Employment and banking

I may be unique in having a viable explanation of the current high unemployment in the face of a robust and growing economy.  A non-political explanation.

To understand my position you need to know two historic facts.

The first fact is that Japan has had virtually no unemployment (under 2% as measured by international standards) since the mid-1950s.  Japan achieved this fifty year success after studying the issue, discovering that small business absorbs the hard to employ and then Japan created a strategy to protect and expand small businesses.

Second fact, at the turn of the 20th Century banks provided nearly 90% of all business finance and 100% of small business financing.  At the turn of the 21st Century banks provided only 20% of total business financing (the rest is bonds, stocks, insurance companies and retirement funds) and more than 40% of financing for small businesses (including credit card financing).

Currently loans to small businesses are still at the contracted level they fell to in mid-2008 during the finance crisis.

Put these two together and we can see that the absence of expanded finance for small business is one major element that is keeping unemployment high.

No expansion of bank financing for small business, no expansion of the job market for the unemployed.

The most recent $30 billion Congressional Act to deal with this problem was removed today.