Has American Business Lost Its Mojo?
Daron Acemoglu, an economist at M.I.T., put it this way in an email to me:
It’s becoming more and more difficult to run a successful business in the United States without doing lobbying, campaign contributions and other deals with politicians. This I think is the most dangerous, I would even say nefarious, trend for the creativity of American business in general, and young and new businesses which we badly need in particular.
.. New firm creation feeds into this big time. If you don’t create new firms, then workers are likely to remain locked up in their previous jobs or just go to unemployment because there aren’t new, higher productivity jobs to which they can be reallocated.
.. The drop in new business start-ups should be seen in the context of other key indicators — for example, a lack of labor liquidity, which is a measure of “the rate at which workers leave one firm to go to another,” according to Acemoglu.
.. The authors conclude:
If our assessment is correct, the United States is unlikely to return to sustained high employment rates without restoring labor market fluidity.