Contact Us Disclosures Blog
Make an Appointment Contact Us Podcast Blog
Market Commentary Audio Archives Book Shelf InvestAbility Center

Jobs and Faith

October 5, 2012 – 5:05 pm

The jobs report this morning clearly shows the struggle in producing jobs in this economy. There is a clear relationship in job growth and economy growth. It is impossible to get any significant economic growth without job growth and the opposite is just as true. That begs the question as to how can we start a cycle of ever expanding growth in both jobs and the economy?

The simple truth is that it takes faith. I am not referring to religious enlightenment. I am referring to faith in the system. Faith in the political system, and the legal system in which an economy operates. Fair and open rules and regulations that are applied equitably. In the U.S. we take fairness and equitable application of the law for granted whereas in many societies that is not true.

When there is uncertainty about rules and regulations economies tend to slow. No corporation large or small wants to take on additional risk by expanding in a changing legal environment whether it be the possibly of a default in payments by governments, e.g. Greece, Spain or certain cities in California, or in the U.S. with new financial and health care regulations that have been passed into law but with few of the many new rules published and implemented.

Faith in any system, understanding the landscape of commerce, has to come before corporate expansion, or before startup companies are willing to take higher risks. This may not be the entire reason corporations are sitting on their cash maintaining very high liquidity levels but it certainly explains some of it. Job production will continue to struggle until faith is restored.

Good Trading
Steve Peasley

Post a Comment