Jobs are Job #1

By
AdLib
-
172
31

800px-FEMA_-_29783_-_Workers_unemployed_by_the_freeze_in_CaliforniaThe stock market is over 10,000. Banks are declaring billions in profits. Just one problem. There ain’t no jobs!

It is not unusual for jobs to be the last thing that comes back from a recovery…but this is not your grandparent’s recovery. Is it even a recovery at all?

In the Depression, when money was poured into infrastructure and the war, it created jobs. But how many jobs were created by pouring TARP money into banks, especially when instead of lending it back out to small businesses and consumers, they kept in for themselves to be able to declare billions in profits.

That’s not saying that TARP was a total mistake, money did need to be lent to the financial sector to stabilize the economy before it collapsed like Lou Dobbs’ career. But there were no requirements on what the banks had to do with the money so here we are, with credit still terribly hard to come by, businesses not being able to afford to retain workers, let alone hire new ones… and banks declaring billions in profits.

So we have unemployment increasing while the financial world is enjoying a “recovery”.  A corporate version of Robin Hood.

It’s too late now but when the decisions about TARP 2 were in process, there were some voices saying, “Give the money to consumers instead!”. Some folks proposed giving a million to every citizen…obviously, these were not people who had lost their jobs as accountants or if they did, it was well deserved.

However, what could have been done is to have the government, as they do with the SBA, directly loan money to businesses at low rates. The government gets interest, small business gets credit and loans and can afford to keep their employees and even add employees if other businesses getting credit helps their business come back.

The same should have been done on the mortgage front, just as Freddie and Fannie backed loans, the government could have backed mortgage refinancing through them to keep people in homes and reduce crushing mortgage expenses…which would translate into more cash available for spending, on necessities at the least and non-necessities at best. Juicing the economy substantially.

As Congress weighs a new Stimulus bill to boost employment, my suggestion is that they also consider what was neglected by TARP, heavily funding perhaps SBA or some government entity provide low interest loans to a wide array of small businesses. That’s money that returns a profit to taxpayers and will be spent, not horded as the banks have done. And ultimately, makes money available to small businesses which can employ more workers.

If we want jobs and a solid economy in the short and long term, the approach should be holistic and forward looking, putting taxpayer money where taxpayers get a good deal, small businesses are fortified and jobs are sustained and increased.

172 COMMENTS

  1. Lot of news on the jobs front in my mail box today.
    I have been writing and talking about this tax for a long time. I felt it was one way to pay for health care but I will accept this way to pay for jobs.

    “House Democratic leaders are considering imposing a new tax on stock transactions to fund a jobs bill,” The Hill reports. The idea, which has been pushed by Rep. Ed Perlmutter (D-CO), “is attractive because it’s very small, likely 0.25 percent of each trade.” Though “Small- and medium-sized investors would hardly notice a transaction tax,” major trading firms “may see it as a significant threat to their profits.”

  2. Anyone familiar with this “new Stimulus/jobs” bill? I haven’t heard that it was close to a bill?
    http://www.google.com/hostednews/afp/article/ALeqM5h1-v8_4uEROQtVLibsQgS2nWDN9A
    Of course Eric Cantor had to make a snide comment about it.

    “We say it’s about time, I say you’ve got to be kidding me,” said Cantor.
    “Sometimes it is difficult for us to take the other side seriously, but if they are serious we welcome this news,” he added, urging Pelosi to work with Republicans to craft the bill.

    Bet you they (GOP) will find some way to fight it.

  3. An now a word or two from our ultimate expert on the economy giving tips to Warren Buffet on how to improve it or rather tell this man, who did make money without her expert advise many years ago, how to answer questions in an interview that will satisfy her superior knowledge on this matter. Can heads grow so large that one can’t scratch their ears anymore?

    Can egos inflate to the size of the moon?

    It seems that they can and do.

    http://www.huffingtonpost.com/arianna-huffington/memo-to-warren-buffett-pu_b_359899.html

  6. In the mid-70’s, I worked direct for Chrysler for a couple years.
    Even back then they were outsourcing to Mexico.

    I worked for Borg and Beck briefly, doing clutches, and they were outsourcing to Brazil and ended up closing that plant entirely!

    I asked it back then, and ask it again.

    Why do corporations outsource, taking away jobs from the very people who buy their products?
    Even Henry Ford, for being a real conservative SOB and not a very nice man, understood the importance of hiring workers and paying them a good wage so that his employees could buy his cars!

    • Except for trolls!

