Posted tagged ‘jobs’

So Refreshing, A Few Facts

November 4, 2018

The Trump Administration, as well as the Trumper-in-Chief, President Trump has set a high bar for future Presidencies to proclaim “best ever”, “tremendous success”, or “all time best”.  It seems every aspect of life in the US has become super special through the magic touch of the President.  Hmmm.

This past Friday, the Labor Department released its monthly estimate of new jobs added to the economy.  The number of 250,000 was higher than estimates and signaled good news for the Trump Administration.  Just another sign of President Trump’s Midas touch?

Monthly New Jobs 11:2018

(Published in the Philadelphia Inquirer on November 2, 2018 citing Bureau of Labor statistics.)

In fact even a casual look at the recent history of monthly jobs shows that 250,000, while a good number is just one of many similar numbers since 2014 and part of a positive trend since 2010 when Barack Obama was President.

The 250,000 jobs number is good news to be sure.  A wise person, however, would wonder why after the huge tax cuts handed out to corporations and the wealthy, the number of new jobs (predicted by the President and Republicans) was not much higher?

For the time being, let’s use this example as one indicator why data and facts are so important when dealing with a President untethered to the truth.

Vote Tuesday and choose “facts”.

Trump Meets China

April 2, 2017

President Trump will meet President Xi next week at Mar A Lago, the Florida White House. There will be no loss for topics both sides wish to discuss but almost assuredly the two lists will not include the same items. Maybe they will alternate. Hmmm.

President Trump seems set upon trade issues and steering the “free trade” towards “fair trade”. While this is a worthy objective (assuming that the President was at all interested in anything other than politics, like satisfying 2020 campaign bench marks), free and fair trade are very complex issues. What is fair to one side may be quite the opposite to the other side.

Most likely the upcoming visit will conclude with more of the phrases we have gotten use to… “Two nations pledge to work together on areas of mutual interest…” Hmmm.

China represents a clear picture of globalization and what outsourcing looks like.  Globalization has brought blessings and cruel dislocations in the same breath.

In the 80’s China began to stir. Adopting a more cooperative and welcoming attitude, China invited a few Western companies into their midst assigning them preferential business licenses. China provided space, people, and infrastructure support. The incoming companies provided manufacturing know-how and the promise of large markets overseas. Most of these new comers were American companies and with them came “outsourced” American manufacturing jobs.

On a macro scale, this arrangement seemed ordained in heaven. China got steady work for its peasant class, thereby raising the “lucky” peasant’s standard of living. With increasing volume, China (the Government) got hard currency generated by the sale of goods overseas.  And, of course, a lot of wealthy Chinese became even wealthier.

For the job exporting country (for example, the US), companies were able to offer for sale goods which cost considerably less than if had manufactured these goods been manufactured using American labor. This translated into lower selling prices, greater profits, or both.

For America (the Government), inflation slowed to a crawl. For American businesses, the way was clear to hold down wage and salary increases (because there was no upward inflation pressure).   And even better, the increased productivity could go in greater proportions to top executives and share holders. Hmmm.

So when we hear rhetoric promising to bring back to America manufacturing jobs, one must realize that the “forced” repatriated jobs will drive up the prices Americans pay (this is called inflation).  Worse, there is no reason to believe the returned jobs will pay anything more than minimum wages.  Hmmm.

There is nothing wrong with more jobs for Americans and if free enterprise were alive and well, the shift of jobs from China to the US would be cost/quality driven. (Most Americans would reject more expensive or lower quality goods.)

I wonder whether the Trump Administration will think about closing the barn door, once the lost jobs are back in the barn. Europe deals with “fleeing jobs” by making it costly for companies to simply lay people off.

Hmmm, maybe not.

The Coming Week – Will The Big Kids Show Up?

July 25, 2016

The Democrat National Convention begins Monday. It will not be difficult to present a more positive message compared to the just completed Republican convention. But is that enough?

For example, will it be enough to speak of tweaks to the Affordable Care Act or should the convention assert “basic healthcare” is a right to which all Americans are entitled?

Or, with respect to jobs, is it enough to say a Clinton Administration will work to generate jobs, or should the convention acknowledge the reality of globalization and the disproportionate sharing of productivity gains during the last 25 years?

