Let’s put this in terms that even an economics professor can understand:
Why is the recovery so anemic? Why is the employment-labor force ratio hovering around 58 ½ percent, instead of 62 ½ percent as it was until around 2008? In other words, why are we 9 or 10 million jobs behind where we should be if the same proportion of the workforce were employed as was normal until just 5 years ago? Why is it that, despite the Fed giving away money and loans available at the lowest rates in history, companies are not taking risks or expanding jobs here?
Back in late 2008 and early 2009, in an economic hailstorm, when the job creators in the private sector hunkered down awaiting the initiatives of the incoming Obama Administration, they expected tangible steps to jumpstart the private economy. After all, that’s where jobs are created. What did they get? The Administration’s first priority was health care reform that created immense uncertainty that lasts to this day – excepting only the absolute certainty that labor costs would increase. Added to that were new reporting and compliance costs in other areas of endeavor, so that enterprises could “prove” to the government’s satisfaction that they were not violating various laws and regulations. Added to that were measures that gave preferences to our most inefficient industries, whether in the form of wealth transfers from shareholders and investors to the ossified automobile industry, or from all taxpayers to the incredibly inefficient solar and wind industries peopled with Administration cronies. And did we forget the stimulus package trumpeted as “infrastructure” that was no such thing? To top that off, the President dished out some serious demagoguery over the airwaves against “wealthy fatcats” – never mind that milllions of small business owners qualify as “the wealthy” in his lexicon.
Despite incredibly low interest rates, the risk-takers aren’t buying. If you are the CEO of a Fortune 500 concern, are you going to gear up to hire more Americans and suffer more mandates – not just the ones you know about, but the ones you cannot yet imagine? Not likely. The Fortune 500 companies aren’t borrowing, and if they are, they are acting rationally by investing overseas. And they are sitting on wads of cash, much of which they cannot even repatriate to the U.S. in the form of dividends to U.S. shareholders. If you are the owner of a small company, are you going to take risks by expanding? No, your first priority is to cut overhead, not increase it; your second priority is to stay under the 50-employee limit so you don’t run into the Affordable Care Act.
There, does that explain it?
After four years, it’s time — at long last, and having been safely re-elected – for the President to own the consequences of his foolhardiness and (we hope) to chart a new path. Who’ll give odds on that?