On Some Economic Questions

The US economy is mired in a slump, the European economic crisis add to the woes, and Americans are wondering, “Jobs, jobs, jobs – where art thou job.” Americans have lost over 8 million jobs, yet the economy has created on 2.5 million since the upturn.

For starters, the private sector (not the public sector) is the main job source in a capitalist economy. No matter if consumers are individuals or corporate, increased consumer demand for goods and services is the main fuel for hiring and investment. In other words, regardless of all the partisan talk, government can only do so much. Therefore, it is time to ask some questions.

Reducing payroll taxes for employees increases the money available to workers, but what if workers save more because of the uncertainties in their life?

Tax credits to companies hiring those unemployed for 6 months is a noble thought, but this would primarily fill a vacant existing position – thus not a new job. Do you think any company would create a steady stream of hire-to-fire so can get more credits?

Why should a company expand payroll if their demand for the good or service has not increased?

With demand driving growth, how do reduced regulations increase demand?

Companies are achieving more with less, and are using offshore workers to lower costs. Even with the GOP talking points of lower taxes, less regulations, loosened lending practices, and increased demand, what guarantee do the taxpayers have that the companies will invest in American workers?

A strong financial sector is the foundation for a capitalist economy. With a large reason for our economic troubles directly aimed at the roulette nature of the financial industry and their pseudo-promotion of the housing industry, how can returning to the less-regulated casino environment be good for the economy?

If the housing/building industry drives the demand for much of the economy, what is the plan to stimulate this industry?

Taxes decreases must increase revenue to federal, state, and local governments. What if they don’t?

Infrastructure projects increase the demand for materials while putting more people to work, which also returns money in the form of tax withholdings. However, where/what is the funding source for this investment – and at the expense of doing without what?

Do our leaders construct trade agreements to increase demand?

We have a federal government struggling with the opposing forces of deficit reduction and stimulating demand by providing aid to financially struggling public sectors in order to help local public workers keep their job. Of course, one’s position directly correlates with a concern about the next election.

Meanwhile, as consumers drive demand, three main factors act as significant forces acting on their psychology: high unemployment, a depressed housing market, and a political atmosphere consuming all the oxygen in the room with their battle between the inept, the misguided, and the knowledgeable choosing to be inept or misguided.

With another round of budget ideology ahead of a September 30th deadline, count on Washington lowering not only consumer confidence, but the confidence of the business and banking sectors, thus promoting consumers, businesses, and lending institutions to keep more money on the sidelines.

On Thinking Differenty

I’m not sure why I’m in a sour mood or even pessimistic. Heck, maybe my biorhythms are off today. Nonetheless, I’ve got to get this off my chest – and in advance of President Obama’s speech is as good of a time as any.

While Democrats quote FDR and Clinton, Republicans long for the years of Reagan while integrating quotes from Lincoln into their omnipotent knowledge of the US Constitution. (Yes, my eyes just rolled.)

I hate to inform our elected leaders, but this is not 1776, 1860, 1942, 1996, or even 2000. The world is a much different place than it was just 10 years ago. Today’s world is a global economy meshed with the greatest communication system the world has ever known. Twitter, Facebook, Skype, and phones serving as commuters were not around at the start of the new millennium.

Like it or not, corporate America has been and will continue to use offshore resources as that is today’s economy. Like it or not, many non-US companies are leaders in their field. Hello again, today’s world is a much different place. So, here is the major question: What can we do about the problems the US faces in the modern world?

Well, we can take the Republican approach of focusing of making President Obama a one-term president by disagree with anything and everything, including their own ideas. We can take the Democratic approach and blame as much as possible to the Bush administration and a Republican led Congress. Better yet, why not just take the party line – after all, big dollars are behind party. Just ask your representative how much time they spend fund raising.

Since today’s world is a different place, we need leaders to look at the world the way it is and where it is going – not the way it was. WW II is over. The Cold War is over. It’s not to say that everything in the either party’s ideological box of ideas is good or bad, but these times requires leaders who are willing to meet the challenge to lead America upward and out of this funk.

I listen to the Republican candidates and the main message I hear is fear, dogma, and return to past. As I listen to Democratic leaders, including President Obama, I hear a different message from yesteryear that is also stagnant. I think President Obama knows what I am saying, but I’m unsure if he believes it, thus getting caught up in the Washington quagmire.

Meanwhile, America watches the world change while elected leaders spend exorbitant amounts of energy and resources that lacks forward thinking while focusing on the interests that are behind their party.

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.