And what about poverty? Is it enough to declare war on poverty without addressing why poverty exists at all and especially why poverty appears institutional with some Americans?

Americans would benefit if Democrats considered aloud the larger subject of healthcare. In a country that fancies itself as the world’s most powerful, offering a healthcare delivery system which is often too difficult or too expensive for many of its citizens to access, seems bazaar if not outrightly shallow.

And Democrats should be clear that no government service is free and health care is no different. Government, of course, needs to be clever about how it finances healthcare so that it is available for all citizens when they need it, even if they cannot afford the insurance or the co-pay. (Most other countries use a VAT to underwrite healthcare costs.) But beginning with the notion that America offers the best healthcare one can afford is no longer acceptable.

Globalization is like the elephant in the room. No one seems to want to discuss how it is a fact of life. Political leaders also seem to deny the best way to deal with globalization is through open trading arrangements and not protectionist measures. Open trading, of course, must be fair.    Democrat leaders, however, fear their many Unionist supporters will not want to face up to globalization and globalization is a subject better left unsaid.

Poverty is as old as the ages. Never the less, systemic poverty is a serious problem and a potential security threat (as we have seen in Europe with poor disaffected immigrants). Democrats need to move beyond the notion the Government can simply give enough handouts to the poor that they will rise above poverty and enter the productive economic streams. Poverty is not just a state of wealth (like having no wealth).  Poverty seems also to be a state of mind. Will Democrats step up and say the poor bear some responsibility in improving their own lot?

IMO, behind closed doors, Democrat leaders could have these discussions. During the discussions, however, someone will remind these leaders that the election is theirs to lose.

Clinton-Kane should walk away with the election by simply not self destructing. My guess is that regrettably  platitudes and PC talk will dominate and once again an opportunity will be lost.

320,000 New Jobs, I Still Don’t Like Him

December 5, 2014

The Bureau of Labor Statistics announced today that last month the US added 320,000 new jobs. This figure was considerably higher than expected and about 100,000 greater than the previous month. Experience has shown that this figure could be adjusted slightly upward or downward in future months as overall national figures are analyzed. Never the less, the 320,000 figure is an extremely positive statement about the economy.

Also announced today was a poll measuring President Obama’s approval rating. It was his lowest ever. Hmmm.

How is it possible that the President is being rated so poorly when things are going so well in America? Is it that the strong economy is an uneven phenomena and some people are just not feeling that love? Or, are people pretty much done with President Obama and ready for someone new to sit in the White House?

The jobs figures, regardless, represent an important development. When President Obama took office, the Country (along with most of the rest of the world) stood at the edge of a 1929 era depression. The President pushed through a $800 billion stimulus package like first responders might use fresh blood and a tourniquet. Many States, however, offset lower State tax revenues with public sector layoffs. So, while the Federal Government was trying to stimulate employment, State and local governments were stoking the unemployment fires by cutting public service employment.

Most progressives argued for another stimulus package while most conservatives argued that there never should have been a stimulus plan in the first place. Gridlock settled the argument and no further stimulus was enacted.

Oh, how fortunate the US was.

Slowly and out of the way from well intended government intervention (stimulus or tax reductions), the silent hand of capitalism began to reallocate the nation’s resources. This method has prevented the more frequently used economic policy methods where the party in power tends to stimulate the overall economy by either increasing government spending or by reducing taxes (or both).

Except in emergencies such as in 2009, politically driven stimulus policies almost always over stimulate the economy. Over stimulations leads to over production, over consumption, and over borrowing (too much debt). Sooner or later, the free lunch ends and the head ache of readjusting to a more sustainable economy is before us.

The beauty of 320,000 new jobs is that the overall economy can sustain this magnitude of growth much longer than much higher numbers. Also, when there is inevitably a “correction” and the economy contracts, history says the contraction will be less severe that when a “bubble” bursts.

And let us not overlook that the US economy is performing better than any other free economy. Someone must be doing something right, one would think.

Ebola, ISIS, and Feguson have just happened.  These events have been downers for the population in general and they would have happened no matter who was President.

