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A "now hiring" sign and job applications are posted outside of the soon-to-be-open Marin Ace Hardware store in San Rafael, Calif.
Small businesses are in a hiring sort of mood.
Take Tammy Krings, owner of the Travel Solutions agency based in Columbus, Ohio. She is about to boost her staff of 125 by 65 more people because larger companies are chasing higher growth markets outside the United States.
“Where they’ve consolidated their travel in the U.S. or North America, they’re now saying we want to look for opportunities in these other markets,” Krings said.
As the job market slowly gets back on track, much of that hiring is coming from small businesses that have weathered the storm of the past four years. Job openings and hiring plans in December hit the second-highest levels since the recession of 2007, according to a December survey of the National Federation of Independent Businesses.
A series of strong signals could translate into a positive surprise Friday, when the government publishes December employment figures in one of the most closely watched economic reports of the month. On average analysts estimate the economy added 155,000 jobs last month, up from 120,000 in November. But that is unlikely to move the jobless rate much from its current 8.6 percent level, according to Briefing.com.
“The big firms aren’t growing employment; it's the small firms that fired everybody during the recession,” said NFIB chief economist William Dunkelberg. “Those jobs are now coming back. The barber shop that used to have five chairs working and fell to three when people cut back on spending -- now they're getting back to five.”
The pickup in hiring is showing up in a series of economic reports, beginning with last month’s sharp drop in the unemployment rate to 8.6 percent from 9.0 percent. On Thursday, payroll processor ADP reported that its monthly survey of businesses showed a net gain of 325,000 jobs in December, roughly twice what economists had expected, after reporting 204,000 private jobs added in November.
Large companies (with 500 or more workers) added 37,000 jobs, according to the survey, so the bulk of the hiring came from small to midsized firms.
Many economists sounded a note of caution about the ADP data, saying the number may have been distorted by seasonal factors. But it added to other data that point to an upbeat job outlook.
In a separate report Thursday, the Labor Department said weekly applications for unemployment benefits dropped to a seasonally adjusted 372,000 last week. That's 11 percent lower than the same time last year and the lowest level since June 2008. A pace of new applications below 375,000 is generally seen when hiring is strong enough to lower the unemployment rate.
There were other signs of a pickup of hiring in the services sector. An index tracked by the Institute for Supply Management trade group rose to to 49.4 from 48.9 in November. A reading below 50 means overall employment levels are shrinking, above 50 they’re expanding. In the ADP report, of the 148,000 jobs created by small businesses, 130,000 of them were in the services sector.
Even as the job market improves, it will take some time to hire back the large pool of workers laid off following the biggest financial collapse since the Great Depression. Despite the sharp drop in the jobless rate in last month’s report, the current pace of growth is barely strong enough to keep up with the growth of the workforce.
The job market recovery is expected to remain uneven across regions of the country and industry sectors. The two sectors that suffered the most job cuts in 2011 -- government and financial services -– are expected to continue to struggle again this year, according to John Challenger, CEO of Challenger, Gray & Christmas, the consulting firm that tracks mass layoffs.
Hiring will also get a boost in 2012 from new small businesses that haven’t even been created yet. As the 2007 recession took hold, small businesses were failing at a rate faster than new ones were being created. That trend reversed in early 2010: Businesses are now being started at a rate that outpaces the failures.
Many of those old jobs, though, have been replaced by new positions requiring entirely different skills. That’s why many laid-off workers are having a hard time finding work.
Krings, for example, has applied new technology to provide service to customers around the world outside Ohio’s normal business hours. That’s meant looking for workers with a new set of skills.
“We need talent, but were having a very difficult time trying to secure it,” she said. “We need multilingual people. We need people who have traveled the world, but who also understand the technical side of what we’re doing here. Those types of people are hard to find.”
Insight on some promising employment reports, with CNBC's Steve Liesman.
Leave a Comment:
Exactly!!! Kringis " we have jobs available but we need talent in multilingual people AND people who understand the technical side also!!" Now without the job-training resources and the cuts to fund these types of programs it'll take Kringis six months to fill her 65 positions because those that have both of those skills together are already working.
