Why Unemployment Will Continue to Rise

The New York Times inadvertently gives a back-channel opportunity for conservatives to communicate via comment-sites in its "caucus" chat-room format, loosely defined as a zone where free exchange of ideas can occur. Among the many apologists for Obama trying to answer the question of the site, "Where did all the jobs go," occasional lucid rays of enlightenment brightened the surrounding Bush-bashing, job-flight whining and other conventional liberal tropes.

Here is a good explanation by Milton Recht of Mount Kisco, NY, near a Friendly's where we often sipped & gnoshed while rushing to get on the Taconic Parkway on our way northward to MA & Cape Cod.

The rise in unemployment is a mystery unless one is willing to include the political agenda of the current administration as a possible cause. The excessive unemployment for this economic downturn and the lack of job creation as the economy rebounds shows that employers are shifting away from labor/worker and into capital/machinery and process improvements.

Contrary to the current administration's causality of blaming the past, employers base their hiring decisions on expectations about the future. The likely future cost increases for employees increases an employer's willingness to utilize more machinery and capital in production of goods and services, while reducing the number of employees.

Employers are acting rationally to an expected increase in the cost of labor. The new healthcare law significantly increases the cost of employing labor versus capital. Many other proposals from the Obama administration, such as card check, increase the cost of labor to companies. Obama's anti-business, pro-union policies give employers the impression that more costs are likely in the future.

Employers have responded as anyone does to increase costs. They have chosen cheaper equivalent alternatives. Employers are shifting away from workers to machinery in response to the administration's policies of increasing the costs of hiring workers.

The Democrats and the President see businesses as bottomless pits of cash and profits. Employers have logically reacted to the administration's business philosophy and are attempting to reduce their future costs by employing fewer workers and using more capital as the economy grows. Unfortunately, it takes time to switch to more capital and machinery, which adds to the slowness of the economic recovery.

It is unlikely that the current administration will change its view of business, which means that the economy is unlikely to improve until those in office see business and capitalism as their friend and not as their enemy.

The zero-sum game mentality fostered by the socialist Obamanables in their crenellated ivory tower economic redoubts has had the very predictable effect of causing producers to automate and mechanize means of production, so the capture strategy by big unions can be offset by a diminished need for employees. As Milton notes, the raid & plunder mentality of the economists & their union myrmidons can be avoided [somewhat] in situ by counter-strategies of eliminating opportunities for featherbedding, etc., and other time-honored class-warfare tactics which lead to the predictable beggaring of the US economy. Raising taxes will further hamper a return to full employment, and the socialist Obamanables take away with their government hand one of the few investment tools, capital, that might return the economy to a robust 5% employment level.

When the Bush tax-reductions are repealed, predictably the other shoe in the downturn will drop and we will see unemployment vault above the 10% level. All so very predictable.

Thank you, Milton Recht, for exposing the economic Luddites surrounding Obama and their plan to employ unions to return to full employment after the 2010 elections.....!