Cramer: On the Sad State of Small Business

Editor's Note: This article was originally published at 8:30 a.m. EDT on Real Money on June 27. To see Jim Cramer's latest commentary as it's published, sign up for a free trial of Real Money.

NEW YORK ( Real Money) -- You want depressing? You want to know the real problem with the American economy? Go listen to the conference call hosted by Paychex ( PAYX), the excellent payroll-processing company, which reported earnings Thursday.

This one was a real gut-puncher -- and not because of Paychex itself, which is a first-rate company and a known best-of-breed payroll processor. It was tough to listen to because an undercurrent weaved through the call that said, basically, "We didn't deliver what you wanted because the country didn't deliver what we expected."

The company went out of its way to not blame the economy. The chief financial officer, Efrain Rivera, point-blank said, "Now, we're not using that as an excuse." He said that, in order to get to the growth people are expecting in their payroll-processing business, "You need a slightly different environment in terms of new business formation than the one we have," because right now the nation "basically shows no growth whatsoever in new business formation."

Three years out of the worst downturn since the Great Depression, and we have no new businesses formed of the type at which Paychex excels? I'm talking about the small businesses that are responsible for so much of the job creation in the country. How can that be?

Now, the conservatives in this country blame the government for getting in the way of new business. As someone who has started a half-dozen businesses, I am not going to apologize for the government, as the local, state and federal minefields can be impossible to navigate. The liberals are seemingly willing to excuse the government at every turn, particularly the federal government, citing lack of demand as an issue.

It is true that this government in Washington seems incapable of coming up with something as bold as the interstate-highway system build-out that President Eisenhower did, in a feat of brilliance, in order to shut down a possible recession in the 1950s.

However, that's still a relatively simplistic analysis. You almost begin to think that those who espouse this line of thought have never had to navigate a local hearing, a state regulation about safety or a federal mandate about mandatory health care for workers. Of course, their view never seems to encompass the taxes at every level, including absurd ones that could keep anyone from starting a business.

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