Erring on the Side of Government

July 2, 2010 at 7:26 am Leave a comment

With today’s release of June’s jobs report from the Bureau of Labor Statistics will come a new found fear that we may be facing a double dip recession.   In the wake of a stimulus that failed to produce promised jobs, the resultant ballooning of the federal deficit and government mandates,  this should come as no surprise. 

There are several certainties in the “new economy” including downsizing of organizations and outsourcing of jobs, many of which will be overseas.   Given the confiscatory mandates being imposed by the federal government this outcome is fully expected and will continue to get worse should other items on the table such as cap and trade or card check become the law of the land. 

Much of this problem can be attributed to having a concentration of so many lawmakers and administration officials who simply lack business acumen.  With only eight percent of Obama administration officials having private sector experience, it makes sense that they would leverage government for solutions. 

Unfortunately, we are seeing history repeat itself with repeated missteps that led to the prolonging of the Great Depression.   The reality is that the current recession will continue for as long as the federal government continues to err on the side of government.

Much of what has been put in place will continue to hamstring the employment market.   Business owners already facing the highest corporate income tax rate in the industrialized world are skittish about hiring.  Many of the job functions traditionally done domestically can now be done overseas, not only cheaper but with less confiscatory regulation. 

In the meantime, the only sector where there has been steady job growth is the federal government which is the one area that needs to be scaled back. 

Fears of a double dip recession are legitimate.   Private sector hiring is stagnant, the housing market remains in shambles and this past month saw a significant decline in the stock market.   These are all red flags for people with private sector experience, who sadly remain concentrated outside of the beltway. 

With roughly four months remaining until the mid-term elections it will be interesting to see how the administration addresses the unemployment epidemic.   By deflecting blame they may further alienate the chronically unemployed who want one thing; jobs.  Or they can alienate their base by taking steps, such as extending tax breaks set to expire and reducing income tax and capital gains which is the only proven way to generate job creation. 

For the rest us, we have to understand the paradigm from which we are being governed.   By putting it into perspective it becomes easier to recognize why government dependency has taken precedent over job creation.  While this mentality is certain to prolong any economic recovery, it will also expand the size and scope of government in the name of power which appears to be the goal of those currently controlling Washington.   

_________

Chris Tidball is the author of Kicked to the Curb and provides businesses with innovative solutions to increase their bottom line with no new money required.  He can be reached at chris@christidball.com or on the web at www.christidball.com.

 

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Chris Tidball is a claims and revenue management consultant and author of the "20 Essential Rules" series of self and organizational improvement books. You can ask him a question at chris@christidball.com

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