Recessions-Good Times For New Businesses?
Of course, there are a lot of new businesses started during booms as well but this illustrates that it can be done during recessions as well. But how is that possible considering how credit conditions are tighter and "aggregate demand" falling? The article does not try to answer that.
The answer can be found if you consider Austrian theory, including that of proto-Austrian Jean-Baptiste Say. The cause of recessions isn't "insufficient aggregate demand" as there are always needs and wishes that aren't met. The problem is instead that factors of production have been wasted through malinvestments, so that people cannot offer the goods and services needed to buy the goods and services they want. Demand is in other words lower because supply is also lower. And the reason supply is falling is because factors of production aren't used because they have been diverted to malinvestments.
But while people have increased difficulty to afford the things they want, the increased amount of unused factors of production also means that entrepreneurs will have more means at their disposal to satisfy whatever desires people can still afford to meet, thus to some extent counteracting the effects of lower production of other goods. And once there is a more general economic upswing, those astute entrepreneurs that acted during the slump will still have those extra factors and make it easier to for them to expand than if they had started their businesses during booms when there are shortages of workers and capital goods.
It can be argued whether really recessions are a better time to start businesses as the article claims. But clearly it is not as difficult as Keynesian analysis would suggest, and the explanation for this can be found using Austrian analysis.