Saturday, August 1, 2009

Now Comes the Hard Part

Economies that crash eventually find a bottom. The American economy might have found a bottom. IF so, it will probably stay there. Without employment gains, no significant economic recovery is possible. Only the government is hiring. The government is not subject to the Obama-Congress rules on employees. As long as the public is willing to tolerate unlimited deficits, government hiring can continue. But, private sector hiring is in the deep freeze and unlikely to emerge.

Obama and his cohorts don't believe in free markets. They think somehow those who hire employees don't care what employees costs. They think employees just get hired by magic. They are wrong.

Obama and his cohorts do not understand profits and why people hire people in the first place. The entire Obama agenda aims at making employees more expensive to employers. While Obama celebrates increases in the minimum wage and more mandates and card check, employers cringe at the thought of hiring anyone.

At the end of the day, employers will make the decision as to whether there will be jobs and they are terrified of this administration and its "Employee Toxification" program.

The good news is that the US is almost alone in adopting anti-employee policies. Outside the US, there should be a reasonably normal economic recovery. Asian recovery is now well under way. Only the US and Europe will stagnate with high levels of unemployment and slow growth.

World economic leadership is shifting and it is shifting away from the US. In some ways, this change will be a positive change. There is no reason for the US to maintain economic hegemony over the world forever. On the other hand, for those who would like to see the US as a dominant economic power, the Obama crowd is making certain that that is a passing vision. Maybe that's what they intended all along. Obama does seem to be enjoying himself.

No comments: