I’ll give you a little anecdote that happened last week. A friend of mine owns a company with about 12 employees. He’s sitting on a good sized pile of cash at the moment as he’s had a few good years, he’s paid off debt, and has a core of some really great people who all know their job and do their job, and he’s got a huge back-log of work. At any rate, his truck is depreciated out and he was debating simply writing a check for $45 to $50K. He eventually went with taking Ford’s money at .9% for 36 months plus a $1500 cash rebate. A lot can change in 36 months and he’s of the mindset that if we end up in a double-dip, he’d better have cash on hand to survive it. He’s legitimately worried about what impact Obamacare may have on his bottom line. His accountant and insurance company still can’t tell him the financial impact so he really doesn’t care to add more employees at this time. He has no confidence in Obama’s leadership ability and he’s one of those who is convinced that the president could severely screw things up in a lame duck term if he’s re-elected in November.
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It’s not the corporations who are hindering job growth. Give small business incentives to expand, relax their fears of over-regulation and over-taxation and they will expand and hire. Real or imagined, those are the folks who are far more influenced by what they read in the paper, hear on talk radio or in the bar after work. Call them idiots, or ignore their interpretation of every Obama bowel movement, but if the current administration isn’t inspiring growth through it’s actions and words, there are those who will simply hang in there either out of fear or deep seated spite, classic economic theory be damned. Remember that economic theory generally doesn’t take into account behavioral issues.
I don't disagree with any of that, but would note that the vast majority of jobs do not come from small business, except in the sense that most large businesses were once small businesses. That's not to diminish their importance, because they do provide millions of jobs and god knows the last thing we need is to send another million or two people out of work.
So yeah, I think it in a large way is corporations sitting on piles of money with nothing worth investing in that are hindering the economy. Credit isn't nearly as tight as it was a couple of years ago. I know people who got bit hard by banks pulling their lines of credit. Not so bad they had to fire anybody or anything, but bad enough they had to put expansion and hiring plans on hold. Plenty of folks have been there over the last few years, but that part of it is easing somewhat.
I'm sure your friend can make more than .9% on his money, so the loan was probably a good idea.
There is a lot of uncertainty out there, but I don't buy that it's government-based. Health care costs have been out of control for years. Obamacare may be the insurance company's current excuse, but it's not as if they needed them when they were doing the same price hikes 5 years ago. Nobody has any idea what costs will be next year because insurance has been going up between 5 and 20 percent a year since I can remember. Luckily, the health care stuff will work itself out in a couple more years when it's fully implemented. Whether it gets costs under control or not, the uncertainties will be right back where they were before ACA passed.
I agree that more can be done, but Congress deserves much of the blame here. The Republicans are too busy trying to make sure Obama doesn't get anything through Congress that could be claimed as a success to really care about the plight of the country as a whole. Maybe that will change if Romney wins, I sure hope so. Even so, we've had tax cuts, we've got incentives, we've got most everything but demand.
If only there was a party in Washington who actually cared to listen to the people instead of spending all their energy creating loopholes and special favors for their donors. Clearly, neither of the present two are that party.
