious.
- watwut 12y ago
  Americans tend to be incredibly risk-averse when it comes to physical risks and terrorism, but they seem much less risk averse when it comes to money. Given the same personal financial risk, Americans seem more likely to start risky business.
- muzz 12y ago
  Or it could be that there are fewer anti-monopoly laws, and that's resulted in huge megacorporations, especially in areas like banking.
  - gcp 12y ago
    ...not to mention things like the patent system, which also help the established.
    - muzz 12y ago
      That too, but the patent system hasn't changed since 1980, whereas enforcement of laws against monopolies declined.
      - nitrogen 12y ago
        The courts have changed the way they interact with the patent system multiple times since then.
- rayiner 12y ago
  The U.S. is a lot less regulated, in practical terms, than it was 30-40 years ago. Entire industries have been deregulated, like transportation, communications, etc, and enforcement in areas like antitrust, etc, is less. Agencies like EPA, OSHA, NLRB, etc, area shadow of what they were in the 1970's.
  - nickff 12y ago
    The regulations that have harmed new businesses and (non-software) start-ups are not related to anti-trust enforcement. OSHA, EPA, healthcare, and IRS regulations in the last 30-40 years have greatly increased compliance costs, and severely complicated matters for small companies, this has crippled many, either preventing them from growing, or killing them entirely. The agencies may be taking more or less enforcement actions on various different subject matters, but they have greatly increased the complexity of compliance and the volume of documentation required to stay within the bounds of the law. If you need proof of this, please take a glance at the federal register, and you will see that the rate of regulation has greatly increased in over the past 30-40 years ( the FR more than tripled in length from 1970-2000), with few of the FR entries being repeals.[1] Please also keep in mind that the FR does not contain all the existing administrative rules, so the integral of all the FRs is a more relevant (and horrifying) statistic (~3 million cumulative pages as of 2010).[2] [1] http://www.intellectualtakeout.org/sites/www.intellectualtakeout.org/files/chart-graph/Federal%20Register%20Pages,%201940-2001.JPG http://www.intellectualtakeout.org/sites/www.intellectualtak... [2] http://politicsandprosperity.com/2012/02/17/lay-my-regulatory-burden-down/ http://politicsandprosperity.com/2012/02/17/lay-my-regulator...
    - rayiner 12y ago
      Quoting "# of federal register pages" is like quoting "number of source lines of code." It's not a good metric for understanding the scope of what a program does. The increase in the number of federal register pages is a response to court cases in the 1970's that made it easier to challenge federal administrative agency actions on the basis that they were inadequately justified. The 1935 Administrative Procedure Act requires agencies to accompany regulations with a "concise general statement" in the Federal Register. From 1935 to the 1970's, that's precisely what they were, even when the substantive regulations had far-reaching scope. In the 1970's there was a trend of increased judicial scrutiny of agency actions, centering on the agency's explanations and rationales for new regulations. Sometime in the 1960's, economic cost-benefit analysis also became a fixture of agency action. Thus, the page count of the federal register exploded, as the "concise general statement" became exhaustive rationales filled with the results of studies, cost-balancing analysis, etc. The end result is that agencies like the NLRB have vastly less actual power than they did decades ago, but to exercise what little power they have, they must detail every bit of reasoning and evidence behind a rule in the Federal Register, to fortify the new rule against challenges in court. Modern agencies have to slavishly justify every little action, whereas agencies of the 1930's-1960's could impose sweeping regulations of industries without so much as a cost-benefit study. The "greatly increased compliance costs" narrative is garbage. One would assume that if compliance costs were increasing, legal costs would increase too. Yet, the opposite is true: the legal sector's share of real GDP has shrunk from over 2% in the 1970's to 1.3% today: http://amlawdaily.typepad.com/.a/6a00e55044cbaf88340168e507757b970c-pi http://amlawdaily.typepad.com/.a/6a00e55044cbaf88340168e5077.... Indeed, that understates the decrease. Finance is a very legal-intensive industry, and makes up a much larger fraction of the economy than it did in the 1970's. Thus, the decrease in legal expenditures in the non-finance sectors must have been even larger. Now, legal expenditures are not necessarily the same as regulatory compliance costs, but one would imagine the two are highly correlated. And the trend is totally in the opposite direction from the "greatly increased compliance costs" narrative.
- ArkyBeagle 12y ago
  Economists call an aversion to risk "liquidity preference". You don't even need regulation to cause this.
at-fates-hands 12y ago
>>> Meanwhile large corporations have increased power and influence acquire/stifle competition. Actually most large corporations tend to shrink in poor economic times. They also tend to lay more people off, reduce spending and hiring and hunker down to weather to storm. I could post a dozen stories about company layoffs over the past 5 years. Many small and medium sized companies who have smaller workforces, will simply go under. Target laid of 1,100 employees in January Cargill laid off 900 employees in March of this year Microsoft just announced it would lay off 14% of its employees in July Intel laid off 1,500 employees in April of this year When the economy is poor, people don't get poor and corporations get rich. It simply doesn't work like that.
digikata 12y ago
Also the dropping of pensions, and increase in cost of healthcare. It used to be that some portion of people could get 20 yrs in a their first company then have the option of having a fairly secure foundation from which to take risks.

