American Elephants

The President Has No Idea How Jobs Are Created, And It Shows. by The Elephant's Child

Since the Great Depression in the 1930s and ’40s, there have been eleven other recessions in America before this last one.  In all those recessions, the economy recovered all the jobs that had been lost during the recession by an average of 25 months after the recession began.  So the unemployment effects of those recessions lasted an average of about two years.

Today we are 5½ years after the recession began and we still have not come near to recovering the jobs lost during the recession. In 2008, the Bureau of Labor Statistics reported that total nonfarm seasonally adjusted employment amounted to 138 million workers. Today we have fewer than 136 million, and the number of working age Americans has grown by 12.8 million.

Note that last number. President Obama is out on the budget campaign trail, bragging about his recovery. “[W]e are in a much stronger position now than when we were then. And we’ve created 7.5 million new jobs in the private sector.”  But the number of working age Americans has grown by 12.8 million.

The good news is that every one of the challenges that we confront, every one of the barriers — whether it’s education, immigration, infrastructure —that prevent us from being as competitive as we could be, they’re all solvable. …

Mr. Obama always goes back to the same themes, so it’s apparently the only idea he has. We will create a better economy by improving education with Common Core. And if that were to work, (though I reject indoctrinating children), how many years would it take for a better-educated workforce to appear and start inventing new things?

Democrats are counting on increased immigration to swell the ranks of Democrat voters. Big business is lobbying for increased immigration to give them cheaper workers skilled in science, technology. math and engineering. Big business does not want to hire the unemployed, nor do they admit that we have more STEM graduates in this country than there are STEM jobs. Mark Zuckerberg, Facebook CEO, is heading to Washington to lobby for more immigrant workers. The Center for Immigration Studies shows clearly that while Americans were getting laid off during the recession, immigrants were getting hired. But if they vote Democrat, what’s the difference?

Obama has been relying on “infrastructure” to revive the economy for 5 years, unaware of the lengthy process involved in building anything. Financing, permits, environmental impact, design approvals and so on and on. On major public projects it can take years.

He had big hopes for “green jobs” but when it turned out that there was never any significant number unless you included bus drivers, and janitors and accountants as “green jobs.” Obama has no idea how jobs are created, won’t listen to those who try to tell him, and keeps destroying jobs daily in major numbers. Home Depot is putting 20,000 workers on part-time because of ObamaCare. Walgreen’s is putting 160,000 workers on part-time. The Cleveland Clinic, celebrated by Mr. Obama in countless speeches as one of the best medical facilities in the country, has laid off 3,000 workers. And that’s just this week.

Obama said, in his speech to the Business Roundtable that in order to continue to bring down the deficit:

Now, in order for us to do that we’ve got to do a couple of things.  Number one, we’ve got to continue to be tightfisted when it comes to spending on things we don’t need.  We’ve got to continue to streamline government.  We’ve got to continue to cut out waste.  And there’s waste to be had, and there are programs that don’t work or used to work and are now obsolete and we should eliminate.  And we’ve identified a whole range of programs that we want to eliminate and programs that we’d like to consolidate.

This is demagoguery at its best. “Continue to be tightfisted when it comes to spending on things we don’t need” — like basic military readiness. “Continue to streamline government.” Bwa ha ha ha. “Cut out waste” — see military readiness.  “and there are programs that don’t work or used to work and are now obsolete and we should eliminate” — he has spoken about that at great length in many speeches, there was a policy that required spilled milk on a dairy farm to be treated as a hazardous oil spill, and they eliminated that. Or perhaps he has in mind the coal-fired power plants that the EPA is shutting down , so your power bills will go up and your chance of blackouts or brownouts will increase, in a potentially cooling climate.

The White House website has a new big graphic called “A Better Bargain for the Middle Class,” an exercise in demagoguery. Celebrating things that are not accomplishments, phony claims, appealing to emotions.  One statement that particularly caught my eye was “No one who works full-time in America should have to live in poverty”— President Obama.

This, as Mr. Obama’s celebrated “law of the land” is causing all sorts of businesses all over the country to drop their employees from full-time to part-time — 27-27½ hours. To escape poverty those workers will have to find a second part-time job to combine with their shortened hours. ObamaCare is raising costs for most businesses. Obama listens to favorable statistics and drops the rest. He doesn’t know how jobs are created. ObamaCare is creating a disaster in the country, it is unready for prime time. It is clumsy law, poorly devised, and poorly thought out, and may collapse of its own weight, leaving disaster in its wake. And it only involves health insurance. There is no promise of actual care. There are not enough doctors to go around.



Obama’s Relentless Commitment to Pivoting to Jobs by The Elephant's Child

Here’s How it Works Out in the Real World! by The Elephant's Child
December 3, 2010, 11:03 am
Filed under: Capitalism, Economy, Law, Taxes | Tags: , ,

U.S. employment barely grew in November, and the jobless rate unexpectedly jumped to a seven-month high.  The jobless rate rose to 9.8 percent.  Nonfarm payrolls rose by only 39,000 the Labor Department said today.  Economists had expected payrolls to  increase by 140,000 last month and the unemployment rate to be unchanged.

The experience of small businesses like these folks is being replicated across the country.  Departments of the Obama Administration are continuing to issue regulations — increasing government control of the economy — yet the regulators can’t figure out why the private sector is not creating more jobs.  It’s simply a mystery.

