Job growth is as often driven by psychological impulses on the part of employers as actual facts on the ground, given the requirement of a business that it must plan for the unknown future better than do its rivals. While business people don’t read every economic report or follow every political psychodrama, they do watch for trends, know hourly the pulse of their businesses, and talk to colleagues and rivals to form general opinions about business climate and government attitudes and future policies.So what do they see?
Here is the lament I heard: the near $5 trillion in borrowing in just three years, the radical growth in the size of the federal government and its regulatory zeal, ObamaCare, the Boeing plant closure threat, the green jobs sweet-heart deals and Van Jones-like “Millions of Green Jobs” nonsense, the vast expansion in food stamps and unemployment pay-outs, the reversal of the Chrysler creditors, politically driven interference in the car industry, the failed efforts to get card check and cap and trade, the moratoria on new drilling in the Gulf, the general antipathy to new fossil fuel exploitation coupled with new finds of vast new reserves, the new financial regulations, an aggressive EPA oblivious to the effects of its advocacy on jobs, the threatened close-down of energy plants, the support for idling thousands of acres of irrigated farmland due to environmental regulations, the constant talk of higher taxes, the needlessly provocative rhetoric of “fat cat”, “millionaires and billionaires,” “corporate jet owners,” etc. juxtaposed, in hypocritical fashion, to Martha’s Vineyard, Costa del Sol, and Vail First Family getaways — all of these isolated strains finally are becoming a harrowing opera to business people.
And the result?
Despite enormous opportunity for many cash-rich firms to take advantage of the down cycles (low interest, plentiful potential employees, discounted prices, etc.), they are taking a pass, almost as if to collectively sigh, “This bunch doesn’t like me much and I’m going to hunker down, hoard my cash, and sit out the next year and a half until they are gone.”I'm convinced that Victor Davis Hanson, the author of this piece, is right. What I see happening in the tiny corner of the business world that I occupy comports with this analysis, pretty much completely. Especially if you own your own company, what is the incentive to expand your operations, especially in an environment that feels like Buenos Aires in 1949? Why would you put your cash out there, have the government take it away, and then give it to Solyndra?
If the president wants to announce a job program that could turn things around on Thursday, about the best thing he could do is repudiate everything his administration has attempted in the past 2 1/2 years.