Quote:
Originally Posted by d-ray657
One might think that the decline in investment was as much related to the fortunes that were lost in the crash during the Hoover years, and the resultant doubt in the stability of the markets as a place for investing capital. The good prof. seems to be making a result-oriented assumption about the causes of investor reluctance, blaming it on the Government programs that were designed to relieve the effects of the crumbled economy, rather than the creation of the economic circumstances that lead to the crash.
Regards,
D-Ray
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Rather, I think the question being asked is: Was the medicine worse than the disease? Frankly, I think we're seeing much the same thing today. Business owners that I speak to are as much worried about what the government might do as they are planning and executing their business plan.
Just one case in point - the lack of certainly that is being created by the lack of clarity about whether or not the "Bush tax cuts" will be allowed to expire. Whether or not one agrees or disagrees with continuing the status quo, the president's advisers are begging him to let them expire. At the same time, the President and key Democrats are sending mixed signals about whether or not they will expire, or possibly be modified in some manner. This is creating a level of paralysis in the marketplace.
Uncertainty stalls investment, which stalls forward progress in the economy. I see this nearly every day. Few of my clients are actually looking at adding to staff, and if an employee leaves, they think long and hard about replacing them. Thus, employment levels / company payrolls continue to stagnate.