U.S. Job Losses Demystified 79 comments
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As the unemployment rate crossed the double digit barrier for the first time since Michael Jackson learned to moonwalk, President Obama announced that he will convene a “jobs summit” to finally bring the problem under control. Using all the analytic skill that his administration can muster, the President is determined to figure out why so many people are losing their jobs and then formulate a solution. That's a relief; for a while there, I thought we were in real trouble! In fact, the absolute last thing our economy needs is more federal government interference. If Obama really wants to know what's behind entrenched joblessness, he should start by looking at the man in the mirror.
Obama is pursuing, with unprecedented vigor, the same policies that have for decades undermined our industrial base and yoked us to an unsustainable consumer/credit driven economy. This doubling down on Washington's past failures is destroying jobs at an alarming rate. We learned that the September trade deficit surged by 18.2%, the largest gain in ten years. Much of the deficit resulted from Americans spending Cash-for-Clunkers stimulus money on imported cars – or “American” cars loaded to the sunroof with imported parts. In exchange for more domestic debt, we have succeeded only in creating foreign jobs.
An article in last week's New York Times by veteran writer Louis Uchitelle confirmed a fact that I have been alleging for years. Uchitelle pointed out that foreign outsourcing of component manufacturing has led to consistent overstatement of U.S. GDP and productivity. The connection goes a long way to explain why we keep losing jobs even as GDP is apparently expanding.
As our economy becomes less competitive due to higher taxes, burdensome and uncertain regulations, and capital flight, more manufacturing and services will be outsourced to foreign firms. However, the flaw in GDP calculation allows the output of those foreign workers to be included in our domestic tally. Since we count the output but not the worker responsible for it, government statisticians attribute the gains to rising labor productivity. To them, it looks like companies are producing more goods with fewer workers.
The reality is that we are producing less with fewer workers. The added “productivity” comes from higher unemployment and larger trade deficits. This is a toxic formula that will have lethal economic consequences.
Don't expect the brain trust at the President's job summit to fret much about these details. That public relations stunt will likely ignore the root cause of the economic imbalances and instead stress the need for government spending on training and education, i.e. more public debt. The unemployed do not need government theatrics, they need actual jobs. But as long as the government props up failed companies, soaks up all available investment capital, discourages savings, punishes employers, and chases capital out of the country, jobs will continue to be lost.
To really fix the unemployment problem, the President must look past his peers in government and academia to understand how jobs are actually created. In the private sector, all individuals have a choice to either work for themselves or someone else. Since labor is far more productive when combined with capital (office equipment, machinery, business models, and intellectual capital), those who lack these assets themselves often choose to work for others who have sacrificed to accumulate them. This increased productivity is shared between the worker and the owner of capital, and both are better off.
However, for one person or company to choose to offer a job to another, there must be an incentive to do so, and they must have the necessary capital. In the first place, employers must commit to paying wages and benefits, comply with government mandates and regulations, and subject themselves to potential lawsuits from disgruntled employees. All of these costs must be measured against the extra profits an employer hopes to earn by hiring an additional worker.
If profit opportunities exist, jobs will be created. Otherwise, they will not. Of course, anything the government does to raise the cost of employment, such as a higher minimum wage, mandated heath care, or greater regulatory burdens, not only prevents new jobs from being created but also causes many that already exist to be destroyed. Anything that diminishes the profit potential of extra hiring will diminish the number of job opportunities that are created. Also, since it is after-tax profits against which employers measure risk, the higher the marginal rate of income tax, the less likely employers will be able to hire.
Finally, in order to hire workers, employers must have access to capital to expand operations. Anything the government does to discourage capital formation automatically diminishes job creation. By running the largest federal deficits in history, Barack Obama is diverting all available capital to the Treasury, and is in effect waging a war against private capital formation.
If the President's summit truly intends to find the root cause of unemployment, his advisers don't need Bureau of Labor statistics or complex modeling software, just the courage to drop their dogmatic belief in central planning and embrace the laws of economics.
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This article has 79 comments:
The more onerous it becomes to do business in the USA, the more companies will leave. Why should they stay?
a must watch :
peterschiffchannel.blo...
Yet Rand is cited as the reason for a deregulation that allowed all this mess. Talk about turning over in one's grave! The Republican manipulators captured her philosophy and used it to rip us all off! (Some Dems too).
