Economic Stagnation Explained, Why Private Businesses Aren't Hiring

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    May 27, 2011 11:08 PM GMT
    http://www.bloomberg.com/news/2011-05-26/carter-economic-stagnation-explained-at-30-000-feet.html

    The man in the aisle seat is trying to tell me why he refuses to hire anybody. His business is successful, he says, as the 737 cruises smoothly eastward. Demand for his product is up. But he still won’t hire.

    “Why not?”

    “Because I don’t know how much it will cost,” he explains. “How can I hire new workers today, when I don’t know how much they will cost me tomorrow?”
    He’s referring not to wages, but to regulation: He has no way of telling what new rules will go into effect when. His business, although it covers several states, operates on low margins. He can’t afford to take the chance of losing what little profit there is to the next round of regulatory changes. And so he’s hiring nobody until he has some certainty about cost.

    It’s a little odd to be having this conversation as the news media keep insisting that private employment is picking up. But as economists have pointed out to all who will listen, the only real change is that the rate of layoffs has slowed. Fewer than one of six small businesses added jobs last year, and not many more expect to do so this year. The private sector is creating no more new jobs than it was a year ago; the man in the aisle seat is trying to tell me why.
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    May 27, 2011 11:44 PM GMT
    I also read this. I think key points are in the last few paragraphs:

    On the way to my connection, I ponder. As an academic with an interest in policy, I tend to see businesses as abstractions, fitting into a theory or a data set. Most policy makers do the same. We rarely encounter the simple human face of the less- than-giant businesses we constantly extol. And when they refuse to hire, we would often rather go on television and call them greedy than sit and talk to them about their challenges.

    Recessions have complex causes, but, as the man on the aisle reminded me, we do nothing to make things better when the companies on which we rely see Washington as adversary rather than partner.

    (Stephen L. Carter, a Bloomberg View columnist, is a professor of law at Yale University. The opinions expressed are his own.)

    -----------------------

    Calling businesses greedy for not wanting to hire has been a common theme by the left on RJ. Also of note is from their discussion of backgrounds, the ones calling the business owners greedy have NEVER had to make a payroll.
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    May 27, 2011 11:51 PM GMT
    socalfitness saidI also read this. I think key points are in the last few paragraphs:

    On the way to my connection, I ponder. As an academic with an interest in policy, I tend to see businesses as abstractions, fitting into a theory or a data set. Most policy makers do the same. We rarely encounter the simple human face of the less- than-giant businesses we constantly extol. And when they refuse to hire, we would often rather go on television and call them greedy than sit and talk to them about their challenges.

    Recessions have complex causes, but, as the man on the aisle reminded me, we do nothing to make things better when the companies on which we rely see Washington as adversary rather than partner.

    (Stephen L. Carter, a Bloomberg View columnist, is a professor of law at Yale University. The opinions expressed are his own.)

    -----------------------

    Calling businesses greedy for not wanting to hire has been a common theme by the left on RJ. Also of note is from their discussion of backgrounds, the ones calling the business owners greedy have NEVER had to make a payroll.


    On the plus side I think, it is increasingly easier to start a business - and many people do - which is an empowering trend in itself. I think for this reason we'll start seeing more economic liberals. Of course, I don't quite get California. What is frustrating at times is that at least to me, it seems obvious what governments can do to promote economic growth (ie less and promote transparency) and yet, their tendency, irrespective of party seems to be to do the exact opposite.
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    May 28, 2011 12:03 AM GMT
    Excuses, excuses...

    Perhaps there is some truth to this article for some businesses in some sectors that are relatively small.

    It does not apply to the businesses (actually, multi-billion dollar, transnational, "American" corporations) that are usually the object of scorn by the left.

    Your own love for such corporations and their interests is actually in complete conflict with your alleged love of the "free" market and small businesses since the rise of multinationals has seen the decline of competition and decrease in ability of small businesses to compete.
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    May 28, 2011 12:13 AM GMT
    Christian73 saidExcuses, excuses...

    Perhaps there is some truth to this article for some businesses in some sectors that are relatively small.

