Archive for the ‘Jobs – Unemployment’ Category

Is financial stress making Americans dumber?

September 12, 2017

Connecting some research “dots” suggests that may be the case.

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A recent Bankrate.com survey says that 40% of respondents or their immediate family ran into a major unexpected expense last year.

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That’s a problem since most Americans (63%) don’t have enough budget-cushion or savings to cover an unexpected $1,000 expense (think, medical bill, house or car repair).

According to the poll, only 37% said they would be able to take the money directly from savings; the rest said they would try to cut expenses (24%), use their credit cards (15%) or borrow money from friends & family (15%). About 1 in 10 had no idea what they’d do.

Predictably, those with higher incomes were most likely to say they would be able to tap savings for emergencies or divert some discretionary spending.

75% of people in households making less than $50,000 a year and 2/3s of those making between $50,000 and $100,000 would have difficulty coming up with $1,000 to cover an unexpected bill.

Even for the wealthiest 20% — households making more than $100,000 a year — more than 1 in 3 say they would have  some difficulty coming up with $1,000. Source

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Obviously, the threat of a large, unexpected expense is emotionally daunting to most Americans.

“It definitely adds stress to everyday life. It hangs over you.”

To make matters worse, there is some evidence that the financial stress may impair “cognitive functioning” – that is, dent a person’s IQ.

(more…)

Is financial stress making Americans dumber?

January 27, 2017

Connecting some research “dots” suggests that may be the case.

======

A recent Bankrate.com survey says that 40% of respondents or their immediate family ran into a major unexpected expense last year.

image

That’s a problem since most Americans (63%) don’t have enough budget-cushion or savings to cover an unexpected $1,000 expense (think, medical bill, house or car repair).

According to the poll, only 37% said they would be able to take the money directly from savings; the rest said they would try to cut expenses (24%), use their credit cards (15%) or borrow money from friends & family (15%). About 1 in 10 had no idea what they’d do.

Predictably, those with higher incomes were most likely to say they would be able to tap savings for emergencies or divert some discretionary spending.

75% of people in households making less than $50,000 a year and 2/3s of those making between $50,000 and $100,000 would have difficulty coming up with $1,000 to cover an unexpected bill.

Even for the wealthiest 20% — households making more than $100,000 a year — more than 1 in 3 say they would have  some difficulty coming up with $1,000. Source

======

Obviously, the threat of a large, unexpected expense is emotionally daunting to most Americans.

“It definitely adds stress to everyday life. It hangs over you.”

To make matters worse, there is some evidence that the financial stress may impair “cognitive functioning” – that is, dent a person’s IQ.

(more…)

Obama the job creator … say, what?

December 20, 2016

According to his economists, the trillion dollar stimulus program was a bust!

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Lots of MSM headlines these days about the strong economy that Obama is handing Trump … with a strong suggestion that Trump will have a hard time matching Obama’s stellar performance as a job creator.

Really?

On the plus side, the reported unemployment rate has dropped from the financial crisis highs.

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For today, we’ll push aside the facts that (a) American’s who have been economically crushed largely voted the Dems out of office; and (2) the labor force participation rate has dropped precipitously – giving the unemployment rate a faux boost.

But, let’s dig a little deeper into the numbers … using the Administration’s own analyses.

(more…)

What do tenured profs & Federal judges have in common?

December 8, 2016

“A permanent job with good benefits is (now) beyond reach for most American workers … only federal judges and tenured professors are insulated from the forces of workforce transformation”

That’s according to the authors of the book Working Scared (Or Not at All): The Lost Decade, Great Recession, and Restoring the Shattered American Dream

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The book Working Scared is focused on the ways that the American workplace has changed in the past 50 or so years … and the implications on American workers (and non-workers).

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The central premise of the book is that globalization (out-sourcing & off-shoring); de-industrialization (towards more services and knowledge-based); technology-intensity (computers, internet, robots); and de-unionization have shattered the American Dream for tens of millions of working adults who are struggling or poor … “despite working hard and playing by the rules.”

More specifically …

(more…)

What has happened to workers who lost their jobs during the recession?

December 7, 2016

After last week’s employment numbers, Administration reps emphasized that over 12 million jobs have been added … recovering the number of jobs lost, plus a few to spare.

Predictably, conservative pundits countered that that the “mix” of jobs has deteriorated … well-paying full-time jobs have been replaced with lower paying full-time jobs and involuntary part-time jobs … with many of the added jobs going to immigrants – some legal, some not.

