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Is The Small Business Sector Being Deliberately Targeted for Destruction?

October 8, 2021

Is The Small Business Sector Being Deliberately Targeted for Destruction?

Photo by Stephen Paris

The past 18 months have not been kind to small businesses. If you were unfortunate enough to live in a blue state during the onset of the covid lockdowns and you own a brick-and-mortar business then you have probably spent a large part of that 18 months closed, or struggling to stay open with a skeleton crew of employees. If you did manage to get a PPP loan from the government during shutdown you are now realizing that the 24-week grace period is running out and you will probably have to pay most if not all of that money back soon. Many who tried to get a PPP loan failed because the money was quickly chewed up by major corporations instead of being reserved for small businesses.

And this isn’t even the beginning of the list of troubles for small companies. I have to say, unless a large part of your business is handled online your chances of staying solvent are slim. This is not the fault of most business owners, though, it is a consequence of artificially created conditions and restrictions.

What do I mean by this? Well let’s look at some factors that many people might not be aware of…

Here’s why small businesses are suffering

For example, both state and federal governments have been offering some level of covid unemployment stimulus. In the case of federal programs this could amount to $300 extra a week on top of a person’s existing unemployment checks, even more if their state has a separate program. This has created a massive drought in the employee pool. No one wants to work when they can stay home, do nothing and make more money than they ever were before the pandemic…

…click on the above link to read the rest of the article…

The Fed Has Given Big Business A Huge Advantage

October 1, 2020

The Fed Has Given Big Business A Huge Advantage

And Its Gone!

The last few months have been painful for small businesses across America. These businesses often have a difficult time getting a bank loan. Bubbling up to the surface is the recognition the Fed has played a major role in pushing inequality higher. This was highlighted when Federal Reserve chairman Jerome Powell admitted it’s tough for the Fed to boost lending to smaller businesses. “Trying to underwrite the credit of hundreds of thousands of very small businesses would be very difficult,” Powell said. He acknowledged that many of these small loans are really nothing more than the personal promises of people struggling to keep the doors of their business open.As the financial pain from the pandemic and government restrictions placed on businesses continue, much of the money thrown out to ease our pain has rapidly flowed into the hands of Wall Street and big business. The reality that most small businesses close in failure underlines the risk involved in loaning money to such concerns. Still, it is difficult to deny the importance of small business in the overall economy. It plays a major role in communities by both creating jobs and allowing individuals to better their lot in life. 

During a recent exchange between House Financial Services Committee Chairwoman Rep. Maxine Waters of California and Powell, it became evident that Powell was not rushing to implement changes in the way things are done in an effort to aid small businesses and level the playing field. Waters suggested the Fed and Treasury Department lower the minimum size of the loans under the Main Street Lending Program to $100,000 from the current $250,000 to help a larger number of small companies that have been hurt by the pandemic. Powell even went so far as to claim there was little demand for loans below $1 million.

…click on the above link to read the rest of the article…

A Surge in Small Business Bankruptcies is Underway

July 12, 2020

A Surge in Small Business Bankruptcies is Underway

The new rules make it easier for small businesses to file for chapter 11. And they are.

Small Businesses Walking Away

In 2008, homeowners walked away from mortgages. 

Thanks to the Small Business Reorganization Act of 2019 (SBRA), in effect as of February 19, 2020, small businesses have an easier shot at doing the same.

For example, the Twisted Root Burger grew quickly, but co-founder now says ‘I’m gonna walk away’ from some locations.

Twisted Root Burger was a Texas success story, expanding from one casual restaurant in 2006 to 24 sites including restaurants, bars, a brewery and a theater. Now, the company is moving fast in another direction—into bankruptcy.

“I’m not gonna open that restaurant at half the revenue,” said co-founder Jason Boso. “I’m gonna walk away from those restaurants. I’m not gonna set myself up for failure.”

More than 500 companies filed for bankruptcy under the small-business bankruptcy rules since February, according to the American Bankruptcy Institute. June was the top month for filings with 131 cases; many were filed in states hit hard by the pandemic like Florida, Texas, California, New York and Illinois.

