Jobs, Jobs, Jobs: There Are No Jobs!

Jobless numbers continue to increase, beyond the expert’s forecasts and expectations, and yet “productivity” rises.  Ah, that productivity number went up; see all is well.  The reality behind the statistic is evidenced on the ground by the Pizza parlor I occasionally frequent.  The couple who owns it was, at last visit, talking with the customers, topping off that Diet Coke, playing with their son, clearing an occasional table and generally giving their business a personality.  This visit was different, the wife was behind the counter and the husband was behind the pizza oven, the familiar faces in those jobs nowhere to be seen. 

But, fear not!  The White House is organizing a “Jobs Summit”.  The problem here is that 12 months of policy must be reversed or the answer will be that there are no jobs, no now and not in the foreseeable future! There will not be jobs for some time to come begging the logical question. Why?

Stimulus opted for political pork over productivity a lost opportunity of major proportions for the administration.  The short term result of the administration’s policies is the triple whammy of weak macro economic fundamentals, a weak dollar and no structural incentives to produce or maintain jobs. Coming soon to a job market near you is the potential for deficit motivated inflation and additional job losses as costs skyrocket based on a weakening economy and essential dollar devaluation.  Everything will cost more!     

Small business was essentially left out of the stimulus package.  The opportunity to use the SBA as an alternative vehicle for credit provision is absent.  Government guaranteed loans would have cost the government only a small percentage of the actual loan amounts.  Absent, as well, are incentives related to job creation for small business.  With a history of creating 80% of the new jobs in America this absence is glaring and must lead one to question the actual intent of the stimulus if not the wisdom of it.  OK, folks move, on nothing to see here, no jobs here. 

The stimulus package did not address the re-industrialization of America; there was certainly enough money to motivate that process.  Immediate investments and associated credits could have been structured to create the conditions whereby long term job growth could have been created in a dying sector.  Nope, no joy on industrial production, and no jobs!

Stimulus could have been utilized to motivate the return of jobs shipped off shore over the past 10 years.  Jobs such as telephone call centers could have been brought back painlessly.  While call center jobs don’t have much sex appeal they do address the sectors where unemployment is most critical.  Incentives could have also addressed the most economically challenged geographic areas.  Nope, no jobs here!

 Micro Loans for small and home start up businesses is an idea that has worked the world over.  Not present in current programs.

Infrastructure spending does not create immediate job growth.  Even key Democrats are bemoaning the percentage of stimulus targeted to infrastructure, such as Pennsylvania’s Governor.  In New Hampshire the Democratic political structure is upset over the union mandates associated with stimulus related infrastructure spending.

In the push me, pull you department wind farms are held up by law suits to prevent the construction of transmission lines.  Farm jobs in California are disappearing at a startling rate in the interest of a law suit decided to protect water for minnows over jobs for farmers.  If it really is about jobs what’s going on here?

 The absence of credit availability for small and medium size business is real. While bank balance sheets may be improving that improvement is not seeing its way to the provision of credit.  Bank regulators, insisting on balance sheet recovery and conservative lending standards have dried up credit availability.  The administration has made it clear that “risk” is not really risk, it’s a fundamental flaw in the financial system.  The absence of credit means belt tightening, lay offs, position eliminations, elimination of expansion plans and results in a significant net loss in jobs and the arc of job growth.  The unemployment numbers over the past 12 months prove the premise.

Green jobs, green jobs, green jobs; there is no significant increase in green jobs on the immediate horizon.  You simply can’t talk jobs into being.  Green energy sources represent 1.5% of total energy production.  We are a long way from that percentage taking a huge leap forward based on current technology, environmental lobby push back and expected returns on investment as they currently exist.  Contradictions at every turn; shut down 40% of electricity generation by eliminating coal but don’t invest in nuclear.  Develop electric cars that will get their electricity from …. where? 

Economic history has been ignored.  The best way to stimulate an economy is to cut taxes, especially capital gains taxes and small business taxes.  Cutting taxes results in consumption, savings, investments and risk taking.  The history is clear, each and every time significant tax cuts occurred (Kennedy, Reagan and Bush) the economy grew, jobs grew, personal income grew, investment grew and reinvestment of profits grew.  There were no significant tax cuts in any of the bills passed so far.  It is true that there was a tax cut equating to about $12.00 a week for the average person; however the argument can be well made, based on the evidence, that tax cut was not significant in an overall economic sense.  Top wage earners are on the sidelines, hunkering down waiting for the promised tax increases and establishing off shore entities.   

Pending legislation creates uncertainty; uncertainty is guaranteed to produce conservative approaches to hiring by businesses and to investments in those businesses.

Card Check, is frightening to small and medium size businesses; those businesses assume, correctly, that the costs associated with unionization will be significant.  They will be.  Card Check will not motivate job growth and a check on the recent history of unionization argues that exactly the reverse will occur.  Card Check is a job killer.