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Coincidentally, I started reading a book titled Working Scared (Or Not at All) … about the plight of the American worker … both old-timers who worked hard and played by the rules and newbies who are graduating with high college debt and disappointing career prospects.

The authors cut to the chase by researching the core issue: have the workers who lost their jobs bounced back?

(more…)

Flashback: Over 100 million “hard workers” are now jobless or “working scared”.

November 11, 2016

Trump’s target constituency was identified by 2 liberal academics … who laid out the case, but drew the wrong conclusion.

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Bottom line: Roughly 75% of the U.S. labor force (i.e. 100 million people) have been personally affected by or deeply concerned about joblessness:

Originally posted on May 15, 2016 titled “What do tenured profs & Federal judges have in common?“

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A permanent job with good benefits is (now) beyond reach for most American workers … only federal judges and tenured professors are insulated from the forces of workforce transformation”

That’s according to the authors of the book Working Scared (Or Not at All): The Lost Decade, Great Recession, and Restoring the Shattered American Dream

======

The book Working Scared is focused on the ways that the American workplace has changed in the past 50 or so years … and the implications on American workers (and non-workers).

clip_image002
=======

The central premise of the book is that globalization (out-sourcing & off-shoring); de-industrialization (towards more services and knowledge-based); technology-intensity (computers, internet, robots); and de-unionization have shattered the American Dream for tens of millions of working adults who are struggling or poor … “despite working hard and playing by the rules.”

More specifically …

(more…)

WashPost deals Trump a turnaround card …

August 8, 2016

I can’t believe my eyes.

I’ve oft opined that the Washington Post is most biased of the Clinton-supportive print media.

Stories of the Post’s 30-person Trump attack team are widespread and not denied by the paper.

So, imagine my surprise when I saw the headline:

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The article is a thorough investigative story — not an opinion piece.

Here’s the short version of the story …

(more…)

Is financial stress making Americans dumber?

May 24, 2016

Connecting some research “dots” suggests that may be the case.

======

A recent Bankrate.com survey says that 40% of respondents or their immediate family ran into a major unexpected expense last year.

image

That’s a problem since most Americans (63%) don’t have enough budget-cushion or savings to cover an unexpected $1,000 expense (think, medical bill, house or car repair).

According to the poll, only 37% said they would be able to take the money directly from savings; the rest said they would try to cut expenses (24%), use their credit cards (15%) or borrow money from friends & family (15%). About 1 in 10 had no idea what they’d do.

Predictably, those with higher incomes were most likely to say they would be able to tap savings for emergencies or divert some discretionary spending.

75% of people in households making less than $50,000 a year and 2/3s of those making between $50,000 and $100,000 would have difficulty coming up with $1,000 to cover an unexpected bill.

Even for the wealthiest 20% — households making more than $100,000 a year — more than 1 in 3 say they would have  some difficulty coming up with $1,000. Source

======

Obviously, the threat of a large, unexpected expense is emotionally daunting to most Americans.

“It definitely adds stress to everyday life. It hangs over you.”

To make matters worse, there is some evidence that the financial stress may impair “cognitive functioning” – that is, dent a person’s IQ.

(more…)

What do tenured profs & Federal judges have in common?

May 18, 2016

“A permanent job with good benefits is (now) beyond reach for most American workers … only federal judges and tenured professors are insulated from the forces of workforce transformation”

That’s according to the authors of the book Working Scared (Or Not at All): The Lost Decade, Great Recession, and Restoring the Shattered American Dream

======

The book Working Scared is focused on the ways that the American workplace has changed in the past 50 or so years … and the implications on American workers (and non-workers).

clip_image002
=======

The central premise of the book is that globalization (out-sourcing & off-shoring); de-industrialization (towards more services and knowledge-based); technology-intensity (computers, internet, robots); and de-unionization have shattered the American Dream for tens of millions of working adults who are struggling or poor … “despite working hard and playing by the rules.”

More specifically …

(more…)

What has happened to workers who lost their jobs during the recession?

May 17, 2016

After last week’s employment numbers, Administration reps emphasized that over 12 million jobs have been added … recovering the number of jobs lost, plus a few to spare.

