There Is No There There
Zero jobs last month — a net change of zero job growth? It was just announced that last month’s unemployment is still above 9% — despite the nearly five trillion dollars in Keynesian pump-priming, the near zero interest rates, the expanded unemployment and food stamp support, and the government takeovers and subsidies of businesses. There is a scary sort of deer-in-the-headlights look about Obama and Biden that is quite disturbing, as if they are thinking, “This was not supposed to happened to us. Geithner, Goolsbee, Orszag, Romer, Summers assured us that all this borrowing would turn things around — but they are all gone or leaving, so now we are alone? What to do? Hmmm. More them/us class warfare rhetoric? Embrace more of the California/Illinois/New York blue-state model? More European Union emulation? A national high-speed rail jobs program? Bring back Van Jones and “millions of green jobs”? Borrow another $5 trillion? Maybe negative interest rates? Seventy-five million on food stamps? Four years of unemployment insurance? A new Department of Jobs? Call in Jimmy Carter for advice about 1979? $100 billion more in green subsidies to progressive caring companies? Take over Ford? Another speech from Buffett? Unleash the Congressional Black Caucus?”
Two Sorts of Depression
Job growth is as often driven by psychological impulses on the part of employers as actual facts on the ground, given the requirement of a business that it must plan for the unknown future better than do its rivals. While business people don’t read every economic report or follow every political psychodrama, they do watch for trends, know hourly the pulse of their businesses, and talk to colleagues and rivals to form general opinions about business climate and government attitudes and future policies. I’ve been speaking a lot lately to civic groups, a few firms, investors, large and small farmers and farm suppliers, and individual employers. And the following would fairly sum up their current state of mind.
The Great Sit-Down Strike
In the last 30 months, the Obama administration has created a psychological landscape that finally just seemed, whether fairly or not, too hostile to most employers to risk new hiring and buying. Each act, in and of itself, was irrelevant. Together they are proving catastrophic and doing the near impossible of turning a brief recovery into another recession.
Here is the lament I heard: the near $5 trillion in borrowing in just three years, the radical growth in the size of the federal government and its regulatory zeal, ObamaCare, the Boeing plant closure threat, the green jobs sweet-heart deals and Van Jones-like “Millions of Green Jobs” nonsense, the vast expansion in food stamps and unemployment pay-outs, the reversal of the Chrysler creditors, politically driven interference in the car industry, the failed efforts to get card check and cap and trade, the moratoria on new drilling in the Gulf, the general antipathy to new fossil fuel exploitation coupled with new finds of vast new reserves, the new financial regulations, an aggressive EPA oblivious to the effects of its advocacy on jobs, the threatened close-down of energy plants, the support for idling thousands of acres of irrigated farmland due to environmental regulations, the constant talk of higher taxes, the needlessly provocative rhetoric of “fat cat”, “millionaires and billionaires,” “corporate jet owners,” etc. juxtaposed, in hypocritical fashion, to Martha’s Vineyard, Costa del Sol, and Vail First Family getaways — all of these isolated strains finally are becoming a harrowing opera to business people.
Despite enormous opportunity for many cash-rich firms to take advantage of the down cycles (low interest, plentiful potential employees, discounted prices, etc.), they are taking a pass, almost as if to collectively sigh, “This bunch doesn’t like me much and I’m going to hunker down, hoard my cash, and sit out the next year and a half until they are gone.” And the administration’s efforts to counteract these symbols and impressions by courting a high-profile, hyper-capitalist Warren Buffett, or a GE CEO Jeffrey Immelt have proven even more ironic: the former calls for higher taxes that his firms seek to avoid, or targets his post-mortem wealth to (more efficient?) private foundations that rob the Treasury of billions in lost inheritance taxes, or knows higher taxes won’t much matter to his tens of billions in net worth; the latter’s firm paid no 2010 U.S. income taxes on many of its profits and outsourced jobs overseas. And when Obama is told by his base to “get tough,” “get angry,” and “double-down” on the EU-like statist policies and Chicago-organizing, get-in-their-face rhetoric that got him into this jobs stagnation mess, should we laugh or cry? Get furious and demand — what? Snarl and scream about the right to go “big” from $1.6 trillion to $2 trillion in annual borrowing?
Highly publicized visits to bankrupt subsidized green plants, blaming George Bush, new racially-driven invective from some congresspeople against the Tea Party, sermons about the sensitivities of illegal aliens, politically-correct tutorials about Islam — all that might rally the base or in isolation be understandable, but again fairly or not, such liberal rhetoric simply adds to the problem from yet another dimension: confirming perceptions that employers are about the last people in the world that this administration is worried about.