Tags: Clifton | stock | startup | business

Gallup CEO: 'Wall Street Needs Stock Boom, Even if Boom Fueled by Illusion'

By    |   Friday, 16 January 2015 10:50 AM

The United States is in big trouble when it comes business formation, but that's not a story Wall Street or the White House wants you to hear, says Jim Clifton, CEO of Gallup.

The U.S. ranks 12th among developed nations in business startup activity, trailing Hungary and Italy among others, he writes on Gallup.com.

For the first time since the data began in 1977, the number of businesses closing exceeds the number of startups — 470,000 to 400,000 in 2012, according to the latest Census Bureau numbers.

"This is our single most serious economic problem. Yet it seems like a secret," Clifton says. "You never see it mentioned in the media, nor hear [about it] from a politician."

So why isn't the issue getting more attention? You can blame it largely on Wall Street and the White House, Clifton writes.

"The White House needs to keep you in the game because their political party needs your vote. Wall Street needs the stock market to boom, even if that boom is fueled by illusion. So both tell us, 'The economy is coming back.'"

But, "this economy is never truly coming back unless we reverse the birth and death trends of American businesses," Clifton states.

"When new businesses aren't being born, the free enterprise system and jobs decline," he adds.

"Entrepreneurship is not systematically built into our culture the way innovation or intellectual development is. You might say, 'Well, I see a lot of entrepreneurial activity in the country.' Yes, that's true, but entrepreneurship is now in decline for the first time since the U.S. government started measuring it."

One person who is paying attention is Dane Stangler, vice president of research and policy at the Kauffman Foundation.

"This may sound odd [given the flood of money going to venture capital], but the United States needs a revival in entrepreneurship," he writes on Real Clear Markets.

"Many markets have become either entrepreneurially stagnant, or are experiencing massive efforts by incumbent businesses to use their political and economic power to protect themselves from new competition."

Even the technology sector is largely dominated by big companies, such as Google and Amazon.com, Stangler notes.

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The United States is in big trouble when it comes business formation, but that's not a story Wall Street or the White House wants you to hear, says Jim Clifton, CEO of Gallup.
Clifton, stock, startup, business
360
2015-50-16
Friday, 16 January 2015 10:50 AM
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