Why No Jobs? Hurricanes!

Celebrated blogger Mark Thoma picks up an issue raised by celebrated blogger Arnold Kling: why is the recovery of modern labor markets so slow? Kling points out the mismatch of skills – the newly unemployed don’t have the skills desired by consumers. Thoma seems to agree, but also notes that jobs aren’t being created in sufficient quantity. Thoma then refers to some scheme to allow the government to soften the blow for the unemployed.

That’s treating the symptom and not the disease. New jobs come from expanding businesses (of which there are not many) and new ventures. New ventures? Who in his right mind would undertake a new venture in an environment where the government is changing the rules of the game faster than you can write a business plan? What could impact business plans? New expenses (health care reform), higher costs (green energy schemes), higher taxes – all of which are being bandied about daily in Washington. The prudent capitalist will simply wait until the dust settles and there is better visibility and more hope for stability. Oh, a new unemployment scheme simply aggravates the core problem.

Rare is the captain who has the courage to plot a course through a hurricane.


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