The government becomes Dale Snitterman

I was flipping through the morning news shows today and now that the BP Oil gusher is all capped off and nobody really cares about that anymore, there is more bandwidth to talk about jobs or the lack of jobs. Apparently media anchors are stunned that companies are hoarding cash and and not sharing with everyone by creating jobs.

They inevitably interview some know-nothing economics professor who parrots the US Chamber of Commerce position that it is the crushing weight of regulation and uncertainty that is making business hesitant to hire. Everyone keeps saying it over and over and over, so it must be true, right?

No.

Business creates jobs and hires for one of two reasons; to fulfill existing demand and to create new demand. In short, they need a visible, viable revenue stream and that stream comes from customers. A private-sector job is not a charity handout or a social program. It exists because it makes money for a company. Period.

But business is looking out on the horizon and not seeing any customers lining up to buy their goods and services. They are seeing no potential customers behind the ones that are not there. The customers that are looking to buy are bottom-feeders who demand a low price and high maintenance and then leave once they find a better price. Many businesses are saying “no” and just sticking the cash in the bank, squeezing their existing employees a little harder for increased productivity and waiting it out for real customers to come along.

Moreover, if government were to lift regulations and decrease taxes, business would still not hire without a viable revenue stream. They would just pocket the money and fatten up the bottom line. In addition, since they now need fewer employees to perform regulatory tasks, they would let them go, further increasing profits. But, they still would not hire until they see a viable revenue stream. I know because I am one of them.

Of course the Chamber is going to ask the government for less regulation and lower taxes. That is all the government can give them. What they really want to ask for is a crap-load of people to buy goods and services from their members, but that is silly and they know it. The government can’t (or shouldn’t) compel people to buy a certain level of goods and services just so business can hire more people. What the Chamber is doing is setting the government up as the “boogie-man” or a common enemy for their members as it takes the heat off their members inability or unwillingness to dive in and make investments on new good and services, on the very probable risk that they will lose the farm in the process. No business is going to do that, so they need a common enemy the average Joe can understand. The government becomes Dale Snitterman.

The Chamber can’t afford the population to turn it’s anger on its members. Americans already think most businesspeople are greedy, corrupt, manipulative, unfeeling, cold-hearted bastards who would sell their own grandmother for an extra dimes of profit or stock price increase.

We’re all being played again. The real solution is for us to stick our necks out and dig into the savings we don’t have because we’ve been cashing in on our home equity and credit cards, living paycheck to paycheck. But the smart people who didn’t use their house as a piggy bank are not going to stick their necks out to help those who did.

And we keep staring each other down. Business who won’t hire because they don’t see a revenue stream and consumers who can’t spend because they haven’t got a job.

It’s Dale Snitterman’s fault! Let’s get him, yells the Chamber. And media runs cheering in predictable mob-like fashion, flamed on by those who know better, relieved that the stupid populace is not throwing bricks through the windows, looting the stores, spilling casks of wine and highjacking trucks in desperate retaliation.

Business knows that it can’t sustain profitability based on cost-cutting forever. Eventually, the sales they are getting will decline as more people become unemployed and are unable to purchase goods and services. But, they also know that the cash-rich companies are more likely to survive a siege longer than their competitors and eventually, they either buy them up or allow the competition to crumble, gaining market share by default in the process.

Customers will come along eventually. It is a big game of chicken where time and nature will ultimately force consumers to buy stuff they can’t afford but need to sustain life. And the ball will begin rolling again. Business knows that. Economists know that. What they don’t know is how long that will take.

In the meantime we can either do something, anything; or blame Dale Snitterman.

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About Rufus Dogg

I'm a dog who writes a blog. It is not a pet blog. It is a real blog that talks about real ideas. No, really. I do my own writing, but I have a really, really cool editor who overlooks the fact that I can't really hit the space-bar key cause I don't have thumbs. I talk about everything from politics to social issues to just rambling about local problems. And, sometimes I just talk about nothing in particular. Google+
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One Response to The government becomes Dale Snitterman

  1. Dear Bubba,

    Chicken, naw, you are talking Turkey!

    – Dale