Thursday, June 24, 2010

It's The Jobs Stupid!

Take a look at this chart:

Courtesy Investor's Business Daily

The deep red hook is the current jobs recession. Why, after 29 months is it not turning up like times gone by?  It's simple - businesses are scared stiff.  First, being business people, they know that the huge deficits being piled up are going to have to get paid somehow...either massive tax increases or rampant inflation; either way, the already anemic credit market will get further squeezed as interest rates go up.
Second, they are now starting to understand what is inside the abortion of Obama"care:" huge costs on employers (for you folks in Washington, that's who makes the jobs). Third, they know that passage of the cap and trade legislation in Washington will add huge costs to transit and energy.  Fourth, they don't know what's coming with the financial "overhaul" bill, but they suspect...given the track record...that it will only make lending even more expensive and problematic.  Fifth, they look to the end of the year and see the Bush tax cuts expiring and they realize that personal income tax rates are going up significantly.  And finally, they look at the leadership in Washington that everyday demonizes private industry and worry that their industry will be targeted next.

November can't get here soon enough.

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