Opinions in the Shorts: Vol. 63

On Democratic Whining
House Democrats are upset because President Obama is distancing himself and the White House is accepting a possible GOP majority in November. Tough nuggies! House leadership and President Obama obviously misread or ignored the public. Yes Mr. President, I can honestly say, I told you so.

On Blaming the Previous Administration
President Obama and his White House operatives continually point to what they inherited. Mr. President, we already know that so stop the excuses and get the job done. Oh that’s right – you would rather be a good one-term president than a mediocre two termer. Sorry, this moderate independent isn’t buying that lame excuse, so continuing to point the finger at President Bush is both getting old and is also a risky tactic. Here’s an interesting column by David Broder (Washington Post).

On the Job Front
It does not take a Rhodes Scholar to determine that too many people are out of work. Let’s see – less income for the general population means less spending, fewer people seeking new homes, less income for governments from payroll taxes, more cuts by state and local governments, and on and on. There continues to be a huge gap between Wall Street and Main Street, and Washington does not seem to understand – regardless what Mr. Boehner and Mr. McConnell say. I enjoyed this David Brooks column about the economy.

On Judicial Activism
Senator Sessions (R-AL) speaks for many when he worries about nominee Kagan being an activist judge. On the other hand, these people are forgetting that appointing someone who favors their own personal and political view is also judicial activism. Justice Sotomayor’s appointment did not alter the court, nor will Justice-nominee Kagan. The last judicial activist appointment was Justice Alito. Hmmm .. and Senator Sessions and his cronies voted YES. Isn’t that right Senator Hatch (R-UT), Senator Kyl (R-AZ), Senator Coburn (R-OK), Senator Cornyn (R-TX), and Senator Grassley (R-IA) ?

On a Wrangling Rangel
I nominate Rep. Charlie Rangel (D-NY) as the symbol of Washington – one who stands for what is wrong on both sides of the aisle. Then again, is having an Ethics Committee in each chamber an oxymoron?

On a Tea Party Thought
The Tea Party hailed the Scott Brown’s (R-MA) election, and now turned against him because of his vote on the financial reform bill. Here are a couple of questions to ponder. If the Tea Party leads the way in nominating a Republican, can the nominee capture the center necessary to win? If a Tea Party candidate makes it to Washington, can they successfully legislate? After all, Sharon Angle’s record in Nevada is filled with being the sole NO vote and, polls currently have her trailing a very beatable Harry Reid. Here’s an article.

Opinions in the Shorts: Vol. 43

On Additional Walls
Monday’s post honored the 20th anniversary of the Berlin Wall’s fall and attempt to stimulate thinking, along with providing a wonderful 2-minute NPR segment. Here are some additional thoughts about walls.

A conversation with one of my pastors produced this analogy: One aspect of Christianity is to turn walls into tables. Now that’s worth thinking about.

Secondly, I continue to see letters to the editor in the Cincinnati paper pointing to President Reagan’s 1987 “Tear down that wall” speech as a single historic moment regarding the wall. Historic? Yes. Significant? Yes. The key event? No. Let’s us not forget World War II and Winston Churchill’s iron curtain speech – “From Stettin in the Baltic to Trieste in the Adriatic, an iron curtain has descended across the Continent.” – as a line was drawn and the many events to come; including, but not solely, President Reagan. Here’s an interesting column from San Antonio’s Jonathan Gurwitz.

On Jobs and War
NY Times columnist Bob Hebert wrote an interesting column this week focusing on what would he tell President Obama about jobs, the economy, and the war in Afghanistan. Although it’s not about independent moderates, to me he hit the nail on the head about why nonpartisan independents are discouraged. To me his words weren’t based on a party or an ideology, but on a nonpartisan reality. Here’s the column.

On Moderates and Fiscal Policy
One thing Republicans don’t understand about independent moderates is that we tend to be more sensitive to social programs, including health care insurance. One thing that Democrats don’t understand about independent moderates is that we tend to be fiscally sensitive. Although I don’t always agree with George Will, I do appreciate his columns – including this one about fiscal concerns.

On Interesting Football Stat
Cincinnati Bearcat QB Tony Pike guided the team to a 4-0 start before suffering an injury in game 5. Sophomore QB Zach Collaros has started 3 games and produced these unconscious numbers:

  • Record: 3-0
  • Rushing: 33 attempts, 172 yards, 2 TDs
  • Passing: 66-82, 0 INT, 8 TDs

Tonight the Bearcats host West Virginia at Nippert Stadium, one of the great old, on-campus sporting venues. (Here’s a prior post about the stadium.) I’ll be there so watch for me as I’ll be wearing red.

On the BCS
Since I mentioned college football, for those who haven’t seen the latest edition of the BCS Committee meeting from the Global Sports Fraternity, enjoy!