It seems like if she has 65 positions to fill she could look at candidates more holistically rather than individually. Perhaps she finds 30 people who are strong in a variety of languages, 30 who are strong on technical skills, and 5 who are strong on leadership attributes. Then she could implement a cross-training and knowledge sharing program in the workplace where the employees teach and train each other and in six months she not only has a fully trained workforce, but a team who trust each other and recognize the value of their fellow associates, and who have a sense of ownership and investment in their company. That will lead to a more dedicated and loyal staff moving forward, and the cross-training program could be used as a mentorship or internship model moving forward. There is always opportunity for growth in any challenge, and those who are most equipped to adapt will be those who are most likely to succeed.
barchi
She is running a successful business. Good for her. Stay out of her way. You don't have any input in her decision making. I don't really want to piss anyone off but you sound like a politician who thinks their way is the best. Speaking as a small business owner, I want people, especially our government, to stay out of my business.
Jeffrey - we have community colleges that offer training. We need to cut back on spending. The government sponsored training programs are not all necessary.
JH..., "you sound like a politician who thinks their way is the best."
A lower unemployment rate is not good news for the GOP.........
Rightly
I am a business owner who feels my way is best for my business and my employees.
JH, the cuts in government spending went deepest in education, like those community colleges you mentioned. Now there are not enough teachers for the number of students seeking new skills. And community colleges seldom include world travel in the curriculum, anyway. Barachi made a suggestion that did not include a single mention of government mandate, or an increase in taxes or government spending. Your response would indicate that you would never invest that kind of capital in your employees. May your peasants revolt!
The small businesses in this country would be doing even better had the Republicans not blocked virtually every bill designed to assist them during the past three years.
You are absolutely right. Further, I find it interesting that no matter how good the numbers are, the media always adds that caveat..." but we need......_____— thousands more to fix the problem". How about taking a breath and saying at least our President is working to get things moving. Can the republican party say they are doing the same? Absolutely not.
Dear God, you really believe that? Obamacare still hasn't come home to roost, let's just see what Obama's policies do down the road. Interesting how his policies are set to come into fruition after the election. Also, businesses cannot thrive under an umbrella of uncertainty, Obama flip/flops and it is hard to know what taxes are going to be, what healthcare is going to cost and, most importantly, what inflation will do to the markets. Gasoline is going up again and most folks are now cutting back on travel. The holidays and holiday spending is over, once the bills start rolling in there may be a pull-back with spending.
Having said all that, I hope that this truly is a sign that things will start getting better, we sure do need some positive news.
Depending on which way the numbers go, the influence is either from the White House or the Congress hahahah. Human nature will never allow us to know the unabated truth.
This employment figures increases every year at this time because of the holidays.
We will have a better outlook on the actual rate towards mid February.
Until then we can't make any predictions through these rose colored glasses.
But, I do pray and hope that it is getting better.
The problem is companies leave a vacancy open for months and months and waste a ton of cash on overtime and recruiting vainly seeking the perfect candidate that meets 110% of unrealistic expectations instead of just hiring a strong candidate and spend a smaller sum training him/her. Couple that with wanting someone with a masters for $12 a hour.
JH-479998@
Liberal dimwits have no idea what it takes to run a business. Their solution is to let the government do the thinking for thm.
Blackbox - and what if Fuax news posted the same thing? That would make this right?
Hey Tea Baggers... What do you think now? If this continues, every single complaint and whining moment you have had for Obama will be mute. Stop the doom and gloom approach, things just might be looking up.
You are so right.
The city of Seattle got 25 million to train individuals to install insulation. It produced 14 jobs. So a lot of people got the training but no jobs materialized. Seattle has a climate that is fairly even. That is the problem. Not much savings for spending the money to insulate. Why did Seattle get this money to begin with and why is the city doing the training? Why not a business in the insulation business? If there are no qualified installers, small businesses would then train them. It really is that simple. Government sponsored jobs training have been a huge failure and a lot of money wasted.
Obama touts "job training" which allows him to throw good money at such projects as above and then feel good about that effort. What government needs to do is look at the "bang for the buck". If it isn't as shown above, then DON'T DO IT AGAIN. Instead work with business people to figure out how to HELP them create more jobs.
BTW, under the very best of times, businesses started barely increase over those that shut their doors. Since 2000, start-ups have decreased each year. I am a business owner. I can see why. There are so many fees, assessments, taxes, licenses that many starting a business have no idea about before getting started. It is why so many businesses start off with way too little cash reserves for the 1st year which is very hard for so many reasons. In our industry 80 percent fail the first year. It is good I didn't know that when we started, or I probably would have run the other way.