Health Care, again based on the current proposals will result in mandates, new taxes, new regulation and business is scared of the impact.  When mandated costs to business go up dramatically, hiring retreats.  Health care is a job killer   

Cap & Trade will result in massive increases in energy costs; some estimates reflect as much as a 90% increase in utility costs.  A business with shrinking margins will wonder where the money will come from.  If the increase is even half of the estimate it is not difficult to assume that what little manufacturing we have left will be rendered uncompetitive.  Cap & Trade combined with an absolute refusal to take advantage of domestic energy resources will do more than eliminate massive numbers of jobs it could eliminate entire segments of the economy.  Cap & Trade is a job killer. Regulation is moving front and center based on nothing more than changes in definitions and administrative mandates.   Based on the histories and writings of the key people who guide administration policy there much more regulation coming down the pike, it will be aggressive and stealthy.  The assumption that regulation will be regressive is supported by the logic of the folks who will be writing the regulations. 

 Taxes, especially for small business are critical as most small businesses report profits as personal income.  Reported profits for small business and what you actually put in your pocket can be two very different things.  The current tax proposals do not consider that equation and treat many small business owners as “rich folks”.      

Congress, regardless of the rhetoric actually anticipates job losses.  The evidence is in the actual legislation. The energy bills in both the House and Senate takes pains to provide money and programs related to job displacement.  Would you worry about job displacement if you really believed that Cap & Trade was good for the economy and would produce jobs in the short run?

Finally, there are economic fundamentals and the pregnant question.  Is it possible, in light of massive deficits, declining Federal tax revenues, high unemployment, no jobs related impact of the stimulus, a recessionary GDP, state and local budget deficits, a declining dollar, small business uncertainty, credit markets marginalized by government borrowing and  the specter of inflation to assume job growth?

 Will the Jobs Summit look to a diametric change in economic policy of a restructuring of unspent stimulus dollars?  Will the Summit end the political feeding frenzy and pay homage to economic history? Will that history trump ideology?

 As we stand now the “focus” on jobs has been nothing more than optimistic rhetoric long on style and short on substance.  The two sided equation of rhetoric and policy simply do not balance, and will not balance in the near term. The result; no jobs!

  • JD

    The stimulas bill is definitely a controversial one. I do agree that more should have been spent on small business loans or grants but I think the real result of the stimulus spending is going to be seen in the next year or so.

    As for the moving jobs back from overseas, I think that is an issue congress needs and has needed to tackle for 2 decades when the leak really got out of control. Stimulus money can do very little unless legislation is there to back it up and arguably it can do nothing regardless because it is a cost issue. It will always be cheaper to have it made in Mexico so companies will always look for ways to bend the rules so they can make an extra buck.

    I have to admit that I know 4 people who have a job because their company received civil contracts for infrastructure due to the stimulus package. 4 people is hardly a large number but considering I am but a small speck in the sand of millions working leads me to believe others have a similar story.

  • The jobs “created of saved” is over-stated tenfold.

    http://abcnews.go.com/Politics/jobs-saved-created-congressional-districts-exist/story?id=9097853

    Dozens of states have reports of overestimates of job creation. It’s all a sham. Billions were spent for 10.2% unemployment and 49 states losing jobs this year. If Bush was President right now, JD, you and the media would have impeached him at this point.

    To say the stimulus bill is “controversial” is an understatement, more like the epitome of economic incompetence.

  • Bill Hedges

    Nate

    Glad to see ABC News carrying stimulas jobs, err lies. I’m sure you know Fox News was far ahead of that link in reporting.

    No wonder Fox News is # 1.

    NBC news is like a weekly newspaper competing and a tv hourly news Fox. ABC is behind the times.

    Fox is talking about jobs created in State districts that don’t exist.

    “1 In 6 ‘Stimulus Jobs’ Does Not Exist “

    http://sweetness-light.com/archive/1-in-6-stimulus-jobs-was-made-up

    “$160,000 Per Stimulus Job? White House Calls That ‘Calculator Abuse’”
    October 30, 2009 7:12 PM

    http://blogs.abcnews.com/politicalpunch/2009/10/160000-per-stimulus-job-white-house-calls-that-calculator-abuse.html

    “Wash. Examiner forwards misleading cost-per-job stimulus math”
    November 02, 2009 5:22 pm ET

    http://mediamatters.org/research/200911020039

    I just don’t think we can afford anymore government jobs.

    No wonder social security and medicare are ($100 trillion ??) deep in debt. Let’s pass health care and start collecting taxes now and put plan into effect 2013-2015 (not my idea). Congress can either use that money to keep afloat social security and medicare or just simple spend on pork.

    Wasn’t obama in Senate spending $1,000,000 a day average in pork ? Should have saved money and keep him in Senate.