    It does not apply to the businesses (actually, multi-billion dollar, transnational, "American" corporations) that are usually the object of scorn by the left.

    Your own love for such corporations and their interests is actually in complete conflict with your alleged love of the "free" market and small businesses since the rise of multinationals has seen the decline of competition and decrease in ability of small businesses to compete.


    My experience has been quite the contrary. It's quite a bit more easy to start a new business and capital requirements have either dropped or the ability to find capital has risen with barriers to entry continually falling.

    Excuses? No - the problem that exists here - I think is pretty pervasive and consistent to any that are on the bubble of hiring (my business being one of them as we look at building out in the US).
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    May 28, 2011 1:29 AM GMT
    riddler78 said
    Christian73 saidExcuses, excuses...

    Perhaps there is some truth to this article for some businesses in some sectors that are relatively small.

    It does not apply to the businesses (actually, multi-billion dollar, transnational, "American" corporations) that are usually the object of scorn by the left.

    Your own love for such corporations and their interests is actually in complete conflict with your alleged love of the "free" market and small businesses since the rise of multinationals has seen the decline of competition and decrease in ability of small businesses to compete.


    My experience has been quite the contrary. It's quite a bit more easy to start a new business and capital requirements have either dropped or the ability to find capital has risen with barriers to entry continually falling.

    Excuses? No - the problem that exists here - I think is pretty pervasive and consistent to any that are on the bubble of hiring (my business being one of them as we look at building out in the US).


    Of course, you believe it's "pervasive". The reality is that we've heard for two years now that some mythical regulation was about to descend on businesses, yet, no new legislation has been passed or even proposed since ACA passed nearly a year ago. So it's pretty clear to anyone paying attention that this has become the latest in a long line of increasingly pathetic excuses to justify greed and misanthropy. You're not an American, so it's quite irrelevant what you think. But for those on here who are and still support such continued and increasingly laughable "arguments", it's not only laughable, it's unpatriotic.

    Union power is at its weakest in 80 years.

    Taxes are effectively the lowest they've been in 50 years.

    Employee rights demolished.

    Costs of benefits increasingly foisted on employees rather than employers.

    Short of turning the US into a banana republic, what's the big scary "regulation" on the horizon?

    Please... tell your story to someone uninformed enough to believe it. icon_rolleyes.gif
  • creature

    Posts: 5197

    May 28, 2011 1:46 AM GMT
    Don't forget that mythical self-regulation mocktwinkie believes the market performs to weed out bad business.

    http://www.huffingtonpost.com/2010/04/05/west-virginia-coal-mine-e_n_526151.html

    So why is Massey Energy Co and others who have a long list of violations which endanger their employees continuing to thrive?
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    May 28, 2011 2:34 AM GMT
    Christian73 said
    riddler78 said
    Christian73 saidExcuses, excuses...

    Perhaps there is some truth to this article for some businesses in some sectors that are relatively small.

    It does not apply to the businesses (actually, multi-billion dollar, transnational, "American" corporations) that are usually the object of scorn by the left.

    Your own love for such corporations and their interests is actually in complete conflict with your alleged love of the "free" market and small businesses since the rise of multinationals has seen the decline of competition and decrease in ability of small businesses to compete.


    My experience has been quite the contrary. It's quite a bit more easy to start a new business and capital requirements have either dropped or the ability to find capital has risen with barriers to entry continually falling.

    Excuses? No - the problem that exists here - I think is pretty pervasive and consistent to any that are on the bubble of hiring (my business being one of them as we look at building out in the US).


    Of course, you believe it's "pervasive". The reality is that we've heard for two years now that some mythical regulation was about to descend on businesses, yet, no new legislation has been passed or even proposed since ACA passed nearly a year ago. So it's pretty clear to anyone paying attention that this has become the latest in a long line of increasingly pathetic excuses to justify greed and misanthropy. You're not an American, so it's quite irrelevant what you think. But for those on here who are and still support such continued and increasingly laughable "arguments", it's not only laughable, it's unpatriotic.

    Union power is at its weakest in 80 years.

