George Will explains why confidence is so important and how uncertainty about government intervention can lead to disarray in the private sector:
Today’s evidence suggesting sluggish job creation might give pause to a less confident person than Obama. But pauses are not in his repertoire of governance. Instead, yielding to what must be a metabolic urge toward statism, he says the Gulf of Mexico oil spill is yet another reason for yet another explosion of government’s control of economic life. The spill supposedly makes it urgent to adopt a large tax increase in the form of cap-and-trade energy legislation, which also is climate legislation, the primary purpose of which is, or once was, to combat global warming, such as it is.
At any time, some economic conditions would be better than others, but the more certainty about conditions the better. Today investors and employers are certain that uncertainties are multiplying.
They are uncertain about when interest rates will rise, and by how much. They do not know how badly the economy will be burdened by the expiration, approximately 200 days from now, of the Bush tax cuts for high earners — a.k.a. investors and employers. They know the costs of Obamacare will be higher than was advertised, but not how much higher. They do not know the potential costs of cap-and-trade and other energy policies. They do not know whether “card check” — abolition of the right of secret-ballot elections in unionization decisions — will pass, or how much the economy will be injured by making unions more muscular. They do not know how the functioning of the financial sector will be altered and impeded by the many new regulatory rules and agencies created by the financial reform legislation. The economy has become dependent on government stimulation of demand, and no one knows what will happen as the stimulus spending wanes.
Uncertainty is a consequence of hyperkinetic government, which is a consequence of the governmental confidence that is a consequence of progressivism. The premise of progressivism is that all will be well if enough power is concentrated in Washington, and enough Washington power is concentrated in the executive branch, and enough really clever experts are concentrated in the executive branch. This is why the government’s perceived impotence concerning the gulf oil spill is subversive of the Obama administration’s master narrative.
Source: Washington Post
As long as our governments continue to engage in games of numbers tampering, double speak and flat out lies, the private sector will remain on edge.
Business owners, especially small businesses who are responsible for 90% of the employment in the US, don’t know what to expect. Thus, they cannot take risks like expanding product lines or production, hiring more employees, or taking on loans.
Unlike Federal and State governments, businesses do not have the ability to print endless amounts of money with no intention of ever paying that money back in real terms. Borrowing by small business is backed by, usually, the owner’s personal assets. And very few are willing to stake their life’s work on a promise or a hope that change is coming.
Another Tunguska event would solve the problem.
CoPaul could you steer it over D.C.?ments…..
Is any of it really going to matter post callapse? The 53/47 vote to give the EPA all the power is the final steak thru the heart of small and large business.
Bullets, Beans and Bandaids will rule the days. Get ready to lock and load, judgement day is withinÂ weeks, maybe months.
The ball of shit rolling out of washington is moving so fast now nothing can stop it except a huge wall of Patriot’s.Â
yo Pat 1 ……Â ove to read your comments but i must correct you on one thing …..Â Â it”s stake , not steak !Â Â Â Â <eg>
Thanks for theÂ correction Brian.Â I know I’m lacking in the spelling and grammer department. Its that public school thing and the lack of higher education. Most get my point though.
Yesterday I heard a comment from a spokeswoman from the Retailer’s Association.Â She said retail sales were down 1.2% because “with the contraction of credit that people can no longer spend beyond their means and that is what fuels our economy”.Â That pretty much explains the whole mess we are currently experiencing……it is all one big phony bubble.Â All due respect to George Will, but there is plenty of blame to go around on both sides of the isle.Â Has the Obama administration made it worse; absolutely, but W was asleep at the wheel for eight years except when it came to making his buddies in the oil and military industrial complex more rich.Â I do agree with Patriot one in that the collapse could come any week or month.Â I do not think there are enough presses to monetize us out of this mess.