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Monday, August 12, 2013

Demand Drives Hiring. Period. End of Story.

Cashier checks out customer
Last week, we got one of those good news/bad news jobs reports we're so used to seeing by now. The good news is very good news: new jobless claims are at a 6-year low, suggesting that employment has stabilized and that the days of massive layoffs are behind us. The bad news, according to the Associated Press:

[W]hile most companies have stopped cutting jobs, many remain reluctant to hire. That’s bad news for the roughly 11.5 million Americans who are unemployed and a major reason the unemployment rate is still so high four years after the recession officially ended.

"We have seen a disconnect between the level of hiring and firing," said Bricklin Dwyer, an economist at BNP Paribas.

Ask any rightwinger what's going on here and they blame Obamacare. Healthcare reform is creating the dreaded uncertainty and that uncertainty is keeping employers from hiring.

Thing is though, employers and capital investors aren't panicky types who need hand-holding and therapy before they take a risk. If they were, they'd be in a different line of work. It turns out that, historically, periods of uncertainty have been moments of opportunity, when the opportunistic investors and employers actually have hired more workers in order to take full advantage.


So what's slowing up the jobs recovery?

"Really not a mysterious question," says Gerard McLean, CEO of a web applications company, told the AP. "We’re sitting here waiting for the promise of customers. With money. Really that simple."

So demand.

Over and over and over we see the same story; Republicans argue that employers are like skittish rabbits and any sort of new regulation or  lack of a 100%, iron-clad guarantee to make profits will scare them off. That they need huge tax cuts and subsidies, because employers hire people whenever they can afford them, not just when they need them. That growth is the bottom line of every business, when the truth is that bottom line is profit.

And then you ask businesses what they need and they say demand. Not getting tucked in with a nightlight on and reassurances that the big, bad monster of uncertainty isn't hiding under their bed. They need to see rock-solid, real-world demand. And who is it who is the enemy of demand at the moment?

That'd be Republicans. It was Republicans who celebrated the sequester, which is the largest assault on demand in my lifetime. They're slashing state budgets with no concern for the economic carnage they're creating. And they demand the ability to do more damage, with insane cuts to food stamps and entitlements. Wherever consumer demand rears it's ugly head, Republicans are right there with an ax to cut it off. The party that practically worships "the job creators" is busy doing everything in their power to see to it that the conditions of job creation are undermined. On matters of economic and monetary policy, Republicans are as credible as Todd Akin talking about the ways a rape victim's body has of shutting down a pregnancy.

It's all crazy horse-crap, wishful thinking, and pseudo-psychological mumbo-jumbo straight out of some '70s self-help book. At this point, I don't care whether or not they actually believe this ridiculous nonsense, because whether they're lying or just ignorant, the result is the same: going after demand with a meat cleaver, then blaming economic problems on everyone but themselves.

If Republicans were really interested in helping the economy and their supposed "job creators," they'd do a 180 on their attacks on demand. Employers aren't job creators, consumers are. If you've ever doubted that, scroll back up and read McLean's statement again: "We’re sitting here waiting for the promise of customers. With money."

Not certainty, not tax cuts, not someone to hold their hand and whisper in velvet tones that everything's going to be OK -- just customers, with money.

Now, if only Republicans would stop trying to take that money out of customers' hands.


[photo by MIKI Yoshihito]

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