View Full Version : The Economy
Multiple polls show the economy is the single biggest concern for a majority of Americans. So far the administration has not regularly stated that the economy is it's top priority. Should it be?
Jobs are supposed to be the main concern for 2011, isn't this the same?
It is the same, for a strong jobs market will affect/is the economy. Fortunately we have a President who can chew gum AND walk at the same time.
It's not like there is a "list" on the oval office wall. Done, check, next, done, check, next....
Maybe there ARE some politicians who can only think of one thing at a time, and refuse to even think about, or work on, anything else before that "thing" is fixed" (whew! now on to fixing nuclear proliferation!) but that's not really how government works. That's why there is an army of advisers, and secretaries, and such (you know, the evil government people) so those we elect can focus on the important bits of every issue. We expect teachers and policemen and firemen and doctors to multi-task. With all the pressing issues in our world, I certainly expect our politicians to do the same.
If an elected representative in Washington can only hold one thought at a time, I'm thinking we aren't getting our moneys worth!
So far the administration has not regularly stated that the economy is it's top priority. Should it be?
I think your statement is incorrect, Gregg. This administration has consistently stated and shown that the economy is top priority. The bailouts, tax cut extensions, stimulus program are examples of efforts to stimulate the economy or at least stop the economic free fall.
In today's 15 second attention span environment, it is quite easy to "state" something but doing it is quite different. I personally think that our economic structure for the last 30 years has finally brought the chickens home to roost. Deficit spending, tax cuts, de-regulation have all been attempts by both Parties to stimulate our consumption based economy - I think we need a more sustainable model and I don't see anyone even suggesting that model - I'm am not even sure it is on their radar.
I think that blaming government and then expecting government to fix things is strange. :confused:
We need to all look in the mirror and try and understand how we got to this point.
Peace
They are saying that jobs is the priority, but after spending two years admonishing and demonizing business, it's hard to take their current claims seriously.
Virtually every action this administration has taken has had a direct affect on an enterprise's ability to do business or has given business leaders pause through uncertainty.
Jobs are not created in an adverse climate and it is yet to be determined if this administration has truly learned anything as a result of the midterms.
I'll take a wait and see attitude on this issue as I'm not sure that it is understood that it takes something more than giveaways to public unions at the expense of private enterprise to stimulate the economy.
I do not think there is a lot an administration can do about an economic cycle especially a big one like this recession. If you look back in history government attempts to change an economic cycle have not been that successful. We the people demand that the government do something when in reality there is not much the government can do. It can stimulate the economy by spending or cutting taxes both have the negative affect of increasing government debt.
Could it be that we the people have become a bunch of cry babies!cow-hi
I think the government wants us to continue to fret about the economy. It keeps our mind off the endless war they are "fighting" and from which they and the military complex continue to profit.
Well, I guess this is a soapbox issue for me, but I'd have to say I wish the government would stop trying to fuel the growth economy we currently can't sustain, and work toward a more steady-state stability. Dragging out that over-used word: sustainable. Taking cues from nature and physics, the systems that last have a wave pattern, not a constant upward spiral.
My take on it is that the economy is definitely a top priority, but the type of economy they're trying to stimulate is one that's destined for failure, I really wish they'd stop throwing money at an overspending problem!
Not sure that any administration can do any more about an economy. If people have too much debt to spend, countries have too much debt to spend, and economies are in a longstanding debt to be paid for by our grandchildren and their progeny and we feel entitled to maintain our current lifestyle at any cost, how can any economy be realistically revitalized? In what manner? By whon? When? At what cost?
I think the administration feels the ecomony is their top priority, but other than throwing a lot of money at it (that we don't have), I don't see any lasting change. Government projects do not create lasting jobs. Government projects are great, new roads, bridges, bike paths, etc in our area. But now those projects are done and we are back to square one.
Our business relies on the young adult males -- and they are not buying. They have lost their construction, manufacturering
jobs, etc. or their buddies have so none of them are buying. Our prices have NEVER been so low and yet very little business.
I don't see a lot of change in 2011 and wonder if our owner's will continue to weather the storm...
