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darkstar
26263 Posts |
 Posted - 11/07/2009 : 04:37:43 AM
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Two dissatisfied customers comment about a restaurant. One says, "The food here is terrible." The other replies, "I know, and such small portions!" In many ways, they could be describing our current employment picture. Not only are the portions shrinking, but the jobs themselves are steadily losing quality.
Today's release of the October jobs report showed the loss of another 190,000 jobs had pushed the official unemployment rate to 10.2%, only the second time since the Great Depression that unemployment was quoted in double digits (factoring in workers who had given up job hunting altogether or have settled for part-time work would push that rate to 17.5%). That didn't stop Wall Street pundits from trying to fashion a silk purse of this sow's ear. The 'green shoots' crowd focused on the slowing pace of job losses, the nascent economic 'recovery' (even if it is jobless), and the projected improvement in 2010. No mention was even made of the quality of what few jobs were being created.
The analysts completely ignored the continued trend of replacing goods-producing jobs with those jobs that require production from other sources. For example, we lost 61,000 manufacturing jobs last month, but added 45,000 jobs in education and health services. In particular, the addition of health workers is nothing to celebrate. Just as a family's economic position is not improved by higher medical bills, the country as a whole does not benefit from increased health-care spending. Until this trend reverses, our unbalanced economy will not regain its stability, a real recovery will never take hold, and the overall job outlook will get much bleaker.
By spending trillions of dollars of borrowed money, President Obama hopes to engineer a recovery and create jobs. However, he has only succeeded in digging America into an even deeper hole than the one he inherited from his predecessor. He believes that if we can simply push up spending to levels seen during the “good times,” then those favorable economic conditions will return. The reality, of course, was that those good years came with a heavy price-tag that we have barely begun to pay.
In a press conference today, the President claimed that the latest extension of unemployment benefits will not only help the unemployed, but the overall economy as recipients spend the money. If spending government-granted money really were a benefit to the economy, why not simply increase the amounts endlessly? Why limit the benefits to the unemployed? Let's make this recovery a real barn burner: send out million-dollar checks to everyone! Of course, what Obama and his economic advisors do not understand is that money spent by recipients of unemployment benefits is money not spent or invested by taxpayers. It's a transfer of wealth, not a creation on new wealth.
In addition, policymakers are also struggling with diminishing returns on ultra-low interest rates. No matter how much monetary alcohol the Fed tries to pour down consumers' throats, the swill simply will not go down anymore. Consumers have already had enough and are trying to sober up – by refusing to spend irrationally. The excess liquidity simply weakens the dollar and spills over into other pools, such as goods prices, money metals, commodities, and investment assets.
During the boom, we spent money we did not have to buy things we did not produce and could not afford. As a result, we are now deeply in debt and must sharply reduce our spending to replenish our savings. By focusing solely on consumer spending, the Administration is neglecting the capital investments necessary to improve our infrastructure and productive capacity.
To generate legitimate economic growth and meaningful jobs, we must reverse the trends that brought us down. Consumers may have led us into this recession, but they can't lead us out. The road to recovery is a one-way street, and it's paved with savings, capital investment, and production. It's not an easy road, but we must follow it to ensure our future prosperity.
As a first step, our politicians must stop pushing us backward. Rather than imposing more market-distorting regulations, we should repeal those most responsible for inefficient resource allocation. Rather than creating new moral hazards, we should withdraw guarantees for large financial institutions and irresponsible consumers. Rather than continuing the Greenspan policy of keeping interest rates too low, we should let them rise. Rather than trying to prop up asset prices, we should let them fall to market levels. Rather than increasing the burden of bureaucracy on the economy, we should look for ways to lighten the load. Rather than encouraging people to borrow and spend, we should reward those who save and produce.
Until we acknowledge these fundamental errors, more of our citizens will lose their jobs. As those that stay employed are funneled into unproductive industries like the federal bureaucracy, the country will sink further into stagnation. Worse still, everyone taking jobs in these sectors will be laid off in the next phase of the crisis – and will have lost this opportunity to build practical skills for the new economy. |
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zpaperkid
365 Posts |
Posted - 11/07/2009 : 1:12:15 PM
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Good read!
The ship is sinking, and only the captains will be on the lifeboats. This is triage, survival of the fittest(richest). The working men and woman be damned!
In America today, its; "I've got mine and to Hell with everyone else!" All of our hallowed institutions have failed us. Wall Street, bailout banks, the political system, government, schools, you name it. The "Greed is Good" crowd from the 80's prevails, and rules us.
Marx was right. Capitalism will collapse upon the sheer wieght of its unrestrained greed.
