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Don’t Blame Companies for the Hiring Freeze

Thursday September 15th, 2011   •   Posted by Stephanie Freedman at 10:15am PDT   •  

John Stossel talks job creation today with Fox News:

Hiring doesn’t come from new laws. It comes when government gets out of the way and leaves all of us with simple and predictable rules.Given time, an economy, unless crippled by government intervention, will regenerate itself. An economy is not a machine that needs jumpstarting. The economy is people who have objectives they want to achieve. They will not sit on their hands waiting for government to “fix” things. Free people continually work to overcome obstacles to get what they want.

But Washington still remains confused:

The big-government media are baffled that big spending hasn’t paid off. “Corporate profits are soaring. Companies are sitting on billions of dollars of cash. And still, they’ve yet to amp up hiring or make major investment,” wrote the Washington Post when Obama’s first “stimulus didn’t work.

Stossel explains:

C’mon, Wash. Post, don’t blame the companies. CEOs don’t just wake up one day and decide not to hire. They hold back, quite reasonably, because they don’t know what obstacles they’ll face next. Will activist government prop up housing prices? Impose a new health care mandate? Forbid me to move to South Carolina?

When rules are unpredictable or unintelligible (is the investment firm you use in compliance with the 2,300-page Dodd-Frank finance regulatory act?), when new employees are threats because byzantine Labor Department regulations make it impossible to fire employees, when it is unclear what taxes lie ahead, businesses hesitate to hire.

Nothing more effectively freezes business than what historian Robert Higgs calls “regime uncertainty.”

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September 2011