Zigzagman certainly has a point that bailouts, stimulus and tax cut extensions are attempts to get the economic engine fired up again. I get the sense that the administration is frustrated that big switches have been thrown, but no lights are coming on. Smaller businesses would seem to be the only sector nimble enough to adapt quickly to market conditions and create the jobs that everyone seems to agree are the linchpin of the economy.
There is always debate whether tax credits are enough to spur business into action. I've always been one that argued they do. This time I'm not so sure. Hiring is a major investment for most businesses. First hand experience tells me that hiring is not something that gets done in uncertain times. You just can't afford to take the risk if the benefits derived from hiring won't be permanent or at least predictably long term. I'm not trying to blame the administration here, but for whatever reason that stable, predictable environment does not currently exist. Businesses are able to deal with high costs, including high taxes, if they have confidence the rules aren't going to change in a year or two. IMO we won't see any job creation until employee burden line items such as health insurance, unemployment insurance, FICA (to name just a few) AND business tax burdens are well defined and appear to be stabilized enough to allow long term planning.
I'm not trying to blame the administration here, but for whatever reason that stable, predictable environment does not currently exist. Businesses are able to deal with high costs, including high taxes, if they have confidence the rules aren't going to change in a year or two. IMO we won't see any job creation until employee burden line items such as health insurance, unemployment insurance, FICA (to name just a few) AND business tax burdens are well defined and appear to be stabilized enough to allow long term planning.
I believe you're showing admirable restraint Gregg. I think this administration has everything to do with the current unemployment numbers.
You're right that we won't see any job creation until employee burden line items are stabilized, although we could have seen employment begin to rise 2 years ago if not for all the rhetoric and ideological gamesmanship our President and Congress have put us through.
The recent (temporary) tax resolution and Congressional reluctance to pass a Cap & Trade bill will help the jobs picture, but that could be undermined by regulatory agencies seeming desire to introduce through regulation what couldn't be achieved through legislation.
This weekend the minimum wage in my state was increased to accomodate inflation, even though it was previously determined that there would be no Social Security increases because there was no inflation. Now, what will be the affect of this additional burden on employers? Does anyone think it will have a positive impact on job creation?
The more our government tries to impose 'fairness', the more the economy suffers. We can only hope that an ideological shift in the new Congress will help.
Multiple polls show the economy is the single biggest concern for a majority of Americans. So far the administration has not regularly stated that the economy is it's top priority. Should it be?
No. In general, I think the government should protect the rule of law, private property rights, and the freedom to contract, and not involve itself in attempting to manipulate the economy in any particular way, except in certain edge conditions.
The more our government tries to impose 'fairness', the more the economy suffers.
I think you're right about that Alan. Generally speaking I'm not in favor of the government having any latitude with subjectives such as "fairness". Fairness seems to be synonymous with redistribution in the current environment, but there is no fair way to simply redistribute wealth (which itself is another subjective concept).
No. In general, I think the government should protect the rule of law, private property rights, and the freedom to contract, and not involve itself in attempting to manipulate the economy in any particular way, except in certain edge conditions.
At least on the surface it seems like those protections might fall under the umbrella of the judicial branch. Then we have the quasi-governmental institutions like the Fed who's very purpose IS to manipulate the economy (or at least some of the driving factors). A true capitalist would probably hope that the markets would correct and adapt, and I'm with you bae with the thought that less manipulation would be better than more. My worry is that, from a practical standpoint, the economy is so inextricably tied to policy that there is no way to separate the two.
alan,
I don't buy the Anti-business mantle that is automatically put on any Dem president. In fact, this president is very business-friendly:
http://www.realclearmarkets.com/articles/2010/12/17/burying_the_obama_anti-business_myth_98800.html
Lainey, He is trying to soften that perception now. I think he even met with the Chamber of Commerce the day after the mid-terms.
But that doesn't change the fact that earlier in the year, over three quarters of American investors rated him as being anti-business.
Source: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a8UiI1bCRdmY&pos=5
Lainey, it has very little, if anything, to do with Mr. Obama's party affiliation. I am a small business owner and I am one of the people who view our President as being anti-business (mostly for the reasons I described above). Some would have you believe that the President and his party were deliberately trying to crush business, but I don't see it quite like that. In a lot of ways the problem is just as simple as not having any clear course of action laid out. What is obvious to those of us attempting to make a strategic plan beyond 2012 is that we can't do it because of a mixture of legislation, proposed legislation, rumors of legislation, etc. There is no way to predict what costs are going to be just 24 months from now. Whether Mr. Obama is committed to making changes in his relationship with the business community or is simply trying to change his image remains to be seen. I'm willing to give him the benefit of the doubt for now, but can not justify hiring anyone until the fog lifts.
