It’s the government, stupid:
…we have a real problem. Businesses are reluctant to hire due to two hard years behind and concern about the future policies of an ideologically driven government that is clearly not pro-business ahead. Business conditions in 2010 are a little better than 2009, but nowhere near the prior levels that might encourage a more aggressive view. The three major forces in policymaking, President Obama, Harry Reid, and Nancy Pelosi, continue to hold office and make no secret that they desire to advance their agenda with or without regard to the Constitution. They and their anti-business orientation will remain in place for at least two more years. On the other side of the aisle, most of the senior Republicans who were so ineffective over the past decade will retain the same ability to compromise away government restraint for the next two years. The November elections may have helped the situation, but the Republicans have a long, long way to go to prove they are up to the generational level change it will take to turn things around. Worse, it is becoming easier to accept the possibility that the corruption between all the special interests, including corporate, and government is just too firmly entrenched and too lucrative to break apart at all. If that is true, nothing changes until an ultimate collapse.
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It’s so simple, and yet beyond the grasp of the Keynesians with their macro this and aggregate that and non-existent or negative stimuli. Buttheads.
Keynesians need to be put to work in the salt mines. That’d learn ’em.
It wouldn’t be half as bad if modern Keynesianism could identify either true infrastructure or where the actual worker performing the manufacturing work was located. They actually do profess that any government spending is good Keynesian spending by definition. Paying a Chinese factory to built widgets that are installed in the US – but aren’t infrastructure – is a flabbergasting pile of fail.
I don’t know much about Keynesianism and all.. but I think that small businesses will hold on tight to their budget in search of a faster, better and cheaper alternative for now — as uncertainties still looms.
We need to shift the culture in a more open, democratic direction. Increasingly authoritarian government is only part of the problem. Some government growth — not all — is a response to things like the growth of megacorporations embracing business practices that are harmful to the larger community. I personally find it difficult to condemn the little guys in labor unions who just want to put food on the table and keep a roof over their families’ heads when megacorporate CEOs decide to fire thousands just to improve the quarterly bottom line. Those little guys might not understand all that is going on, but they have a right to live their lives in reasonable manners.
Chuck,
I won’t disagree that an unholy alliance between mega-corporations and a bloated government isn’t also part of the problem. However, I do take exception to, “…when megacorporate CEOs decide to fire thousands just to improve the quarterly bottom line.” It’s the CEO’s job (responsibility to his shareholders) to improve the bottomline. Not doing so would be to abdicate that responsibility. We can argue all day long on whether or not laying off workers is the best policy to improve profits in any given situation, but not doing so for strictly “humanitarian” reasons is a non-starter.
“…but they have a right to live their lives in reasonable manners.” Says who? Where does that “right” come from? Who gets to decide what’s “reasonable?” Thankfully, the right to a “living wage” does not exist in this country.
“Thankfully, the right to a ‘living wage’ does not exist in this country.”
If only our government believed that; their recent and continuing extension of unemployment benefits shows their hand in that regard.
I’m not sure which bugs me more: the continual extensions, or the fact that the most of the web pages devoted to the question “what to do when your unemployment runs out” start with MORE government aid programs, and don’t talk about getting a job until more than half-way through.
Those in the regime regularly demonstrate gross ignorance of basic free market mechanisms and contract law. On top of which a healthy free market is contrary to their objectives of themselves in control of us. So we should expect them to mistrust and undermine the free market in favor of the simplistic and wrong command economy models they understand.
I continue to be thoroughly dubious about the handwaving around “special interests”.
Because, well, I’ve seen precious little evidence of it being important in the past few years. (Indeed, the only thing resembling a “special interest” with serious power that I’ve found is the AARP, and if “old people” are a “special interest” rather than just “part of the Republic”, the term’s lost a lot of power.)
The rest of that analysis, however, seems reasonably sound.
Chuck: Which “practices” did you have in mind? And who gets to decide the difference between “harmful to the larger community” (whatever that means!) and “I don’t like it”?
Because most of the time I see people using language like that, they’re not making a plausible distinction between the two reasons for disapproval. Further, “democractic” decisions like that tend towards capricious, unpredictable, and despotic, none of which are good for either the Republic or for growth.