On Nov 15 01:41 PM optionsgirl wrote:
> We are going to see another Ayn Rand prediction occur:
> The more onerous it becomes to do business in the USA, the more companies
> will leave. Why should they stay?
So, a strong dollar will derail the economy and now a weak dollar will derail the economy. The recovery is all about the American consumer, who Larry Summers has left for dead.
At least if the dollar is strong the American consumer will get a raise. Only this consumer can improve the world economy. No one wants our exports or else the trade deficit would have narrowed. Good insight Schiff!
Good article. I own a small business and over the last year have met with the governors action team, industrial resources commissions, regional alliances to name a few. They have come to us looking for ways to help. The only money they offer is for training. I tell them that's nice but training really isn't a big problem. I asked how about money to replace my heaters or new overhead cranes or maybe some kind of voucher so I can buy forklifts. They say we have a few programs like that but they currently don't have any funding available.
Frankly I don't know why I even agree to meet with them. It for me anyways has always been a waste of time. I know these economic development guys are trying to help but they show up with their tool boxes and no tools.
Every year we some new tax and or fee (which I believe is a hidden tax) Last year it was the first time for a program called the unified carriers registration or UCR. Because we own delivery trucks we have to pay an additional $800.00 a year. I won't get into to all the fees we already pay just because we have delivery vehicles.
The truth is I do not need or want any help from the government. I wish they would just leave me alone and quit raising the costs to be an American manufacturer beyond what my markets will bear. Especially too prop up some large insurance and or financial companies who's business models suck.
The reason Middle Class unemployment keeps rising is that the Middle class is simply too blind to see these jobs, too indolent to apply for them if they actually happen to see them and just too unskilled to be hired , if, remarkably they actually do apply. No doubt the summit will make this very clear.
2. Jobs are created when free, fair and fast markets continually reallocate resources, via efficiency and bankruptcy , from low or no or negative value added uses to higher value added uses.
In a productive economy where price signals are true; where work, innovation, entrepreneurship and savings are applauded; where the alignment of risks and rewards is just and where credit and equity are based on merit, there is a "jobs summit" every day in which millions of free people eagerly participate.
It is only when the parasitic economy consumes the substance of the productive economy, when transfer payments and unmerited entitlements are glorified, when capital is allocated based on political favoritism, when unjust taxes and suffocating regulations are deemed good government and when anti-capitalism is the ruling ideology of the corrupt and thieving elite that a physical "jobs summit" organized by the anointed and attended by the self absorbed is needed: as yet another form of extravagant propaganda....... and self adoration.
www.marketoracle.co.uk...
On Nov 15 02:08 PM reveigel@msn.com wrote:
> The real unfortunate part of this story is that many BIG businesses
> are in bed with government and love central control. It eliminates
> competition, adds to big business profits along with many politicians
> receiving large donations from the selected big business elite few.
> This program of raping the public has been going on for over a century.
> I have tried to place all the blame on government, but big business
> is just as guilty for our present mess. To overcome this double obstacle
> will take Herculean effort.
At the start of the Industrial Revolution, the "standard work week" was 7 days a week, 12 hours a day - for a total of 84 hours/week (more than double the current work-week). It was only through steadily reducing the work week that "structural unemployment" was kept within tolerable limits.
We are now SEVERAL DECADES overdue for another reduction in the work week - see "Where is the Four-Day Work Week?" (www.bullionbullscanada...).
It will NEVER be theoretically possible to reduce structural unemployment to tolerable levels until this permanent and necessary evolution is allowed to continue.
On Nov 15 02:20 PM Gary A wrote:
> Option Girl, Rand was for free markets, not the distortion of markets
> that came from a Fed allowed ponzi housing bubble. Rand surely wasn't
> in the pockets of big banksters was she?
>
> Yet Rand is cited as the reason for a deregulation that allowed all
> this mess. Talk about turning over in one's grave! The Republican
> manipulators captured her philosophy and used it to rip us all off!
> (Some Dems too).
>
> On Nov 15 01:41 PM optionsgirl wrote:
>I asked how about money to replace my heaters or new overhead cranes or maybe some kind of voucher so I can buy forklifts. They say we have a few programs like that but they currently don't have any funding available.<
But they have plenty of funding available for golf carts. The administration is just dancing to the tune of their owners. They've got a program in place to provide a non-productive, consumption themed idiotic program that would give a golf cart to everybody in America who wants one (or 12, there's no limit). How insane is that? But they have no intention of providing funding for people like SAS70 who would do something productive with it. Hell, if given a little help like that he might even hire someone.