Ok the basic formula is, if you sell widgets, and you sell more widgets, you will hire the necessary personnel to sell those widgets. Period. All the "investment" in business in the world won't help if people are just not buying your widgets. Now, how can we assure folks will buy your widgets, (hamburgers, stepping stones, clothes alterations, etc..) or your service? Well, we need a strong middle class first and foremost. People who have the funds to buy your widgets.
I don't know what you sell, gregg, or what service you offer, but I'm betting if you were selling more or servicing more, you would hire the necessary workers to meet your demand. Right? I'm sure you wouldn't turn down more business because you don't want to hire anyone else. If your workers are not bringing in more than they cost, it's your issue, not the governments. I guarantee you McDonald's hires the extra workers and adds a penny to the burger. They don't make less burgers. No one is ever turned away from the drive up window. :~)
Maybe the question you should be asking is, who are my customers, and why aren't they buying? Could it be because they don't have the money, and why don't they have the money? Could it be because they are spending every extra penny on health insurance? I can't believe you, as a small business owner, can't see the benefit of health care reform. And I can't believe you, as a small business owner, isn't working towards a single payer, public option health care. We need to dislodge health care from the responsibility of the small business owner. We need to free the small business owner from this yolk of health care to help them really soar! I'm sure you, as a small business owner, knows exactly who your customer is and their financial situation. If you don't, you're not an effective business owner.
Obama isn't anti-business. He is pro America, and dancing as fast as he can to fix this. But there are a million people all demanding first attention. Everyone feels they are first priority.
Let's not forget how we got into this mess. I'm not saying don't try anything just because it was a republican who got us into this in the first place, but also we shouldn't put all the blame on Obama and say he is solely responsible. It's taken a lot of years to get to this point, and it's going to take some time to fix it. To expect otherwise is unreasonable.
I don't see Gregg as putting all the blame on Obama for getting us into it, but he IS the man of the moment (uh, Obama, I mean - sorry Gregg :~) ), if someone's going to implement policy to start getting us out of it, it's got to be him. I see Obama's policies as a well-intentioned loosing of the floodgates ... but he's (intentionally? unwittingly? because his hands are tied? ) failing to address the fact that there's a big ol diverter dam of legislation in place between the top and the bottom that's siphoning most of the "stimulus" into the hands of Big before it ever arrives at the doors of small business, let alone individual citizens.
ETA: I agree, the recent health insurance legislation is a perfect example of something supposed to help all of us that's actually making a really nice nest-feathering opportunity for Big Insurance.
I don't see Gregg as putting all the blame on Obama for getting us into it, but he IS the man of the moment (uh, Obama, I mean - sorry Gregg :~) ), if someone's going to implement policy to start getting us out of it, it's got to be him. I see Obama's policies as a well-intentioned loosing of the floodgates ... but he's (intentionally? unwittingly? because his hands are tied? ) failing to address the fact that there's a big ol diverter dam of legislation in place between the top and the bottom that's siphoning most of the "stimulus" into the hands of Big before it ever arrives at the doors of small business, let alone individual citizens.
ETA: I agree, the recent health insurance legislation is a perfect example of something supposed to help all of us that's actually making a really nice nest-feathering opportunity for Big Insurance.
This is true, and I agree. And it really wasn't just republicans who drove this car over the cliff, although Bush kept his foot on the accelerator more than most, both parties contributed to this. It's taken 30+ years to get into this mess, and to expect Obama, or any one person really, to "fix" it is unreasonable.
Have I agreed with everything the President has done? Certainly not. I don't think the tax cuts should have been extended, for anyone! I was disappointed Obama caved on that one, like an exasperated parent giving in to a spoiled child. He needed to remain the adult there, but failed in that. Really, I think his biggest problem is PR.