mhb 12y ago

Or it could be a symptom of an increasingly risk-averse society which encourages its government to promulgate ever more regulations to keep us "safe". Big/rich companies are favored by that, so the causality isn't obvious.

watwut 12y ago
Americans tend to be incredibly risk-averse when it comes to physical risks and terrorism, but they seem much less risk averse when it comes to money. Given the same personal financial risk, Americans seem more likely to start risky business.
muzz 12y ago
Or it could be that there are fewer anti-monopoly laws, and that's resulted in huge megacorporations, especially in areas like banking.
- gcp 12y ago
  ...not to mention things like the patent system, which also help the established.
  - muzz 12y ago
    That too, but the patent system hasn't changed since 1980, whereas enforcement of laws against monopolies declined.
    - nitrogen 12y ago
      The courts have changed the way they interact with the patent system multiple times since then.
rayiner 12y ago
The U.S. is a lot less regulated, in practical terms, than it was 30-40 years ago. Entire industries have been deregulated, like transportation, communications, etc, and enforcement in areas like antitrust, etc, is less. Agencies like EPA, OSHA, NLRB, etc, area shadow of what they were in the 1970's.
- nickff 12y ago
  The regulations that have harmed new businesses and (non-software) start-ups are not related to anti-trust enforcement. OSHA, EPA, healthcare, and IRS regulations in the last 30-40 years have greatly increased compliance costs, and severely complicated matters for small companies, this has crippled many, either preventing them from growing, or killing them entirely. The agencies may be taking more or less enforcement actions on various different subject matters, but they have greatly increased the complexity of compliance and the volume of documentation required to stay within the bounds of the law. If you need proof of this, please take a glance at the federal register, and you will see that the rate of regulation has greatly increased in over the past 30-40 years ( the FR more than tripled in length from 1970-2000), with few of the FR entries being repeals.[1] Please also keep in mind that the FR does not contain all the existing administrative rules, so the integral of all the FRs is a more relevant (and horrifying) statistic (~3 million cumulative pages as of 2010).[2] [1] http://www.intellectualtakeout.org/sites/www.intellectualtakeout.org/files/chart-graph/Federal%20Register%20Pages,%201940-2001.JPG http://www.intellectualtakeout.org/sites/www.intellectualtak... [2] http://politicsandprosperity.com/2012/02/17/lay-my-regulatory-burden-down/ http://politicsandprosperity.com/2012/02/17/lay-my-regulator...
  - rayiner 12y ago
    Quoting "# of federal register pages" is like quoting "number of source lines of code." It's not a good metric for understanding the scope of what a program does. The increase in the number of federal register pages is a response to court cases in the 1970's that made it easier to challenge federal administrative agency actions on the basis that they were inadequately justified. The 1935 Administrative Procedure Act requires agencies to accompany regulations with a "concise general statement" in the Federal Register. From 1935 to the 1970's, that's precisely what they were, even when the substantive regulations had far-reaching scope. In the 1970's there was a trend of increased judicial scrutiny of agency actions, centering on the agency's explanations and rationales for new regulations. Sometime in the 1960's, economic cost-benefit analysis also became a fixture of agency action. Thus, the page count of the federal register exploded, as the "concise general statement" became exhaustive rationales filled with the results of studies, cost-balancing analysis, etc. The end result is that agencies like the NLRB have vastly less actual power than they did decades ago, but to exercise what little power they have, they must detail every bit of reasoning and evidence behind a rule in the Federal Register, to fortify the new rule against challenges in court. Modern agencies have to slavishly justify every little action, whereas agencies of the 1930's-1960's could impose sweeping regulations of industries without so much as a cost-benefit study. The "greatly increased compliance costs" narrative is garbage. One would assume that if compliance costs were increasing, legal costs would increase too. Yet, the opposite is true: the legal sector's share of real GDP has shrunk from over 2% in the 1970's to 1.3% today: http://amlawdaily.typepad.com/.a/6a00e55044cbaf88340168e507757b970c-pi http://amlawdaily.typepad.com/.a/6a00e55044cbaf88340168e5077.... Indeed, that understates the decrease. Finance is a very legal-intensive industry, and makes up a much larger fraction of the economy than it did in the 1970's. Thus, the decrease in legal expenditures in the non-finance sectors must have been even larger. Now, legal expenditures are not necessarily the same as regulatory compliance costs, but one would imagine the two are highly correlated. And the trend is totally in the opposite direction from the "greatly increased compliance costs" narrative.
ArkyBeagle 12y ago
Economists call an aversion to risk "liquidity preference". You don't even need regulation to cause this.

at-fates-hands 12y ago

>>> Meanwhile large corporations have increased power and influence acquire/stifle competition. Actually most large corporations tend to shrink in poor economic times. They also tend to lay more people off, reduce spending and hiring and hunker down to weather to storm. I could post a dozen stories about company layoffs over the past 5 years. Many small and medium sized companies who have smaller workforces, will simply go under. Target laid of 1,100 employees in January Cargill laid off 900 employees in March of this year Microsoft just announced it would lay off 14% of its employees in July Intel laid off 1,500 employees in April of this year When the economy is poor, people don't get poor and corporations get rich. It simply doesn't work like that.

digikata 12y ago

Also the dropping of pensions, and increase in cost of healthcare. It used to be that some portion of people could get 20 yrs in a their first company then have the option of having a fairly secure foundation from which to take risks.