Bankruptcies up 9% in Q2
posted at 2:20 pm on August 18, 2010 by Ed Morrissey
If Democrats wonder why voters aren’t buying the Recovery Summer public-relations campaign, it’s probably because more of them than ever can’t buy much of anything. Bankruptcy filings rose to their highest quarterly level in five years in 2010 Q2, underscoring the decline in the American economy heading into the summer:
U.S. bankruptcy filings have reached the highest level since 2005, government data released on Tuesday show, as the economy slows and the unemployment rate hovers just below double digits.
There were 422,061 bankruptcy filings between April and June, according to the Administrative Office of the U.S. Courts, up 9 percent from 388,148 in the prior three-month period, and up 11 percent from 381,073 a year earlier. …
Quarterly filings surpassed 400,000 for the first time since a record 667,431 bankruptcies were begun in the fourth quarter of 2005, when Congress overhauled federal bankruptcy laws and made it harder for people and businesses to file.
“We know the causes of bankruptcy are principally job losses and health care, with the overlay of the foreclosure crisis,” said Deborah Thorne, an associate professor of sociology at Ohio University. “It feels very unsettled, and I’m not surprised the numbers are going up. Until we get our feet on the ground, provide decent-paying jobs, and do something with the housing crisis, bankruptcies will continue to go up.”
Corroborating this is a piece of news that won’t help Harry Reid. Nevada topped the list of filings, while not coincidentally having the highest unemployment rate in the nation and one of the worst foreclosure problems as well. In contrast, Texas came in 48th.
Again, the root of the economic misery is the lack of investment in job-creating activities. That comes from an expansion of government regulation that is ambiguous, ill-considered, and overreaching. ObamaCare is the worst of these. Chris Barden, the GOP candidate for Attorney General in Minnesota, notes the frequency in which the phrase “the Secretary shall determine” or similar language appears in the bill to show the massive uncertainties for businesses in the ObamaCare regime. Most of the rulemaking has been left by Congress to executive fiat, and until those rules get defined, businesses have no idea how to invest — and simply won’t risk capital until absolutely necessary as a result. And ObamaCare is hardly the only locus of uncertainty while Democrats continue to push for cap-and-trade and other burdensome regulatory regimes.
Still, one can notice a measure of improvement. For the first time in quite a while, Reuters didn’t include the word “unexpected” in reporting negative economic results. Perhaps they’ve finally caught up to the rest of us in reading economic indicators and understanding what they mean.