Tough sledding

I know our Republican gubernatorial candidates have been talking at length about business climate in Maryland, but last night I saw a devastating chart which shows the result of bad national policy, compiled by the generally liberal Brookings Institution and found on the post at the Independent Journal Review.

When you open the chart up (because my links generally open in a new tab) you’ll notice that the firm entry line had been ahead of the firm exit line until they met in the latter part of 2008. And while the Brookings data only covers through the end of 2011, I’m pretty sure the situation is no better now given the situation with Obamacare.

In contrast, the chart seemed to have its widest positive gap in the mid-1980s, right in the sweet spot of the Reagan presidency and just after two tax cuts.

To be honest, there’s not a whole lot of incentive out there to create a business. It’s very hard to get capital because lenders are finding it more lucrative to play financial games among themselves to make a profit, and larger would-be competitors are busy trying to rewrite the rules to limit competition. For an example of this, study the story of ride-sharing service Uber and how it has to put up with the taxi cartels in large cities. The same might be said of e-cigarettes, which are being categorized (and banned) like regular cigarettes despite the fact the “smoke” is much less hazardous. Something tells me Big Tobacco is behind the scenes somewhere in this e-cig controversy and states will become much more amenable to the product once they receive a more hefty cut.

Finally, if you succeed all it gets you is a higher tax bracket. It’s like the old saying: no good deed goes unpunished. So the idea is to make being good less of a punishment, and perhaps a return to the successful policies of the Reagan era would be a beginning.