Predictably, conservative pundits countered that that the “mix” of jobs has deteriorated … well-paying full-time jobs have been replaced with lower paying full-time jobs and involuntary part-time jobs … with many of the added jobs going to immigrants – some legal, some not.

clip_image002

=======

Coincidentally, I started reading a book titled Working Scared (Or Not at All) … about the plight of the American worker … both old-timers who worked hard and played by the rules and newbies who are graduating with high college debt and disappointing career prospects.

The authors cut to the chase by researching the core issue: have the workers who lost their jobs bounced back?

(more…)

Study: “Don’t come here to work !”

April 11, 2016

A recently reported study of 1,015 LinkedIn users “sought insights into how organizations attract, engage, motivate as well as retain workers and build the kind of workplace that employees promote.”

The headline conclusion: “About half of workers wouldn’t recommend their organization to a friend or family member searching for a job.”

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What’s their beef?

(more…)

Want to be rich?

August 14, 2015

The most recent Census Bureau data … sorts households by income quintile … the highest quintile are “rich” households and the lowest quintile are “poor” households.

A fundamental conclusion drawn from the data: if you want to be rich, it helps to have a job and be married to someone who has one, too.

image .

Let’s dive into some of the details …

(more…)

Want to be rich?

June 17, 2015

The most recent Census Bureau data … sorts households by income quintile … the highest quintile are “rich” households and the lowest quintile are “poor” households.

A fundamental conclusion drawn from the data: if you want to be rich, it helps to have a job and be married to someone who has one, too.

image .

Let’s dive into some of the details …

(more…)

What do companies look for in new hires?

May 11, 2015

Her are the top %, according to the National Center for Education Studies

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Since my courses center on problem solving, I’m glad to see that it tops the list.

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#HomaFiles

Follow on Twitter @KenHoma            >> Latest Posts

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The “Dirty Jobs” guy nails it …

February 24, 2014

Following up on our salute to garbage men last week …

Mike Rowe is the host of “Dirty Jobs” … a series on the Discovery Channel that reports on jobs that many (most?) people wouldn’t touch.

He’s not an economist, but he certainly has a perspective on jobs.

His: view: “employers are desperate for people willing to learn a “useful skill” and work hard.

But, many unskilled unemployeds shun jobs that are “Beneath them” … even if the jobs pay the rent and are stepping stones to better jobs.

It’s a great country that liberates them from jobs they might not like, right?

Video clip is worth watching …

click to view 90 second video

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Back to the garbage men: a reader forwarded an interesting link

Triumph of the trashmen: Landing a gig on D.C. truck is hard to do and they stay on the job a long time

Nutshell: Though wages are modest (~$35,000) and the job is dirty, job security is high, benefits are good … including (for gov’t trash guys) a short work day.

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Follow on Twitter @KenHoma             >> Latest Posts

Bored at work? Here’s why …

May 14, 2013

Interesting tidbit in a Business Week article What’s Wrong With the U.S. Job Market?

Punch line: the “cognitive content” of tasks performed by employed college graduates peaked in 2000, has dropped fairly steadily since, and is approach all-time lows.

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Here’s more …

(more…)

Biz Insider: “Krugman won, austerity lost” … say what?

April 25, 2013

Yesterday, Business Insider guru Henry Blodget wrote: The Economic Argument Is Over — Paul Krugman Has Won

I haven’t been a big Blodget fan since he was run off of Wall Street for hyping internet stocks during their pre-bubble bursting run-up.

I think he’s trying to balance the scales these days … leaning far left to – he hopes – increase his odds of getting through the Pealy Gates.

The essence of his article is that the only thing wrong with the economy is a lack of adequate aggregate demand.

So, the government should keep borrowing and spending  … and things will right themselves,

The economic water level will rise to a point that reluctant CEOs will have no choice but to start hiring and building plants to meet demand.

That’s not a patently dumb notion … it’s just flat out wrong.

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Here’s what’s wrong with Blodget’s argument …

(more…)

Bid & Ask: Are new graduates ready for prime time?

January 8, 2013

Just read an interesting McKinsey study: Education to Employment – Designing a System that Works.

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The focus of the study:

Worldwide, young people are three times more likely than their parents to be out of work.

Paradoxically, there is a critical skills shortage at the same time.

In other words, there are two related global crises: high levels of youth unemployment and a shortage of people with critical job skills.

This report focuses on skill development, with special attention to the mechanisms that connect education to employment.