The people who own the administration are doing exactly what they've planned for decades, the wanton destruction of the USA economy. They want it destroyed, and they're purposely causing it right before our very eyes. I hope they've all got neck insurance.
Jimmy Carter started with idealistic support and lost it through incompetence. The stakes are much higher now, the American system seems in danger of going under through massive wealth transfers to the wealthy, a critical level of stifling of the domestic private economy covered by lies and "stimulus" to government and it's favorite, wealth-destroying failures, and general ponzi economics headed for imminent collapse. Nothing but an intensified continuation of the destructive overburdening of the only generator of value-added employment, small business, has transpired.
If by some miracle, sensible words come out of the "jobs summit," there is still a negligible chance this government will translate them into worthwhile actions.
On Nov 15 03:42 PM Jeff Nielson wrote:
> As usual, this author provides "straight talk" on the U.S. economy.
> However, competitiveness is literally only HALF of the picture in
> fixing structural unemployment in the U.S. (and ALL Western industrialized
> economies).
>
> At the start of the Industrial Revolution, the "standard work week"
> was 7 days a week, 12 hours a day - for a total of 84 hours/week
> (more than double the current work-week). It was only through steadily
> reducing the work week that "structural unemployment" was kept within
> tolerable limits.
>
> We are now SEVERAL DECADES overdue for another reduction in the work
> week - see "Where is the Four-Day Work Week?" (www.bullionbullscanada...;view=article&...
>
>
> It will NEVER be theoretically possible to reduce structural unemployment
> to tolerable levels until this permanent and necessary evolution
> is allowed to continue.
Seriously he is right about the adminstration but is wrong about gold 5000.
The chinese control the price of gold indirectly as most of us realize
China and america have astrong bond as written about by Zack Karabell
There is no doubt this adminstraion is the most liberal in history
Like Bush or not despite 9/11 and a massive asset bubble on stocks which yielded little capital gains because the stock market was selling at 40 times eranings tax receipts under him rose for 7 yearsstraight
The problem is interest on the debt and entitlement spending shot through the roof
This guy Schiff omits the fact that the vast money flowing in Wall St now that basically pushed us out of manufacturing as it was more profitable to make money by leveraging etc. His simplistic "explanation" of labor and capital helps keep the ignorant, ignorant. With trillions are going down the drain, Wall St eats Main St, then they get wannabes to preach on their behalf about "market regulation"!!
These are apologists for wall street hoping to get rewarded for pushing the great deception of ordinary Americans.
We are being intentionally driven into the ditch so the people that are doing the driving can "help" us when we are all bleeding with broken bones.
Who said you would never see wide bodied jets coming out of China?
On Nov 15 01:41 PM optionsgirl wrote:
> We are going to see another Ayn Rand prediction occur:
> The more onerous it becomes to do business in the USA, the more companies
> will leave. Why should they stay?
You represent pure capitalism and thus provide little insight concerning America's "change."
On Nov 15 03:00 PM SAS70 wrote:
> Peter
>
> Good article. I own a small business and over the last year have
> met with the governors action team, industrial resources commissions,
> regional alliances to name a few. They have come to us looking for
> ways to help. The only money they offer is for training. I tell them
> that's nice but training really isn't a big problem. I asked how
> about money to replace my heaters or new overhead cranes or maybe
> some kind of voucher so I can buy forklifts. They say we have a few
> programs like that but they currently don't have any funding available.
>
>
> Frankly I don't know why I even agree to meet with them. It for me
> anyways has always been a waste of time. I know these economic development
> guys are trying to help but they show up with their tool boxes and
> no tools.
>
> Every year we some new tax and or fee (which I believe is a hidden
> tax) Last year it was the first time for a program called the unified
> carriers registration or UCR. Because we own delivery trucks we have
> to pay an additional $800.00 a year. I won't get into to all the
> fees we already pay just because we have delivery vehicles.
>
> The truth is I do not need or want any help from the government.
> I wish they would just leave me alone and quit raising the costs
> to be an American manufacturer beyond what my markets will bear.
> Especially too prop up some large insurance and or financial companies
> who's business models suck.