We can take it, you know. I think he is missing an opportunity, just like Bush missed an opportunity after 9/11, to go to the people and not only level with them, but involve them. We're tough, we're resilient, we can take it. What's more, I think we want it. We want him, and all our supposedly responsible politicians, to stand up there and say, You know, this is a mess. We have created a mess, and we can talk about how we got here all day but the truth is, we can't fix it alone. We need your help. And then they need to tell us what we can do to help fix it. People will pull together for the common good. Just tell us what to do! And I don't mean just finger pointing, but real actionable plans. whats more, I want both parties to sit down and talk, like adults, and then bring it to us. And the first guy/gal who utters "Anti-American, Anti-constitutional, Failed, " in reference to anyone else should be taken to the edge of town and given their walking papers.
But here's my take on the parties. They don't want us to come together and find common ideals and goals. And although it may be to a lesser extent from the left, it's mostly coming from the right. They want to keep us divided, and at each others throats. This is why the rhetoric goes far beyond simple disagreement of policy, and into demonizing the other party. Their entire mantra is, Your life sucks and here is who to blame! They might as well have it tattooed on their butts cause that's the framing of just about everything they say. When's the last time you heard someone from the right say, We're going to work together to get us out of this mess we've gotten ourselves into because that's what we were hired for, and we can do it!
Nope, their stated goal is to see Obama fail. Period. Actually said that, without a blush or a blink. How exactly does that help us? How does that help you? How does that help me? How does that help the economy? It helps them. It helps their naked, raw political ambitions, but it doesn't do squat for the country. In fact, it pretty much gives notice that they want the country to fail. They want you and I to crash and burn just so THEY can get back in the White House! Now I'm sure some politicians throughout history have secretly wanted their rivals to fail, (although this level of cavalier disregard for the country, you and I, is beyond the pale) I think this open, bald stating of these "goals" is unprecedented. Absolutely unbelievable!
I think this says volumes about these elected officials, and those who elected them!
I'm sorry, I didn't mean to turn this into a rant. It's just that every time I turn on the news I'm just floored by the naked ambition and stated "goals" of these rats. And it floors me that no body ever asks why. Why do you want the economy to fail? Why do you want SS to fail? Why do you want health care to fail? Why do you want the President to FAIL?
Isn't success, success for all? It all goes back to that division thing. They want us divided. They NEED us to be divided. And willingly we go along.
I've said it before and I'll say it again. We are becoming Bosnia. We are allowing them to do this to us. And it's all a political power grab!
Ok the basic formula is, if you sell widgets, and you sell more widgets, you will hire the necessary personnel to sell those widgets. Period. All the "investment" in business in the world won't help if people are just not buying your widgets. Now, how can we assure folks will buy your widgets, (hamburgers, stepping stones, clothes alterations, etc..) or your service? Well, we need a strong middle class first and foremost. People who have the funds to buy your widgets.
I don't know what you sell, gregg, or what service you offer, but I'm betting if you were selling more or servicing more, you would hire the necessary workers to meet your demand. Right? I'm sure you wouldn't turn down more business because you don't want to hire anyone else. If your workers are not bringing in more than they cost, it's your issue, not the governments. I guarantee you McDonald's hires the extra workers and adds a penny to the burger. They don't make less burgers. No one is ever turned away from the drive up window. :~)
Maybe the question you should be asking is, who are my customers, and why aren't they buying? Could it be because they don't have the money, and why don't they have the money? Could it be because they are spending every extra penny on health insurance? I can't believe you, as a small business owner, can't see the benefit of health care reform. And I can't believe you, as a small business owner, isn't working towards a single payer, public option health care. We need to dislodge health care from the responsibility of the small business owner. We need to free the small business owner from this yolk of health care to help them really soar! I'm sure you, as a small business owner, knows exactly who your customer is and their financial situation. If you don't, you're not an effective business owner.
Obama isn't anti-business. He is pro America, and dancing as fast as he can to fix this. But there are a million people all demanding first attention. Everyone feels they are first priority.
Let's not forget how we got into this mess. I'm not saying don't try anything just because it was a republican who got us into this in the first place, but also we shouldn't put all the blame on Obama and say he is solely responsible. It's taken a lot of years to get to this point, and it's going to take some time to fix it. To expect otherwise is unreasonable.
