Risk-Averse Culture Infects U.S. Workers, Entrepreneurs

[question everything]

From the WSJ

Americans have long taken pride in their willingness to bet it all on a dream. But that risk-taking spirit appears to be fading. Three long-running trends suggest the U.S. economy has turned soft on risk: Companies add jobs more slowly, even in good times. Investors put less money into new ventures. And, more broadly, Americans start fewer businesses and are less inclined to change jobs or move for new opportunities.

The changes reflect broader, more permanent shifts, including an aging population and the new dominance of large corporations in many industries. They also may help explain the increasingly sluggish economic recoveries after the past three recessions, experts said.

(snip)

Companies that gamble on new ideas are more likely to fail, but also more likely to hit it big. Entrepreneurs face long odds, but those that achieve success create jobs for many others. As important, say economists, are small acts of risk-taking: workers who quit their jobs to find better ones, companies that expand payrolls and families that move from sluggish economic regions to ones with low unemployment rates. Multiplied across the U.S. economy, these acts of faith and ambition help speed money, talent and resources to where they are needed.

Of course, too much risk-taking can be dangerous, as the financial crisis showed. And with the stock market soaring, some types of risk are displaying signs of a strong postcrisis rebound. Indeed, the Federal Reserve said it was watching for signs that easy-money policies are leading investors to take excessive risks. But a broad cross section of U.S. economists, from a range of academic disciplines and political persuasions, agree that a specific and necessary kind of risk-taking is on the decline. Historically, risk-taking that supports high rates of churn—lots of hiring and firing, company formation and destruction—gives economies more flexibility to adapt to changing markets.

More..

http://online.wsj.com/article/SB10001424127887324031404578481162903760052.html

(If you cannot open the link, copy and paste the title onto google)

[Demeter]

1. What BS

There's no demand for entrepreneurs or their products. There's taking a risk, and then there is futility. This economy is contracting and has been since 2001.

But there are a lot of greedy shysters and crooks who would like to con the desperate and hopeful out of their last cent...in the pursuit of the foreclosed American dream.

You want to thrive in this economy, learn how to steal legally. It's the only growth industry left, with special government incentive programs to reward the successful.

[Warpy]

6. Exactly, just claw back all that hoarded wealth from the ultra rich

and circulate it into the real economy at the bottom with infrastructure jobs and watch all the risk taking entrepreneurs pop up.

This article is just more victim blaming horseshit.

[Gidney N Cloyd]

2. Universal healthcare would be a huge boon for entrepreneurship

[jtuck004]

3. I would agree that "the spirit" is flagging, having been beaten down for so long, but

it's not so much that people are risk-averse, it's that they have so much less opportunity.

Corning glass came about after a fella at Corning Glass works accidentally took the temp of a piece of glass far higher than he was supposed to, thought is was ruined, and dropped it when it came out of the oven. To his surprise it didn't shatter, it bounced.

Corning Ware was the result. As well as the Gorilla Glass that is on the front of many tablets and smart phones.

The story of sticky notes is similar, and there are thousands of those, most related to people working in factory jobs which no longer exist. That same sort of thing can and does happen with high tech, but we have placed much of that learning either far away from mere mortals, or taught them for years that someone else needs to tell them what to learn, and evaluate whether they know anything or not. And they listened, the poor children...

But since the majority of the jobs we are "creating" today are low-wage food service, hotel work, etc, this sort of thing can't happen as much. I mean, when you burn french fries, you just get trash.

As suggested above, you put your self and your family at great risk to leave insurance behind to pursue an idea.

And given that so many people haven't even recovered half of the wealth they have lost in the past 10 years, and large numbers are finding themselves unable to get poverty level wages, or maybe twice that, there is little to no extra money to experiment and try things. Even a lousy community college, a place where much experimentation went on in decades past, will leave many people with so much debt they may well find themselves paying it off with their SS checks.

Ironically, it seems we have gone to war against innovation in this country, in a country where, by and large, the culture is ripe for innovation.

[Nay]

4. In addition to the points in the above posts, you have to realize that even if an

entrepreneur took a big chance to manufacture something, China and Asia would steal it before the guy ever got his business up and running. Walmart would be happy to host the Chinese version of the item that was stolen from our risk-taking entrepreneur. EVEN IF Walmart decided to 'buy American' it would demand all sorts of concessions that would deliver such thin profit margins to our guy that he'd wish he never started it up.

The only businesses that have much of a chance are services, and only a few kinds. And generally, they don't make you much money.

[question everything]

5. Good observation

I think that this is what happened with Solyndra that the RWers like to rub Obama's nose in it. It was my understanding that China undercut the prices so deeply that no one could compete.