    Just think about these folk running health care ?

    Regulate yes. Well, I don’t know. Not these folks.

  • Bill Hedges

    TALKING ABOUT SHOVEL READY

    When it comes to obama, JD seems to be the eternal optimist.

    1. For example in JD’s above comment JD say “I think the real result of the stimulus spending is going to be seen in the next year or so.”

    Well Nate and I have uncovered the ‘real results’ are lies in numbers and super expensive cost for job so far. And it keeps a coming.

    2.Now JD was right in saying “I do agree that more should have been spent on small business loans or grants,”

    But so far that’s not obama style. Maybe after 2nd Newt revolution.

    3. “I think the real result of the stimulus spending is going to be seen in the next year or so.”

    I’m afraid I can’t have the positive enthusism that JD has. Past perforance is not good. After all weren’t these shovel ready projects. The ‘dirt’ is flying on this stimulus package. So no real cause to believe future will be better. Unless we wave obama bye-bye.

    4.“As for the moving jobs back from overseas, I think that is an issue congress needs and has needed to tackle for 2 decades when the leak really got out of control. Stimulus money can do very little unless legislation is there to back it up and arguably it can do nothing regardless because it is a cost issue. It will always be cheaper to have it made in Mexico so companies will always look for ways to bend the rules so they can make an extra buck.”

    I can agree with what JD said. Except for JD’s cynicism. To turn jobs back to America we must attract. JD ignored what would attract in Landreaux article. Landreaux has some great ideas. Re-read it JD. Americans are highly productive. Lower taxes for businesses and follow Landreaux suggestion and jobs will flow into America.

    There is much in article that will bring jobs back and ways to develop job here, surprised to did not pick up on it. Stopping obama’s bills from being past. Stop buying so much foreign oil and burning our own oil.

    I see why you ignored this because obama’s agenda must be discarded to develop jobs here. That you don’t want, right.

    5. “I have to admit that I know 4 people who have a job because their company received civil contracts for infrastructure due to the stimulus package. 4 people is hardly a large number but considering I am but a small speck in the sand of millions working leads me to believe others have a similar story. ”

    Have already talked about lack of jobs really created and high cost per job that were.

    Incentives for small business would be more economical for jobs. Add throwing obama’s agenda out of window.

  • Bill Hedges

    JD

    All this government spending and bills that Congress are working on that requires tax increases is not conducive to small business hiring. As Landreaux so well described in his article. Jobs is not obama’s middle name…

    Let me add:

    “According to President John F. Kennedy:”

    “Our true choice is not between tax reduction, on the one hand, and the avoidance of large Federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits… In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now.”

    “The Reagan tax cuts”

    “Thanks to “bracket creep,” the inflation of the 1970s pushed millions of taxpayers into higher tax brackets even though their inflation-adjusted incomes were not rising. To help offset this tax increase and also to improve incentives to work, save, and invest, President Reagan proposed sweeping tax rate reductions during the 1980s. What happened? Total tax revenues climbed by 99.4 percent during the 1980s, and the results are even more impressive when looking at what happened to personal income tax revenues. Once the economy received an unambiguous tax cut in January 1983, income tax revenues climbed dramatically, increasing by more than 54 percent by 1989 (28 percent after adjusting for inflation).”

    2) “The rich pay more when incentives to hide income are reduced.”

    “The tax cuts of the 1920s”

    “The share of the tax burden paid by the rich rose dramatically as tax rates were reduced. The share of the tax burden borne by the rich (those making $50,000 and up in those days) climbed from 44.2 percent in 1921 to 78.4 percent in 1928.”

    “The Kennedy tax cuts”

    “Just as happened in the 1920s, the share of the income tax burden borne by the rich increased following the tax cuts. Tax collections from those making over $50,000 per year climbed by 57 percent between 1963 and 1966, while tax collections from those earning below $50,000 rose 11 percent. As a result, the rich saw their portion of the income tax burden climb from 11.6 percent to 15.1 percent.”

    “The Reagan tax cuts”

    “The share of income taxes paid by the top 10 percent of earners jumped significantly, climbing from 48.0 percent in 1981 to 57.2 percent in 1988. The top 1 percent saw their share of the income tax bill climb even more dramatically, from 17.6 percent in 1981 to 27.5 percent in 1988.”

    “Harmful Spending & Complexity”

    “Lower tax rates are important, but they are not the only critical issue. Both the level of government spending and where that money goes are very important. And even when looking only at tax policy, tax rates are just one piece of the puzzle. If certain types of income are subject to multiple layers of tax, as occurs in the current system, that problem cannot be solved by low rates. Similarly, a tax system with needless levels of complexity will impose heavy costs on the productive sector of the economy.”

    http://www.heritage.org/research/taxes/wm327.cfm

    This link simple backs up Landreaux article with some extra numbers.