Peggy, just to get it out of the way I'll say out loud that I'm not blaming the President for the recession. I do think there are much more effective courses of action available and my idea of what our priorities should be is considerably different than his, but there are a lot of factors pressuring the US economy that have nothing to do with Mr. Obama. I won't hijack this thread to debate healthcare, but would be happy to join in if you'd like to start a new thread for that.
All that said, you have about 2/3 of the business picture exactly right. Especially in a retail environment it can be as simple as 'if-sales-go-up-you-hire'. The part most folks who are not in business forget about is how much it costs to hire new employees. Even in the case of a relatively straightforward job like McDonalds a new employee has to be interviewed, all the paperwork processed, uniforms issued, schedules made, they have to be trained for a predetermined amount of time, etc. All that has to be done before they actually produce anything for the company, but the employer is paying the burden, payroll taxes/unemployment/FICA/etc. plus all the training costs, from day one. In the case of my business I estimate it costs from $30,000 to $40,000 for me to hire a white collar employee (the only kind we have right now), depending on their experience. It may be 'only' a thousand or two for McDonalds, but that is not a middle class job.
As our product is geared mainly toward government entities and is supported by large utilities my customers have plenty of money. I am, in fact, turning away a lot of business. Unlike McDonalds, but exactly like many non-retail businesses in this country, my cost of sales continues for a long time after customers pull away from my 'drive up window'. If I'm not sure that a job will still be profitable two years from now I will not take it. Any project that may only be marginally profitable is just not worth the risk. At that point there is no reason for me to make a major investment and add employees. Any employee I add would receive a salary and benefits that would place them squarely in the middle class. The example of McDonalds is somewhat invalid because that does not represent a middle class job. Our employees preform work that is very much in line with positions held by middle class people across the country. Think of workers in hospitals, railroads, insurance companies and banks. Think of engineers and architects, HR managers, CPA's and home builders. Those are the kind of people that make up the middle class. Those are the people who are NOT being hired right now because the businesses who would hire them can not determine if they will ever recoup their investment in that employee.
I think you nailed it, Peggy. It has become pretty obvious that our political leaders are far more interested in getting elected and maintaining power than anything else. Until we see real meaningful campaign reform I don't see anything changing. The idea is"get out the vote" more than "fix the problem". With the recent ruling by the Supremes I think things will get worse before they get better. The profile of a typical government representative whether local, state or federal is pretty much the same. I am thankful to be white and retired and I'm hoping that Gen X and Y and whomever comes after came overcome this mess we seem to have created for them. As a baby boomer I think we "blew it" and when I think back to the 60's and 70's idealism it is really sad.
Instead the "Age of Aquarius" we've got "Greed is Good" and "War is Peace" :(
Peace
...their stated goal is to see Obama fail. Period. Actually said that, without a blush or a blink. How exactly does that help us? How does that help you? How does that help me? How does that help the economy? It helps them. It helps their naked, raw political ambitions, but it doesn't do squat for the country. In fact, it pretty much gives notice that they want the country to fail. They want you and I to crash and burn just so THEY can get back in the White House! Now I'm sure some politicians throughout history have secretly wanted their rivals to fail, (although this level of cavalier disregard for the country, you and I, is beyond the pale) I think this open, bald stating of these "goals" is unprecedented. Absolutely unbelievable!
I think this says volumes about these elected officials, and those who elected them!
I'm sorry, I didn't mean to turn this into a rant. It's just that every time I turn on the news I'm just floored by the naked ambition and stated "goals" of these rats. And it floors me that no body ever asks why. Why do you want the economy to fail? Why do you want SS to fail? Why do you want health care to fail? Why do you want the President to FAIL?
Isn't success, success for all? It all goes back to that division thing. They want us divided. They NEED us to be divided. And willingly we go along.
I've said it before and I'll say it again. We are becoming Bosnia. We are allowing them to do this to us. And it's all a political power grab!
Peggy, I think you're misrepresenting the wishes of your opponents. No one wants this country or this economy or SS or health care or our President to fail. That's silly.
What many people do want is an agenda to fail. An agenda comprised of forced "fairness" through income redistribution, of government taking control of private enterprise, of legislators telling business people how much money they can make, of increased governmental intrusion into the private lives of citizens.
I can assure you that failing to thwart that agenda will not result in "success for all", no matter how many times it's repeated.
