NEW YORK ( ETF Expert) -- A wide range of uncertainties caused many investment assets to struggle in the April-June period.
Foreign stocks, foreign bonds and currencies suffered sizable declines in the second quarter. While the losses for major U.S. stock benchmarks were not quite as grim, falling prices still rattled confidence.
Granted, the majority of market anxiety emanates from Europe's endless debt debacle. However, the concerns are hardly confined to shoring up the balance sheets of developed world banks and bankrupt nations. The potential for a Middle East flare-up remains high, whether it is the nuclear capabilities of Iran or the ongoing civil war in Syria.
And then there's the well-being of the U.S. economy. Perhaps ironically, many economists were speaking about the U.S. economy in glowing terms prior to April. Even now, many blame the unwillingness to hire on corporate greed or slowing demand out of China and Europe.
Yet, that's more of a smokescreen.
In truth, the partisan divide on tax policy (a.k.a. "fiscal cliff") has created intolerable levels of uncertainty in the minds of job creators. Neither small businesses nor larger ones know which way the government ball is going to bounce -- not in an election year like 2012.
Think back to 2010 and the popularized "economic soft patch." It wasn't just the second round of quantitative easing, or QE2, that got the ball rolling again, but clarity in tax policy after the 2010 elections.
Here in 2012... same thing. Job creators are, once again, waiting for more certainty in tax policy before they will commit whole-heartedly to bringing new hires aboard.
The reality that politicians and technocrats understate joblessness makes matters worse; that is, Congress and the White House are not going to meet the business world's needs for greater tax policy clarity because the people aren't demanding action prior to November. And they're not demanding action because both sides are content to work with a number like "8.2% unemployment."
Perhaps the people would be a little more incensed if they understood the concept of labor participation. Specifically, 36.4% of working-age persons between 16 and 64 are unemployed and not looking for work. That's a 30-year high for non-participation.