On Nov 15 05:02 PM Dar Kangel wrote:
> Ayn Rand preached "greed is good", her disciple Alan Greenspan helped
> to architect our economic disaster. Read his book, in his own words
> he admits that he agreed with Bush's lets cut taxes program because
> he feared there was too much surplus left behind from Clintons time.
> Ayn Rand and all these greedy folks get a lot of support from big
> business to help them lie to Americans about policy. By the way I
> don't think she is an honest person, she cheated on her husband,
> and was pretty egoistic and not as talented as she is made out. She
> rose, because she became a perfect spokeswoman for big business,
> and even now lots of big organisation buy tons of her books to keep
> it circulating. There was a group wanting to donate money to U.of
> Texas if they made her book required reading.
>
> This guy Schiff omits the fact that the vast money flowing in Wall
> St now that basically pushed us out of manufacturing as it was more
> profitable to make money by leveraging etc. His simplistic "explanation"
> of labor and capital helps keep the ignorant, ignorant. With trillions
> are going down the drain, Wall St eats Main St, then they get wannabes
> to preach on their behalf about "market regulation"!!
>
> These are apologists for wall street hoping to get rewarded for pushing
> the great deception of ordinary Americans.
Considering the fact that Asian countries have been succesful using Government directed economies, US will need to rethink it's traditional Laisses Faire, anti-Government thinking, if it wants to survive economically.
India and China are not the rolemodels we need...lol
That is unless the plan is to put profit above all to include pimping out your countries bloated impoverished populations to build the next big hit at wal-mart.
Have you seen what india's ground water is like... I'll give you a hint it has the highest concentration of drugs in it in the world due to mass dumping by the generic drug producers.
Two words for ya on China...
Tian'anmen Square
On Nov 15 08:49 PM LCACM wrote:
> The author and others are still stuck in classical economic thinking.
> Most of the classical economics developed at a time when large chunks
> of Asia were colonies and were not significant economic players.
> Now Asian economies are strong economic competitors and this fact
> should be considered when thinking of econmic policies. By and large,
> Asians have strong faith in their respective government and this
> is borne by the fact that the high growth economies of China and
> India have been guided by strong central government policies. <br/>Considering
> the fact that Asian countries have been succesful using Government
> directed economies, US will need to rethink it's traditional Laisses
> Faire, anti-Government thinking, if it wants to survive economically.
On Nov 15 01:52 PM Austrian Economics wrote:
> Peter Schiff Harvard University Students for Liberty Conference Excellent
> Speech Nov 7th
>
>
> a must watch :
>
> peterschiffchannel.blo...
We have government paying people to buy houses, hundreds of billions of dollars going to prop up failed, government-subsidized mortgage schemes, perhaps trillions of taxpayer dollars being used to bail out poorly-run banks decimated by government-encouraged real estate speculation, and an economy brought to the brink of ruin. Might it not be simpler and far more prudent and economical to treat houses like any other objects in the marketplace, worth only what willing, unassisted buyers will pay for them?
America investing in failed institutions, waging wars, and outsourcing industry, not a productive investment.
It is as simple as looking at what things give returns, and what things give losses. The government can be part of the solution, but by investing in the wrong things, they can be a leading part of the problem. Seems like it is part of the problem right now.
But the only thing I disagree with Schiff about is that you can only pay people less if you strengthen the dollar and lower asset prices and the cost of living. He probably agrees with that but didn't articulate it in the article.
On Nov 15 03:53 PM vbierschwale wrote:
> Companies moving offshore and job losses caused by that are definitely
> terrible and devastating to our economy, but let me show you something
> that is not normally discussed at all which is devastating our towns,
> counties, states and federal budgets.
>
> Take a look at this analysis of the IRS Databook broken down by AGI
> from 1996 - 2007
>
> This is what is causing all of our economic problems and it definitely
> started way before the 08/09 crisis
>
> keepamericaatwork.com/...
>
> You might also want to take a look at the series of articles I have
> written showing how wages are declining in America and documenting
> it.
>
> You can find these articles on the right hand sidebar.
>
> Regards,
>
> Virgil
> www.KeepAmericaAtWork.com
On Nov 15 10:26 PM mullet22 wrote:
> This ponzi scheme, which makes Madoff blush, is quickly arriving
> to it's inevtiable demise. BHO Inc. is pissing off our enabling creditors
> with a run of protectionism (Chinese tariffs on tires and pipes)
> that puts him in favor of ----- yes, you got it ---- unions. It
> wasn't enough to steal from GM & Chrysler bondholders and give
> the companies to the unions (ironically a massive cause for their
> failures), but bho inc's tryst with the unions will soon bankrupt
> the country in the name of comradeship and "spreading the wealth."
