This President is Great Continued: The Economy

You may have wondered why I did not mention jobs and the economy yesterday. The answer is that it is a subject that must be addressed on its own.

The president and government, as mentioned previously, can not create sustainable long term employment. Government can put in stop gap measures such as the hiring for the US Census, unemployment benefits or infrastructure projects to repair or build roads, bridges and the like. Roosevelt tried that; but in truth from 1929 until the US entry into WWII, unemployment(25%) and a stagnant economy were entrenched. Why did the war change things and people go back to work? One million people went into the military and the rest, both men and women, went in to America's factories.

Only business can create sustainable long term employment. Business is sitting on the side lines with trillions of not invested dollars parked in retained earnings on their balance sheets. Why? Business does not have the confidence that this administration is trustworthy to protect its interest and be fair.

These three concepts confidence, trust, and fairness are and have been the under pinnings of all economies since the beginning of time. Read or read about Adam Smith, John Maynard Keynes, John Hicks and today's Robert Shiller out of Yale and you will see the recurring theme that these Animal Spirits are what drive any economy. Animal Spirits is a term coined by Keynes that comes from the Latin animus meaning the use of ones feelings, mind and gut instincts to make economic decisions.

So, business should come off the sidelines, start investing and hiring which would pump money into the economy. The government must cheer them on. Both, however, must demonstrate fairness, confidence and trust for this depression to end.

More specific recommendations on what each should consider doing in future blogs. Please let me know what you think