Uncertainty and Our Economy
Author: Neal Boortz
There is one measure of economic stability that I’ve talked about from time to time and that is uncertainty. Businesses create business models to estimate future growth. Those models rely on a certain amount of stability in government treatment of private businesses. Certainty when it comes to our tax system, regulations, monetary policy and upholding our laws.
Unfortunately for American businesses, Dear Ruler has managed to do anything but provide certainty for businesses in America. Aside from his demonization of wealth and profits, his policies have created a tentative environment that has forced companies to the sidelines to wait it out. This has nothing to do with whether or not they like the man occupying the White House and everything to do with the protective measures necessary to ensure the viability of their business.
James Pethakoukis points to a study about how this uncertainty affects our economy. The uncertainty we’ve seen during the “Great Recession” is responsible for at least one or two percentage points of our unemployment rate.
Our model estimates that uncertainty has pushed up the U.S. unemployment rate by between one and two percentage points since the start of the financial crisis in 2008. To put this in perspective, had there been no increase in uncertainty in the past four years, the unemployment rate would have been closer to 6% or 7% than to the 8% to 9% actually registered.
The election of Mitt Romney alone could prove to be a form of economic stimulus, simply from the standpoint of these businesses knowing that they’ve got a guy in the White House who understands a thing or two about what it takes to foster a successful business environment.
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