They have looted and plundered us until nothing is left. All Obama is doing is rearranging the deck chairs on the Titanic....and pretending that he is saving us!
Obama. "It's the economy, stupid!" JOBS, JOBS, JOBS.
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BrewCrewGuy
169 Posts |
Posted - 11/08/2009 : 08:32:26 AM
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The pool of folks with good credit is shrinking fast....nobody wants to lend a nickel to any one with the least bit of tarnished credit now...by the end of 2010 two out of three people will have blemished credit because of this deep recession...inconsistent income for many will be waht puches them over the edge....for every one year a recession lasts, there is an average of 32 months of hard core clean up...we saw this consistently when I worked in the legal collection biz....the recession may be over per most economists, but the clean up & recovery will take at least 5 years....Unless you start cycling credit in on different underwriting standards, job growth will be very weak in the near future...job growth and the credit markets are virtually connected hip to hip...banks and businesses are hoarding huge amounts of cash right now ~ trying to determine the exact derivative of consistent paying customer ~ which is impossible to figure out...i am not saying open the barn doors wide open again, but changes must happen quickly. I think the goverments "magic show" has lost alot of steam & a pure economic growth must take place. One that involves people purchasing goods and services because they can pay for them with cash or credit....not one that involves a gov't hand out.
"Feed the king and you will live like masses, feed the masses and you will like the king" |
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seaRick1
844 Posts |
Posted - 11/08/2009 : 9:49:33 PM
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Unfortunately that is becoming more and more clear. Way too much greed and corruption. We have incredible spending of which I do question as to what long term impact it will have on jobs. I'm still waiting on my 'bailout' - I hear the doorbell just now, maybe it finally came............quote:
Originally posted by zpaperkid
Good read!
The ship is sinking, and only the captains will be on the lifeboats. This is triage, survival of the fittest(richest). The working men and woman be damned!
In America today, its; "I've got mine and to Hell with everyone else!" All of our hallowed institutions have failed us. Wall Street, bailout banks, the political system, government, schools, you name it. The "Greed is Good" crowd from the 80's prevails, and rules us.
Marx was right. Capitalism will collapse upon the sheer wieght of its unrestrained greed.They have looted and plundered us until nothing is left. All Obama is doing is rearranging the deck chairs on the Titanic....and pretending that he is saving us!
Obama. "It's the economy, stupid!" JOBS, JOBS, JOBS.
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benjamin
6966 Posts |
Posted - 11/09/2009 : 03:48:02 AM
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"During the boom, we spent money we did not have to buy things we did not produce and could not afford"
I agree with reasoning. |
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MarkIFC
936 Posts |
Posted - 11/09/2009 : 07:08:48 AM
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Americans are going to have to lower their lifestyles.
It may not be a return to the 1930s due to all of the "safety net" programs, but it will be similar.
Our church food pantry has seen the number of families seeking assistance go from 70 in 2007 to 528 last month. Where this started as a sideline Outreach program, the pantry has grown to 1/3 of our church's budget.
I am seeing a lot of families barely hanging on. If this economic situation continues for much longer (which I think it will) a lot more people are going to be losing homes. I think the drop in real estate values has no where near bottomed. We are going to see a lot of families moving in with relatives. I know of a family of 5 that lives nearby that had to move into the parents basement.
At my daughter's school, they had trouble finding Room Mothers for several classes this year. So many moms have gone back to work, at least part time. The days of the "stay-at-home" mom are over. |
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Oracles
450 Posts |
Posted - 11/10/2009 : 12:08:00 AM
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quote:
Originally posted by MarkIFC
Americans are going to have to lower their lifestyles.
It may not be a return to the 1930s due to all of the "safety net" programs, but it will be similar.
Our church food pantry has seen the number of families seeking assistance go from 70 in 2007 to 528 last month. Where this started as a sideline Outreach program, the pantry has grown to 1/3 of our church's budget.
I am seeing a lot of families barely hanging on. If this economic situation continues for much longer (which I think it will) a lot more people are going to be losing homes. I think the drop in real estate values has no where near bottomed. We are going to see a lot of families moving in with relatives. I know of a family of 5 that lives nearby that had to move into the parents basement.
At my daughter's school, they had trouble finding Room Mothers for several classes this year. So many moms have gone back to work, at least part time. The days of the "stay-at-home" mom are over.
A very good friend of mine feeds (buys/cooks food) poor for one of many outreach centers here in Los Angeles. I had helped him few times in the past and found most of the needy to look like what you’d expect from outreach centers. Well this past Saturday I wanted to help out again and I was shocked and sad to see what appears to be well to do folks who looked like they could be working for many financial/law/medical firms in the area in need of warm meal and a place to stay.
God Bless and help America
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