The Explanation

Why is the unemployment rate still going up?

Here's one explanation:

On ABC News today, Vice President Joe Biden told George Stephanopoulos, "The truth is, we and everyone else misread the economy."

Vice President Biden said the administration's prediction that unemployment would peak at 8 percent was too optimistic. "The truth is, there was a misreading of just how bad an economy we inherited." he said.

Here's another explanation:

Jerry Bowyer, chief economist at Benchmark Financial Network, wrote on CNBC.com last week that small businesses are not hiring because they are "paralyzed by regulatory uncertainty":

"If they hire someone who ends up doing poorly, will they be able to fire that person? Will they have to pay their health care bills after they've been terminated? If so, for how long? Who will pay for all these stimulus checks? If it will turn out to be small business, why would they hire instead of keeping costs low to prepare for the big tax bill? Where will the market move? Are you in the right business or are your clients in a politically disfavored industry? Are your clients in health care (being nationalized), autos (already nationalized), banking (somewhat nationalized) or any energy production process which uses carbon (pulverized)? Until you know, you don't grow, and until you grow your market, you don't grow your payroll."

You be the judge.


Copyright 2009

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