More specifically:

  • Seventy-five million youth are unemployed
  • Half of youth are not sure that their postsecondary education has improved their chances of finding a job
  • Almost 40 percent of employers say a lack of skills is the main reason for entry-level vacancies

An obvious conclusion: employers need to work with education providers so that students learn the skills they need to succeed at work

The pivotal finding: Employers, education providers, and youth live in parallel universes.

(more…)

“I inherited the deficit” … say, what?

October 25, 2012

Draw your own conclusion, but looks to me like Obama inherited a $500 billion deficit

…. goosed it by a trillion dollars to kinda stimulate the economy

… and has hung well over a trillion dollars, way after the Stimulus.

What’s he talking about?

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Source: Hot Air.com

* * * * *

While we’re at it, note how the current recovery stacks up against prior recession recoveries …

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Source: Hot Air.com

>> Latest Posts

Encore: “It is important not to read too much into any one monthly report” … unless the data is good.

September 10, 2012

Team Obama’s reaction to last week’s dismal jobs report was quite predictable:

“It is important not to read too much into any one monthly report”

Why predictable?

Because it’s EXACTLY the same thing they say whenever the jobs numbers are bad.

Below is an encore post … a stroll down memory lane …

Question: Is it ok to read something into, say, 42 jobs reports?

* * * * *

What are you going to believe, the facts or our rhetoric?

Reported by Chris Moody of Yahoo News

When the Bureau of Labor Statistics announced the nation’s latest national employment last week, the Obama administration stressed that people should not “read too much” into the data.

Mitt Romney’s campaign pounced, and flagged the fact that the White House has repeated that same line nearly every month since November 2009.

See below for the roundup of articles from WhiteHouse.gov that Romney’s campaign posted on its site. In many of the posts, the authors for the administration do acknowledge that they repeat themselves:

June 2012: “Therefore, it is important not to read too much into any one monthly report and it is informative to consider each report in the context of other data that are becoming available.”

May 2012: “Therefore, it is important not to read too much into any one monthly report and it is helpful to consider each report in the context of other data that are becoming available.”

April 2012: “Therefore, it is important not to read too much into any one monthly report and it is helpful to consider each report in the context of other data that are becoming available.”

March 2012: “Therefore, it is important not to read too much into any one monthly report, and it is helpful to consider each report in the context of other data that are becoming available.” (LINK:)

February 2012: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report; nevertheless, the trend in job market indicators over recent months is an encouraging sign.”

January 2012: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report; nevertheless, the trend in job market indicators over recent months is an encouraging sign.”

December 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

November 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

October 2011: “The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision. There is no better example than August’s jobs figure, which was initially reported at zero and in the latest revision increased to 104,000. This illustrates why the Administration always stresses it is important not to read too much into any one monthly report.”

September 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

August 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

July 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

June 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

May 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

April 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

March 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

February 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

January 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

December 2010: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

November 2010: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

October 2010: “Given the volatility in monthly employment and unemployment data, it is important not to read too much into any one monthly report.”

September 2010: “Given the volatility in the monthly employment and unemployment data, it is important not to read too much into any one monthly report.”

July 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative. It is essential that we continue our efforts to move in the right direction and replace job losses with robust job gains.”

August 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”

June 2010: “As always, it is important not to read too much into any one monthly report, positive or negative.”

May 2010: “As always, it is important not to read too much into any one monthly report, positive or negative.”

April 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”

March 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”

January 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”

November 2009: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”

In other words, it’s important not to read too much into the Obama administration’s past 3-1/2 years of performance.

So much for accountability …

Thanks to SMH for feeding the lead

>> Latest Posts

Told you so: Companies emerge from recession more productive.

April 12, 2012

Way back in July 2009, we posted “Private sector jobs won’t be coming back any time soon”

Our logic was basic business:

First, you can’t let a good crisis go to waste, right?

Businesses always use tough economic times to clean house.

Fat builds in all organizations over time. In “normal” times, it’s difficult to get rid of dead wood. Employment laws – perhaps well-intended originally –- serve to protect slackers by making it cumbersome and difficult to fire anybody.

When the economic tide rolls out, companies have the air cover they need to resize and purge under-performers en masse.

The tendency is to cut deep. If some muscle gets pared too, so be it. It can be rehabilitated later.

In typical business cycles, employment is a so-called lagging indicator of an economic rebound. That is, when the economy starts to recover, jobs are usually added back very slowly.

Why?

