The Todd County (MN) unemployment rate continues its trend of increases. Over the past three years we have witnessed an alarming acceleration in unemployment from 5.3% in 2006 to 6.6% in 2008.  Estimates of the unemployment rate forecast show current rates in Todd County around 8% for the current year.

SCSU Scholars economist, King Banaian, shows in a recent study (Slowing Layoffs & Fewer Hires) that while there are fewer layoffs than in previous quarters.  The acceleration in hiring for new jobs just isn’t registering.  

In my conversation with local employers and employees this seems to be the case.  An abundance of caution is being taken to figure out a true direction in our economy.  

Accordingly, one executive, representing our areas largest employer referred to the numerous changes that might be occurring at our state and federal levels. (i.e. banking, health, taxes)  He told me their company just cannot make investments or decisions on a large scale until the legislative actions are brought to a definitive conclusion.

Many of you might remember a post on The Policy Bubble (March 2008).  I had warned about this exact circumstance.  What our free market needs is political certainty on the levels of taxation, regulation, and reform.  Right now business cannot resume until elected representatives in Washington & St. Paul get out of the way.

At the local government level it means elected representatives should not be raising taxes at any level.  Relying on reserves and reform resulting in less of a burden on businesses and citizens. It is a correct economic course of action.  Cities need to take a fresh look at what they are mandated to provide and what they should be cutting altogether.  Touch choices but needed choices.

Let's let businesses and people use their money to drive demand and investment.  It is then true recovery and innovation can occur.

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