ICYMI: “Where Are the New Jobs”

August 25, 2010

In today’s RealClearPolitics, John Stossel looks at why the economy isn’t recovering.

“Corporate profits are soaring. Companies are sitting on billions of dollars of cash. And still, they’ve yet to amp up hiring or make major investments.”

So writes The Washington Post about the recession’s stubborn refusal to go away. The statisticians at the National Bureau of Economic Research declared the Great Recession over — but tell that to people who can’t find jobs. Today, businesses replace equipment and inventory, but they are reluctant to hire new workers. Investment that does occur aims at replacing the use of labor by adopting advanced technology. In a growing economy, that’s a sign of progress. Freed-up workers are then available for new projects. But lately, those new projects aren’t being launched.

Why isn’t the economy recovering? After previous recessions, unemployment didn’t get stuck at close to 10 percent. If left alone, the economy can and does heal itself, as the mistakes of the previous inflationary boom are corrected.

The problem today is that the economy is not being left alone. Instead, it is haunted by uncertainty on a hundred fronts. When rules are unintelligible and unpredictable, when new workers are potential threats because of Labor Department regulations, businesses have little confidence to hire.

In at least three big areas — health insurance, financial regulation and taxes — no one can know what will happen.

[Economist and historian Robert] Higgs says: “Unless the government acts soon to resolve the looming uncertainties about the half-dozen greatest threats of policy harm to business, investors will remain for the most part on the sideline … consuming wealth that might otherwise have been invested.”

Click here to read the entire article.

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