Because businesses have a renewed zeal for productivity, they recommit to keeping the fat from building up again, and they want to be sure that the signs of better economic times aren’t false positives.

Fewer jobs will get added back than history would suggest, and those that get added back will materialize later than past patterns.

Businesses will add jobs as a last resort rather than trying to build capacity ahead of the economic growth curve.

Well, the WSJ has confirmed our prognosis in an article titled: Large Corporations Emerge from Recession Leaner, Stronger—and Hiring Overseas

Overall, the Journal found that S&P 500 companies have become more efficient — and more productive.

In 2007, the companies generated an average of $378,000 in revenue for every employee on their payrolls. Last year, that figure rose to $420,000

Such efficiency moves are essential for companies to be competitive.

But economists warn that improved efficiency and continued executive caution are slowing the recovery.

“What’s best for an individual firm may not be best for the overall economy,”

Yeah, but, you just can’t let a good crisis go to waste …

>> Latest Posts

Company Policy: ‘Not hiring until Obama is gone’

November 28, 2011

“The way the economy’s running, and the way my business has been hampered by the economy, and the policies of the people in power, I felt that it was necessary to voice my opinion, and warn that I wouldn’t be able to do any hiring.”

So said a Georgia small business owner who posted a sign that has gone viral.

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Well, we told so … going back to a July 2009 post titled: “Why private sector jobs won’t be coming back any time soon … hint: it’s called passive aggressive resistance.”

Back then, we were saying:

The bottom line: businesses will resist government policies passive aggressively. 

Fewer jobs will get added back than history would suggest, and those that get added back will materialize later than past patterns.  Businesses will add jobs as a last resort rather than trying to build capacity ahead of the economic growth curve. 

Why should companies increase their costs and risks any more than is absolutely necessary ?

Companies will continue to off-shore jobs, but will be more clever and clandestine about it, e.g. by vertically disintegrating and simply buying goods and services from 3rd parties.

Given the Administration’s anti-corporate rhetoric, actions, and proposed game-changing rules, I doubt that many CEOs will be taking on added costs and risks to boost the administration.

More likely, they will let unemployment continue to creep up, and will slow roll the process of rehiring. 

Corporate chieftains will sit back and watch the President squirm and spin his “saved you from a catastrophe” riff . 

As Rev. Wright would say “the chickens will have come home to roost”. 

Passively aggressive  resistance at its very best.

There’s more in the original post.

>> Latest Posts

Boehner says “Businesses are on strike” … we told you so July 21, 2009

September 21, 2011

Last week, Speaker Boehner spoke about the Obama’s Jobs Plan and the state of the economy”

House Speaker John Boehner said President Barack Obama’s jobs plan would do little to get the economy moving again because “job creators in America are basically on strike.”  Source

Well, we told so … going back to a July 2009 post titled: “Why private sector jobs won’t be coming back any time soon … hint: it’s called passive aggressive resistance.”

Back then, we were saying:

The bottom line: businesses will resist government policies passive aggressively. 

Fewer jobs will get added back than history would suggest, and those that get added back will materialize later than past patterns.  Businesses will add jobs as a last resort rather than trying to build capacity ahead of the economic growth curve. 

Why should companies  increase their costs and  risks any more than is absolutely necessary ?

Companies will continue to off-shore jobs, but will be more clever and clandestine about it, e.g. by vertically disintegrating and simply buying goods and services from 3rd parties.

Given the Administration’s anti-corporate rhetoric, actions, and proposed game-changing rules, I doubt that many CEOs will be taking on added costs and risks to boost the administration.

More likely, they will let unemployment continue to creep up, and will slow roll the process of rehiring. 

Corporate chieftains will sit back and watch the President squirm and spin his “4 million jobs – saved or created”. 

As Rev. Wright would say “the chickens will have come home to roost”. 

Passively aggressive  resistance at its very best.

There’s more in the original post.

>> Latest Posts

Smackdown: Obama versus business …

July 30, 2010

At a recent cocktail party, in a lightning strike occurrence, I brushed up to a real, live CEO. 

He’s a member of the Business Roundtable, so I said “glad to see you guys speaking out on Obama’s policies”.

He said “yeah, we figured he’s going to screw us any way, so we might as well speak out”.

He also said Obama sent some communications flunky to address the group – she said “you gotta understand, it’s good politics for us to beat up on you guys.”

