A lot of conservative economists seem to think that the unemployment rate is stubbornly high because of uncertainty created from the cap and trade and healthcare bills being debated in congress. So as I drive from strip mall to strip mall in my hometown, noticing there are at least 2, sometimes more, businesses shuttered I have to marvel at how disconnected from reality they are.
We are in the midst of a debt crisis - is it so unbelievable that over-leveraging of commercial businesses is still responsible for continued unemployment? No, it's not because of "uncertainty" created by government. It's because there's no dang customers! Businesses were so leveraged, based on everyone thinking housing prices would keep going up, that they were running razor thin profit margins in the best of times. Take away 20% of those customers in a matter of months and they cannot pay off their loans anymore. That, combined with banks now unwilling to refinance these businesses means none can keep their doors open, much less worry about hiring because of the uncertainty created by congressional bills.
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Update:
The real problem?
no customers.
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