Capital has lots of different options when things don’t go its way. One of them is to go on strike, by decreasing investment expenditures. The result is a decline in economic activity and an increase in unemployment, which—via lower wages and government stimulus programs—(perhaps) restore the conditions of profitability.
(The chart is from the Cato’s Chris Edwards, who blames the decline of private investment on fears of “higher taxes, inflation, health care mandates, increased labor regulation, and other profit-killers coming down the road from Washington.” He seems not to understand that (a) capital’s strike began long before Obama was elected and (b) much of capital wants health-care reform precisely to restore the conditions of profitability.)