She should have added “now, go out there and save or create some jobs for us.”

Might work …

* * * * *

Excerpted from FT: Obama needs to stop baiting business, Mort Zuckerman, July 26 2010

The growing tension between the Obama administration and business is a cause for national concern.

The president has lost the confidence of employers, whose worries over taxes and the increased costs of new regulation are holding back investment and growth. The government must appreciate that confidence is an imperative if business is to invest, take risks and put the millions of unemployed back to productive work.

One unfortunate pattern that has emerged in the past 18 months is to lay all the blame for our difficulties on the business community and the financial world. This quite ignores the role of Congress in many areas, most glaringly in forcing Fannie Mae, Freddie Mac and the Federal Housing Administration to make loans to people who could not afford them. Then there is the Securities and Exchange Commission, which raised acceptable levels of leverage for financial institutions.

The predilection to blame business was manifest in one of President Barack Obama’s recent speeches.

He was supposed to be seeking the support of the business community for a doubling of exports over the next five years. Instead he lashed out at “unscrupulous and underhanded businesses, who are unencumbered by any restriction on activities that might harm the environment, take advantage of middle-class families, or, as we’ve seen, threaten to bring down the entire financial system.”

This kind of gratuitous and overstated demonization – widely seen in the business community as a resort to economic populism on the part of Mr Obama to shore up the growing weakness in his political standing – is exactly the wrong approach.

It ignores his disappointing stimulus program, which was ill-designed to produce the jobs the president promised. It also undermines the confidence that business needs to find if it is to invest in the face of a new generation of regulations, increased bureaucracy and higher taxes.

Disillusion has spread to the Business Roundtable, the US Chamber of Commerce and the National Federation of Independent Business, which represents small businesses.

The chief economist of the NFIB recently wrote: “Business owners do not trust the economic policies in place or proposed … the US economy faces hurricane-force headwinds and the government is at the center of the storm, making an economic recovery very difficult.”

Full article:
http://www.ft.com/cms/s/0/a18bd9a2-98e6-11df-9418-00144feab49a.html

OK, let’s pretend the Stimulus worked … the math (continued)

July 16, 2010

Yesterday, we pointed out that taking Obama’s numbers at face value, i.e. the Stimulus “saved or created” 3.5 million jobs … almost $250k was (or will be spent) for each job saved or created.

A couple of loyal readers replied that “only half of the Stimulus money has been spent so the cost is only about $125k per job saved or created”.

First, $125k is still a lot of money per job.

More important, all of the money will eventually be spent and the total claim for jobs saved or created is 3.5 million … so we’re back to the $250k number.

Most important, let’s merge the 2 ideas: Romer says 3 million jobs saved or created are in the books … since $425 billion has been spent (1/2 of the total Stimulus) … that means that the spending per job has been just under $150k.

But, the next $425 billion will only save or create 500,000 jobs … that works out to about $850,000 per job.

It’s called “diminishing returns” … and it illustrates – using Obama’s own numbers – why throwing more stimulus money at the problem is a bad idea.

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OK, let’s pretend the stimulus worked … but let’s do some math

July 15, 2010

Yesterday, as part of the Recovery Summer Tour, Obama’s CEA Chief Christina Romer cheerfully pitched that the Stimulus worked ever better then they (her and Biden-economist Jared Bernstein) said it would … that 3 million jobs have already been saved or created and another 600,000 will materialize before the end of 2010.

It’s easy to quibble since actual employment has fallen by 2.5 million since the Stimulus was enacted … and it’s well-traveled that the same same Ms. Romer said the unemployment rate would rise to 9% without the Stimulus, but would get capped at 8% if the gov’t threw a cool trillion dollars  at the problem.  Oops.

 image

The Job Impact of the American Recovery and Reinvestment Plan, Romer & Bernstein, January 2009
http://www.economy.com/mark-zandi/documents/The_Job_Impact_of_the_American_Recovery_and_Reinvestment_Plan.pdf

But, HomaFiles aren’t in to cheap shots, so we’ll assume that Ms. Romer has gotten smarter and has crafted a more refined econometric model.

And, we’ll assume that she’s an honest person and isn’t just ginning up numbers for political purposes.

Let’s do some simple arithmetic.

Assuming Romer’s right, then – in the best case — each job saved or created cost almost $250,000 !

I don’t know about you, but that strikes me as a pretty big number.

