Kellner writes:
"The health of the labor market is best measured by employment, not by unemployment....
...The drop in the unemployment rate from over 10% just after the recession ended to 7.5% today is more a reflection of people dropping out of the labor force than of people finding jobs....
...My colleague, Rex Nutting,pointed out last week that the drop in hours worked in April was the equivalent of a loss of more than 500,000 jobs..."
It would seem as though mention should be made of the old ratio from the 1980's that found growth in the private economy (read: jobs) needed more money to be left in the private economy both as a reward for and the means to create private jobs. That ratio was the share of GDP taken by government and was roughly 19%.
Regulatory concerns, relative tax rates, labor policies also matter and with respect to the Obama Administration, plus the excess above the above ratio taken by the entitlement state, is something too easily overlooked.
Many European countries talk about a growth agenda for their economies but, these economies are so mired in too high taxes and too much government that they can't afford or support real growth in private jobs.
If a person knows how to create a business plan, one knows that in the private economy what matters is the net after-tax internal rate of return (plus other factors). If the net a/t return isn't there, then the venture isn't begun.
Government should be looking to maximize this net a/t return for the greatest number of possible entrepreneurs and job creators. Somehow, however, it can't get beyond raising taxes to support its welfare state.
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