Why Temporary Fixes Aren't Fixes at All

Unfortunately, most of those in a position to influence policy have no practical experience in business or creating jobs. As a result, they don’t really understand what will motivate action. Thus policymakers are frustrated; they honestly don’t understand why their trillion-dollar schemes aren’t producing the growth expected.

As an employer, although I would welcome any payroll tax relief for my company and our employees, a law such as Frank proposes would actually make me very careful about hiring.

One wishes there was some indication that Professor Frank or policymakers who push these macroeconomic modeled programs had thought at all about the way an entrepreneur, confronted with the prospect of his business being disadvantaged by such a federal policy, could easily come to the conclusion that his goal should be to stop reinvesting, not to start new ventures, and to pull out money where he can. A whole society can come to start thinking that government policy is too arbitrary and that it makes building a business too risky.

Thus the all too clever machinations of brilliant policymakers can purchase a little short-term stimulus at the cost of the death of American entrepreneurialism. And the oh-so-smart experts, who know little of human motivation and fear, will stand befuddled wondering why the model didn’t work.

I’d love to read the rest of the article, but until I have some assurance that the 21 cookies and 2 trackers we found on this website have been removed, my curiosity about your writing will take a back seat to the hassle of cleaning out my files.

Again.

(But then it’s not like you’re a regular member of this community. You just seem to show up once in a while looking for hits and never comment on any threads other than your own.)

“The fickleness of Washington has a lot to do with this uneasy atmosphere for potential investors. It’s not just tied to one economic model.”

I believe a massive chunk of our current economic problems are tied directly to the president’s actions in the Chrysler and GM debacle where the president decided the winners and losers instead of the law. The “secured” bond holders should have been given priority. But the labor unions, who had no legal rights whatsoever, got the bulk of the money. My reaction as an investor was to go cautious as there were no more laws. Our society and our economy depend on laws. Having a socialist swing in on a rope and dictate who wins and who looses means the economy won’t grow until he’s gone and the investors see the reestablishment of law.

Gen.Blather wrote: Having a socialist swing in on a rope and dictate who wins and who looses means the economy won’t grow until he’s gone and the investors see the reestablishment of law.

..... and I would venture to say that the investment community will require a great deal of convincing that orderliness and due legal process have been re-established before they become comfortable enough to place any really big bets.

This is not going to be repaired by a press release.

RE :”Unfortunately, most of those in a position to influence policy have no practical experience in business or creating jobs. As a result, they don’t really understand what will motivate action. Thus policymakers are frustrated; they honestly don’t understand why their trillion-dollar schemes aren’t producing the growth expected. As an employer, although I would welcome any payroll tax relief for my company and our employees, a law such as Frank proposes would actually make me very careful about hiring. Employee hiring and training is very expensive, and we really don’t want to hire anyone if we don’t think there is a decent shot they will be working for us in two years. Terminating employees is also difficult and expensive and we try hard not to do things that could lead us to have to fire people. We often pay severance pay and wind up keeping people longer than we need to (for example, we try to not fire people in the weeks before Christmas). It also is demoralizing for fellow employees. Then there is the burden of COBRA paperwork and pension rollovers. There is the ever present possibility that a terminated employee will sue. Yet this plan seems to set us up either to experience dramatically increased cost of employment on January 1, 2013, or to lose lots of employees.
Obviously, the fact that we will have to start paying 6.2 percent on January 1, 2013 right away makes me hesitant. If I don’t think the workers are worth that price now, I wouldn’t sign an agreement with the workers promising to give an automatic payroll increase of 6.2% in the future. Yet that is practical the implication is of Frank’s proposal. It would make me instantly want to underpay any new employees so that I could be ready to give them this raise that would be required by law when the payroll “tax holiday” is over.”

Exactly. Democrats/liberals are continuing to complain how we currently have low taxes and how it is not working. But it's the threat and plans to raise the taxes that discourages job growth. This is the major flaw in the Krugman/Maddow Keynesian ;run up lots of debt to stimulate the economy’ theory.

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