Friday, April 02, 2010

So why does the employment situation remain grim?'s just another huge variation in the crisis of confidence we've been suffering through:

"The point, of course, is that corporations are
still in a position, driven by increases in productivity and lack of demand as
well as an unsettled business environment, not to increase hiring any time soon.
The money corporations are sitting on, as noted, is going to go somewhere – most
likely to increased dividends or mergers. And mergers actually mean fewer jobs,
not more. Until companies see increased, well-defined and sustainable growth in
demand to the point they can’t handle it with their present level of employees,
they’re not going to hire no matter how many 'jobs' bills Congress passes and
Obama signs."

Despite what you will hear elsewhere in the local blahgosphere, this entire economic malaise we've been suffering through these last few years is first and foremost a result of a crisis in confidence, on many different levels, in many different segments.

Initially, it was private investors who had little confidence (mainly thanks to mark to market), but now they've been joined by corporate operations. Private investment funding has mainly been sitting on the sidelines for almost 30 months. Corporate funding among those whose free cash flow can afford such are not investing at the levels that promise help for the economy.

Why is the crisis of confidence continuing on many different levels?

You get three guesses at the answer, and the first two don't count.

Part of the solution comes with the voters' actions in November. The other part comes when we are subsequently successful in stopping further disasters coming out of the White House.


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