More on the Remedy for the "Hireless" Recovery

There are a number of very specific reasons that this worldwide economic situation persists, primarily, as I wrote earlier, due to the very poor decisions and lack of clarity from politicians. While we do live in a worldwide economy, the United States remains that primary engine of that economy. For that reason, what happens in the US leads the rest of the world in a particular direction. Right now, that direction is aimless wandering. For more evidence of the repercussions of the unpredictable environment that the US government has created with its fast-changing taxes, fees, and laws, realize that the 500 largest non-financial corporations are holding more than 10% of their assets in cash according to a recent Wall Street Journal article. That's about a trillion US dollars sitting on the sidelines. It's not hiring new staff, developing new products, or buying new capital. It's sitting there doing nothing.

Why? Because the management of those companies doesn't know what they are going to have to do next as the US government changes the rules yet again. So, they hold on to the funds just in case they might need them to handle yet another "great idea" from government bureaucrats who have never had to make payroll or delivery a product or produce a service that customers value. They are utter unequipped to understand -- much less implement -- effective solutions to economic issues involving the complex interrelationship of business.

The first thing to do is to promise and then deliver predictability to the market, and not just for interest rates. Interest is not the only expense that businesses have to plan to address, so predictability must extend to the other areas such as regulation, taxes, fees, and other mandates. When that happens, those funds will find their way into investment, turning into jobs, investment, and an economy on the rebound.

Until then...? A continuing malaise.

How My iPad Makes Reading Better

As I sat finishing breakfast at our kitchen table yesterday morning with the Colorado sun filling the back yard and the kids enjoying their last few days of "freedom" before they head back to school next week, I caught up on my news reading using my iPad. I use Feeddler, an RSS (Real Simple Syndication) reader for iOS together with the Wall Street Journal and Guardian Eyewitness apps to stay current with news and insights from my favorite content sites. I thought about how this was so different than it has been for me until just recently. I no longer need to go to my desktop computer or pull out my notebook computer to check my favorite web sites; I just pull out my iPad. Not only that, but because Feeddler uses Google Reader to sync what I've read, I can use Feeddler on my iPhone and my iPad or Google Reader or one of the Google Reader compatible applications to stay up-to-date throughout the day.

Of course, I also use the iPad to stay current with email, some web browsing, and my eBooks, too (mostly using the Kindle app). I even use it for a bit of Bible reading and study using Logos.

As a result, what I have noticed is that my iPad, this small, lightweight device, has become the center of my reading world. It's like I'm carrying my entire stack of books, magazines, newspapers and websites with me all the time. I am beginning to see very clearly just how much the iPad has simplified my life. And this from a guy who definitely wasn't sold on the idea of an iPad for my own personal productivity.

Pretty interesting...

Of Course It's a "Jobless Recovery"

As I sat in my family room here in Boulder, Colorado a few days ago thinking about the utter ignorance of the people who are making laws in this country, I began writing this post. Then, this morning, I read this excellent piece in the Wall Street Journal: "Why I'm Not Hiring" by Michael P. Fleisher outlines the reality of the situation that the ignorant, poll-driven politicians have created. Subtitled, "When you add it all up, it costs $74,000 to put $44,000 in Sally's pocket and to give her $12,000 in benefits." the piece demonstrates why the "recovery" is "jobless:" The government is doing almost everything in its power to make it painful to hire, and is simultaneously making it clear that it will very likely get more difficult to hold on to existing employees by increasing fees, taxes, and other mandatory payments for having an employee.

In short, the politicians have killed any hope of new jobs.

And why wouldn't they? They don't understand business. They don't see how many flows in business, or understand forecasting, revenue, cash flow, or managing to a budget. After all, when they want more money, they simply pass a law to get it.

Of course, those laws never actually work they way that they had planned, since money naturally moves away from areas that are taxed. That's why no one is hiring.

So, in short, the very structures that the government is putting in place has killed the employment marketplace. It will not improve until there is some assurance that the idiots in Washington, D.C. won't make yet more changes on a whim and a prayer. And that's not going to happen until there is a change of thinking in those circles.

You cannot vilify business and those wealthy enough to run businesses without also decimating the job market. Yet, that's exactly what they are doing in D.C.

Update: So what can be done?

It's actually quite simple: lower the burden on those who do the employing, and make the costs of hiring and maintaining employees predictable.

How is that done?

That's also simple: reduce taxes and fees on employers and employees and create laws and policies that make those reductions predictable, giving 12 months' notice for any increases. When increases can happen at any time, business owners and leaders must maintain additional reserves to cover unexpected costs dictated by the whims of government.

For some real research into what happens when these kinds of approaches are followed, look at The Historical Lessons of Lower Tax Rates, the Joint Economic Committee report on the Reagan tax cuts, and Wikipedia's explanation of the Laffer Curve for some insights into how complex the interconnections are. Regardless of this theoretic conversation, predictability is the key to business management, and the lack of predictability is a primary issue impacting the "Jobless Recovery" that we're now seeing.

Second update: I am clearly not alone in my thinking on this. For another, there is Michael Schrage's perspective on his Harvard Business Review blog article "The Hireless Recovery" (my thanks to my good friend Stephanie George for pointing me to this article!).