Jeff Goldsmith on Hard Times, cont.

Unemployment has gone sideways for thirteen months at 9.5%, according to the June employment report.  If you add to the 14.6 million “officially” out of work, meaning unemployed and looking to the 8.6 million working part time who need to work fulltime, plus the 2.6 million BLS calls “marginally attached”, meaning mostly discouraged workers, there are almost 26 million unemployed people here in the “land of opportunity”.

Young people haven’t seen a labor market like this in three generations- 25.7% “officially” unemployed.  And in the “why bother” department, almost a million people dropped out of the labor market in the last two months.  A lot of Millennials will have spent Barack Obama’s entire term living in their parents’ basements, or tripling up with friends in substandard accommodations waiting for a break.

Sad to say, there’s a big political fight about what to do about it.  The Democrats’ huge stimulus program ($787 billion) from last year hasn’t done the job, and the NY Times, (god love ‘em), wants us to borrow more from the Chinese and prime the pump.http://www.nytimes.com/2010/07/04/opinion/04sun1.html?hp.  That isn’t going to get things going.  Our government isn’t going to get real job creation to happen simply by digging the hole we’re in deeper with someone else’s money.  If government spends money, they basically have to take it away from individuals and businesses, or borrow it abroad, and guess who repays it:  the young people reading this blog.

Want to hear a scary story?  I talked last week with senior execs of two huge multi-national corporations with, between them, almost $70 billion in the “bank”- that is, spendable capital.  Are they spending it here in the US?  Nope.  Because they know that taxes here are going up sharply, e.g. 60%, on investment, guess where they’re going to invest it?  In Europe and Asia.  So European and Asian young people will end up getting hired in their research labs and new factories.  Don’t get angry at them; it’s just business. They will be fired by their shareholders for doing otherwise. We have some of the highest taxes on corporations in the world, and now will among the highest taxes on investors who supply them capital.

Businesses didn’t cause this recession, but they are handy political whipping boys for people who want to permanently expand government’s role in the economy. (This recession was caused by people taking on debts they could not repay, and then financial institutions repackaging and selling all those bad debts).

Small businesses, who account for most of the job growth in the US, are also going to have to actually earn money in order to PAY those higher taxes in the first place.  So basically, their owners are trying to get back to paying themselves to come to work (47% of small businesses are losing money!), so they aren’t going to be creating jobs.

The Economist worried about all this in its last issue and basically concluded that President Obama and his crew mean well, but haven’t a clue about how jobs or wealth is created.  If they cannot figure it out, they’re going to be joining the unemployment lines  themselves. 

Until the powers that be in Washington figure out that it’s the hostile business climate  that’s prolonging this endless recession, there aren’t going to be a lot of new jobs for anyone, including you.  And they are going to end up being the powers that WERE…