Look, the day of the gal wanting to sell cakes from her home is over. In order to do food from your home, you must have a commercial kitchen. No, you can't use your existing kitchen unless it can be closed off from the rest of the house. It is complicated and very expensive and selling a few cakes to make some extra money won't pay for those start-up costs.
The US is shooting itself in the foot each year with so many increased regulaions. Just last week an article on this site talked about 40,000 new regulations across the country that tgot passed in 2011. We are shutting the door on so much commerce because we react to every law suit and impose more and more regulations. It is endless and frightening.
Last I checked - it was the Regressive, Right-Wing Comrades at FOX News that have the biggest & least trustworthy propaganda machine around!
The Boys,
"To many Regulations," give that right wing BS a rest! The GOP has stripped regulations and funding for regulatory agencies down to nothing over the last 30 years. Any regulations we do have are completely toothless because enforcement has been completely underfunded.
Corporate America is now running rough shod over everyone. And the Tax payers are the ones left footing the bills.
The financial straights we are in right now is because of GOP led DEREGULATION. To Big to fail used to be to big to exist, but thanks to the GOP we have now returned to 1900 and a world of massive MONOPOLIES!
Don't look now, but another millionaire is creating real jobs!
Someone with a payroll of over 100 people is certainly not in need of any liberals idiot ideas, that's for damn sure.
So if the 325,000 private sector jobs hold up, it'll be the second highest December gain from 1981 to now. The seasonal job gains argument still doesn't hold up. Average gains for December ≈100,000 so IF the 325,000 number has a moderate resemblance to the BLS number then it'll be significant.
Well, it's obvious the Conservatives efforts to create jobs is finally starting to work. This despite Hairy Reed's attempts to thwart any success by holding back most of the bills passed in the House and refusing to bring them to debate or committee. Imagine how much better the numbers would be if some of the legislation uncle Hairy has held back would have been allowed through. This shows the true obstructionism and incompetence of the Democrats.
This shows how well the economy will improve when the limp Libbies are finally evicted from our White House and the Senate. The American people will finally realize that the Republican's efforts to put a stranglehold on the Liberal's out of control spending is what is starting to bring some semblance of certainty to the business community.
ABO (Anybody But Obama) 2012
All that without the 4,000 part time jobs the XL pipeline is supposed to be able to create. So much for Republican efforts. Spin it anyway you want, the (R) brand has only slowed the recovery. Oh and who would have guessed such a robust month even with such looming debt.
spg64-1292127
OK, I'll bite. Name 3 regulations the Republicans "stripped". Then show me where the funding for your alleged "underfunding" occured.
Here, I'll even give you the link to the home page of the 145,00+ page Code of Federal Regulations.
gpoaccess.gov/cfr/
Sorry, you'll have to dig through all of the legislation passed over the last 30 years to prove your alleged defunding claims. There's too many different regulatory agencies for me to help you with any links. Just show me 3 pieces of legislation that the Republicans created that defunded a regulation.
Good luck.
FreedomRingsLoud and what exactly have your republican right wingers done to help the private sector gain jobs. Please, post back here just how many job bills they have supported in 3 years? Good luck, you won't find anything. All these republicans care about it is costing Obama his job instead of helping americans get jobs.
FreedomRingsLoud
Please tell me about those conservative efforts to create job! (Please note my Sarcasm!)
So if this is such a bad thing that Senator Reid is doing, I bet you're really angry at the fact that the Senate Republicans are playing a game with their so called "Senate Recess" which is preventing President Obama from making a Recess Appointment. After-all, Senate Republicans are fighting the confirmation of the new Consumer Financial Protection Bureau Chief - Ohio Atty. Gen. Richard Cordray.
So, why are Senate Republicans doing this? Well according to said Sen. Richard Shelby, "The director will single-handedly determine the financial products consumers can buy, as well as which consumers have access to credit and which do not." He also said, "It is staggering the amount of control the director will exert over the daily financial choices available to Americans."
What Senator Shelby fails to say is this...this new agency will be monitoring and controlling back door business such as payday loans or predatory home loans, anything that will be considered "illegal business." He says he is concerned about the "daily financial choices available to Americans." The "Americans" he is referring to is definitely not the consumer - it's American Business!
