Although according to economists we’re technically out of the great recession, the economy continues to creep along sluggishly, and unemployment still hovers near double digits. Businesses have plenty of money, so why aren’t they hiring?
The Washington Post reported last year that American non-financial businesses are sitting on a combined 1.8 trillion dollars of disposable income, yet hiring is low and jobless claims continue to increase. USA Today recently reported on big business profits:
Are these businesses run by cold, heartless moneygrubbing brutes who are doing this just to punish workers? Is their scrooge-like greed so great they cannot bear to part with any money?
Stephen Carter teaches law and ethics at Yale, and he had a conversation with a businessman recently while traveling that helps make sense of what’s going on:
See, the reason hiring and expansion of business – and thus the economy – is slow right now is that the uncertainty of the Obama administration’s plans and actions for the future has not gone away.
Some hoped that the 2010 elections that broke the supermajorities the Democrats held in Congress would ease concerns of business owners, but the Obama administration has repeatedly demonstrated that they’re willing to bypass Congress and use agency regulations to apply greater burdens on business.
The Obama administration is a bit confused about why this hiring is not taking place. The last round of “Quantitative Easing” (QE) was designed to inject money into the economy for business owners to hire and expand their businesses with.
The problem is that businesses were not short on cash; they are short on confidence. If the future holds greater costs, then a business cannot increase their expenses. Without being comfortable that long-term planning won’t collapse under sudden regulatory costs, it’s smarter and safer to be cautious and work smaller.
So all QE2 did was trigger inflation and lower the value of the dollar, hurting the economy even further by injecting cash into the system that had no actual value.
Until the Obama administration demonstrates through tangible action that they are not hostile to business, or leaves office, things are not likely to change for big business in America. That’s not good news for any of us.
It is very important for people to understand that the United States of America and no country around the world can devalue its way to prosperity
Read more at the Washington Examiner: http://www.washingtonexaminer.com/blogs/opinion-zone/2011/05/high-cost-uncertainty#ixzz1NcFT7Ygz
