For those who are sure that the Bush-era tax cuts are the key to stimulating job growth, here is a little sober realization: in 2009, private sector job growth for the previous ten years: a net loss of 203,000 jobs. So, to recap, in roughly the last ten years, there has been no job gain in the U.S. private sector, including the years in which the Bush tax cuts were in effect. So, for those pinning their hopes on putting money in the pockets of the wealthy as a means to stimulate job production, I'm sorry to say that you are misplacing your faith.
The job situation is bleak, and it is so because the circular chain of job loss is not being broken. Americans are not buying goods and services. This causes companies to trim expenditures on equipment and supplies, and decrease their employment rolls to maintain profit margins and keep investors happy. With new people out of work, forced to rely on savings and/or unemployment, they spend less, paying only for the necessities, and therefore the economy weakens further. This cycle continues apace, with companies holding dearly to unsustainable profit margins, rather than bucking the trend and putting people back to work. No longer is it OK to run lean; you must be able to maintain profits, even in the hardest economic times.
The Federal government can only do so much. While the stimulus bills initially helped, the fact remains that the government cannot continue to pour money it does not have into the economy to keep it running. The "free" market is supposed to be able to correct itself, but it shows no sign of doing so, squeezing every last dime out of operating margins to ensure that stock prices remain high and the outlook for their companies, healthy. Those who bear the brunt of this tortuous policy are the small and middle-sized businesses, who rely on the big businesses to generate their cash flow. The effect cascades down the supply chain, until small businesses are bankrupted and middle-sized companies are forced to lay off workers to survive.
Congress shows no signs of rushing to the aid of small and medium business in a mid-term election year. The Republicans hope to capitalize on the sluggish economy, as a way of pointing out the folly of Democrats, even though it was they who stalled and obfuscated and rejected to the point of hopelessly snarling necessary legislation. Even now, they could be helping small businesses with tax breaks and incentives, and doing more to get big business to pry money out of their wallets, but they prefer to watch the slow strangulation of the American worker in order to score political points with a constituency that does not seem to realize that their elected representatives are to blame for their plight.
The job situation will not improve until big business decides to stop the bleeding and pump up its payrolls. Rather than off-shoring work and trimming workers to force up productivity numbers, they need to grab up the available talent and put them to work in expansion and solidification. Until companies hire workers, injecting money back into the economy in the form of salaries and benefits, the news will continue to be dismal. While Fortune 500 CEOs may be enjoying their big bonuses, eventually the companies beneath them will be eaten away, and their golden parachutes will be more full of holes than they realize. It is up to captains of industry to step up and do their part, to take the cash out of the bank and put it where it will do the most good: in the hands of decent, hard-working Americans.