If Americans feel that President Obama has not provided leadership during these events, so be it. If Americans think someone else could lead the Country in a better direction, so be it. IfAmericans think poorly of the President, so be it.

What Americans cannot make true is that the economy is not strong, that American soldiers are not being committed to unnecessary wars, and that healthcare is not more available and at a more affordable prices.

While Americans can use whatever scale they wish when deciding whether they approve of the President, they cannot change the facts.

2016 – What Will The GOP Run Against?

December 3, 2014

A NBC poll released today showed former GOP Presidential candidate Mitt Romney leading all perspective 2016 nominees. Romney logged in with 20% preference by those polled. In second place was Ben Carson with 10%. All the other Sunday talk show guests lined up as little ducks with descending percentages. Hmmm.

Romney’s preference can certainly be assigned to the fact that there has been little money spent to date for the 2016 race. The boat load Romney spent in 2012 makes him the most recognizable GOP candidate even though Romney has consistently said he is not a candidate for a third try.

Here’s some ideas for the eventual GOP candidate.

  • The Economy. Candidate “A” can claim he/she will get the economy going again. Hmmm. Considering the mess President Bush left, and the steady climb back, the current US economy is second to none in the world. And, the return to a strong economy was accomplished without any tax give away programs for corporations or the very wealthy. What can the GOP claim? Maybe they might point to the many Americans who do not feel they are participating in the recovery because their jobs do not pay enough. Hold your breath and lets see what this daring GOP candidate offers as the path to fairer income distribution.
  • Good Jobs. This would be a worthy goal for either party. The difficulty both will have is where would “good jobs” come from and how would the government play a role in enabling? Chances are no GOP candidate will offer anything substantive in reference to type of jobs or how to enable their creation (conflicts with small government goals). Simply saying, Candidate “B” stands for more good jobs will probably be the extent. For example, being specific like wanting to complete the XL pipeline because it will create good paying jobs, while partially true will also help depress the price of oil and refined products (good for most consumers). The lower oil prices will simultaneously create unemployment as current oil producers find their sunk costs exceeding the new lower price of crude. Hmmm.
  • The Affordable Care Act. It will be practically irresistible for GOP candidates to not cry for repeal of ACA. Candidate “C” will pronounce it a “train wreck”. Unfortunately for Candidate “C”, the facts do not support the train wreck description. No longer are Americans denied coverage due to a pre-existing condition or have their coverage canceled due to catastrophic illness. Uninsured Americans can obtain affordable coverage when in the past only the healthiest could. And, while it is still early, estimates are being made that the ACA’s emphasis upon reducing hospital errors is actually reducing health care costs. Hmmm. The wise GOP candidate, however, will move from repeal to “repair” ACA and point out certain aspects which should be fixed based upon experience.
  • Foreign Affairs. Most GOP candidates will puff up and say they favor a strong national security posture. More spending by the Defense Department will be their call. These demagogues will point to Russia, the Ukraine, China, and the Middle East as proof that the Obama Administration has botched foreign affairs. Oh, really? The Russian ruble is in free fall due to non-military sanctions put in place to counter Russia’s Crimean and Eastern Ukrainian policies. The Middle East mess, which began with President Bush’s ill-advised invasion and occupation of Iraq and his Administrations frequent calls for “democratic elections” in middle east countries, can only be resolved by the Middle East countries themselves. Any GOP candidate who proposes another invasion will be in for a rude surprise.
  • Immigration. Potentially the hottest potato of all. What can an honest GOP candidate say? Studies by even the most GOP minded business groups all point out the economic advantages of immigration reform. Common sense compels one to see the foolishness of any attempt to deport over 11 million undocumented. Probably the best advice would be to try the “Dick Nixon Vietnam approach”. Candidate “D” could say he has a secret immigration reform plan but can’t reveal it during the campaign because if he did, some could game the system… and Candidate “D” would want the reform to be fair to all.

President Obama will not be running this time. The presumptive Democrat candidate, Hillary Clinton, can both defend and modify the Obama track record based upon the passage of time… things change.

Should the Democrats infact nominate Hillary, the GOP will have the real red meat they seek. Run against Hillary (and Bill).

