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By An Objectivist Individualist (Reporter)
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Krugman and Schramm: The Fool and the Wise Man

Wednesday, November 16, 2016 19:46
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Paul Krugman, post-election: “It is true that we’ve been adding jobs at a pretty good pace and are quite close to full employment.”

Prof. Carl J. Schramm, Opinion in 16 Nov 2016 Wall St. Journal:  ”Despite the addition of 161,000 jobs in October, the labor-force participation rate fell to its second lowest level in nearly 40 years, according to the St. Louis Federal Reserve…. America needs at least 325,000 new jobs every month to stanch the growing numbers of discouraged workers, according to the Bureau of Labor Statistics.”

How low the left sets the bar for employment!  High employment is clearly not one of their premier goals.

Prof. Schramm, of Syracuse University, once headed the Kaufmann Foundation, which promotes American entrepreneurship.  He notes that:

  • Firms less than 5 years old create more than 80% of new jobs.
  • Fewer than 500,000 new businesses were started in 2015, which is a 30% decrease since 2008.
  • Over the last 8 years, the number of new businesses has decreased by more than 1 million.  The missing new businesses mean 7 to 10 million missing jobs, which would have been enough to provide jobs to the millions of discouraged workers.
  • New businesses are more likely to be started when the economy is growing at a 4% rate than when it is growing at a 2% rate.  The faster growth rate gives consumers the confidence to buy the innovative products of start-up companies.
  • Too much attention is given to Silicon Valley whose start-ups are only about 5% of all start-ups and have higher failure rates and create proportionally fewer jobs than the businesses started by franchisees, which are 40% of all new businesses.
  • Dodd-Frank suppressed the financing by local banks of local businesses in their communities, whose business prospects they are best qualified to gauge.
  • Municipal regulations are particularly protective of older businesses and likely to discriminate against new businesses.
Address these problems and he says we can enjoy 4% economic growth.  The first step was to remove the anti-jobs, anti-business party from the presidency.


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