On Thu, Sep 2, 2010 at 10:45 AM, Robert Munn <cfmuns...@gmail.com> wrote: > > Companies are terrified to expand in the face of significant > uncertainties in regulations (cap and trade), taxes, and consumer > sentiment.
I think that this is part of it but you are way overstating the case. Consumer demand is 70% of the economy. If consumer demand is low and consumer confidence is low, businesses aren't likely to expand. It isn't rocket science. The good news is that consumer demand is showing signs of rebounding a bit. Consumer demand is the engine for our economy as it is currently tooled. Other things matter but if you ignore consumer demand, the other stuff isn't going to amount to much. The other thing to consider is productivity. Up until just the last 2 or 3 months, productivity has continue to rise. That means that any added demand could be taken care of with the same workers. Productivity has leveled off and in some instances declined a bit. That is generally seen as a sign that increased demand will be met with increased hiring. > This isn't rocket science. The President should go on television > tomorrow and say we're going to extend the Bush tax cuts and defer cap > and trade legislation until the economy recovers. And forget about > extending "most" of the tax cuts - the big chunk of money at the top > is the money that will go to create new jobs through business > investment. I agree with you on cap and trade legislation. The bit about the Bush tax cuts is pure bullshit. The top 1% of earners hasn't been hit by the recession at anything near the same rate as the bottom portion. Why is that? Because wealth in our country in excess of general spending (housing, food, transportation, energy, etc) is largely invested in the stock market. And while unemployment rates have been high, the stock market has been doing fabulously. If Obama was judged on the stock market (hey, remember all the shit he was given on this list at the beginning of his term for market declines? "The stock market hates Obama!") then he'd be a raging success. However, the bulk of the population does not derive their regular, ongoing wealth from market investments but rather from wages. The opposite is true for the richest portion of the population. Most of the rich don't directly invest in companies, they invest in the market. The market is doing fine. Those that do invest directly in companies (VCs) are not hurting for capital. The opposite is true, actually, the hard part is finding good investments for the capital is ready to be invested. Continuing the tax cuts for the wealthiest portion of the population will do nothing to stimulate consumer demand (which is the bulk of our economy) and will not produce any viable scenario where businesses will start increasing hiring or capital investment. Judah ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Order the Adobe Coldfusion Anthology now! http://www.amazon.com/Adobe-Coldfusion-Anthology-Michael-Dinowitz/dp/1430272155/?tag=houseoffusion Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:326734 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/groups/cf-community/unsubscribe.cfm