(Look at all the people who dislike Wal-Mart… for what boil down to purely class-based reasons, despite all the immense, demonstrable economic benefit Wal-Mart’s prices provide.
And look at all the populist movements around “Made in America” – I don’t want to give them plenary power around economic decisions, because they’re horribly, destructively wrong in their basic assumptions! Hell, a lot of them somehow have the idea that American manufacturing is “disappearing”, despite the numbers saying the opposite…)
I am fairly sure who is responsible, at least in part, for the current difficulties. It’s an unholy alliance of several groups who have been, and still are, getting up to things that would see anyone else sent to jail.
Irresponsible (and borderline criminal) people who were prepared to lie on mortgage application forms in order to get mortgages they never should have been given. Mortgage brokers who wanted to inflate their commissions and gave the borrowers to do just that. Lending authorisers who carefully failed to properly inspect the applications because they were after huge bonuses. Higher managers who deliberately sliced and diced these dodgy loans in order to sell them (for huge bonuses – is a pattern developing here?) to other bankers as securities. Bonus-chasing “investment bankers” who carefully failed to look over these “securities” because the dodgy ones offered higher interest.
The real trouble is that the entire financial industry is completely devoid of anything resembling a sense of ethics. Gordon Gekko is alive and well – and so are millions of his clones. America, Britain and the rest of the world all need the banking system to be completely dismantled and remade – and all the people who have made fortunes by wrecking the world’s economy to be bankrupted and thrown out on the street with nothing except the (cheap) clothes on their backs. In winter. At least that, as a minimum. Personally, I think hanging is too good for many of them.
You forgot regulations encouraging banks to not discriminate in who they lent to, and the semi-governmental fanny and freddy buying up the bad mortages. Then fanny and freddy selling the mortgages off as mortgage backed securities with fraudulent ratings.
Keynesians need to be put to work in the salt mines. That’d learn ‘em.
Can’t do it. Commissar Bloomberg has outlawed salt and all the mines have closed.
Keynesians need to be put to work in the salt mines. That’d learn ‘em.
Can’t do it. Commissar Bloomberg has outlawed salt and all the mines have closed.
Then in classic government make work fashion, put them to work digging ditches and filling them in. That, or have them break big rocks into small rocks while suitably dressed in stripped uniforms.
So I need some code cutting over the next two months, do I a) hire some locals here for $7 – $10k a month, or some Indian guys for $2.1k a month?
It’s not hard to work out. The recession is still hitting client spends and I need to maximize margins for the people I do pay.
Short of paying me to hire people in the US there is almost no government policy that could help that…
Oh and until the banks actually start lending money to small business again I am agog wait to hear who is actually picking up the slack caused by the banks not lending small business money.
While we’re on e subject, how about mandating payment terms so I can stop waiting 90+ days for multinationals to get around to paying my invoices…
All,
I was in the hospital being treated for an arm injury yesterday. That’s why I haven’t commented until. The arm is healing nicely.
Steve,
A corporate CEO has many responsibilities that go beyond a quarterly bottom line. It’s possible to boost the quarterly bottom line in ways that harm the company in the medium to long term. There’s been too much of that in our lifetimes. That helps explain the current economic mess. And the right to live their own lives? How about the Declaration of Independence? You know — life, liberty and pursuit of happiness. Seriously, countries that don’t honor rights like that face real rebellions for understandable reasons. Think 18th century France for example. England learned from that example and adopted more moderate measures in the 19th Century that worked out better for all concerned.
Sigivild,
What harmful practices? Let me give you one example. I learned awhile ago that Sears got rid of large numbers of employees over 50 to save money in various ways. They discovered that they got rid of a great deal of corporate knowledge in doing that and harmed Sears. They voluntarily corrected their problems by going out and hiring back large numbers of the over 50 crowd.
Contemporary business leaders seem to need a more well rounded education so that they are at least aware of things outside their specialties.
Enough for now.
Peterh,
“You forgot regulations encouraging banks to not discriminate in who they lent to”
Except, they weren’t, at least not since 1995 when the regulations were tightened up to allow banks to focus purely on the quality of the loans…
Which does make me wonder why it’s the loans from 2004/5/6ish that were the really really bad ones…