On Jobs: February 2012

As the unemployment rate continues to slowly lower, I offer the following thoughts.

  • In January 2008, 7.6 million were unemployed (4.9%)
  • In the 7 months prior to Sept 2008, unemployment grow by 1.259 million
  • From September 2008 through March 2009, unemployment grow by 5.779 million
  • In the 9 months following March 2009, unemployment grew by 1.495 million

If 8.533 million Americans lost their job in the economic collapse of 2008-2009 – and improving the job market by 100,000 per month will take approximately 86 months – that is over 7 years to return to the unemployment rate of January 2008 (4.9%), of course with assumptions.

However, the 86 months does not account for colleges continuing to graduate people ready to enter the job market, nor military personal returning to the civilian workforce – oh, surely we haven’t forgotten that the unemployment rate in those two groups is higher than the average.

If job growth continues to improves, the discouraged worker (unemployed, but not looking) will seek work, thus unemployment could rise. See this graph from Bruce.

Of course given that unemployed has an official definition and that other categories exist, this provides more statistics so any partisan can find numbers to justify their point and to say what other partisans want to hear.

Republicans continually complain about the slow jobs numbers, but they continue never to address the following:

  • Being for smaller government, how many federal workers do you plan to layoff?
  • Being against the auto bailout, how many additional workers would have lost their jobs in addition to the 8.533 million?

To the Democrats and the White House I ask the following:

  • Because the sensible already know, when are you going to stop emphasizing the inherited situation?
  • When are you going to admit that you spent too much political capital on the health care debate at a time when the economy was at the top of the list?

I could go on, but I have already set forth other tough economic questions in these posts: March 2011 and September 2011.

Although none of us are perfect and each of us use a preference filter of some sort, the American public needs to remove their head from their ideological anal orifice, shed the partisan filters, stop listening to political horseshit, and learn to understand the situation – thus checking out what the accuracy and inaccuracies from the talking heads. Then, and only then, the public can have meaningful discussions to not only agree and disagree, but to also determine the course.

Ah – at least now I feel better, but I have little hope for this.

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.

On the Housing Mess

In early June, we put our house up for sale – not with hopes of downsizing or upsizing, but resizing. In other words, we decided to seek a house with a similar square footage, but in a different configuration and allotment.

We have been in our current location for 23+ years, so we’re ready for a change, but we understood the current market’s difficulty. Almost three months later, we’re still here and do not see a buyer on the horizon. The bottom line is simple: housing inventory is too high and the number of buyers is much lower – not a good match. I really believe there are three factors at the center of the current housing market.

Unemployment is high, and many with a job realize the cloud of uncertainty. These factors sharply decrease the number of potential buyers, which banks automatically reduced by setting qualifications for getting a loan.

Follow the dominoes:

  • Many (but not all) financial institutions accepted borrowers with questionable qualifications, thus increasing the number of buyers.
  • More buyers meant more sales of existing homes and newly constructed homes – thus creating an artificial housing boom.
  • The housing market busts, thus foreclosures increasing, number of vacant houses increase, number of new home sales decrease, number of qualified buyers decrease, and the overall inventory of homes on the market drastically increases.

Contrary to many political pundits, no one White House administration is responsible because deregulation of the financial sector has happened over the past 30 years. Glass-Steagall Act, the Banking Act of 1933, established controls on the financial industry. Whether being the majority in a portion of Capitol Hill or being a Pennsylvania Avenue resident, I remain confident at pointing the fingers to both parties at various times.

The bottom line is simple. Glass-Steagall provided stability in the financial sector for 50 years, but since the players wanted more, including our elected officials, responsible homeowners are unable to more on because of the market conditions created by deregulation and irresponsible loan practices.

Today, Congressional Republicans are against the regulations passed by Congressional Democrats for the primary reason of disagreement. Let us remember that since neither party sought to reinstate Glass-Steagall, the answer of the reasons behind their actions are found in the following:

  • The party’s best interest
  • Elected official’s self interest
  • Re-election campaign’s interest
  • The party’s financier’s interest

In other words, having a stable financial sector in the best interest of the country and its citizens is too low on the priority list. Just follow the money.