Just up the street from me, a new business opened earlier this year in what had once been a furniture shop. As I drove past it last week, the store was empty, the walls painted white, a “For Lease” sign perched in the doorway. What struck me about this new business is that it was one of the few new enterprises I had seen in the Hollywood/West Hollywood neighborhood in the first year of the Obama/Reid/Pelosi era. It didn’t make it to Christmas (or Chanuka for that matter).
Drive down the major commercial thoroughfares in this area, Santa Monica Blvd., Melrose, Beverly or 3rd and you’ll see a whole host of shuttered storefronts, with signs like “This Space Available” abounding. Travel up the 5 to Sacramento and I would expect you’ll see a different sign. While my friends in some professions report taking pay cuts so their employers don’t have to lay anyone off, state employees don’t appear to be suffering. And many in the private sector in the Golden State have not been as fortunate as my friends with smaller salaries.
And the outlook doesn’t look good for California. Small businesses, as even the President has said, create the most net new jobs. But, as we learn via Jim Hoft, small business bankruptcies in the Golden State are far outpacing the national average:
“While bankruptcies are up, overall, small-business closures are up even more,” Headd [Brian Headd, an economist at the Small Business Administration’s office of advocacy] said.
California has been particularly hard hit. The latest data show small-business bankruptcies up 81% in the state for the 12 months ended Sept. 30, compared with the previous year. Filings nationwide were up 44%, according to the credit analysis firm Equifax Inc.
The article focuses on the reluctance of banks to loan to small businesses. Typical of the LA Times to ignore the burden of federal and state regulation which impact small enterprises the most. Banks might lend more if the government didn’t attach so many strings to their lending of fear the legislation Barney Frank is pushing to regulate the financial sector even further.
With California legislators electing a union acolyte as their new Speaker of the House, the odds for reforms beneficial to small business are next to nil. And our legislators in Washington are more interested in spending money and increasing the power of the federal government than they are in crafting policies which reduce the burdens on entrepreneurs and innovators, you know, those folks, who create products and deliver services which improve our lives and create jobs for citizens eager to find work.
Unless they change their way of thinking, we’re going to see even more shuttered storefront on the once bustling thoroughfares of Hollywood and other neighborhoods in the once Golden State.