Comments on: That Graphic I Said I’d Post

By: Jake

Jake — Sun, 05 Aug 2012 18:27:47 +0000

The huge spike in concern about inflation in 2009 shows that this is largely BS. There was no inflation anywhere near there, except in the fevered imaginations of right-wing apocalyptics. To me it looks like the response of businesses to poll questions like this reflects largely what the talking heads are telling them to think.

By: David

David — Sun, 05 Aug 2012 07:54:33 +0000

And while the worry about regulation has been going up recently, I don’t think that there is any credible evidence that the amount of regulation small businesses are facing is an higher today than it was a few years ago.

I tend to take this kind of subjective poll with several large grains of salt. The issues that small businesses will mention in a poll are at least as much driven by the discussions in the media and in the political process as they are by the facts.

By: Paul F.

Paul F. — Fri, 03 Aug 2012 22:45:41 +0000

I wonder if another thing holding back hiring has to do with the size of the derivatives market. The Credit Default Swap market was larger than the New York Stock Exchange before the collapse, and by some reports, is only bigger now. The entire derivatives market (the value of all investments covered by those derivatives?), by some reports, is greater than the whole world economy.

In other words, if more people are hedging their bets (and some are making lots of relatively unregulated money off of derivatives–which come from failed investments), then it might seem the wrong time to hire, when so many are betting on failure or hedging bets. It would seem, instead, to be time to be conservative about cash reserves (and not to “bet” in a hopeful way by hiring).

It might change the equation if one of two things happened:
1. Reenact Glass-Steagal, and outlaw many of the derivatives that allowed or caused the crash to occur.
2. Short of that, regulate and tax derivatives in a major way so as to make it *much* harder to profit from betting an investment will fail. The money would then have to move toward betting that good investments will succeed, and toward helping them succeed.

If the economic climate changed in that way, it would make much more sense to hire new employees.