Unemployment Benefits Are the Best Way of Creating Jobs? by The Elephant's Child
December 2, 2010, 6:03 pm
Filed under: Capitalism, Democrat Corruption, Economy | Tags: , ,

Nancy Pelosi made this claim again today, that unemployment benefits are the best way of creating jobs. President Obama said essentially the same thing — that unemployment benefits will be spent right away. Since the unemployed are hard-up, they will spend their benefits immediately, and then that money will s-l-o-w-l-y circulate through the economy creating “multiplier effects” which Christina Romer pegged at somewhere over 1.5% — to which some other economist said — obviously, all you have to do is dump $1 trillion into the economy, and you will get $1.5 trillion back.  You don’t even have to do anything else, just keep dumping money into the economy and — oh wait!!!  That’s what we have been doing.

Consumer demand is a consequence, not a cause, of economic growth.

I have an idea.  If we can just get President Obama to stop destroying jobs, I’d bet things would pick up right away.  The moratorium in the Gulf of Mexico cost something over 32,000 jobs, some rigs have left the Gulf, and although the moratorium is over, new drilling permits are not being issued — even for shallow water wells which have had no safety problems at all.  When Congress banned incandescent lightbulbs, to please GE, the incandescent factories closed permanently, and twisty bulbs now come from China.

The administration has subsidized  several electric battery factories, but there is a glut of batteries, and no market.  When you hike the minimum wage, you raise the unemployment rate.  Mandating health insurance shuts down small businesses.  Raising the cost of energy kills jobs, and requiring the use of renewable energy raises the cost of energy.  Denying permits to the coal industry (Obama said he would  bankrupt Coal) kills jobs.  Defunding the Yucca Mountain nuclear waste repository kills jobs.  And bashing business, particularly small business as represented by America’s Chambers of Commerce doesn’t help.  I could go on, but you get the idea.

Putting the Cart Before the Horse. by The Elephant's Child
November 30, 2010, 9:21 pm
Filed under: Capitalism, Conservatism, Economy, Freedom | Tags: , ,

Consumer demand is a consequence, not a cause, of economic growth.

Job Creation 101. Some Prior Business Experience Required. by The Elephant's Child
February 13, 2010, 11:50 pm
Filed under: Capitalism, Democrat Corruption, Economy, Politics, Taxes | Tags: , , ,

If you wanted to know why the Obama administration seems to be at such a loss as to a way to create jobs, this little graph explains.  Nobody much in this administration has ever worked in the private sector.  No familiarity with the workings of the free market.  Capitalism, — well, you know what Academe has to say about that.

Here’s  economist Veronique de Rugy, at Big Government, yesterday:

The definition of insanity is to keep doing the same thing over and over again and expect different outcomes.  The different versions of the jobs bills circulating in Washington DC these days are perfect example of that point.

See for instance, the  jobs tax credit for hiring new workers idea. What a brilliant example of bipartisan nonsense that is. Pushed by President Obama during his State of the Union address earlier this month and most recently picked up by Senators Schumer and Hatch.

Still no one seems to wonder, why would employers pay a new worker $40,000 to earn a $5,000 credit unless that worker generates at least $35,000 of revenue? Even when the advice comes from economists at the National Federation of Independent Businesses, the largest association of small business owners in the country, it is ignored by the President and Congress.

Think about it this way:

If your business is slow, and your customers are not buying your goods and services, it is likely that your tax liability will be significantly reduced or nonexistent even.  No tax liability, no need for a tax credit. Better yet, no customers, no need for employees, tax credit or not. (Duh)

Of course the same can be said about Obama’s proposal to use $30 billion of the repaid TARP money to prop up small business lending. There will be no demand for loans as long as the economy is doing poorly and customers are not buying goods and services produced by small businesses.

If Obama wants to help small businesses he should stop pretending to give with one hand while stealing big time from the other hand. What do I mean? Well, he gives useless tax credits on the one hand but is proposing big tax increases for those earning more than $250,000 a year on the other, including all the small business owners that report their business income as individual income. These guys aren’t going to take loans and invest in their businesses and hire new employees if they are going to be hammered with tax the following year.

The Stimulus Bill was not about “stimulating the economy,” nor about spurring economic recovery.  It was about funding favored Liberal policies.  Stimulus II is not called a “stimulus” because the first stimulus notably failed to stimulate and people have noticed. It is instead called  “A Jobs Bill,”  but it also is not about spurring economic recovery. If Congress includes the tax hikes included in the budget into law, countless more jobs will be lost.

President Obama has said that his number one goal for 2010 is to create jobs.  He’s not only not particularly interested, he’s uninterested in learning how it’s done.

Creating and Destroying Jobs the Massachusetts Way. by The Elephant's Child
January 29, 2010, 11:00 pm
Filed under: Capitalism, Economy, Freedom, Taxes | Tags: , ,

States make a real mistake when they focus their economic policies on working to entice out-of-state businesses to relocate in their state. Efforts to nurture home-grown entrepreneurs and companies would result in more economic growth, according to a new study in Massachusetts from the Pioneer Institute, a conservative think tank.

The study found that job growth in Massachusetts had stagnated over the past 18 years largely because the state’s economy had not created enough new companies.  The study also found that Massachusetts start-ups are employing far fewer workers than in the past. Between 1990 and 2002, each new firm created an average of seven jobs, but in the last few years the average has declined to fewer than four jobs.

In any given year, company relocations generated just a fraction of the jobs created by start-ups. The number of new jobs created has not kept up with those lost when older companies shut down.  There is no guarantee of business success, skillful management or enthusiastic customers.

Successful states create a climate conducive to business success — low taxes, few regulatory hurdles, and an attitude that promotes and nurtures entrepreneurs.  We often see states romancing large firms located elsewhere, offering vast subsidies, in the hopes of landing a new division or a new plant. while burdening existing small businesses with burdensome taxes.  Well-known names may seem glamorous, but it may be far better  to take good care of your own people and encourage their creativity and enthusiasm.

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