> Unchecked, the future for American prosperity is bleak.
On Nov 16 03:20 AM Gary A wrote:
> You are viewing unemployment as a leading, not lagging indicator.
> And it may very well be leading in many ways now. The jobs won't
> come back.
>
> But the only thing I disagree with Schiff about is that you can only
> pay people less if you strengthen the dollar and lower asset prices
> and the cost of living. He probably agrees with that but didn't articulate
> it in the article.
could someone explain me for which reason if a product is produced in a foreign country and imported in US can be accounted as a positive contributor to domestic GDP? Thanks
On Nov 15 01:58 PM AmateurFarmBoy wrote:
> A healthy bout of deflation may be just the medicine needed for high
> unemployment if it results in breaking wage inflexibility and government
> regulation of private business. But Gutenberg-nanke is making that
> a long-shot hope.
Socialism is the shared misery of all. I'll have my misery my own way, thank you very much.
1. Term limits for ALL of Congress
2. No retirement program - collect social security if you retire, or go back to work like the rest of us.
3. If you've been a Congressman, you can't be a lobbyist.
4. If you've been a lobbyist, you can't be a Congressman.
Drain the cesspool that DC has become. Eat your own dogfood Congress!!!
On Nov 15 03:13 PM User 353732 wrote:
> 1. Is the purpose of this "Jobs Summit" to count all those many and
> varied, high paying, high quality jobs that have been " created and
> saved" ?
>
> The reason Middle Class unemployment keeps rising is that the Middle
> class is simply too blind to see these jobs, too indolent to apply
> for them if they actually happen to see them and just too unskilled
> to be hired , if, remarkably they actually do apply. No doubt the
> summit will make this very clear.
>
> 2. Jobs are created when free, fair and fast markets continually
> reallocate resources, via efficiency and bankruptcy , from low or
> no or negative value added uses to higher value added uses.
> In a productive economy where price signals are true; where work,
> innovation, entrepreneurship and savings are applauded; where the
> alignment of risks and rewards is just and where credit and equity
> are based on merit, there is a "jobs summit" every day in which millions
> of free people eagerly participate.
>
> It is only when the parasitic economy consumes the substance of the
> productive economy, when transfer payments and unmerited entitlements
> are glorified, when capital is allocated based on political favoritism,
> when unjust taxes and suffocating regulations are deemed good government
> and when anti-capitalism is the ruling ideology of the corrupt and
> thieving elite that a physical "jobs summit" organized by the anointed
> and attended by the self absorbed is needed: as yet another form
> of extravagant propaganda....... and self adoration.
On Nov 15 03:48 PM Northern Dancer wrote:
> On Nov 15 03:00 PM SAS70 wrote:
On Nov 16 02:46 AM chris coonan wrote:
> America needs to support small business, innovation and creation.
> If government can invest in infrastructure, making the world better,
> more beautiful and safer, that is great. Hiring creative Architects
> and Engineers is a good use of resources.
>
> America investing in failed institutions, waging wars, and outsourcing
> industry, not a productive investment.
>
> It is as simple as looking at what things give returns, and what
> things give losses. The government can be part of the solution, but
> by investing in the wrong things, they can be a leading part of the
> problem. Seems like it is part of the problem right now.
financial industry:
1) Guaranty that they never go out of business
2) Allowed them to buy (lobbying) congress and presidents so that regulations are tossed to the side
3) Allow them to borrow unlimited amounts of free money (FED)
4) Let them position their ex-employees in key regulatory agencies (Treasury, FED, SEC etc)
5) Look the other way and obfuscate when they violate regulations, laws etc
So do the same to:
High Tech
Manufacturing
Pharmaceutical
Etc
Etc
See problem solved
Let the prosecutions begin, at least start the process, enforce the principals and spirit of the Constitution as set forth. Yes we can? I'll believe it when I see it!
and from the last 8 years, we can't exactly show much good investment from the private sector either. it was all smoke and mirrors
On Nov 16 10:33 AM Zmartmoney wrote:
> Who is America in your equation? It sounds like you equate America
> with Government. That is our problem - America is not equal to Government.