So maybe the Affordable Care Act, and the Economy, or Jobs, or Foreign Affairs will not be the issues, just Hillary. Hmmm.

Looking Ahead Economically Speaking

September 6, 2013

Today the Government will release its monthly “jobs” numbers.  Analysts will report regardless of whether the numbers exceeded or trailed their projections, that the 7+% unemployment rate is less than the nation is capable of producing.  Citing the “good old days” of 2006, experts will say the recovery is still in progress but well underachieving the nation’s potential.

These prognostications could (and maybe have) been written weeks ahead of any jobs data release.  They are general statements and almost unprovable.  They are safe statements which neither damn or glorify the economy.  But there is a question whether current conditions will ever return the overall jobless rate to 2006 levels?

One must remember that in 2006, the economy was on “housing industry” steroids.  The housing industry lives on jobs.  Excavators, framers, roofers, plumbers, electricians, siders, and landscapers all enjoy work when a house is build.  In addition there are all the people who make the concrete, the cider blocks, nails, staples, windows, roofing shingles, doors, flooring materials, and kitchen appliances.  And let’s not forget the decorators, bed makers, rug layers, wall painters, cabinet installers, and audio visual equipment servicers.  Lastly there are the real estate agents, the surveyors, the title searchers, transfer agents, tax assessors, and the local Starbucks or coffer shop that provides the sandwiches and coffees for all these workers.

Without a doubt this is a valuable part of any economy.  The first question is how and where did/do Americans get the money to buy houses in the first place and start this domino effect of job creation?  The second question is where is that money today?

The general answer is that American industrial productivity (that produced the money to fuel the drive for housing) has been so successful that it has reduced the number of legacy jobs needed, and we are currently in a period of economic reallocation.  People who made steel or clothing, for example, are suppose to be “retraining” to become computer makers or users.  (If only that were true.)  Regardless, free enterprise promises that capitalists, if left alone, will reallocate resources if an industry becomes uncompetitive.  But, how long will it take and what will emerge at the other end?

The crystal ball is still pretty fuzzy.  Renewable energy is often cited as a future growth area.  Maybe so but what will happen to all those delivering present forms of energy.  Health care is a growing field but the question of who can afford it is becoming a more urgent concern.  High tech, computer aided, manufacturing is touted too.  And in the same breath, a pause arises when we think about our schools and current inventory of Americans who can barely read or write and can’t balance a check book.. these are not likely candidates for high tech jobs.

So… the American economic engine keeps puttering along.   We are living to die another day.   We must remember there is no obvious other country that is about to overtake the economic strength of the US.  Never the less, unless our economy does shift to fuller employment, we will be stuck with some difficult budget and tax issues where we will constantly be debating what can the government afford and who will pay for it.   These are seeds for a declining USA.

Ironically, all economic periods are cyclical.  That is this slow and steady growth we are currently experiencing will eventually need an adjustment and contract.  In the best of circumstances, the contraction will be mild and growth will return soon.  The irony is that should this slow down occur in 2016, Republicans, despite there hugely dysfunctional behavior and absence of ideas, could look like the prettiest girl in town.

What a hoot.

A New GOP?

April 24, 2013

I read in the Wall Street Journal that Senator Rand Paul wants to create a movement that will make the Republican party bigger and better.  Hmmm. I wonder what he is thinking?

Paul is the Libertarian’s poster child.  I just wonder what he is thinking.  For example, Libertarianism could help the GOP, at least if Republicans stopped telling women or gays how to run their reproductive health or lead their lives.  The GOP might get more votes.

And a more circumspect view of foreign entanglements might not be so bad if the country transitioned sensibly.  This would get my attention.

But there is more that comes with Libertarians.  And that’s what makes me wonder.

Libertarians love guns, “boot straps”, and their country.  While there is a place for guns, the woods and the city present two quite different conditions.  Personal protection, sports shooting, and hunting do not require military style weapons.

Boot straps refers to the general attitude that everyone should simply “pull themselves up by the bootstraps” if they wish to get ahead (or in many case just to survive).  When said quickly, this attitude sounds plausible.  When boot straps are put in context of modern America, it comes up short for too many people.

And the Libertarian franchise of loving ones country does not bode well for immigration reform.

