A Hidden Cause Of Market Turmoil?

I've heard something a number of times from a number of different people now, so I think there's some increasing credibility to it, and I wanted to pass it along for your consideration.  Have you wondered why the stock market has been bouncing around like crazy, and how businesses (both small and large) are bracing for cutbacks?  An example:

Employers are moving to aggressively cut jobs and reduce costs in the face of the nation's economic crisis, preparing for what many fear will be a long and painful recession.

The labor market has been weak all year, with a slow drip of workers losing their jobs each month. But the deterioration of the job market is now emerging as a driver of economic distress, according to a wide range of data and anecdotal reports from corporate America.

In September, there were more mass layoffs -- instances in which employers slashed 50 or more jobs at one time -- than in any month since September 2001, the Labor Department said yesterday. And nearly half a million Americans have filed new claims for unemployment benefits in each of the past four weeks, the highest rate of such claims since just after the terrorist attacks seven years ago.

Anecdotal reports suggest that the hemorrhaging in the job market has only begun.

Here's the big question that I'm hearing pretty frequently now: what effect is Barack Obama's economic policy proposals having on this already weakened economy?

Don't get me wrong - I'm not suggesting he's the sole cause of the yo-yo-ing.  But, I've seen more and more people suggesting that businesses are getting increasingly skittish about Barack Obama winning the election, and that's at least a significant part of what's causing the constant turmoil.  Consider the following excerpts from the story above:

[T]he pullback in hiring is not a direct result of tightening credit. Rather, firms simply don't know whether their own customers will be affected by the financial crisis; as a result, they want to hold their breath and delay hiring decisions until they have a better sense of the future...

The slide accelerated in late summer...

More obscure indicators monitored by economists at the Federal Reserve and in the private sector also show an inflection point in late summer...

What?  The problem isn't the credit crisis?  Hmmm...  What else happened in the summertime?  Hillary bowed out of the Democrat primary race, leaving Obama in the pole position for the nomination.  What happened in late summer?  More details on Obama's tax plans, as well as bailout mania, the first steps toward penalizing and socializing successful American businesses.  Combine those with the subprime mortgage meltdown and we have the makings of an economic perfect storm, especially with a Democrat supermajority to go along with every Obama policy.

Now, I could see how all of this looks a bit sketchy, but consider this from the Wall Street Journal:

The business community is back in politics. After years of contented political gridlock, American companies are now officially horrified at what an all-Democratic Washington intends to inflict on the U.S. economy. The Chamber is throwing its extensive resources at denying the left a filibuster-proof Senate. In doing so, it has stuck its finger in the Democratic leadership's beehive, and is facing retribution.

It says something about the momentousness of this race that the Chamber doesn't care. While the trade group has always been a force, over this decade many businesses have inched back from in-your-face politics. They felt comfortable with Republicans in charge. They felt comfortable with Democrats running Congress, since divided government rarely brings change. They felt comfortable not offending either political party, and not inviting attack by liberal activists.

They do not feel comfortable now. The Democratic Party once respected the need for a healthy U.S. business community. That was in part because business was ferocious enough to demand respect. But a resurgent labor movement has asserted control over the party. And business has been more concerned with PR than principle. This, and the recent financial crisis, has emboldened Democrats to pursue a pure antimarket agenda.

The Chamber has been fully engaged in close Senate races all over the country, prompting Democrat outrage and accusations of hackery at the non-partisan group.  Those accusations are completely false:

[The Chamber] makes endorsements based on which candidate will do the most for the business community. ... As it happens, the Chamber in 2006 went all out for three vulnerable House Democrats who'd been targeted for their free-trade votes. This year it is going to bat for Louisiana's Mary Landrieu and Virginia's Mark Warner -- both of whom it believes will work with business.

Mr. Miller doesn't apologize for supporting members' interests: "What if we became lambs instead of lions? Would the legislative agenda be less beholden to trial lawyers and labor unions? Maybe this is a shot at K Street, but the lobbying mentality of too many is to go up and be solicitous, and hope to get some crumbs from the table. That is not our deal. Our deal is to be the last line of defense for the business community. And while we always work collaboratively, that's what we'll continue to be."

Which is another way of saying the Chamber's real work starts Nov. 5. Senate supermajority or no, Democrats will be in control. The fights coming will demand that business take sides. If one outcome of this year's election is that the business community becomes the loudest voice in Washington for freer markets, so much the better. The Chamber is showing the way.

When the official organization to protect American businesses -- which backs pro-business Democrats and Republicans alike -- is going all out against Barack Obama, you know there are some major problems with his plans.  I refer you to my previous post, as well as the links in the "Critical Election Information" section at the top right of this blog to find out exactly what those problems are.

Keep in mind, too, the mindset of most of the people who run businesses, especially small businesses.  They deal in reality, with a keen eye toward their bottom line.  If they can't make a profit, they can't stay in business.  To maintain a profit in the face of higher taxation, they'll have to make cuts in other areas: jobs, salaries, and benefits.

When it comes to economics, we would be wise to keep a sharp eye on what business does, and right now the business world seems to be increasingly twitchy at the idea of an Obama presidency.

There's my two cents.