      Once the Dow hit 10,000, even though I don’t think we’re in a true recovery, I smiled at the trolls jabbering on right after Obama was elected and crowing every time the market went down that it was all Obama’s fault (and that the Dow would drop to 4,000 or less).

      Kinda odd they’re not talking about the Dow anymore, huh?

          • That’s why the crashes occurred for sure because loans were made on bloated assets. But the fact is the crashes actually outpaced the real lose in market capital. Even with real estate prices dropping and a rise in foreclosures it still represented about a 20-25% drop in valuation while the market dropped about 65%. Sure the derivatives took a steeper crash but they were never real in the first place.

            The new reality is that banks are making more responsible loans now on capital that is much more properly valued then it was. Sure there is still the problem of derivatives but even those are based on more fundamentally sound loans.

  8. There are three pillars to a viable economic future. Healthcare Reform, Education Reform and removing our reliance on foreign energy by investing in green energy. I don’t want to sound tone deaf to the unemployed now but the only way we will ever generate good paying jobs in the future again is to make progress in these three areas.

    • They are all interconnected to our economy, getting healthcare cost under control is a big one.

      Why the big corporations don’t support reform, is something I just don’t get. Reform and competition should reduce their overhead costs, thus boosting their profits.

      Bringing back manufacturing jobs is a big one for me, but that means “UNIONS”…the bane of the big corporations.

    • Javaz, There is a company that manufactures photovoltaic systems in Tucson. They needed a new plant. Where did they build it? Germany. When I asked them why, they said we have more customers in Germany! What, no sun in AZ? (NY has more solar collectors than AZ)

        • What always burnt me was they didn’t provide the tools necessary in India to do the job right, and we were having to rewrite requirements to make their testing easier. And then I had people there working in the same file I was overwrite my work during my off shift and nobody saw the problem.

          They don’t want to think about the amount of time devoted to babysitting those people and reworking the effort multiple times because they didn’t provide them with the right tools or the full understanding of what was needed or expected.

          I see them every time I go to the credit union, and I’m not mad at them for my loss of a job, but it irks me when I think of Brand H and how much they’re losing out. But I also worked a little at a Brand C division and they’re in trouble too.

          • Monk–In my last company, we worked with a group of Russians. After a shake-up, the entire Russian company was dismissed and we THREW AWAY EVERYTHING they had done. Everything! The UIs were a mess, the core processor was a mess, and even the QA department hadn’t actually tested anything but had written endless pages of test scripts that were little more than lists of screens and fields. I could go on about that experience! They were not dumb — they were highly educated professionals. But the language and management and cultural problems were overwhelming.

            So then what does the company do? They hire a company in the Ukraine.

            And yes, in case you were wondering, we all eventually got laid off when we were years late with our delivery.

    • This is what we need to be doing to turn job losses around, investing in manufacturing and setting up green technology. I know the Stimulus did provide funds for this but we should be pursuing it like this country did the race to the moon.

      If we can invent the best green technology, the world will be beating a path to our door…getting there in hybrids of course.

  12. Escribacat: I think some of those over there are having blind loyalty to Arianna no matter what. It is sad because there are good people among them, even if we disagree on where it is going. But I also think that few over there even read the article anymore. The title is just the “outline” for where to start the battle from for the left and right. So why should they care about AH?

    I tried really hard last night to stay out of it, but finally decided to put in a voice of sanity, only to get attacked. That was really sad. I was not letting my bias interfere with having things calm down. Unfortunately…

    • That’s a good point. Perhaps it’s silly to look for actual reasons. I also suspect that, at least later on, a significant portion of the commenters are so loaded, they don’t particularly know or care what they are posting.

      • Reminds me a lot of that mechanical robot game of a few years ago where the objective was to “knock their block off”. No other purpose, nothing gained.

        Frankly, the negativity, including that which it invokes in me, is more than a little disturbing.

        I may not agree with everyone here all the time, but we are all civil. (contrary to what one troll may have reported)

        • I’ve found I rarely get angry over there any more…but a few things do push my buttons. Michelle-bashing is one thing I cannot stand. And, yes, despite being a lib, I get really annoyed at the ‘evil Americans’ speeches from non-Americans. I once got so pissed off at a Canadian poster who obviously hates Americans, I made a complete ass out of myself, posting multiple retorts and following him around to other comments he made with new insults that I thought up. 🙂 Other posters piled on me — “What the f#ck is your problem?” It was too much to explain what he had said over there and blah blah blah. Oh well. I learned something from that I hope.