So on balance it is not clear whether more libertarian views would help or hurt the GOP.  In the last election, the GOP managed to shoot themselves in the foot with little or no help from Libertarians.  But the rise of Rand Paul makes me wonder whether Paul and myself are seeing the same problems.

The current US path is patently unsustainable.  Medicare, Medicaid, and the Defense Department are leading the country to bankruptcy.  Social Security is not far behind. Republicans won’t increase taxes and advocate large cuts in government spending.  I would predict civil unrest if they somehow could pursue this path.

Democrats, on the other hand, are willing to raise taxes (albeit mainly on the rich) and faint at the notion of cutting government spending.  Deficits will keep increasing and the debt will swell with Democrat leadership.  Not a pretty picture this way either.

Congress is hopelessly deadlocked.  Public opinion is all over the map.   With so many gerrymandered districts, it makes little difference what the public thinks anyways.  The same crowd is going to be reelected regardless of their performance.


Americans must wake up.  The American dream is now about the very rich getting richer and the rest staying the same or losing ground.  While the rules of the game are stacked in the rich’s favor, too many Americans are not trying hard enough.

Rand Paul needs to put forth a program where those who do work or study harder will have a reasonable chance to obtain a good paying job.  The Middle Class simply does not earn enough to have any chance at the American dream.

Paul needs policies to wean those now reliant upon the social safety net into good jobs.  And for those who are old, disabled, or no longer capable of work, Paul needs to ensure the safety net will be there.

For my money, a social democracy, like Germany should be in our future.  The problem with this vision is that services of a social democracies must be paid for too.  If we are incapable of paying for what we use now, there is no hope that a social democracy will work better.  And a libertarian government which ignores the poor, the sick, and the elderly will be an even greater disaster.

It is time for all of us think about the next generation and put things right in this one.

Economic Growth That Both Parties Made Possible?

December 10, 2012

Employment numbers released Friday showed about 140,000 new jobs were created.  While not a number to be confused with a run away economy, it never the less shows a positive state of affairs.  So, are the Democrats and President Obama responsible?

No, not fully.  The irony is that both parties are responsible.

The GOP has backed wrong headed policies from the get go.  Its hands off, no interference approach would surely have sent the economy into a much deeper recession, if not a depression.  The Democrats, on the other hand, would have panicked when the recession took on its “wide U-shape” instead of the wished for “narrow V-shape” recovery.  Their answer would have undoubtably been to throw more money (borrowed of course) at the recession.  Fortunately, the Washington gridlocked prevented more stimulus and the only course available was to “stay the course”.

Mitt Romney told all who would listen he understood how to create jobs and that President Obama has been a failure.  In hindsight it is easy to see now that these claim were off the mark.  The 2008 recession began when the housing bubble burst and at the same time, the financial sector imploded.  How can anyone fix something unless they know why it is broken?

Building too many houses and trying to sell them to people who cannot afford them has happened before and will undoubtably happen again.  This is an easy to understand problem and with patience, an easy to fix one.

An imploded financial sector is much more opaque.  Clearly financial institutions took too much risk.  But that is not all.  These big banks and investment took an enormous holiday from ethics and fiduciary responsibility.  In essence, they went morally bankrupt.

We all know greed is a human condition and bankers are humans.  If we had returned to 2005-7 conditions quickly, the financial houses would have forgotten their extravagances and resumed business as normal.  Banks would have pumped up consumer and business debt while recording high profits without any reflections.  And this group of money lenders and investors would have shamelessly pushed for more favorable regulations.

The slow recovery, however, has encouraged economic growth on a much broader basis than housing and banking profits.  Although this will take time, the results should make the US far more competitive globally.

It would be nice to assign some form of brilliance to the Obama Administration for engineering a slow recovery.  It would be nice but it would be incorrect.  After the 2010 election, President Obama lacked the Congressional majorities he needed to steer the economic recovery.  He could veto and block legislation he didn’t like but he couldn’t push through policies he favored.  Gridlock.

The US economy does not exist on an island.  It is part of a global marketplace.  When the US does well globally, conditions are ripe for a knock on positive outcome domestically.  It is the global engine that drives the domestic engine.