> Government shouldn't be doing all this "investing" to begin with
> - they invest badly, almost without exception, and then give the
> "profits" to those who didn't earn them. This is all about power.
> Wake up! Waging wars??? No doubt. Let's just wait here - the jihadists
> will eventually come to us. Anyway, it's more fun street-fighting
> on your own block - you can go home for lunch. Sheesh. You still
> think the govt is the solution.
On Nov 15 02:08 PM reveigel@msn.com wrote:
> The real unfortunate part of this story is that many BIG businesses
> are in bed with government and love central control. It eliminates
> competition, adds to big business profits along with many politicians
> receiving large donations from the selected big business elite few.
> This program of raping the public has been going on for over a century.
> I have tried to place all the blame on government, but big business
> is just as guilty for our present mess. To overcome this double obstacle
> will take Herculean effort.
On Nov 16 11:01 AM D. McHattie wrote:
> I won't believe Obama is making forward progress until he gets rid
> of Larry Summers. The guy is poison.
www.mediacircus.com/20.../
On Nov 16 08:42 AM gzulauf wrote:
> Most of the comments above forget that our economy is heavily based
> upon intangible trust. Even if my taxes are high (they are not in
> America) and regulation exists to keep me honest, my bank will not
> lend to me if it feels I will not have a good chance of repaying
> the loan. (The same bank loaned to me two years ago and saw me as
> a very good risk.) In addition, if I am a smart businessman, I will
> not seek a loan if my customers have left because of an uncertain
> financial future. No reduction in taxes or changes in regulations
> will bring my customers back. Not until trust in 'paying' returns
> will this economy get back to what we all consider normal. It will
> happen without government intervention. But, how long are we willing
> to wait for the patient to heal thyself.
On Nov 15 08:49 PM LCACM wrote:
> The author and others are still stuck in classical economic thinking.
> Most of the classical economics developed at a time when large chunks
> of Asia were colonies and were not significant economic players.
> Now Asian economies are strong economic competitors and this fact
> should be considered when thinking of econmic policies. By and large,
> Asians have strong faith in their respective government and this
> is borne by the fact that the high growth economies of China and
> India have been guided by strong central government policies. <br/>Considering
> the fact that Asian countries have been succesful using Government
> directed economies, US will need to rethink it's traditional Laisses
> Faire, anti-Government thinking, if it wants to survive economically.
BY extending jobless benefits you are enocuraging many to continue to work under the table
Tax credits for employers who provide jobs and health insurance for 5 years would work better but does not advance teh socialist agenda enough
> Who is America in your equation? It sounds like you equate America with Government. That is our problem - America is not equal to Government.<
I might be going a little off topic here, but you just touched on an incredibly important topic. In the eyes of those living beyond the shores of the USA, what the government does in the realm of foreign policy, and now in the realm of incredibly poor domestic policy, is very unfairly associated with "the American people". In my opinion, never in the history of mankind has a nation of good people had their reputation and image purposely slaughtered world wide by their own administration. The administration wants Americans to be hated. And in my case, they'd succeeded at first.
But let me make something perfectly clear. Many years ago, before I awoke, I too hated Americans. I was wrong. What I was really feeling was a hated for American foreign policy and therefore the administration. I don't feel that way any more about the people. Now that I see what the global bankster cabal is truly up to, I honestly feel a kindred spirit with Americans that I never before thought would be possible. I actually like American people now.
If any nation or peoples on the face of this earth feel they have been victims of unjustified wars and barbarism committed upon them by the United States, realize that those who have in reality been the most viciously attacked victims of the USA governments are the American peoples themselves. And it all started on Jekyll Island in 1913. Since that time the dollar has lost 96% of its value and American people have lost 96% of their freedoms.
It's so sad that American people are not welcomed very warmly abroad. It's not their fault. Hopefully in time, the rest of the people of the world will wake up as I have.
.
The competition for market capital is now global. The spread of knowledge and working skill is also global.
Why should some one hire an American worker who works only 4 days a week, and get paid 3 times the salary, while you can hire a Chinese worker who gets paid only 1/3 but works 6 days a week? The choice is clear.
Most American simply feel that just because they were born in this great country, they are ENTITLED to something that people in other country can only envy about.
Wake up Americans! You are NOT entitled to anything. You are entitled to the freedom you enjoy, and the opportunity that you have, and a pair of empty hands that you can use to work and produce something good. You are now competing with people in other countries on fair ground.