        • Think of how “social” chat rooms are changing how we deal with people. If we do not maintain the ability to communicate clearly and without hostility, then how do we deal with each other in public? I’m afraid when the “attitudes” of the chat rooms spill out into the real world we are all in deep trouble.

          And the “socialization” seems to be either self reinforcement or the “yes the did” “no they didn’t” gradeschool level of arguements.

          Oh, well, they say we are “evolving”.

          • Monk, that’s why I had to step away from HP for a while. I was back today, but not with the vengence I once had.

            I was very polite to the nasty trolls today, saying please and thank you…kinda of thru them off balance.

          • The anger infiltrated the Internet long ago.
            It’s so easy being anonymous and being able to let the anger and rage out.
            Imho, that’s why social networking sites such as HP have such hostility.
            Besides AH being a Republican in liberal disguise for the money, I can’t bear to go to HP much anymore.
            There’s far too much anger and when the anger and vile attacks occur within the liberal bloggers, well, I’d rather call PPOV my home.
            I love this site and all the members because we are civil to each other when we disagree and we still have fun!

              • We sort of had an experience once and smiling and mouthing I’m sorry didn’t go over real well.
                We were waiting at the bank drive-thru and my husband’s foot slipped off the brake and we tapped this beatup clunker, and we both waved and said sorry, and the guy got out of his beater-pickup and he was a big guy, and he wanted to punch my husband’s lights out.
                That was scary, but the tellers saw everything and a security guard ran out.
                Sheesh.
                We didn’t even have a smudge or scratch on our bumper from his rusted out POS.
                Unreal.
                Then again, his back window was loaded with gun right stickers and Bush/Cheney stickers!
                LOL

    • I think you’re right on the money about people skimming the article just to have enough to start writing comments.

      It is all about diving in the mix there, HuffPo is often just a muddy mosh pit for people to knock each other by throwing their insults and opinions around.

      That’s the “sport” over there for far too many and those making thoughtful or witty-but-pertinent points are just disregarded as amateurs…because that’s not what the game’s all about there in the minds of many.

      Huffy’s not about thoughtful discussion or debate, it’s too often just an immature game of blog-style dodge ball.

      • I had to visit after reading everything , and even couldn’t help but leave a comment, but funny thing was for the brief time I was there, someone posted that they had no idea what the article was about and was just there to visit friends.
        Coincidence?
        I don’t think so.

        Oh, I just love being watched so closely by those that wish they were here!!!!

  13. There are a some things that the average person can do to help the economy. Maybe not fix everything in the global fixture, but perhaps a small help in your community. I am not trying to sound like the “chamber of commerce” just helping your community.
    Many local governments are having budget problems. Local budgets often depend on a regressive sales tax. I propose by doing the simple thing of buying locally. Use the small business that you have been meaning to try anyway. Don’t be purchasing on the internet (to save the sales tax). Use a local bookstore not the chain, the local hardware not Home Depot. The local grocer not the national store. The local craftsman, artisan….. Keep you money in your locale, not shipped away to some large bank and invested elsewhere. Join a local credit union for the same reason( and avoid so many fees)
    These few things will help your community, your schools, your neighbors jobs and homes. Think about where your monies go.

  14. Now let me put my woo woo hat on for a moment. We need to understand that it’s conservatives who dominate the ownership of businesses big and small. Conservative business leaders always have theirs so they can do what they can to manipulate the economy. They propped up Bush’s economy as long as they could even though eight years under Bush the real economy was never that good. Now since their conservative leaders have given them the green light to try and make the Obama administration fail I’m sure they won’t mind holding the economy hostage for a few years.

  15. Here’s what I’ve experienced with the lack of job growth. Our company last year laid off about 12-15 people. This year, they tell us their revenues are back up, but they haven’t refilled those positions.
    Why? Because they’ve figured out they can “get by” with fewer people, and save money. Never mind the fact they’re burning people out with overtime and stress, and that they’re losing employees’ loyalty. They don’t care about that. The job market is slow, so they don’t have to worry about losing people.
    I did the math. Those positions cost the company about $750,000 to $800,000 including benefits. They’ve probably paid around $100,000 or so this year in additional overtime (I’m going to easily crack 120 hours of overtime by the end of the year), so it’s worth their while to go with fewer people.

        • Exactly!

          But when things turn around, and things will turn around, companies will lose valuable people and hopefully that will force companies and corporations to begin offering competing wages and benefits again, like the good old days.

          One can always hope and dream.

          • Actually, I saw that exact thing happen in the 90s. The industry I was in was forced to raise its wages and improve its benefits because the tech boom was siphoning off good people. After the tech industry dropped off, now they’re stuck with these higher wages and full benefits, so I think this is part of their “going back to the old ways.”

