The politicians always seem to be the last people to get it. But anyone who actually works in the corporate world knows that the central economic concern these days, the thing that is holding us all back economically, is not uncertainty about tax rates. They also know the core problem is not frustration with regulation and red tape. Nor is the problem an epidemic of nocturnal terrors about government deficits. The problem is this: not enough customers. And the problem of not enough customers right now is exacerbated by the fact that there is also low confidence that there will be more customers in the foreseeable future. With low confidence that broad prosperity will return to customers, the willingness to invest and hire aggressively is limited. And since so manybusinesses perceive the world the same way, the combined effect of their general unwillingness to hire is persistent high unemployment, and a self-reinforcing perpetuation of the low demand that is the cause of the unwillingness to hire in the first place.Read it at New Economic Perspectives
So one thing this country needs is the political determination to act at the national level to inject demand into the economy by putting increased purchasing power into the bank accounts of those most likely to make use of that purchasing power. But something more is needed. It is not sufficient to bestow a little temporary stimulus on the economy, because businesses do not invest for the long term in people and equipment just to satisfy a temporary uptick in demand. A more convincing form of national leadership is called for – something that convinces investors than sustained and durable demand is on the way.
What’s The Plan?
by Dan Kervick