    Taxes are effectively the lowest they've been in 50 years.

    Employee rights demolished.

    Costs of benefits increasingly foisted on employees rather than employers.

    Short of turning the US into a banana republic, what's the big scary "regulation" on the horizon?

    Please... tell your story to someone uninformed enough to believe it. icon_rolleyes.gif


    Given that I employ people in the US and drive a significant portion of sales through US clients (and am currently exploring several new businesses), you may not care what I think - but in the very least my views seem far more relevant than your own. You are more interested in partisan rants than actually, I dunno, employment. You note the advances in economic freedom but ignore the reality that equality of opportunity is the best it's been in the last 10 years than ever - and the policies you advocate seek to reverse that.

    What's truly laughable is that you claim I am "unpatriotic" when it's in my direct interest to hope that the US economy improves and remains a leader in the world - and yet you would make it more difficult to start a business, more difficult to hire employees and keep people poor through self serving policies that destroy value. As Oscar Wilde has noted, "patriotism is the virtue of the vicious".

    Banana republic? Have you ever been to a banana republic? Your ignorance on this topic is breathtaking - and what's worse, most damaging to those who would seek a better life for themselves and escape from poverty.
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    May 28, 2011 2:43 AM GMT
    creature saidDon't forget that mythical self-regulation mocktwinkie believes the market performs to weed out bad business.

    http://www.huffingtonpost.com/2010/04/05/west-virginia-coal-mine-e_n_526151.html

    So why is Massey Energy Co and others who have a long list of violations which endanger their employees continuing to thrive?


    Mythical self regulation? Why is the effective minimum wage often higher than the legal minimum wage during good economic times?

    I'm curious though - are you aware of the historical industry record on safety in areas like coal mining? Or is the significant improvements in safety despite massive increases in productivity just a coincidence?

    In case facts matter: http://www.msha.gov/mshainfo/factsheets/mshafct2.htm
    For example, the rate of coal mining deaths decreased from about .20 fatalities per 200,000 hours worked by miners (or one death per million production hours) in 1970 to about .07 fatalities in 1977 and an average of .03 fatalities for the 2001-2005 period.

    The metal and nonmetal mining death rate per 200,000 employee hours averaged .02 for the 2001-2005 period, compared to average yearly rates about seven times higher in the 1930s and three times as high in the 1950s.

    The year 2004 was the safest year in modern mining history, with a total of 55 coal and metal and nonmetal mining fatalities. There was an all-time low 23 coal mining fatalities in 2005, compared to the previous all-time coal industry low of 28 in 2002. During a period in 1992, from May 27 to July 14, the coal mining industry did not experience any fatal accidents while producing many million tons of coal--a period of rare length in mining history. There were 33 coal fatalities in 2007.

    The all-time low for metal and nonmetal mining fatalities was 26 in 2003 and 2006. There were 32 metal and nonmetal fatalities in 2007.
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    May 28, 2011 5:25 AM GMT
    riddler78 said
    Christian73 said
    riddler78 said
    Christian73 saidExcuses, excuses...

    Perhaps there is some truth to this article for some businesses in some sectors that are relatively small.

    It does not apply to the businesses (actually, multi-billion dollar, transnational, "American" corporations) that are usually the object of scorn by the left.

    Your own love for such corporations and their interests is actually in complete conflict with your alleged love of the "free" market and small businesses since the rise of multinationals has seen the decline of competition and decrease in ability of small businesses to compete.


    My experience has been quite the contrary. It's quite a bit more easy to start a new business and capital requirements have either dropped or the ability to find capital has risen with barriers to entry continually falling.

    Excuses? No - the problem that exists here - I think is pretty pervasive and consistent to any that are on the bubble of hiring (my business being one of them as we look at building out in the US).


    Of course, you believe it's "pervasive". The reality is that we've heard for two years now that some mythical regulation was about to descend on businesses, yet, no new legislation has been passed or even proposed since ACA passed nearly a year ago. So it's pretty clear to anyone paying attention that this has become the latest in a long line of increasingly pathetic excuses to justify greed and misanthropy. You're not an American, so it's quite irrelevant what you think. But for those on here who are and still support such continued and increasingly laughable "arguments", it's not only laughable, it's unpatriotic.