“It was somewhat prescient,” said Ryan Wagner, a restructuring and bankruptcy attorney with international law firm Greenberg Traurig LLP. “It was passed without the foresight of the pandemic.” The law is the most significant change to the bankruptcy code since 2005.

SBRA Highlights

  • Applies to businesses with $2.7 million in liabilities, raised to $7.5 million under coronavirus stimulus
  • Owners continue operating their business while in court
  • Owners can retain equity after exiting bankruptcy
  • Owners can modify residential mortgages if home was collateral for a business loan
  • Faster turnaround to save time and minimize legal fees
  • Owners generally have three to five years to repay creditors
  • Creditors can be paid based on a business’s projected income

Walking away gets a new lease on life, this time for small businesses.

Fourth Turning Accelerating Towards Climax

May 12, 2020

FOURTH TURNING ACCELERATING TOWARDS CLIMAX

“At some point, America’s short-term Crisis psychology will catch up to the long-term post-Unraveling fundamentals. This might result in a Great Devaluation, a severe drop in the market price of most financial and real assets. This devaluation could be a short but horrific panic, a free-falling price in a market with no buyers. Or it could be a series of downward ratchets linked to political events that sequentially knock the supports out from under the residual popular trust in the system. As assets devalue, trust will further disintegrate, which will cause assets to devalue further, and so on. Every slide in asset prices, employment, and production will give every generation cause to grow more alarmed.” – Strauss & Howe – The Fourth Turning

Economists Predict Great Depression II for US Economy: Fast or V ...

I’ve been writing articles about the Fourth Turning for over a decade and nothing has happened since its tumultuous onset in 2008, with the global financial collapse, created by the Federal Reserve and their Wall Street co-conspirator owners, that has not followed along the path described by Strauss and Howe in their 1997 book – The Fourth Turning.

Like molten lava bursting forth from a long dormant (80 years) volcano, the core elements of this Fourth Turning continue to flow along channels of distress, long ago built by bad decisions, corrupt politicians and the greed of bankers. The molten ingredients of this Crisis have been the central drivers since 2008 and this second major eruption is flowing along the same route. The core elements are debt, civic decay, and global disorder, just as Strauss & Howe anticipated over two decades ago.

…click on the above link to read the rest of the article…

Turn Off, Tune Out, Drop Out

November 5, 2018

Turn Off, Tune Out, Drop Out

An unknown but likely staggeringly large percentage of small business owners in the U.S. are an inch away from calling it quits and closing shop.

Timothy Leary famously coined the definitive 60s counterculture phrase, “Turn on, tune in, drop out” in 1966. (According to Wikipedia, In a 1988 interview with Neil Strauss, Leary said the slogan was “given to him” by Marshall McLuhan during a lunch in New York City.)

An updated version of the slogan might be: Turn Off, Tune Out, Drop Out: turn off mobile phones, screens, etc.; tune out Corporate Media, social media, propaganda, official and unofficial, and drop out of the status quo economy and society.

Dropping out of a broken, dysfunctional status quo in terminal decline has a long history. The chapter titles of Michael Grant’s excellent account of The Fall of the Roman Empire identify the core dynamics of decline:

The Gulfs Between the Classes

The Credibility Gap

The Partnerships That Failed

The Groups That Opted Out

The Undermining of Effort

Our focus today is on The Groups That Opted Out. In the decline phase of the Western Roman Empire, people dropped out by abandoning tax-serfdom for life in a Christian monastery (or as a worker on monastery lands) or by removing themselves to the countryside.

Today, people drop out in various ways: early retirement, disability or other social welfare, homesteading or making and saving enough money in the phantom-wealth economy that they can quit official work in middle age.

We can see this in the labor participation rates for the populace at large, women and men. The labor participation rate reflects the percentage of the population that’s in the workforce, either working or actively looking for work.

…click on the above link to read the rest of the article…

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