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The "Uncertainty" Canard

A week after the White House released its jobs bill, Paul Ryan took Fox News to say this:

It adds further instability to our system — more uncertainty — and it punishes job creation and those people who create jobs. Class warfare, Chris, may make for really good politics but it makes for rotten economics.

The operative word is uncertainty. The word has no substantive meaning. It's most often used by financial reporters to explain the movement of stock markets ("Uncertainty Cripples Fixed Income Arena"), but lately it's become the hobbyhorse of conservatives, who deploy it like a crucifix and garlic whenever they get within a country mile of progressive legislation. Here's Bloomberg News:

House Majority Leader Eric Cantor says that “job-destroying regulations” have left “a cloud of uncertainty hanging over small and large employers alike,” preventing them from hiring new workers. Representative Michele Bachmann says that small businesses are “scared to invest in new jobs because of economic uncertainty.” Sarah Palin, how would you rescue us? “I’d eliminate the uncertainty in the economy.” Mitt Romney: Obama’s policies “have done the one thing employers can’t deal with ... created more uncertainty.” House Speaker John Boehner: “Uncontrolled spending over decades -- by both parties -- has created an environment of economic uncertainty that is destroying jobs.”

It's all so much nonsense.

As Larry Mishel notes, there's no evidence that econonimic growth has been stunted by government and central bank actions. "[T]his recovery," he writes, "is far more investment-led than the recovery under the pro-deregulation George W. Bush administration." Furthermore, private sector job growth tracks with recent recoveries, "suggesting that businesses are not reacting to a new threat of potential regulations and taxes."

It's not as if companies can't hire. That $2 trillion in cash they're sitting on could take a lot of people off the dole. But that's unlikely. In the wake of the tech bubble, many companies decided to hold more cash in lieu of debt. This proved shrewd during the financial crisis, observed The Journal, as "their stronger balance sheets helped them weather the storm."

Frankly, it's understandable that companies are reluctant to hire. I would be, too, given that consumers are tapped out after a decade of flat incomes or don't have jobs at all. It doesn't help that the faith and credit of the United States has been turned into a bargaining chip, with Repubulicans now ready to take the economy to the brink to block tax increases that even many business leaders think are necessary. Indeed, this new brand of political extremism may be the biggest source of uncertainty right now -- courtesy of the same crew that is decrying uncertainty.