Free Markets, Free People

ICYMI: Companies planning on less hiring in near future

According a report by Reuters, much of it is related to the looming crisis in Europe:

Only 23 percent of the firms polled in June plan to add to staff in the next six months, the National Association for Business Economics said on Monday.

NABE’s prior survey, conducted in late March and early April, had shown 39 percent of companies planning to add workers.

The point, of course, is now is certainly not the time, with unemployment at 8.2%, to give business another reason to delay hiring, right?  That would seem, to most, to be a reasonable point.  While the European problem unfolds and comes to some sort of resolution, you’d think government would be attempting to encourage and enable domestic businesses to do some hiring anyway, right?

Instead, as demonstrated in the story below, you have a president (and a party) who seem dedicated to killing whatever possibility there is for such hiring in the bud by calling for higher taxes on the “rich”.

Of course they count on the bulk of the public being ignorant of what comprises the “rich” that the administration wants taxed (small business which produces 85% of the jobs in the US) and certainly, to some extent, they’ve been successful in that endeavor. 

Many will tell you that there’s really not much government can do economically.  That they get blamed or praised when it goes south or does well, but in fact that’s more political tradition than reality.

I disagree.  Economic policy can have a profound effect on the economy.  A policy that encourages and enables business will have a net positive effect economically.  One that discourages or unsettles the business climate (increased regulation, increased taxation, etc.) will have the opposite effect.

Right now we have an example of the latter.   The 8.2% unemployment rate we now endure isn’t a result of the “European crisis”, it is the result of an unsettled and hostile domestic business climate, much of it created by the current administration’s policies.  Europe’s woes will only add to that.  Instead of doing everything they can domestically to encourage expansion and hiring, this administration has decided to again lobby for taxing the job creators at an even higher level.

Of course be prepared for the ready excuse that the crisis in Europe presents.  Blaming Bush doesn’t work as well now as it did 4 years ago.  ATMs and tsunamis won’t work either.  But President “It’s the Other Guy’s Fault” will try very hard to shift the blame of any economic downturn in the next few months across the Atlantic.

But remember – we are at 8.2% now.  And that has much more to do with this President’s policies than anything that has happened in Europe.


Twitter: @McQandO

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17 Responses to ICYMI: Companies planning on less hiring in near future

  • Uncertainty.  THAT is the prime product of this regime WRT businesses.  When you raise it, as has been done virtually every day of the Obamic Decline, you push risk toward the “infinite” peg on the scale.

  • ” it is the result of an unsettled and hostile domestic business climate,”

  • President Obama: The truth of the matter is that, as I said, we created 4.3 million jobs over the last 27 months, over 800,000 just this year alone.

    The private sector is doing fine.

  • I ran businesses when taxes were twice what they are now, and that never my decisions of whether to hire or not. I based my decisions on demand. If I perceived that I needed more people to meet demand, I hired, if I didn’t, I didn’t hire. The only decisions I ever made based on tax policy was to not take any more income that I absolutely needed to. I would reinvest as much as possible with the goal of making the company as whole more valuable, which I would take later at the lower capital gains rate.
    Our economy is consumer driven, if people are buying, companies will be hiring, if people are not buying, companies won’t be hiring, it’s not much more complicated than that.
    Unitl someone shows me an empirical causal relationship between tax rates and hiring, I see no reason to change my opinion that an economy that is made of 70% consumer spending is primarily by anything but consumer spending.

    • And, where, I mean, aside from Unemployment and Food Stamps, do people get money to SPEND?
      The printing press in the basement?

    • And he made up his loses in volume.
      What an idiot.

      • Quite so (idiot).
        Taxes we last “twice as high” thirty-two years ago.
        What kind of business did he run knowing nothing about the investment aspect aside from what his accountant and tax advisor told him?

        • Well, and he could get demand out the whaaa-zooo by being priced below the market…and below cost…if demand was all he looked at (as he implies).
          But I dunno I believe him anyway, so…

    • There are plenty of links between marginal tax rates and growth. And you are wrong, our economy is not consumer driven. It is investment driven. Which is why it sucks so much right now.

    • So, by your own account, tax rates did matter.
      p.s. Obama isn’t just about raising income taxes.

      • Also Capn’ you may want to consider that consumers can only consume what they have in their pockets AFTER TAXES.
        So, higher taxes will lower private sector demand.

        • No no, just the rich, and only the money they’ve stuffed in their mattresses, shoeboxes, moonshine jars and closets that they got by robbing the poor and then failing to spend to help stimulate the “Recovery whateverthisis”.

  • Obviously it’s business fault for not supporting Baracky

  • Of course be prepared for the ready excuse that the crisis in Europe presents.

    Our economy grew enormously under Reagan in the 80’s while Europe’s was in the tank for a generation.

  • I have known a few small business owners, and their income tax rates were never even close to the top of their bitch list, nor did they ever, as far as I know, take them into account when hiring or firing. Frankly it seems a little strange to me for someone to think “Well, I have enough demand to hire another employee, but the marginal profit I make from his labor will be 20% less than the profit I would have made last year. I guess I’ll just tell those new customers to go somewhere else”.