In my area things seem to be picking up. Several of my neighbors are buying new vehicles and also a few new homes by people retiring and moving. The market has been good and almost everyone I know has almost recovered from the 2008 downturn. We are getting an F1 racetrack )first in the US) , still sucking California businesses to Austin, agriculture is strong and so is oil and gas. Austin is such an oasis of positive energy and creativity for us in Texas.
I remain cautious about our future but in Central Texas things really are starting to move forward. With our 25B state budget shortfall may people that work in state government are loosing their jobs so much of the gain is being muted. I'm hoping that the austerity movement that seems to be so popular by the "new" right does not kill any momentum that might be building - I think 2011 will be an interesting year (hopefully on a positive note).
Peace
If people were working we would have more tax revenue and the deficit would not be such a problem. If both Democrats and Republicans had not passed the Bush tax cuts we would not have such a big deficit.
One man if any caused this big recession and that is Allen Greenspan or the Federal Reserve Bank. He allowed the housing bubble to occur and than burst. The popping of the housing bubble was and still is the major cause of our economic problems. As I have said before I worked in banking at the time. I was the chief compliance officer for a small 2 billion dollar community bank. Federal Reserve was our regulatory agency. I dealt with the San Francisco Fed. The lower level people at Fed were worried in 2003 to 2005 (I retired in 2005) about how the consumer credit markets had become a free market in which anything goes. Consumer credit includes real estate. Their concerns were sent up the chain of commend. Greenspan did not do anything he said the markets would correct themselves and they sure did.
One person the head of the Federal Reserve should not have so much power!
Mangano's Gold
1-6-11, 5:34pm
An earlier part of this thread dabbled in what exactly pro-business means. Seth Godin, one of the most innovative business writers and thinkers IMO, wrote a blog entry on this a few months ago. I tracked it down and offer it below. He describes much of what passes for "pro-business" today as "factory thinking". I'm inclined to agree.
http://sethgodin.typepad.com/seths_blog/2010/10/what-does-pro-business-mean.html
There is no way to predict what costs are going to be just 24 months from now...
How is that different than any other time?
again, I'm not convinced by the "perception" or "image" of his supposed anti-business mantle, but that the facts of his governance don't bear this out.
that the facts of his governance don't bear this out.
His policies define whether he is pro or anti business. The article you posted was a sham in that it gave him credit for the tax cuts and maintaining much of the insurance aspects of healthcare when Obama is on record as wanting something else. You can't say George Bush was the savior of social security because privitization was rejected during his admininstration. Obama simply is not pushing pro-business policies.
As anti-business as people may view him Obama's administration is certainly full of people geared towards helping big business, including his key economics people like geithner and sumners. But I guess that's not been enough. He's certainly trying to burnish his "pro-business" credentials with his new chief of staff appointment.
How is that different than any other time?
It's because of what is not predictable. Anyone in business knows that commodity prices will fluctuate. The smart ones hedge against extreme fluctuations. Those are simply costs of doing business, but are entirely different than fluctuations of costs imposed by the government that can, apparently, change on a whim. It's not that that hasn't always been a possibility because it has. There are just very few examples of that kind of uncertainty in the past 150 years or so and most of those center around times of war. Responsible governance will create a stable environment that will benefit business AND workers. It just seems that has been on the back burner for the past two years.
The Big Lie @ http://robertreich.org/post/2586459266 Robert Reich has the authority to share his views on this topic. Must say, I do agree with his viewpoint...
Mangano's Gold
1-7-11, 5:34pm
There is definitely a preception that the current administration (and prior Congress) has created uncertainties. I know this is true for financial reform, and oil rigs in the Gulf of Mexico, but what are some other things?
if by "responsible governance" you mean a Republican administration, then that would mean the George W. administration was fantastic for business, and yet .. the facts don't bear that out.
if by "responsible governance" you mean a Republican administration, then that would mean the George W. administration was fantastic for business, and yet .. the facts don't bear that out.
That's not at all what I mean. Lainey, I'm sorry you seem to feel defensive regarding the President, but I'm not attacking him or his policies. I also don't think the Republicans have any particularly bright ideas. I can't tell what "facts" you are talking about and I'm not sure how involved you are with strategic business planning, but that is the issue I have been talking about.
