Wherein the great, deeply knowledgeable, and insightful proprietor of Vitus Capital publicly disagrees with his admired interlocutor, David Rosenberg.
Rosenberg, today, provides his normal wide-ranging daily tour-de-force recap of markets and economic trends. One of his opinions about the current malaise, though, is:
So something isn’t working, and it is because there is no attack on impediments in the way of more durable job creation such as payroll tax reductions, permanent reductions in corporate tax rates, elimination of the minimum wage and greater efforts at retooling and retraining the near-15 million unemployed
I've seen a number of articles (here, here), which say that the reason small businesses, the well-known primary generator of jobs, aren't hiring is that there are no customers. I've not heard or seen or imagined any small business saying to themselves "Say, if I could just get a tax rate reduction, I'd hire a bunch of people". Perhaps you have? In other words, if you've ever been in a small business, you know that taxes, minimum wages, "uncertainty", etc, are secondary or tertiary issues to consider in running the business and hiring.
I won't even mention the huge amount of recent literature building up to support using more stimulus now. Yes, an eye to austerity is a good thing when times are good and there are actual jobs for people, but not when we are probably slipping into a new depression.
I'd agree with some retraining programs, but to do nothing but cut taxes, while all the states and municipalities are laying people off, the infrastructure is in tatters, the unemployment rate is 9.5% and not decreasing, we have two wars going on, and, in general, the economy is tanking, seems, let us say, wishful. to at least me.
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