People forget what that world was like. I honestly believe that some of them think we'd all be rich and jobs would be sprouting like mushrooms in a rain forest if only that Bad Old Government would just die a well deserved death. The truth is, we have the lowest taxes in a generation, the highest unemployment in a generation and (this will really surprise you I'm sure) the highest corporate cash on hand since 1952.Because you know what you need to create demand? The wages to buy things. Corporations are sitting on their money. They're not investing in new employees and expanding production because there's not the demand to justify it. What the corporations don't get is that the reason there's not the demand is because your average American homeowner was buying stuff off his equity line on his house, and that's gone for good. Credit from the banks is gone for good. Wages have sucked for decades. There's no extra money to go buy new stuff.
You see, corporations being awash in money does not mean they will go out and suddenly start massive hiring and solve all our economic woes. Why? Demand, that other part of the phrase "supply and demand." A generation or more of Americans have been told that supply side economics will bring us all prosperity, but it isn't true. Over the last three decades we have seen little if any real growth in wages among anyone who is not in the top 5% of earnings.
The rich got obscenely rich until the discrepancy between the wealth held by the upper 1% of Americans and everyone else has grown to its greatest level since -- well since Hoover was alive. That's what "supply side" economics (tax cuts, deregulation, relaxation or eradication of labor and worker safety laws) has brought us.
Why? Because feeding the supply side of the economic engine is not sustainable unless you also feed the demand side of the equation. Under republican policies we rejected any efforts to increase demand and promote jobs. We relied solely on the "free market" just like our ancestors back in the Gilded Age of Financial panics and depressions. What do you know. The free market doesn't always magically create demand.
All supply-side Reganomics got us was a deflationary death spiral, folks. All supply: no demand.
Wouldn't you think a lot of uncertainty about the direction of the country is playing into this as well? We have Cap & Trade, HCR, Immigration Reform, FinReg, etc.
ReplyDeleteThis creates a lot of uncertainty within a company and will cause them to be more conservative, on top of the terrible condition of the economy.