Our patriot business folks are sitting on mounds of cash...

[WCGreen]

And they have refused to expand.

Does anyone else think that they withheld spending, hiring people, investing in production because they wanted a republican congress...

I sure do.

I also truly believe that the job situation will be miraculously buoyant in the months to come so that they can say look, when the GOP is in charge, we prosper.

[Dawson Leery]

1. +1

[Newest Reality]

2. Could be ...

but I think they would like us to believe that.

There is a whole process involved with the "job situation" that, to me, relates to the condition the system is in. We are told that this is a "consumer-driven" economy and largely service-oriented with finance being a significant aspect of our production. How does one breakout of the a vicious circle where consumers are tapped, going jobless and losing financial security in various ways?

It appears to me that the illusion must be maintained that, rather than preparing us for a rather dramatic shift in lifestyle, (and thereby allowing us to choose and function better with it) we are going to play a game of assumptions where people are allowed to believe that we are going to rebound and return to way of life that will not be returning. There are so many reasons why.

We should be preparing and adapting to this rather than hoping for a return to what is not sustainable. The profit takers have moved off-shore and are doing extremely well compared to the general population. The host has been drained, but there are new and growing markets to suck dry still.

It seems unbelievable that America could, generally speaking, be written-off, but it looks like that's what is going on. However, there is a also a lot of profit to be made by vultures picking the bones clean and making money on what ensues from the various losses we are all taking.

[SanchoPanza]

3. Two reasons, one overt and one that may be more subtle.

1) Investment is primarily driven by profit expectation. Businesses won't expand if they don't have customers to buy their shit. Even if they didn't have cash on hand to expand, they wouldn't try to get a loan to do it either. With high unemployment and few means available to customers to spend money, businesses have no incentive to expand.

2) The more, shall we say, dickish business owner sees a recession as a pristine opportunity to drive down the cost of labor. With higher levels of unemployment people become desperate, and may be willing to work more for less pay. In some cases this is overt, but the incentive is there on an unconscious level too. Being that unemployment insurance helps stave off this downward ratcheting effect, because you'd be a fool to take a job that pays less than unemployment benefits, some businesses will hold off hiring until benefits run out. Unionization will also affect the declining wages.

Reason one has far greater priority than reason two. We're facing a problem of diminished demand, and most business owners know it. Surveys that measure business owner "concerns" consistently put poor sales at the top of the list.

[Thav]

8. Which is why programs for low/middle class have a bigger impact

on the economy than programs for the rich.

Tax cuts for the rich, in today's economy, will allow the rich to have more money. They won't invest it, because there's a lower expectation of dividends or return. They're likely to sit on that money, or put it into safer investments. Both of which have little effect on the economy. The upper class do buy goods/services, but not at nearly the rate of lower/middle class.

Programs for the lower/middle class have a direct effect on the economy.

Give out $100 in food stamps to a lower class family, they'll go spend $100 in a store. Give 100 families this, and they spend it at the same store, that store is up $10,000 in one month. That, in turn, generates demand for more goods and services, causing the local store to order more goods, and hire more people to provide more service.

Allow the middle class to keep more in taxes, and they're more likely to drive up demand with their spending on goods and services. They may save or invest more than the lower class, but they're still spending.

Want to drive up demand? Give those who do that the ability to drive up demand the ability to do so.

[CaliforniaPeggy]

4. Time will tell...

Do you really think those patriot business folks are that smart? I wonder...

[MadHound]

5. Somehow I doubt it

They're refusing to expand because people simply aren't buying. Why should a business add new jobs when the demand isn't there to pay for them? It isn't about politics, it is about economics.

[WCGreen]

6. It's not the jobs of the individual business owners to hire people.

But if they take the money they are hording and spend it on capital improvements that will create demand for capital goods and so trickle out into the economy as a whole.

[MadHound]

9. Again, why should they make such investments when the demand isn't there?

When people are not buying, then it makes horrible business sense to invest money in improvements that could very well fail to pay for themselves.

Jobs are truly the key to turning this economy around. The one entity that can create freely create jobs in such an economic environment is the government, which is why it is critical for this administration to push through a massive jobs creation program. Sadly, I doubt that this will happen, so I imagine that we'll be in an economic nightmare until somebody rediscovers Keynesian economics and has the guts to follow through on it.

[WCGreen]

10. Because a whale new round of technological updates are set to

kick in.

But mainly because having cash around earning less than 1% interest is not productive when you can invest in capital improvements and bank the tax credits against future earnings which will return 15% in tax savings at the very least...

[jwirr]

7. Bingo