On Nov 15 03:42 PM Jeff Nielson wrote:
> As usual, this author provides "straight talk" on the U.S. economy.
> However, competitiveness is literally only HALF of the picture in
> fixing structural unemployment in the U.S. (and ALL Western industrialized
> economies).
>
> At the start of the Industrial Revolution, the "standard work week"
> was 7 days a week, 12 hours a day - for a total of 84 hours/week
> (more than double the current work-week). It was only through steadily
> reducing the work week that "structural unemployment" was kept within
> tolerable limits.
>
> We are now SEVERAL DECADES overdue for another reduction in the work
> week - see "Where is the Four-Day Work Week?" (www.bullionbullscanada...;view=article&...
>
>
> It will NEVER be theoretically possible to reduce structural unemployment
> to tolerable levels until this permanent and necessary evolution
> is allowed to continue.
I love this article because it gets at the incentives behind the results. Incentives are everything. Without aligning them towards policies that will lead to meaningful recovery... policy, rhetoric, commentary, etc. are futile.
Another great piece. Hopefully one of the "jobs summit" advisors will point to this post as a discussion point.
On Nov 15 02:20 PM Gary A wrote:
> Option Girl, Rand was for free markets, not the distortion of markets
> that came from a Fed allowed ponzi housing bubble. Rand surely wasn't
> in the pockets of big banksters was she?
>
> Yet Rand is cited as the reason for a deregulation that allowed all
> this mess. Talk about turning over in one's grave! The Republican
> manipulators captured her philosophy and used it to rip us all off!
> (Some Dems too).
>
> On Nov 15 01:41 PM optionsgirl wrote:
P.S. Isn't another economic law that of specialization of labor? Do we really want to focus on competing in the manufacturing of components when other countries can do it at one fifth of our costs? Is that really where the unique value comes from this country? I would argue let's let them have component manufacturing while we focus on the design, innovation and specialization of parts that are more difficult to outsource. What is being argued in this article is just a dressed up form of protectionism.
On Nov 16 11:01 AM D. McHattie wrote:
> I won't believe Obama is making forward progress until he gets rid
> of Larry Summers. The guy is poison.
Listening to the Republican candidates on war last fall was scary. They want the brink of WW3. I would rather be poor than dead.
On Nov 16 05:01 PM MarkitWacha wrote:
> I won't believe the country is making progress until we get rid of
> Obama the Great Socialist.
Deflation is a raise. Inflation is a tax. Asset inflation is a tax too.
On Nov 16 10:11 AM Zmartmoney wrote:
> If you think that's a reasonable scenario, you haven't really lived
> through a serious deflation. Another massive loss of wealth across
> the US will only serve to further disassemble the middle class.
> The MC carries the country. Half of the US doesn't pay taxes, instead
> COLLECTS taxes from our pockets. You know - poor folks, with only
> three color TVs and cellphones for only those over 10 years of age.
> The rich (you know - like Congressmen) know how to protect their
> capital and have the resources to do so. That leaves us - the poor
> suckers who go to work every day and hope to someday be able to retire,
> while we watch our "wealth" evaporate from the crazed policies of
> the STATE (in the Marxist sense). A big bout of deflation would
> be almost as bad as the inflation which is looming on the horizon.
> Nobama only wants to be loved - everyone send him a Christmas card
> and a word of encouragement, so maybe he won't single-handedly destroy
> what remains of the free world.
I view this as a scam against America. I think the Fed allowing this housing bubble was traitorous. They owe their allegiance to the Bank of Settlements and not to our constitution or country. It wasn't an accident and it wasn't a Black Swan. It was a cold, calculated ponzi scam brought to our shores by the investment banks as the Fed looked the other way.
On Nov 16 04:25 PM Online Adjunct wrote:
> It wasn't so much deregulation that caused the housing bubble and
> the collapse or near collapse of financial institutions as dysfunctional
> regulation. The financial services industry is the most heavily
> regulated industry in the country. Maybe the derivatives could have
> used more regulation, but the proliferation of derivatives was fostered
> by the need for financial institutions to unload risk that they had
> to take on as a result of overzealous regulation intended to get
> them to lower lending standards in the name of affordable housing.
> Well housing is becoming more affordable, but not in the way intended.
