Brookings report: We are not the nation of risk takers we once were, so we should import some

[LuckyTheDog]

The United States has become less entrepreneurial and its economy has grown increasingly less dynamic over the past three decades, according to a new research paper from The Brookings Institution in Washington, D.C. One way to fix it, the researchers say, would be to encourage more immigration.

Ian Hathaway of Ennsyte Economics and Robert Litan of Brookings analyzed data on the formation of new firms and “churn” in the labor market between 1978 and 2011. They found that: “Business churning and new firm formations have been on a persistent decline during the last few decades, and the pace of net job creation has been subdued. This decline has been documented across a broad range of sectors in the U.S. economy, even in high-tech.”

This is troubling because robust “business dynamism” – the rise and fall of companies as some are formed or expand and others contract or die off – has traditionally been good for productivity, innovation and economic growth. When dynamism falls off, so does the creation of new jobs and industries.

The lack of dynamism is not the result of a few regions of the country dragging down the average. Hathaway and Litan found that the decline in U.S. business dynamism is a 50-state phenomenon.

MORE HERE: http://wonkynewsnerd.com/brookings-report-nation-risk-takers/

[Erich Bloodaxe BSN]

1. So within a decade or two of Republicans starting to seriously

ramp up the flow of wealth from the poor to the rich, people swing into a more cautious mode and stop taking risks?

Could it be that A) if you're at the top, you don't need to take risks any more, the government has enacted policies that keep the money flowing in, and B) if you're at the bottom, you either don't have any money to even use as capital to start a small business, or you don't dare spend it on anything other than keeping yourself alive? Oh yeah, and C) if you're in the middle, congratulations, but you'll probably be at the bottom soon enough.

[LuckyTheDog]

2. Yep, pretty much (nt)

[Hoyt]

3. Folks aren't going to like this suggestion from the article.

"Hathaway and Litan do not speculate about the causes of the decline in business dynamism, but they suggest a few ways to address it. They suggest: Encouraging more of certain kind of immigration. 'Perhaps the best and most immediately effective way to do this is to significantly expand the numbers of immigrant entrepreneurs granted permanent work visas to enter and remain in this country,' Hathaway and Litan write. They also suggest allowing more foreign students in science, technology, engineering and math fields to stay in the country after graduation."

[Brickbat]

4. Really, the biggest clamp on entrepreneurism is this country's lack of safety nets.

The ACA should help some. But giving people the room to make mistakes in the name of entrepreneurship would probably help.