Job Creation: Taking the Risk That Floats the Boat

According to the captains of capital finance, entrepreneurs own and operate businesses, and get financing, to make money, not to create jobs.

Safe to say that today's disappointing jobs data supports that hypothesis; and with the capital in control of the private sector, the argument that government is to blame lacks the proper proof of sound deductive reasoning (one minus one always equals 0) unless, of course, there is some missing variable to evidence some other possibility.

The captains of finance argue there must be some reason for massive unemployment other than because it is what they want, especially those that steer ships too big to sink in risky waters.

That unemployment is the inteneded application of the capital is an easily verifiable hypothesis: equities have risen steadily since the Great Recession. Where did the value come from?

There is a point of diminishing returns, however: the deflationary trend indicated by the accumulation of gamma risk (the risky waters the captains are now navigating).

At this point of the business cycle, the captains claim government roils the troubled waters, increasing the risk of investment while the trouble pours in over the bow with a deflationary headwind. At the same time, however, they argue the ship will sink without being bailed out with an inflationary pump priming.

Having confirmed that the captains float a bigger-is-better boat and sail the ship with a willing and able Ivy-League crew, throwing the passengers overboard to keep the ship afloat with an accumulating treasure in the hold, the deflationary trend now threatens them. The captains, to avert a mutiny of the bounty, realize they need the passengers to pay the freight and the crew to keep the ship afloat in regulatory waters, or go down with the ship.

"The risk" must be taken not only to keep the ship afloat, but to keep it sailing in the right direction.