On That Terrible, Nebulous Economic Environment That's Forestalling Hiring
by Gary Therkildsen*
Sep 2, 2010
A few months ago, a cacophony of conservative voices began complaining about a hazy cloud of uncertainty looming on the economic horizon. Concerns over the Affordable Care Act, new regulations, and the possibility of new taxes, they claimed, explained continued high unemployment and a lagging recovery. Economist Dean Baker flags the latest example of this garbage meme in a Wall Street Journal article on the Obama administration's deliberations over new economic stimulus measures, and points out for the umpteenth time why it's wrong.
As Baker points out, "there has been no unusual increase in average weekly hours," which means that "[i]f uncertainty is holding back hiring then we should expect that firms are working their existing workforce more hours." But "[t]he length of the average workweek has increased little since its low-point last fall, which is standard for a recovery ... [and it] is still far shorter than it was before the downturn."
Unfortunately, this line of argument about uncertainty in the marketplace doesn't seem to be going anywhere despite its ridiculousness. Steve Benen over at Political Animal highlighted Sen. Mitch McConnell's remarks today to ABC News. Unsurprisingly, the Senate minority leader claimed, "[B]usiness is sitting there, hoarding cash because they are concerned of the health care taxes, the health care mandates, the tax increases that are coming in September potentially." Sorry, Mitch, that's just not the case.
My colleague Craig Jennings, picking apart another theory of conservatives about why unemployment is still high – that unemployment benefits make the unemployed lazy – highlighted the real reason why businesses aren't hiring: there's no demand for their products and services.
The uncertainty argument isn't dissimilar to deficit hawk claims that we must cut budget deficits immediately – the downtrodden hurt by the recession be damned – lest some unknown, looming demanders of fiscal responsibility get upset with U.S. debt levels.
Indeed, conservatives have tried every argument they can think of to shift focus away from the fact that the recovery is stalling because demand is still down, and that the government could do a lot by injecting further stimulus monies into the economy.
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