Agree 100%. The follow-on problem is that once you are owed a not-insignificant amount of money by one of these clowns, the temptation is to keep them happy and avoid conflict in the hopes you'll get paid out without having to resort to litigation.
I once worked for a few months with someone before I watched him not pay one of our contractors for no reason. When I raised the issue, he asked me if I'd be willing to take a 50% pay cut - on the work I'd already done for him.
Yes, I've seen this happen at a couple of small businesses that I've been involved with. The trick is to have regular milestone payments, and if they miss them, work stops. (It'll annoy idiots like this to the point where they won't hire you, but that's kind of the point...)
I once worked for a few months with someone before I watched him not pay one of our contractors for no reason. When I raised the issue, he asked me if I'd be willing to take a 50% pay cut - on the work I'd already done for him.