On Jobs

I wonder how many times I’ve heard Speaker John Boehner (R-OH) say something about jobs in America. Yes, jobs and the economy is a pressing need – but how many times have politicians used “jobs” as political manure? Let’s face the music!

Company mergers cost jobs. Company A purchases Company B, thus consolidates operations. Jobs are gone and won’t return.

Companies operate with their eye directly on the bottom line. If the company moves jobs to another country to lower labor cost in order to achieve a certain target, then that’s what is done. Jobs are gone and probably won’t return.

Some companies move operations to another country because of environmental laws. Jobs are gone and probably won’t return.

Companies have been downsizing, thus doing with less. Jobs are gone and probably won’t return.

Many aspects of manufacturing as textiles have gone elsewhere, and probably won’t return.

In manufacturing that remains, technology has replace what employees used to do, so those jobs won’t return.

Many look at government jobs as being the most stable, yet the current political climate is to cut, cut, cut – thus eliminating jobs.

As our politicians look to cut spending, especially by the Department of Defense, I wonder how many jobs will be lost in defense equipment and its supply chain.

The next time anyone hears Mr. Boehner or any other politician ask Where are the jobs?, let us remember that unless they detail specifics about a plan (and good luck with that), their statement is nothing more than political rhetoric for the benefit of their party. Just listen below to hear the party rhetoric of regulations and taxes. Meanwhile,  many Americans need jobs.

On IRAs and Congress

Bear with me, as I have to set the stage on something that has been on my mind for a long time.

In a world where too many people think of Social Security checks as retirement income, Individual Retirement Accounts (IRAs) are a good thing. The Employee Retirement Income Security Act (ERISA) brought us traditional IRAs in 1974. The Taxpayer Relief Act of 1997 tossed Roth IRAs into the retirement planning mix. Because ERISA was primarily aimed at pension programs, various amendments through the years have given small business owners additional options as Simple IRAs and Simplified Employee Pension (SEP) IRAs.

Primarily for executives, 401k plans appeared in 1978 allowing employees to defer compensation. Various amendments through the years expanded 401k opportunities to more people. Bottom line is that multiple opportunities exist to save for the retirement years.

It’s understandable that all these accounts come with rules for the owners: rules about contribution limits, tax obligations, withdrawal procedures, and various penalties for early withdrawal. For the life of me, one rule gets under my skin.

For whatever reason (either special interest or to get someone’s vote), Congress limited IRA contributions by qualifying contributors by income. In other words, those above a certain income cannot contribute to their IRA or they can only contribute a reduced amount.

What were the Capitol Hill nimrods thinking? IRAs should be available for every American. If he chooses, Bill Gates should be able to contribute to an IRA just like Joe Schmuck. I’ll take it one step further. Every American (if they so choose) should be able to maximize contributions into both the traditional and Roth IRAs regardless of income and availability of 401k plans – Period – thus eliminating the need for if-then statements and making the law easier to understand!

Retirement plans are just another example of Congress screwing up a good idea with unnecessary regulations – Damn jackwagons.

On a Global Thought

I bookmarked this interesting video several months ago knowing I would use it in the future. (I believe I get the video from Emma.)

Meanwhile, as the bookmark idly sat in my favorites, columnist David Brooks swooped in to steal any thunder. Not that I intended to reach the eloquence or insight of one of my favorite columnists, but the mere fact that I was a bit ahead of him is nibble of self gratification.

I hope you watch the 5-minute video and then share your thoughts. I will precede the video with one question: What does this mean to you? For those desiring additional questions, I included a few below the video.

Questions to Ponder

  • What does this mean for America’s future?
  • What does this mean for the world and its global economy?
  • Does this have any impact on America’s middle class?

Interesting read: Pew Research Center, The Globe’s Emerging Middle Class (it connects to an excellent summary that has a link to the full report at the end.)

On Federal Employment

Federal employment has received considerable attention of late, so now is a good time for this post.

In an August David Broder (Washington Post) (a columnist I appreciate) stated the DoD Secretary Robert Gates’ and his plan to trim department spending would trickle down through other departments. In this time of a soaring Washington deficit, political campaigns are full of the popular rhetoric to reduce spending and the deficit. Even the Republican’s Pledge to America promotes imposing a net hiring freeze on non-security federal employees.

Let me be the first to reminder everyone that we have heard this before; and, many of those spouting this philosophy are the very incumbents causing the problem. Nonetheless, the issue of federal employment is worth examining.

I have always said that inefficient government has one big advantage – employment. The U.S. government employees over 2 million people, so just think how many people would be unemployed if government was more efficient. Like many issues, one can find the “rest of the story” and potential answers in the demographics.

The U.S. Office of Personnel Management publishes The Fact Book: Federal Civilian Workforce Statistics (last published in 2007). Here are two prominent numbers about the Federal workforce: Average age is in the mid-40s, and over 70% of Federal employees are over 40. In other words, the Federal workforce is an old lot … and all this with 2006 employment numbers.

First, the GOP pledge’s “a net hiring freeze.” In other words, no new workers in new positions, but, replace the ones who retire. How is that going to reduce spending?

Second, whether Secretary Gates or any other department/agency head, are they going to lay off workers as they approach retirement?

Third, with the sudden “concern” about the deficit, federal employment is being scrutinized. With so man impending retirements, is this a good time to freeze employment?

Pragmatists (as me) see numbers are in place for a natural reduction in force across the federal government. For example, as personnel retire over the next 10 years, all departments will replace three retirees with two replacements – so plan accordingly. Heck, maybe having fewer workers would force the Feds to become more efficient.

Who is making the most sense? What do you think?

On Double Standards and Deficits

Presumably, our elected representations are facing voter anger. Presumably, American voters are tired of Washington’s inability to reduce the federal deficit. With the possibility of majority changes in one or both Capitol Hill chambers, the news is running rampant with various polls regarding the upcoming election. My take – what a bunch of crap!

All of the House of Representatives’ 435 seats are on the upcoming ballot. As analysts focus on the 100 or so seats that are up for grabs, 335 are safe. On the Senate side, voters will determine the fate of 37 seats; the majority of incumbents are safe. If voters are angry and fed up with our elected representation, why will the majority of incumbents get re-elected? Obviously, voters must be fed up with others representatives rather than their own.

Deficits, a 40-year trend, occur when expenses exceed income. I firmly believe that voters believe that our elected officials need to get control on the spending. The real point of contention is finding agreement of where to cut the expenses while determining how much. Even without special interest influence, what is good for some is probably bad for others. In other words, who is to sacrifice?

As extending the Bush tax cuts remains a current debate, one fact remains fixed: taxes are the major source of government income. Republicans love the cut taxes mantra, but would you go to your boss asking for a cut in pay if you were operating a personal deficit?

Interesting, conservatives are now Great Britain’s party in power. Although they do not have a majority, conservative leadership is approaching their deficit with a novel two-prong approach: cut expenses and raise taxes. Besides these recent columns by Ruth Marcus and David Broder, seems I mentioned this approach in October 2008 in relationship to the Obama-McCain campaigns. Thus, I continue to maintain that much of America wants leadership capable of making tough decisions that are contrary to campaign rhetoric and party ideology.