Mangano's Gold, the uncertainties I was talking about are not specific to any particular industry. IMO there is no way we are going to climb out of this recession before a significant number of middle class jobs are created. Job creation is currently restricted, at least in part, because of the uncertainty regarding what the government is going to do. We do not know if unemployment benefits will be extended further. If they are it will be an added expense for every employee. We do not know what portion of healthcare "benefits" will be shouldered by employers. The cost per employee could be minimal or it could be huge. We do not know if the ceiling for Social Security contributions will be raised and, if they are, to what level so we can't predict what the employer contribution will likely be. And on, and on... Of course not every uncertainty is based in policy. Interest rates are generally determined by the Fed, which is quasi-governmental. Consumer sentiment is fickle at best. Economic actions taken by China, the other BRIC nations, the EU, etc. are beyond our control. Commodity prices are subject to extreme speculation. There are a lot of things that government policy will not regulate into a neat little box, but we do need leadership. We need a President and a Congress that will take some initiative and chart a well defined course that will help get people back to work and get us out of this recession sooner, not later.
IMHO the economy will pick up when demand picks up. Although I have been out of the workplace for almost 8 years the only time we hired people was due to the expectation of increased demand and it had to be fairly certain. The cost of a new employee needs to be offset by increased sales. In most businesses the rise in overtime for employees usually begins to point to a hiring program.
Uncertainty? Uncertainty has always been a challenge in business planning. Isn't that the reason that "real" business leaders are paid quite handsomely these days - to deal with uncertainty? We will never hear business respond to a tax cut or de-regulation by complaining to the government, “We weren’t expecting that! You’ve spoiled our carefully laid plans.”
For the time being, we’re in a vicious cycle. Consumers won’t step up their spending until unemployment eases, which won’t happen until consumers step up their spending enough to make it profitable for companies to hire more employees. There are several ways to make profit that don't involve employment and of course the most popular is convincing the government to reduce taxes and eliminate costly regulations. That doesn't mean that they are producing more or hiring more it simply means more profit. Hmmm...I think profits are quite high these days.
I think we have two choices. We can wait and the economy will slowly adjust as people drop out of the labor force, or retrain themselves for future opportunities. This will take 5 - 10 years to return to 'normal' unemployment. OR... how about we change the tax code to favor labor more than capital. Currently, we are giving lots of tax breaks to capital. The way to change this is to implement a carbon tax, and use the money to decrease medicare & social security taxes - on both the labor side and the employer side and in the future fund them through the general treasury (which is done anyhow).
Of course nothing will matter until demand picks up by either more peolpe working or by less saving.
Peace
An exacerbating factor here is that in the heyday of dotcoms, real estate flipping and so on, we A. outsourced our manufacturing, B. got a lot better at automating the jobs that remained, and C. created a whole lot of less-than-necessary ways to make money and less-than-necessary levels of management etc. So at the same time that we want more jobs, no employer really wants to return the fat of unnecessary jobs to their company, and no Big company really wants to return to a way of doing things that's less profitable for its bottom line. Even if we somehow allow the government to artificially create new jobs, we have discovered how to do it "better" with fewer people, we've discovered the key to floating the haves, which is unfortunately the same key that sinks the have-nots (automation + outsourcing to the cheapest country.)
One of the reasons I am always in favor of promoting "new green technology" whether it's small farming or installing and maintaining wind turbines or retrofitting houses with better insulation is that it's a small window of opportunity to do things differently - to keep the manual labor force in business and to manufacture new things right here. It's not just a matter of saving the environment, it's an opportunity to create and take back the essential jobs.
Uncertainty? Uncertainty has always been a challenge in business planning. Isn't that the reason that "real" business leaders are paid quite handsomely these days - to deal with uncertainty? We will never hear business respond to a tax cut or de-regulation by complaining to the government, “We weren’t expecting that! You’ve spoiled our carefully laid plans.”
thank you zigzagman, this is the point I was trying to make.
I think the government wants us to continue to fret about the economy. It keeps our mind off the endless war they are "fighting" and from which they and the military complex continue to profit.
That's really interesting. When 9/11 happened and the war began, a lot of us thought it was Bush's saving grace - he didn't have to focus on domestic issues. Just the opposite of what you are saying.
Polliwog
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