With predicaments like this, it’s clear something is going badly wrong.
But what’s worse than wrong?
As Einstein put it:
The definition of insanity is doing the same thing over and over again and expecting different results.
Many commentators, including much of the establishment, are advocating the same old solution: take more productive capital out of the economy in the form of taxes for the government to spend. As I pointed out yesterday, total government spending and unemployment are strongly correlated:
While Obama might talk a good game on jobs, his record speaks not of job creation, but of massive tax breaks for corporations.
From the Daily Mail:
General Electric paid no tax at all in America last year and even managed to get a $3.2billion ‘rebate’ from the government.
The utilities giant allocated just 7.4 per cent of its $5.1billion U.S. profits in tax – around a third of what others companies its size are paying.
But through a complex series of measures GE, which is America’s largest company, will not even have to hand that over.
So where are all the jobs that these tax breaks were supposed to create?
Corporate profits have recovered from 2008 under Obama:
So in spite of all his pro-jobs rhetoric, all of that stimulus and all of that quantitative easing just hasn’t sparked a recovery for jobs.
As I wrote a few weeks ago:
The most annoying thing about the establishment’s ongoing obsession with maintaining the status quo, and supporting and bailing out older and larger companies?
Dinosaurs don’t create jobs.
According to the Economist, research funded by the Kauffman Foundation shows that between 1980 and 2005 all net new private-sector jobs in America were created by companies less than five years old. “Big firms destroy jobs to become more productive. Small firms need people to find opportunities to scale. That is why they create jobs,” says Carl Schramm, the foundation’s president.