NY Times: Family Businesses Are Reeling in Recession

[marmar]

Family Businesses Are Reeling in Recession

By DAMIEN CAVE
Published: July 13, 2009


MIAMI — Using only strips of canvas and a little rope, Scott Peterson walked up a 50-foot flagpole here to remove a star-spangled banner with reds faded pink. His ancestors used the same method: the family business, originally Harold A. Peterson Steeplejack, opened in 1926.

And it will probably close in 2009. The Great Recession, especially its stranglehold on credit and new construction, appears to have mortally wounded what the Depression could not kill.

“It’s not ‘Oh, I don’t have a job, I have to go find a new one,’ ” Mr. Peterson said. “We’re losing a corporation that is 83 years old. We’re losing our house. We’re losing our credit. We’re losing, other than our own physical bodies, everything.”

Recessions, like bullies, always pick on the weak, but few victims feel more beaten down these days than the millions of Americans with family businesses. Most run small operations with just a few employees, and failure often means closing an office with a parent’s name attached and deciding which relatives to fire.

They have been hit hard since the labor market began to weaken. Businesses with one to 19 employees, nearly all of them family run, lost 757,000 jobs from the second quarter of 2007 through the third quarter of 2008, according to figures from the Bureau of Labor Statistics, broken down by company size. That amounts to 53 percent of all private-sector losses for a group of companies with about 20 percent of all employees. ..........(more)

The complete piece is at: http://www.nytimes.com/2009/07/14/us/14flag.html?_r=1&hpw

[bbinacan]

1. So let us

raise their taxes. And yes, I'm in a pissy mood.

[SharonAnn]

4. Yet, if they don't have any profit, they're not paying any taxes.

[scarletwoman]

2. Close down Wall Street. They are the ones responsible for destroying us.

The greed of the financial sector has bled the rest of the country dry. Capitalism is a death cult.

[Tangerine LaBamba]

3. We're doomed -

I am convinced that we're past the point of no return. Nothing can be fixed, all is lost.

I truly believe this ....................

[iMac]

5. That's just not true!

You have to consider that maybe the business did more profitably in the great depression than it did today. Perhaps nobody needs flagpoles replaced these days. who knows?

Small businesses which weren't doing well, just like large ones which weren't doing well, are going to get smacked first in recessions.

I mean, it may be horrible, but what are we supposed to do with businesses that just aren't... profitable? just let them sit there for 20 years, taking up space?

In this recession, there will be some shrinking pains, but i'm very confident that this will all come back to normal levels soon, with tons of new small businesses re-emerging.

[marmar]

6. There's going to be a new "normal"....Much of the rapacious consumerism was driven by credit.....

..... Well, that access to credit has been greatly reduced in this crisis, and people can't use their houses as ATMs anymore. What does that mean? The level of consumerism and thus, business, is never going to be the same again.

[iMac]

8. Then maybe

People need to stop relying on credit cards so damn much!

[robinlynne]

11. My small business has been profitable for 30 years. It stopped being profitable

a year ago, because noone has any money to spend. Not because it ISN'T profitable. Because the economy of our country has been raped and destroyed by the uber-wealthy.

[AdHocSolver]

12. The billions spent bailing out the banksters could have saved millions of jobs and small businesses.

The coming depression is NOT caused by the drop in the stock market. It has been coming for the last 25 years due to the offshoring of jobs to cheap labor markets in Asia, and the predatory business practices of giant retailers like Wal-Mart in destroying the business environment for small American manufacturers and small retailers.

The corporate cartel agreements such as NAFTA, the WTO, the IMF, MFN status for China, and the World Bank together with tax laws that allow these corporations to avoid taxes by setting up dummy corporations in the Cayman Islands and other tax havens is why we are heading into a massive depression.

When Americans lose their jobs or their businesses, they don't earn money to spend, and they don't pay income taxes. Then you get a depression.

At least 80 percent of the products we buy must be made in America, so that the money we spend provides income to Americans. If it leaves the country, we run up debt and the dollar becomes lower in value, prices rise, government revenues drop, and the country hurts.

The corporations have promoted their predatory business practices by claiming that the model of "free trade" will bring prosperity and wealth to all. There is no such thing as "free trade". It is a marketing term, not an economics term, designed to make people accept the offshoring of jobs to cheap labor markets as a good thing.

In reality, trade is controlled by a few giant multinational corporations, and the coming depression is due to these corporate trade practices.

The stimulus packages will be nothing more than money thrown down the drain, if trade laws are not rewritten to give small American businesses the ability to fairly compete with the multinationals. This means voidng NAFTA, MFN status for China, and similar agreements, and imposing import quotas, tariffs, and health and environmental restrictions on imports.

If such actions are not taken, this country is going to experience a serious decline in wealth, and experience long-term, chronic depression. The reason the New Deal worked was because the stimulus packages it promoted went to give Americans jobs and income. Our current stimulus package, since practically everything we buy comes from China, is merely sending the money to prop up the chinese economy.

[nevergiveup]

7. I am beginning to wonder.

I deal every day with small family businesses. They are dropping like flies. It is incredibly sad.

[Tangerine LaBamba]

9. They are, perhaps,

the last "product" we have coming out of America - the small family-owned business.

We manufacture nothing. Wall Street is an illusion, just moving around money that doesn't really exist, except in the fat bonus checks, and the rest of the country is just slowly collapsing in on itself..........................

[grasswire]

10. my family member closed his coffee house last week

It was profitable for ten years. He had not one day off in the past 18 months. Every morning he went in at 4:30 to make the scones and biscotti and cookies. Every day he worked like a dog. Several months ago, business collapsed as the state's unemployment rate went to 12 percent. Last week his seven employees lost their jobs. He's now deeply in debt, with no income, and with two small children.

Another family member had to leave his two small girls in New England because he could no longer find work. He got on the train and went 3,000 miles to where he had family. For months, he had only been eating one meal a day at the restaurant where he was the chef. The night before he left, he walked 28 miles to say goodbye to his daughters who remain with their mother. Two months now in his new location there's still no work for him.

Another family member has taken her last bit of money to move 400 miles away from her mom and friends to a town where she hopes to get work. I told her that it's counter-intuitive to move away from family in a Depression. But she hopes for something to break.

And this isn't the bottom yet.