If anyone (other than our politicians) is still wondering why U.S. unemployment remains near record highs, why the economy remains stagnant, or why U.S. real wages have gone nowhere for over 30 years, look no further than this comment, on our past post “Has The West Lost It’s Way”.
For it is not by an act of Wall Street, nor through an act of Chinese competition or currency manipulation, but through the actions of the U.S. government that our economy has been broken, by putting the screws to all but the largest multinational companies. The source of our economic woes can be summed up in one word and one word only: compliance.
In a concise story that sounds all too familiar, Jack explains exactly why, because of nothing more than government interference, his American dream turned into a nightmare, and he was forced to create a new dream elsewhere, leaving his former employees in the soup lines while he created new jobs overseas… (read comment).
As we’ve noted on multiple occasions, excessive regulation is the straw that broke the back of American job creation, and explains why, more than any other reason, there will be no “recovery” in jobs or incomes, and America’s third world status is imminent if not already here.
So while global corporations might continue to keep the lights on in the USA (propped up by free FED money, hidden subsidies, tax loopholes, and regulatory favortism), and mask the reality of decline to the masses, the lack of small and medium business growth in the USA will continue to suck the life out of the American middle class. Meanwhile entrepreneurs in emerging markets get rich, and their middle class grows, because their governments stay out of the way.