Hood gets it wrong on the economy

Making a tired and inaccurate argument:

Their regulatory excesses and fiscal imbalances have chased investment capital into low-risk, low-return securities. These policies have shattered business confidence.

It wasn't "regulatory excesses" that funneled $62 trillion into credit default swaps; it was the naive and reckless faith in the free market, as espoused by pundits like you, that led a hapless Republican Congress to throw caution to the wind and tear down the regulatory walls. And guess what? Most of those walls are still down, which is why investors are so skittish.

Job creation is a side effect of productive investment. Someone has to be willing to risk capital to start or expand a business venture. That investor or entrepreneur is motivated by the prospect of profitable return, not a desire to employ people for the sake of reducing the unemployment rate.

This is correct for the most part, but Hood is missing (or intentionally avoiding) an inescapable reality: The amount of investment capital wielded by entrepreneurs/angel investors is a drop in the bucket compared to how much is controlled by mega-banks and fund managers.

And in fact, many of those entrepreneurs use government grants and guarantees to leverage more funding from those very mega-banks. Or they did, anyway, before anti-government zealots started "getting in the way" of business and dragging us down the road to mediocrity austerity.

Having a huge percentage of the nation's wealth concentrated in a relatively small number of institutions is not only inherently risky, it can also create a zero-job-growth formula which still lines the pockets of the uber-rich:

This pattern is also visible on an annual scale. Productivity increased 3.9% throughout 2010, while compensation expenditures decreased 1.5%. Either one of these factors would benefit the profit margin for corporations, but the combination of lower costs and higher productivity certainly boosts profits for corporations, even amid a relatively weak economy.

Corporate profits have been at or above the pre-recession level since the beginning of 2010. Throughout 2010, domestic profits grew 37% and international profits grew about 9%, reflecting quite a turnaround for corporate profits in 2010.

Without doubt, corporations have not only recovered from the great recession, but corporations are stronger than ever before. In fact, corporations currently have a record amount of cash on hand with almost $1.9 trillion in banks.

This scenario plays out in poorly regulated countries every day, and has since the dawn of time. In the absence of structure as defined by society (elected government), wealth and resources flow upwards and overall economic health stagnates. I can only hope that we're smart enough to (eventually) grasp this, but the evidence leads me to believe otherwise.