> A collapse in housing prices makes housing genuinely more affordable.
> Relaxed lending standards only makes it appear more affordable by
> deluding buyers into buying houses that they cannot really afford.
>
The main reason for offshoring of jobs is CHEAP LABOR plain and simple!! We analyze whether a foreign market has enough cheap labor with a high enough literacy level to make operations successful + other logistics (e.g., shipping rates, communication, intellectual property concerns and product safety etc). If all fits the model, its a GO!
On the job creation front, what drives hiring decisions is DEMAND for products, plain and simple. Each employee is an investment, if we cannot 're-coup' his cost he is not getting hired. If the demand is NOT there, a tax break will not lead us to hire!
For those blaming the gov't for all our ills, you can do as you please! But remember, the gov't did not ship jobs overseas, we did (corporations), the gov't did not inflate home prices, we did (buyers and sellers) and the gov't did not knock the wind out of the economy, we did (corporate financiers aka wall Street), yet we cry like babies asking the gov't to fix all and even blaming it for all!!
I take responsibility for my actions and frankly, the endless chase for PROFIT is our waterloo (we've got to keep the Dow, S&P 500 and those bonuses coming)! Look don't cry to the Fed, look within for the problem and maybe a credible solution can be found. The gov't didn't make and cannot fix our problems.
On Nov 16 03:01 PM Mark Anthony wrote:
> I have to disagree with you, Jeff!
>
> The competition for market capital is now global. The spread of knowledge
> and working skill is also global.
>
> Why should some one hire an American worker who works only 4 days
> a week, and get paid 3 times the salary, while you can hire a Chinese
> worker who gets paid only 1/3 but works 6 days a week? The choice
> is clear.
>
> Most American simply feel that just because they were born in this
> great country, they are ENTITLED to something that people in other
> country can only envy about.
>
> Wake up Americans! You are NOT entitled to anything. You are entitled
> to the freedom you enjoy, and the opportunity that you have, and
> a pair of empty hands that you can use to work and produce something
> good. You are now competing with people in other countries on fair
> ground.
On Nov 15 01:41 PM optionsgirl wrote:
> We are going to see another Ayn Rand prediction occur:
> The more onerous it becomes to do business in the USA, the more companies
> will leave. Why should they stay?
On Nov 16 07:43 PM The Other One wrote:
> wow, people can really twist and manipulate anything to fit and/or
> rationalize a particular viewpoint! Everything under the sun can
> be blamed on the gov't. I work for a Fortune 500 and we've been outsourcing
> for years, never have I heard that "gov't is depleting capital" or
> "gov'ts high taxes" etc were the primary reason for the jobs going
> offshore (people remember that most corporations are expert at "reducing
> their tax liabilities" through various tax loopholes, think Goldman
> Sachs with $54 BILLION in revenue for 2008 AND $14 MILLION in tax
> expense!!! - but I digress).
>
> The main reason for offshoring of jobs is CHEAP LABOR plain and simple!!
> We analyze whether a foreign market has enough cheap labor with a
> high enough literacy level to make operations successful + other
> logistics (e.g., shipping rates, communication, intellectual property
> concerns and product safety etc). If all fits the model, its a GO!
>
>
> On the job creation front, what drives hiring decisions is DEMAND
> for products, plain and simple. Each employee is an investment, if
> we cannot 're-coup' his cost he is not getting hired. If the demand
> is NOT there, a tax break will not lead us to hire!
>
> For those blaming the gov't for all our ills, you can do as you please!
> But remember, the gov't did not ship jobs overseas, we did (corporations),
> the gov't did not inflate home prices, we did (buyers and sellers)
> and the gov't did not knock the wind out of the economy, we did (corporate
> financiers aka wall Street), yet we cry like babies asking the gov't
> to fix all and even blaming it for all!!
>
>
> I take responsibility for my actions and frankly, the endless chase
> for PROFIT is our waterloo (we've got to keep the Dow, S&P 500
> and those bonuses coming)! Look don't cry to the Fed, look within
> for the problem and maybe a credible solution can be found. The gov't
> didn't make and cannot fix our problems.
On Nov 16 06:36 PM Gary A wrote:
> No if we get rid of Obama we will elect a neocon. Can you imagine
> endless war with the deficits we are running?
>
> Listening to the Republican candidates on war last fall was scary.
> They want the brink of WW3. I would rather be poor than dead. <br/>
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