          • Back in the ’90s, Boeing had a big decline after the 777 progam, and offered incentive retirements, hoping for a 30% RIF. Well, they got nearly 70%, and a hell of a lot of talented individuals left the company, including many of the ones who knew how to make things work.

            Well, when the market reversed, they “couldn’t” (or wouldn’t) rehire these individuals and many of the others they had layed off 5 years before naturally had gone elsewhere. So they went from an average 17 years experience on the work floor to around 2 years experience.

            What they saved during the layoff in salaries was less than what it cost them in ramping up, training, delayed production, quality issues, etc. The LA Times had a good article about it back in the day.

            So much for “business wisdom”.

    • What you’re describing is very common. They lay off ten percent of the workforce and the other 90% are supposed to do that extra work for the same salary. One thing about this type of job market — it’s an employer’s dream situation as far as labor goes. Everyone is terrified of getting laid off so they’ll work harder, be grateful for whatever they get. I know a number of people who’ve been given a salary cut or hour cut — yet they are still producing the same amount of work. As long as a company is solvent and has no credit problems and good business — what’s not to love about a situation like this?

      • I’m actually making more money than I’ve ever made, but I’m losing one or two weekends every month, and that isn’t necessarily worth it. This is my first two-day weekend in four weeks…
        Having our final barbecue of the year today and lotsa, lotsa hockey…

        • I have to say I got over the “overtime” routine a long time ago. Been there, done that. No thanks. I like the European model better than the crazed workaholic US model — but then I have a lot of cheap hobbies and don’t want the boat,gadgets,monster home and all that.

          So we’re just digging out from the second big snow of the season but you’re still having bbqs, Pepe? Weird weather here — One or two feet of snow, then it goes back to 60 or 70 degrees out.

          • As far as the OT, this is the first employer I’ve worked for that actually pays it. They ask you to come in on your day off, and it’s hard to say no to that time and a half. We do get four weeks a year off, so it’s not all bad.

            The snow missed us! It’s 62 here right now! I figure this is going to be the last decent weather of the year, so take advantage of it!

  16. Some of your info is so 2008. Actually tens of billions of the TARP money this year has been diverted to community banks to loan to small businesses already. About $210 billion of the TARP money will probably not even be spent and the estimated final cost of the TARP bill has been revised down to about $200 billion finally spent not almost $350 billion spent. Yes the Obama administration that has been called corporate socialists with the TARP has spent only about $140 billion of the TARP funds (<20%) while spending over $750 billion on the stimulus. The money spent in 2008 was spent very poorly but the second half of the TARP is going unspent and was spent more wisely.

    You also cannot prove a negative, but if all the banks were let to fail ALL of us or at least 30% of us would be living in tent cities. I know everyone loves hindsight and says the banks should not have been bailed out or put into receivership but that's what happened in 1933 and lead to almost 7 more years of 15% plus unemployment.

    By no means am I saying Obama and his economic team did everything perfectly, not even close. I'd give him a "C" on the economy at best but Bush gets and "F".

    This is going to be a long painful recovery for one big reason. People are no longer getting in as much debt and living beyond their means as much so consumer spending is down.

    Government is limited to how much it can turn around the economy. I know people are revising history now but no matter what FDR did the economy really did not turn around until the advent of WWII.

    http://online.wsj.com/article/SB125799009185344567.html

  17. I used to argue with my mum that outsourcing wasn’t so bad, that India and China deserved a shot at the good life. Now….I think all outsourced jobs should be taxed and the money used to pay for this second “jobs bill.” So much for my Citizen of the World View, eh?

    • Afternoon escribacat, BDM and everyone else!

      I thought one of President Obama’s promises during his inauguration and campaign, was that he was going to tax companies that outsource and give tax breaks to those who bring jobs home.
      Am I not remembering that correctly?

      • Hello BDM and Javaz…I remember him talking about how companies were actually being given tax breaks to outsource. I don’t know any details about that …it sounds like something that would make me very, very cranky (being grossly underemployed myself at the moment!).

        Unless they do something about outsourcing, I don’t see how jobs bills or easy credit or anything will help the unemployment situation in the US. At least until the time when Chinese, Indians, Russians, Ukranians, and the rest of them start demanding the same level of salaries as Americans. I read somewhere that the Indian salaries have gone up quite a bit but I have no numbers on that either. (I’m talking about high tech jobs here — my field).

