Why The Economy Is Stagnant

When the staff at a company lose confidence I top management, they do not perform as well as they could, and profits lag. When the staff feels that the CEO and other top managers lie about many issues and they do not know what is reality or what to expect next, the staff tends to just muddle along and not step out taking risks for the business. When the CEO always takes credit for whatever happens, and does not share the credit with those who really put themselves on the line for the company, then the staff loses its interest to take the initiative, When company politics and making the CEO look good become the main goal of the company, and being in the right group and saying the right thing is paramount, then staff tends to shelter and not risk saying or doing much of anything. When covering up mistakes and lying become the expected norm, than the staff tend to do little to avoid having to institute another cover up. This is the same when the president and the White House act this way. In this case the staff is the business community.

Many wonder why this recovery is so weak and muddling along. While there was surely a deep and lasting impact from the crash, and massive crashes such as this have long lasting tails, the recovery should not have been so slow. The Participation rate remains terrible, the percentage of full time workers to the population of working age is as bad as it has been in decades. Long term unemployment remains very bad. The real unemployment rate as measured by U6 is still over 12%. All of this despite the Fed doing three rounds of QE and rates being historically low year after year. Deficit spending continues so fiscal policy is not the restraint. It is an unwillingness of business to use the trillions of stashed capital to invest in capital assets. The result is productivity has lagged badly ad equipment is not updated. More modern factories are not built. Labor is stretched to the limit. Part time labor is at a near high due to Obamacare meaning staff are not as efficient as they would be were they full time. And now we get a push to raise the minimum wage, Mayors like DeBlasio and the mayor of Seattle trying to implement long failed socialist agendas, and in Seattle pushing through a $15 minimum wage. Why would any sane businessman hire or invest under these conditions.