In fact Senator Reid said “Senate Republicans blocked him (Cordray) because they don’t like the agency he would lead – an agency charged with protecting consumers from the abusive Wall Street practices that led to the financial crisis." How do you argue against that!
House Republican legislation is loaded with special interest pork...and does nothing to help this country's financial "backbone!" But if you really want to read about "obstructionism and incompetence" take a close look at your Congressional Republicans.
Again, as I have ask all Republicans in the past - please provide some fact's / specifics and correlate that information with how it'll actually improve the economy. After you spend the next 10 to 20 minutes working your brain over into a frenzy trying to give me a good example....I'll leave you with this one thought - why do I need some cheesy little House Bill, which will waste more taxpayer money debating it's merits and putting it onto paper so that it can be signed into law - when I can simply expect business to start spending some of that "enormous profit" they have saved in the last two years! Why is business holding back from spending?
I like Obama's chances more and more everyday!
ABR (Anybody But a Republican) 2012
Double_Jeopardy
You people are getting tedious.
Preventing the Libbies from continuing their dysfunctional spending that was tried during the Depression and didn’t work. I thought you limp Libs claim to be educated. Unfortunately you don’t believe in history repeating itself. Hint: Read up on Henry Morgenthau, FDR’s Treasury Secretary’s diary from May 1939. While you’re at it you may want to brush up on the “Revolution of 1937”. I’m sure you’re familiar with it, right? It’s all the Liberal rage.
You mean the current Senate that isn’t in recess? You mean the current Senate that is conducting pro forma sessions? You mean the same Senate that Senate Majority Leader Harry Reid (D-Nev.) kept the chamber in pro forma sessions at the end of the George W. Bush administration, he declared that was sufficient to prevent Bush’s use of the recess appointment power?
That senate? Our Incompetent in Chief wouldn’t be so hypocritical, would he? You know, the one that self-aggrandizes himself over his Constitutional “knowledge”. You know, Article I, Section 5, of the Constitution which states that neither house of Congress may adjourn for more than three days without the consent of the other house. The House never consented. The president cannot pick and choose when he deems a Senate session to be “real.” But I’m sure you already knew that. No? So sad.
But, but, but we already have:
The Office of the Comptroller of the Currency (OCC):
The Board of Governors of the Federal Reserve System (FRB):
The Federal Deposit Insurance Corporation (FDIC):
The Office of Thrift Supervision (OTS):
The National Credit Union Administration (NCUA):
The Security Exchange Commission (SEC):
I’m sure you’re well read on all the responsibilities of all these regulatory agencies. I mean, they’re the systems all you Liberals love so much to monitor the evil, rich, mean, nasty, rich, fat-cats. Right? So how is the CFPB’s responsibility any different than these? Hint: It’s NOT! Hairy Reed needs to check the massive bureaucracy he and you dysfunctional Liberals have created for decades before he agrees to more redundancy that will do nothing other than create more uncertainty in the economy.
REALLY?
OK, quote me 3 (THREE) things in the 25 Bills sitting on Hairy Reed’s desk that are considered pork. If you like I can provide links to all 25 of the Bills Hairy is too cowardly to even debate because he knows they will help the economy.
ROTFLMAO!!!! You haven’t read any of the Bills have you? That’s right, you Limp Libbies never read anything, you just listen to Keef Olderman, Richard Maddow and Barrack don’t you? I mean, no one read the Health Care Redistribution of Wealth hoax bill before they signed it. Remember, Nanny Piglosi told you it had to be passed so they could find out what’s in it. Barrack, Eric Holdme and Janet Neapolitan never read SB 1070, but they certainly were opinionated about it, weren’t they?
Well Spanky, when you finally grow up and learn to read and think for yourself, you can come back. Maybe the adults will let you play when you become more informed.
Maybe.
ABO (Anybody But Obama) 2012
sorry but there are more regulations than ever. a lot small business owners are struggling. the tea party may be a mess but some of them want to be successful small business owners a lot them they feel government is preventing them from being so. in depressions the hard times cause a drive to the right. Think about it as part as correction in economic recovery. It is no surprise that tea party was out the gate first and happen before ows. ows is the left version of tea party. I see tough choices will be made and force comprise between the tea party and ows will be made. expect higher taxes a lot less government spending.