And, keep in mind that the Stimulus just funds jobs temporarily …. when the Stimulus is expended, somebody else has to pick up the tab or the saved and create jobs vanish again.

 

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More unionized government employees … here’s the so what.

February 9, 2010

Last week, we posted the increase in the number of government jobs (to over 2 million — not counting contractors) and the increase in unionization of government employees (to over 37% of the government payroll).  Here’s why you should care.

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Excerpted from: DC Examiner: Public-Sector Unions Bleed Taxpayers to Help Dems, February 8, 2010

But union membership is growing by leaps & bounds in the public sector. Last year, 37.4 percent of public sector employees were union members.  For the first time in history, a majority of union members are government employees.

In my view, the outlook for both private- and public-sector unionism is problematic.

Public-sector unionism is a very different animal from private-sector unionism. It is not adversarial but collusive.

Public-sector unions strive to elect their management, which in turn can extract money from taxpayers to increase wages and benefits — and can promise pensions that future taxpayers will have to fund.

The results are plain to see. States like New York, New Jersey and California, where public-sector unions are strong, now face enormous budget deficits and pension liabilities. In such states, the public sector has become a parasite sucking the life out of the private-sector economy. Not surprisingly, Americans have been steadily migrating out of such states and into states like Texas, where public-sector unions are weak and taxes are much lower.

President Obama is … doing his best to increase the power — and dues income — of public-sector unions.

Democrats have used the financial crisis to expand the public sector and the public-sector unions. One-third of last year’s $787 billion stimulus package was aid to state and local governments — an obvious attempt to bolster public-sector unions.

And it was a successful one: While the private sector has lost 7 million jobs, the number of public-sector jobs has risen. The number of federal government jobs has been increasing by 10,000 a month, and the percentage of federal employees earning over $100,000 has jumped to 19 percent during the recession.

Unions contributed something like $400,000,000 to Democrats in the 2008 campaign cycle. Public-sector unionism tends to be a self-perpetuating machine that extracts money from taxpayers and then puts it on a conveyor belt to the Democratic Party.

But it may not turn out to be a perpetual-motion machine. Public-sector employees are still heavily outnumbered by those who depend on the private sector for their livelihoods.

The next Congress may not be as willing as this one has been to bail out state governments dominated by public-sector unions.

Voters may bridle at the higher taxes needed to pay for $100,000-plus pensions for public employees who retire in their 50s. Or they may move, as so many have already done, to states like Texas.

Obama’s But voters seem to be saying, “Enough.”

Full article:
http://www.realclearpolitics.com/articles/2010/02/08/public-sector_unions_bleed_taxpayers_to_help_dems_100206.html

More government employees … standing united: 37.4% unionized.

February 4, 2010

Bottom line: Two related articles with a combined chilling effect: Once government gets big (bigger ?), there’s no turning back … especially if the government employees are unionized.

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Excerpted from Washington Times: Largest-ever federal payroll to hit 2.15 million, Feb. 2, 2009 

The era of big government has returned with a vengeance, in the form of the largest federal work force in modern history.

The Federal government will grow to 2.15 million employees this year, topping 2 million for the first time since President Clinton declared that “the era of big government is over”.

Most of the increases are on the civilian side, which will grow by 153,000 workers, to 1.43 million people, in fiscal 2010. From 1981 through 2008, the civilian work force remained at about 1.1 million to 1.2 million, with a low of 1.07 million in 1986 and a high of more than 1.2 million in 1993 and in 2008. In 2009, the number jumped to 1.28 million.

“When you talk about big government, you’re talking about a big employer.”

Full article:
http://washingtontimes.com/news/2010/feb/02/burgeoning-federal-payroll-signals-return-of-big-g/

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Excerpted from WSJ: The Public-Union Ascendancy, Feb. 3, 2010

Unions once saw their main task as negotiating a bigger share of an individual firm’s profits.

Now the movement’s main goal is securing a larger share of the overall private economy’s wealth, which means pitting government employees against middle-class taxpayers.

It’s now official: In 2009 the number of unionized workers who work for the government surpassed those in the private economy for the first time: 51.4% of America’s 15.4 million union members, or about 7.91 million workers, were employed by the government in 2009.

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Overall unionism keeps declining, however, with the loss of 771,000 union jobs amid last year’s recession.

In 2009 10.1% of private union jobs were eliminated, which was more than twice the 4.4% rate of overall private job losses.