        • Just did a quick google on the Indian salary thing. From June 2008:

          “Janakiraman said the Indian software design industry is growing at an annual rate of 22-25 per cent, forcing a huge influx of new engineering graduates. The result for workers is a boost in the salary scale of as much as five per cent a year. Not long ago, Indian engineers’ salaries were one-third of those in the United States. Now they’re close to 50 per cent and, in ten years, said Janakiraman, there will be no difference.”

          This is only partly good news for the high tech industry — my experience has been that the latest cheap labor for high tech is found in Russia and Ukraine. Hopefully, they will also start demanding higher salaries.

          http://www.eetindia.co.in/ART_8800528878_1800001_NT_ec76ca1b.HTM

          • I know in 2005 the Honeywell wage scale for employees at their Bangalore facility was about $20 an hour, as opposed to a mid range American engineer at $40 per hour. The difference is not just 50%, but that I don’t think the Indians were getting the benefits package we got, either.

  18. As you guys know by now, I’m a small businessperson…giving additional funds to SBA would be good, but they would have to loosen their criteria a bit in order to capture a wider number of small businesses that could qualify for loans to make a dent in the number of jobs.

    • Hi Monk!
      Missed you the last couple days.

      Were you going to email me?
      I don’t know how to get my email address to you, because I do not want to place it on an open forum, and wondered if you had it already from the article you authored.
      My husband has a few contacts, if you’re still interested.

      Sorry for the off-topic!

    • Afternoon Monk, read your link, this program would be ideal, similar to FDR’s CCC and WPA programs. Would get our nation going again, and maybe also start up some new small manufacturing companies to supply the projects….

      But, there’s a hitch, how the heck would this get through without the Repubs, conservatives, Faux, Rush and Bluedogs crying “Socialism”.

      They would scream bloody murder over this…

      • Hello BDM, I wasn’t ignorring you over there in “HELL”, I had gotten off line before I noticed your input. Going there does not make me a happy camper.

        The conservatives of all ilks are not going to like it no matter what. We just have to forge ahead and tell them to go get Flocked. Unfortunately, I don’t think Obama is up to being pushy. If only he could channel “Shaft” for a few weeks.

        • Hey Monk, the conservs are going to squeal no matter what he does….

          I would love for something like these programs to be pushed through, things would get done in municipalities that they can’t afford in these days of budget cuts.

          I just don’t get their, the conservs way of thinking when it comes to the economy…it just baffles me at their lack of logic.

          • My friend was asking how we could answer the conservatives on “how is this going to be paid for” and my statement was that the people receiving unemployment would be the first ones (well, those past unemployment ought to be first) so the money from the supplemental unemployment bills could be channeled into it, so that the conservatives could say we are getting “something” for our money.

  20. Perhaps money should be allocated for a job’s training bill, if it isn’t part of the bill already.
    People collecting unemployment or people who have been unemployed and their benefits have run out, could take training so that when jobs become available, they’ll be able to apply.
    Training for clean energy technologies, such as wind and solar power, or automotive technology for fuel cells or hybrid engines.
    If the health bill passes, more people will be needed as lab technicians and data entry for medical files, to name a few examples.

    Reference:

    http://en.wikipedia.org/wiki/Comprehensive_Employment_and_Training_Act

    • The whole issue with most training programs is what do you train in and how many will all chase after “the next big thing” and end up with an overabundance of newly trained individuals in “it”. I remember in the early 1990s a bunch of retraining as aerospace retrenched, many took the highly expensive network training, only to find out that everyone else had and the entry wages were really low. The “big dollars” were only for the select few.

      I beleive in retraining, it’s just my observation that unless there are a lot of well placed options and some direction in it, it doesn’t necessarily buy a lot. What is needed is some government directed development programs in these new technology areas to ensure that the technology will get developed and that there are positions for people to end up in.

      BTW, you do know that lab work is being sent out of country to places like Mexico in order to cut costs, don’t you. How else can the insurance companies get away with paying less than $20 for a whole battery of tests to a provider.

  21. AdLib, I’m wondering if PPOV has a stalker. Check out the HP main.

    I think you have the right idea. The banks have showed that they are more interested in Wall Street stock valuations, mergers & acquisitions, CEO compensation packages, and shareholder reports than they are in the health of our economy. They were given a chance to do right by the American people. They took a pass.

    So now it’s the government’s turn. We need to get back the money we leant out in the TARP program and target it toward job creation and foreclosure relief. The GOP will scream about socialist giveaways and “personal responsibility.” So let them. Getting people back to work and getting this economy rolling is the only answer the Obama Administration needs to answer any conservative criticism.