Here’s Why Small Business Isn’t Hiring, Part II

Tuesday, July 12, 2011
By Paul Martin

by Charles Hugh Smith

Here are four more structural reasons why small business isn’t expanding/hiring.

Continuing our exploration of why small business isn’t expanding and hiring: here are four more deeply pernicious structural dynamics crushing small business. Yesterday I addressed this issue in Here’s Why Small Business Isn’t Hiring, and Won’t be Hiring; Part II covers three other three systemic issues:

1. The real estate bubble completely mispriced/overvalued commercial real estate. The Federal Reserve’s policies of maintaining super-low interest rates and flooding the markets with easy-money leverage has distorted and poisoned the U.S. economy in multiple ways, one of which is the elevation of commercial real estate valuations to absurd heights.

Here’s how the dynamic works. Landlord A bought his building back in the dog days of the early 1990s for $1 million; his tenants were struggling in the lingering recession and so he kept rent increases modest, or even cut them to keep tenants in a low-demand market.

The Rest…HERE

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