Likewise the "rich" (insert definition of choice, but basically the western world's declining middle class as well as genuinely wealthy) are under attack from rising tax burdens, rising living costs (e.g. education and health care) and face widespread threats of more (the "rich" should pay more etc).
Regardless of the merits of individual proposals (and most are nothing more than a naked grab for revenue so governments unable to live within their means can make electoral bribes to people who, for the most part, take from rather than contribute to the cost of running the country), one of the consequences of the attacks on businesses and taxpayers is that they feel threatened. People who feel threatened don't spend - they go into survival mode:
- businesses (especially smaller businesses) don't invest in expansion and don't hire - they conserve their cash rather than risk it
- taxpayers (especially the middle class) faced with the prospect of rising taxes will cut back spending where possible (discretionary consumption spending and charity being the easy cut backs) - they pay down debt and build emergency funds
- investors divert money away from risk assets into safer investments - in particular government issued or backed securities which do much less for economic expansion than many other forms of investment
Simple message - if you want businesses to invest in themselves and create jobs, take away the threats. This is especially true for countries which do not enjoy a low cost labour advantage.
And yes, I had far too much to drink last night.