How Do You Turn High Unemployment into SUPER High Unemployment?

high unempoymentWell the obvious answer to that question is: Hand the reins of power over the world’s most famous community organizer. Lest you try to ascertain exactly what high unemployment has to do with our stated mission of providing a sound monetary education to those who may have missed it in school, there is nothing more money oriented than a nation that can’t find work. While reported high unemployment numbers linger around 10%, that’s not even the worst news. Certain demographics, in the prime of their working life, are being hit even harder.

Desperate young people approaching college graduation are signing up for another year of classes, seeing no reason to risk exposure to a rocky job market. Maybe another year will bring better options. The prospect is not likely but who can blame them for choosing that path? Thirty-somethings have gone into seclusion in their parent’s basement or the guest room above the garage, shell-shocked at the extent of the working world bloodbath.

What happened? How did we end up here. It’s easy to blame it on “slow growth” and be done with the sordid topic but that doesn’t help anyone understand what’s really going on in America today. To answer that question, let’s look at some numbers from the National Bureau of Economic Research. Actually, skip the numbers. We’ll just tell you what is happening on the ground. The rate of new start-up businesses is falling seriously in arrears when compared to the number of businesses shutting their doors.

During boom times, companies tend to experience employee bloat, which doesn’t mean their employees get fat but rather that the business is making money hand over fist and hires too many workers. When boom turns to bust, the extraneous employees are laid off. When a business closes down, obviously all employees end up as part of the high unemployment number. New businesses fill the recovery phase with jobs, albeit at a lower pay wage than what the “boom” workers were used to getting. Still, it powers a rising trend of economic growth and living standards.

The trillion dollar question becomes why aren’t new businesses starting up this time? For that to happen requires an optimistic belief in the future of the country. The current White House occupant has chosen to pretend we’re on the road to recovery by nationalizing businesses, turning a blind eye to bad debt, creating fake money from thin air and make-work jobs funded by taxpayers. Entrepreneurs of the nation see through this sham and aren’t about to undertake a risky financial move under present conditions.

The problem has now been identified. Solving it is a different story and will require more testicular fortitude than Mr. Obama has displayed thus far.

The American Monetary Association Team

American Monetary Association

Flickr / Evelyn Proimos

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