"You people are getting tedious" said FreedomRingsLoud - LOL
Okay freedom, once again, why can't you answer the question. Where are the jobs the Republican Party promised? Where are they? If the Republicans are so focused on the economy and creating jobs, again, WHAT have they done?
-- Answer -- Absolutely NOTHING. Actually, that's a lie.. they have focused all of their energy on costing Obama his job at the expense of helping millions of americans find jobs.
I am no liberal and it cracks me up how people like you.. label someone a liberal if they DON'T agree w/you.
As much as progressives (liberals) hate to see this post and will do whatever they can to keep others from seeing it, once again we have a weekly -- or near daily -- article showing that this is going exactly as the model predicts for the extension of the Bush tax cuts at the end of 2010. Please refer to my post here (#1.44 from August). This has been predictable since roughly mid-October of last year when it became obvious conservatives would make large gains in Congress. Hiring immediately grew as soon as it became apparent that taxes would not be raised, then the first wave of hiring leveled off. Once the new hires were comfortable with their new income source, they started spending. The economy grows.
This next step is proof that businesses feel better about their own situations and another round of hiring is commencing as well as having less rounds of lay-offs. All very predictable results of the extension of the Bush tax cuts. And this organic job growth will continue. That is unless the small businesses that are the engine of job growth are threatened with higher taxes again or Europe tanks because the European governments have been spending like we've been spendingg, only longer.
One should also note that this rise in economic indicators is well after the trillion dollars of failed boondoggle "stimulus" has been spent. We don't need more of that same kind of failed "stimulus" policy. We need more of the freed market success that we are experiencing now.
There are times to consider raising taxes and times not to consider raising taxes. When unemployment is above 6%, it is not a time to consider raising taxes...on anyone...especially job creators.
What's amazing (and a bit scary) is that you can read this article -- or press releases like this -- which is all about the boom in private sector, small business job growth and you are so entrenched in your false position that you deny the facts that are slapping you in the face!
The Republican's whole point was "Get the government out of the way and quit threatening the job creators with high taxes and the jobs will come." The jobs bill they pushed through -- largely to Democrats' great dissatisfaction -- was the extension of the Bush tax rates at the end of 2010. And not so shockingly, it worked! Job growth immediately moved from stagnant (at near 10%) to a point where we added 325,000 private sector jobs in December 2011 (ADP) and unemployment will be below 8.5% with job growth picking up steam.
Government does not create organic long term jobs for the private sector and therefore no "jobs bill" as liberals -- like you -- define it can do that either. Only the private sector can organically grow long term employment, if you free it to do just that. The extension of the Bush tax rates was a conservative "jobs bill" that so far is working exactly as planned.
Both parties have put forth proposals to get the economy moving again and help people get jobs. Both parties also have significantly different world views, so what looks good to one party often looks bad to the other party (and hence, they fight getting it passed), but that doesn't change the fact they are both trying to help.
People need to step back a bit and quite demonizing anyone with a contrary opinion. I'm not a huge Romney fan, but I was glad to see him say "Democrats love America too".
Disagreeing on policy is fine - I'd even call it healthy since we need to debate the merits of each idea. But, demonizing the messenger is destructive and we need to get past this practice to grow as a society and actually start solving our problems.
Maybe we should just continue the personal attacks on each other. We could solve most of the problems that way.
Is is really that difficult to see that politicians are the problem? They all take their hard-line stance that it is their way or the highway. They all add pork to their bills for their own special interests (what does an oil pipeline have to do with continuing a payroll tax cut? Answer: it doesn't. It's just pork of a different flavor).
When will all of us wake up and realize we are the only ones in our way. We are the ones that can make things happen. To sit here and blame Republicans or Democrats for our problems is just B.S. We went to school and chose our professions - nobody forced us to do what we did and nobody is forcing us to stay where we are.
Take out the few spaces in the links below.
http:// sanders.senate.gov/petition/?uid=f1c2660f-54b9-4193-86a4-ec2c39342c6c
http:// www. americanoverhaulact.org/
http:// www. americanselect.org/
http:// www. thepetitionsite.com/5/take-back-the-power-of-the-vote/
Tiggle - well said!