    Union power is at its weakest in 80 years.

    Taxes are effectively the lowest they've been in 50 years.

    Employee rights demolished.

    Costs of benefits increasingly foisted on employees rather than employers.

    Short of turning the US into a banana republic, what's the big scary "regulation" on the horizon?

    Please... tell your story to someone uninformed enough to believe it. icon_rolleyes.gif


    Given that I employ people in the US and drive a significant portion of sales through US clients (and am currently exploring several new businesses), you may not care what I think - but in the very least my views seem far more relevant than your own. You are more interested in partisan rants than actually, I dunno, employment. You note the advances in economic freedom but ignore the reality that equality of opportunity is the best it's been in the last 10 years than ever - and the policies you advocate seek to reverse that.

    What's truly laughable is that you claim I am "unpatriotic" when it's in my direct interest to hope that the US economy improves and remains a leader in the world - and yet you would make it more difficult to start a business, more difficult to hire employees and keep people poor through self serving policies that destroy value. As Oscar Wilde has noted, "patriotism is the virtue of the vicious".

    Banana republic? Have you ever been to a banana republic? Your ignorance on this topic is breathtaking - and what's worse, most damaging to those who would seek a better life for themselves and escape from poverty.


    Again, given that the last forty years have been an orgy of deregulation, nearly across every business, and there are no new regulations planned, your entire argument is specious.

    You cannot even cite a single regulation that will impact you or your businesses. Instead, you rely on tired platitudes that would embarrass even the Chicago School with their childish belief in free market economics.

    You claim "value destruction" in nearly every one of your threads but can't point to single law that destroys "value".

    And then there's the constant condescension that makes you seem both self-important and ridiculous at the same time.

    I'm glad your ability to excuse antisocial behavior in pursuit of "value creation" must help you sleep at night, comfortable in a socialist country where your every basic need is met, while you argue for an economic race to the bottom for everyone else.
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    May 28, 2011 5:45 AM GMT
    Christian73 saidAgain, given that the last forty years have been an orgy of deregulation, nearly across every business, and there are no new regulations planned, your entire argument is specious.

    You cannot even cite a single regulation that will impact you or your businesses. Instead, you rely on tired platitudes that would embarrass even the Chicago School with their childish belief in free market economics.

    You claim "value destruction" in nearly every one of your threads but can't point to single law that destroys "value".

    And then there's the constant condescension that makes you seem both self-important and ridiculous at the same time.

    I'm glad your ability to excuse antisocial behavior in pursuit of "value creation" must help you sleep at night, comfortable in a socialist country where your every basic need is met, while you argue for an economic race to the bottom for everyone else.


    That "orgy of deregulation" as you call it is the direct cause of the massive economic growth in the economy over the last forty years. No new regulations planned? What about ones in the process of implementation like the healthcare act?

    Constant condescension? You mistake my condescension for derision for ridiculous and repeatedly debunked ideas. On the other hand, where you see condescension, I more charitably see those like you and jprichva wear ignorance like a badge of honor. Advocating tired statist ideas that cause poverty, anti-business which ultimately means anti-worker. Arguing for regulation that favors the connected that results in cronyism, and corruption.
  • Webster666

    Posts: 9217

    May 28, 2011 7:10 AM GMT
    If I don't have a job, I can't afford to buy your products.
    Since I'm not buying your products, you don't need more employees to produce more of your products.
    It's a no win situation, which brings me back to my original argument of 2 1/2 years ago. The Federal government needs to pay people who are out of work. Then, they'll have money to buy products, creating a need to make more products, and a need for them to hire more people to make those products. Then, you move the people off the Federal payroll and onto the private businesses payrolls.
  • GQjock

    Posts: 11649

    May 28, 2011 11:23 AM GMT
    Why Private Businesses Aren't Hiring

    ... Because they see they don't Have to ? icon_rolleyes.gif

    May I introduce you to Count De Monet'