Only one in eight workers (12.3%) now belongs to a union, with private union employment hitting a record low of 7.2% of all jobs, down from 7.6% in 2008.

In government, by contrast, the union employee share rose to 37.4% from 36.8% the year before.

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“The problem for democracy is that this creates a self-reinforcing cycle of higher spending and taxes. The unions help elect politicians, who repay the unions with more pay and benefits and dues-paying members, who in turn help to re-elect those politicians.”

Full article:
http://online.wsj.com/article/SB10001424052748703837004575013424060649464.html?mod=djemEditorialPage_h

Why companies aren’t hiring …

December 9, 2009

Thomas Sowell — a conservative economist — has a skill for reducing complex issues down to their essence.

Bottom line: Government mandates (e.g. added healthcare burdens) and uncertainty are and will continue to keep companies from hiring.

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Excerpted from RCP: Jobs or Snow Jobs?, December 8, 2009

What does it take to create a job? It takes wealth to pay someone who is hired, not to mention additional wealth to buy the material that person will use.

Government creates no wealth. Government takes wealth from others, whether by taxation, selling bonds or imposing mandates.

However it is done, transferring wealth is not creating wealth.

When government uses transferred wealth to hire people, it is essentially transferring jobs from the private sector, not adding to the net number of jobs in the economy.

Destroying some jobs while creating other jobs does not get you very far, except politically. But politically is what matters to politicians, even if their policies needlessly prolong a recession or depression.

In reality, many things that politicians do reduce the number of jobs.

Politicians who mandate various benefits that employers must provide for workers gain politically by seeming to give people something for nothing. But making workers more expensive means that fewer are likely to be hired.

During an economic recovery, employers can respond to an increased demand for their companies’ products by hiring more workers– creating more jobs– or they can work their existing employees overtime. Since workers have to be paid time-and-a-half for overtime, it might seem as if it would always be cheaper to hire more workers. But that was before politicians began mandating more benefits per worker.

When you get more hours of work from the existing employees, you don’t need to pay for additional mandates, as you would have to when you get more hours of work by hiring new people. For many employers, that makes it cheaper to pay for overtime.

The data show that overtime hours have been increasing in the economy while more people have been laid off.

There is another way of reducing the cost of government-imposed mandates. That is by hiring temporary workers, to whom the mandates do not apply.

The number of temporary workers hired has increased for the fourth consecutive month, even though there are millions of unemployed people who could be hired for regular jobs, if it were not for the mandates that politicians have imposed.

Constant government experiments with new bright ideas is another common feature of Obama’s “change”. The uncertainty that this unpredictable experimentation generates makes employers reluctant to hire.

Full article:
http://www.realclearpolitics.com/articles/2009/12/08/jobs_or_snow_jobs_99443.html

How many Americans does it take to make nine pairs of work boots?

November 19, 2009

Bottom line: “No matter how hard or imaginatively the Administration spins, the reality is that the stimulus has been the economic bust that critics predicted it would be.”

And, “they” want another $1 trillion to whack the healthcare system.

Somebody tell these guys that respect and credibility are earned …

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Excerpted from WSJ: The Phantom Jobs Stimulus, Nov. 19, 2009

How many Americans does it take to make nine pairs of work boots?

According to the White House’s recovery.gov site, an $890 shoe order for the Army Corps of Engineers, courtesy of the stimulus package, created nine new jobs at Moore’s Shoes & Services in Campbellsville, Kentucky.

The job-for-a-boot plan may not be American productivity at its best.

But such stories go a ways toward explaining how the Administration has come up with 640,329 jobs “created/saved” by the American Recovery Act as of October 30.

  • Head Start in Augusta, Georgia claimed 317 jobs were created by a $790,000 grant. In reality, the money went toward a one-off pay hike for 317 employees.
  • One Alabama housing authority claimed that a $540,071 grant would create 7,280 jobs … only 14 were created.
  • In some cases, Recovery Act funds went to nonexistent Congressional districts, such as the 26th in Louisiana or the 12th in Virginia.
  • Up to $6.4 billion went to imaginary places in America.

When asked about the overstatements, Ed Pound, the director of communications for the Obama Administration’s recovery.gov, said, “Who knows, man, who really knows.”

That’s a confidence builder, isn’t it?

Full article:
http://online.wsj.com/article/SB10001424052748704204304574544063776158046.html?mod=djemEditorialPage