By JLP | June 30, 2011
Lots of conservatives are giving President Obama a hard time over his comments on the economy (starts at around 2:00).
He mentions that technology has taken jobs from people.
He’s not seeing the full picture. Technology may replace workers but it also opens the door to improvement and frees up workers for other jobs.
I would suggest that President Obama read Chapter 7 of Economics in One Lesson, which opens with:
Among the most viable of all economic delusions is the belief that machines on net balance create unemployment. Destroyed a thousand times, it has risen a thousand times out of its own ashes as hardy and vigorous as ever. Whenever there is a long-continued mass unemployment, machines get the blame anew. This fallacy is still the basis of many labor union practices. The public tolerates these practices because it either believes at bottom that the unions are right, or is too confused to see just why they are wrong.
The belief that machines cause unemployment, when held with any logical consistency, leads to preposterous conclusions. Not only must we be causing unemployment with every technological improvement we make today, but primitive man must have started causing it with the first efforts he made to save himself from needless toil and sweat.
Those words were written in the late 1940s!
I think the main reason companies aren’t hiring is because of uncertainty. Where are oil prices headed? What impact with the health care have on business? How many more health care waivers will be issued? Are banks lending? What about China? What about consumer confidence?
I realize that these are all parts of the big wheel and that each are dependent on the other. For instance, consumer confidence won’t increase until companies are hiring. Companies are nervous to hire if consumer confidence shows that they won’t be willing to spend.