    Explains why obama debt and agenda is leading America into a ‘lost decade’ as occurred in Japan…

  • Bill, there is no way to dig out from under these failures at this point so JD begins attacking me.

    If you can’t shoot down the message, shoot the messenger.

    Unfortunately for Obama, the numbers don’t lie and that is his worst enemy right now.

    I heard Obama is thinking (gasp) of giving businesses tax incentives to create jobs. How shocking since we were told that government spending in the stimulus would create jobs, not the private sector.

    I guess when you try to use failed socialist policies and they fail again, you might as well use proven conservative free-market principles to create jobs.

  • Bill Hedges

    Nate

    I to have enjoyed the indignations from both JD and Kenny. I have struck a nerve at times and they, unable not to acknowledge their pain, lash out at the one who wheeled the dagger. Me.

    Don’t tell JD each new government job costs taxpayers money. That each private job creates revenue for government. Guard this secret with your life. If this knowledge leaks out…. God help us ALL.

    Maybe you know, was it last week that obama or his administrations said we were out of recession ? Today he warns of double dip recession. What kind of message is he trying to send to Americans ? Has the per Madonna been in the public bathroom and been reading the writing on the walls. May account for the stumbling obama saying “businesses tax incentives to create jobs.” as you quoted.”

    Obama uses the disguise of saving America from future recession to pass some of his purposed legislation. As well as lowering cost of health care through government intervention. These veiled attempts to fool the public does not muster desired effect like it use to. Still JD procrastinates in admitting the inevitable, obama is the Flim-Flam Man…

    In my childhood home my Mom knitted and placed her work in our kitchen. Message read “Home Sweet Home”. Using your best persuasive techniques, ask Conservative girl to knit a passage appropriate for your home. May I suggest:

    Hawaii, Oregon, Massachusetts . Canada, England, and more.

    “failed socialist policies and they fail again”

    Leads us not into obamaland

    BUT FREEDOM, INDIVIDUALITY, AND CAPATIALISM…

    Or

    Reagan’s “proven conservative free-market principles” gave birth to America longest Bull market in American history. Stopped only by Bill Clinton’s (liberals) desire to put a home in every unqualified low income person’s pot (instead of chicken).

    All to gain VOTES…

  • JD

    Don’t start complaining about being “picked” on, Nate. I have addressed all your issues and it is no surprise you and I don’t agree on everything.

    The reason why I call it controversial is because it is. Even depression spending in the late 30’s both war and economic was controversial even today; with people falling on both sides.

    As far as tax-incentives it is kind of ridiculous how you feel all free market principles belong to Republicans or outside of Obama. Give me a break both sides have a blend of the two.

    I would hope any president would make changes where changes are needed and not just go down the same road to never make adjustments.

  • Bill Hedges

    Outside of John Kennedy, most Democrat Prez are forced to give “tax-incentives” as Bill Clinton was. But then am sure you read my link. You remember Newt and the gang ?

    As my link also shows simple “tax-incentives” is not enough, controling spending is also key. You left that out. obama is spend freak…

  • Bill Hedges

    JD

    Why don’t you give obama every break:

    “I would hope any president would make changes where changes are needed.”

    His intentions are clear. As I pointed out possible next Watergate is in the works ? Maybe. If not that, one already known or maybe one not known.

    I liked how you did not capitilize p in president. Maybe there is hope for you. A unconscious slip ?

    But you keep praying to your god. Make his excusses. Give him the benefit of the doubt. Over and over and over again. We will silently smile. The numbers in your group are getting smaller, and smaller.

    You do check polls. Maybe you stopped. Disheartening for you I guess.

  • Landreaux

    JD,

    I know I’m late to the comment party but in regards to your first post, the Stimulus Package WAS legislation.

  • Bill Hedges

    JD

    I forced myself to listen to Geithner in Congressional Committee hearing today. No talk of tax breaks for small business. So keep guessing obama might.

    He discussed using TARP money, may have been $42 billion, for bank loans for small business. Will there be government push for bad loans as house loans were that caused recession, I hope not. Won’t bet.

    Will these bank loans help ? Sure. Likely to loss money.

    For jobs help established business. New small ones tend to be owners working long hours.

    Interesting TARP money was said being used for other things. Exact reason social security and medicare are broke. Same will happen with health care money…

  • JD

    Landreaux – “Stimulus Package WAS legislation”

    Yes it was but it was not regulation legislation. It was Budget or Monetary legislation. I guess I should have specified that, however, the point still remains.

  • Bill Hedges

    Stimulus Package__ Pork sandwich law, hyper expensive jobs and fraud found all over. 1-6 Inflated jobs numbers and used to get backing.

    AARP found to have taken money and no jobs.

    Obamaeconomics. Shovel ready projects. Yes, Known pockets to fill with cash.