@JH-479998 re:post #1.2
I'm not a politician at all. I manage a small business where I'm responsible for operations including hiring and training. I'm not forcing anyone to run their business in any specific way, but it seems that when someone is complaining to the media that they can't find candidates on their own that perhaps they're looking for positive suggestions to make it work. You can either sit back and complain that no one is perfect for your very specialized job or you can take personal ownership and responsibility to train and invest in your own employees. My solution doesn't involve government in any way, including relying on government funded community colleges as you suggest.
FreedomRingsLoud
Despite the fact that you believe name-calling and disparaging remarks are viable arguments, your posts certainly deserve a response as to why they lack credence...
In response to a request to specify what conservative efforts caused this job creation "Freedom" writes...
This is wrong on so many levels. First, we've had private sector job growth for 22 consecutive months. Second, assuming you are referring to the debt ceiling debacle, there is no increase in job growth that doesn't correlate to the rising trend that predates the debt debacle. There was a very linear increase from May 2010 to April 2011, followed by a two month lull (during the debacle, possibly resulting from the uncertainty of whether or not we were going to default). Relatively sustained job growth levels followed just as we had before the debt ceiling debacle. Third, have you taken a look at our recent budget? It is still elevated at unsustainable levels. Fourth, the cuts were primarily focused on future budgets (rightfully so), because we cant afford to make cuts now. Obama asked for even larger cuts to future deficits. Most Democrats understand stimulus wont last forever, but we also know that unfocused, ill-planned, and too sharp cuts would mean a slower recovery. Its about moderation.
"Freedom continues...
If you don't understand the present how are we to believe you understand the past? Its funny to here someone from the side of the "Bush Tax Cuts," touting the "history repeating itself" maxim. Anyway, finding and being told tidbits of information does not make you a historian. Historians disagree with your view. Why? Well, you can start educating yourself by reading up on Henry Morgenthau's views before and durin the New Deal. He was opposed from the very beginning. Also unemployment dropped rapidly from 1933 to 1939, even with a slight rise toward the end of that period right after Morgenthau and the Republicans led the charge to curtail stimulus. Btw, even better than the "revolution of 1937", read up on the federalist papers. You might be surprised what you find.
"Freedom" follows by displaying liberal hypocrisy with respect to the pro forma session, but fails to point out that Republicans too, are now on the opposite side of the debate.
Then a few disparaging remarks about Obama (typical, I guess)...
Still, against the Consumer Financial Protection Bureau, "Freedom" mentions six similar agencies to point out bureaucratic redundancy:
On their face, they seem the same but their focuses are all different...You can google anyone of these agencies and read their mission statements or "About Us" section to get an idea of how they differ. Sure they are nuanced, but easy to see when you visit the sites. Not that there is no redundancy through overlap, but to proclaim that the CFPB would create uncertainty is simply out of touch.
By the way, if Republicans are so against "pork," why don't they allow the payroll tax bill to be separated from the XL Pipeline. Probably the same reason the rest of the economy's viability was on the hinged for the tax cuts for the wealthy.
"Freedom" closes with more attacks and vilification (and a capitalized rolling on the floor laughing attack). He also tells another poster to grow up. I wonder if he'd own up to the fact that death panels were make believe and Fox and others distorted the truth on the health care bill.
Mike in SA
Since your still touting your "model"...Im reposting my post which was in response to your near identical argument from a month ago..
Your "model," as you call it (or more aptly put: flawed hypothesis), that jobs are created when tax cuts go into effect, followed by a lull, followed by another surge, should be called the "what ever happens proves me right hypothesis." Its no more impressive than a "psychic" cold reading.
Still there are two ways to expose this "model" as a hypothesis driven by your confirmation bias. First, your logicis flawed. Second, your analysis comes to the point of drawing sympathy.
On the logic front, you are operating on a nearly static view that all employers higher all at once and then all stop at the same time (in waves). In the real world, employers act on news in different time frames, and assess/react to risk differently. There would be no reason, then, to think that employers will, based on the tax extension, all higher at once and then stop for a few months, and then higher all at once again. When companies hire, they don't do it all at once either, but instead have a continuous plan. Its almost like you are suggesting a guess and check system for employers. Lastly, hiring is normally driven by demand anyway. Its easy to see that generically lowering taxes does not correspond to consumer spending or employment just by looking at the 2000's.
