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For example, if you incorporated a business in the state of California, before your business made a dime you would have to pay or be obligated to pay thousands of dollars in state/local/federal taxes and fees. Your marginal tax rate is going to be over 100% until you get those costs covered. Then if you are self-employed, you pay a federal income tax, state income tax, FICA (both sides, about 15%), any local taxes, possibly unemployment taxes, SDI, etc., this has to be covered and could be well over $.50 on every dollar up to a certain point. Then when you do your taxes, you could be subject to deduction phase out, like for child-care, education, mortgage interest, etc., which can have a marginal impact of 100% in certain income ranges. And let's not forget the sales taxes on everything you buy, gas taxes, property taxes, phone taxes, utility taxes, etc., etc. So, inorder to make a comfortable living as a small business owner you are going to need sales in the income ranges that will put you in the classification of being "rich" even if your net after taxes is small.

Krugman, in the Eman article points to the new economy involving the independence and speed used by a company like Enron as opposed to the old monopolistic companies like an At&T. He points to those companies being centralized command and control not different than Eastern European centralized command and control economies run by governments. As of late, he has written a lot about the need for government control and management of the economy.

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"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."