Since ideology of both parties tends towards extremes, the long term prospects for the US economy will benefit the most from continued gridlock.  The gridlock will produce a deficit reduction plan but not much else.  And given the realities of politics, that’s probably enough.

Of course, both parties could gravitate towards the center and moderate, data driven policy making.  There would be no stopping American, then.  And just as likely, pigs could fly.

Congress’ Lost Opportunity Cost

November 27, 2012

Do you remember or have you seen pictures of the great cars produced in Detroit in the 50’s and 60’s?  These automobiles were things of beauty.  They excited the buyer and delighted the driver.  They also lasted about 3 years and then were destined for the scrap heap.  The quality of these beauties was woeful.

Then came a wake up call.

The Japanese arrived and reintroduced cost/quality to Americans.  The Japanese showed that someone else could produce high quality at low prices.

It took some painful years and mighty boardroom hand wringing before American industry decided to relearn what American quality experts had taught the Japanese in the early 50’s.  Drs Deming and Juran teachings had returned, and slowly American manufacturers accepted quality principles.

So what has that got to do with Congress and lost opportunity costs?

Well, it turns out that quality management techniques are universal and can be learned by anyone, not just the Japanese.  So, if the Japanese could make great cameras, televisions, and cars at hight quality and lower prices, why couldn’t the Taiwanese or Koreans?  There was no reason and the US market gobbled up these great products.

American manufacturers say opportunities for themselves also.  They could design and market their products with jobs based in the US and outsource to a low wage country like China to manufacture them.  Soon all manufacturers saw the same opportunities and even Japanese, Taiwanese, and Koran manufacturers looked for low wage countries and outsourced some of their production.  With quality principles, no consumers could tell where a product was made.

So where does Congress fit in?

We are living today in a global economy where goods and services can be produced at high quality anyplace in the world.  American manufacturers do not need the crutch of tax or tariff advantages.  They need instead better educated and more skilled workers, a sound flexible road network, and well equipped shipping ports.  They need to tools to do business, not tax and tariff crutches that encourage doing the minimum and making the most.

So, Congress needs to move on and get this fiscal cliff issue off the table.  Congress needs to deal with the physical and social infrastructure that will allow free enterprise to blossom again.

The Calm After The Storm

October 30, 2012

In the wake of Hurricane Sandy, one is struck by how unforeseen events can take control of everyday life.  This event struck the northeast but just ask anyone living in Tornado Alley what nature can do.  For the Northeast, getting debris cleaned up and electricity restored is the first priority.  No time for politics.

Still, the clock is ticking.  Next Tuesday, one week from today, the nation officially votes for the next President.  For many, Tuesday will mark the end of senseless negative political ads and a return to equally senseless, but less irritating auto and medicine ads.  For others, the election outcome will either raise hopes or caste a spell of near despondency.

In this calm, will voters take this time to think the election issues through?

The election is not about the economy or jobs.   It is true that the political rhetoric says the election is about jobs and the economy.  Compared to other major countries, however, the US economy is growing faster and unemployment is lower.  Any thoughtful analysis would say the US is well on it way towards full employment.

The election is also not about foreign policy.  While some may argue that the US needs to exert its influence (read military power) in the Middle East, Africa and Southeast Asia also represent growing areas of concern.  In short, this is not the time for the US to be tied down with a land war anyplace.

This election is not about the poor, the health care uninsured, the elderly on fixed income, the newly graduated seeking employment, or our failing school systems.  The election is not about the political divide or dysfunctional Congress.

The election is really about all these issues… but in the context of a $1 trillion deficit projected as far as we can see.  The election is about how can the country improve each of these issues while on a path to regain control of both the deficit and the debt.

Neither party has caste the election in these terms.  Most likely the reason for silence is that the only path forward which will work will call for broad sacrifices.  The successful path forward will say good-by to the free lunch form of politics.

So, in the absence of either Mitt Romney or Barack Obama saying taxes must go up for everyone and that entitlements along with defense spending must be reduced, voters are left to decide with only half a deck of cards which candidate to select.

Maybe the Hippocratic Oath is more appropriate for this election.  Who will “do no harm”.