On to the analysis. Your first point:
To the contrary consumer spending started to rise well before before the hiring took place. The data is easily found on the BEA website if your curious. Additionally, according to employment data from the BLS, private sector employment began to increase in February 2010 at differing rates slowing down in May and started to speed up in July. A reasonable trajectory based on regression analysis of jobs created month to month fails to show a correlation between the tax extension and hiring.
Your second point in reference to the relatively low multiple regarding wealthy tax cuts:
The multiplier changes with every additional detail. Not all tax cuts are the same and not all government spending is the same. Certain tax cuts have smaller effects than others and same goes for government spending. "Temporary," cuts have a lower multiple as do general cuts to the wealthy.
Another variable, which you noted, but failed to consider, was timing. What kind of balance do we have? Investment is good, but consumer spending is important as well. Without the proper amount of sustainable consumer demand all of the investment will just create a bubble.
Thats a lie. The estimated number was 38% of the estimated 787 billion, and although the estimates were 5% too low according to the CBO, the tax incentives were also more than 5% higher than expected. The last number I saw by the CEA was 42%.
Back to the (not) impenetrable logic. In response to a question to what their incentive is hire...you replied
Then you go on about rainbows and unicorns and say that business owners invest whatever spare money they have into their business. Shockingly (not so) you lack the ability to understand that spare money for "job creators" do not equate to jobs. Sometimes it does, but only when demand allows it.
Active Army, I appreciate your repost, Rest assured I would have responded had I seen it originally. Now let me take it apart.
Many were predicting this prior to the tax rate extension because of the pent up demand for labor and the initial surge of hiring that would take place to meet that demand. This was not some type of "making the model fit the results", ex post facto "'psychic' cold reading". Had we seen no improvement in the economy, you could have easily come to me or any other proponent of the rate extension and said "See, your model didn't work." In fact you're the one who takes the stance that "what ever happens proves me right". Had we seen continued stagnation in the jobs market you surely would have said "See, your model didn't work." Instead we finally have sustained job creation and you're still saying "See, your model didn't work." The reality is that much of your argument supports supply-side theory.
You're logic completely ignores one thing. While in a normally operating economy employers may generally hire and fire on sector specific news, what happens when they all have the same news simultaneously? Let me go ahead and answer that for you...they will all hire and fire at the same time. We need only to go back to late 2008 and early 2009 to see this. The news of the credit crunch hit all industry sectors simultaneously and they are started laying people off simultaneously. In the utopia you seem to have your economic beliefs tied to, virtually no industry sectors would have interconnecting ties and would react completely autonomously because they would have no common news. Because of this there would be almost no chance of having a recession other than some random simultaneous alignment of sector specific bad news.
As noted, there was pent up demand across industries. This pent up demand was for labor. The spectre of higher tax rates acted as a dam. After all, people who create jobs are going to make sure their mortgage is going to be paid in the future before hiring new employees. Once that dam was breached and it was obvious that the rates would stay the same, it breached for everybody simultaneously, hence the simultaneous reaction. Since much of it was pent up demand for labor, once that demand was satiated and the initial hiring wave was through a lull was to be expected as that initial demand was been met. It's not rocket science. This was very easy to foresee.
I imagine you are speaking to consumer demand, so in a Keynesian model maybe. In other non-Keynesian models, consumer demand plays a role, but nearly as critical. In fact I would like to thank you for directing people to a time-- the longest period of sustained job growth ever in our history --that I can use to demonstrate that consumer demand is not the be all and end all of economic growth and job growth. I can say this because you're right, growth in consumer spending was muted during the 2000s. What wasn't muted was investment and savings rates which more than doubled in the period. The result as noted was the longest period of consecutive job growth in history even as we were near the natural employment rate making it harder and harder to increase employment.
The reason is simple. As I've stated before the rich don't stuff their money in mattresses, they invest it. Even if they stash it away in a bank account, that bank invests it. Their investments either fund or allow the funding of very large purchases (read spending). That funding builds skyscapers and strip malls that not only employ hundreds of people to build but also provides places to employ thousands of workers. It funds the purchase of large industrial equipment for factories, bulldozers for building roads in subdivisions and harvesters for the farm. Without easy access to capital funds (either through loans or investment capital) businesses don't start -- at least the ones that hire people -- and businesses don't expand. You can have a rise in consumer demand and it won't mean squat if capital funds are tight and businesses can't get the funding they need to take advantage of that increase in demand. In point, our steepest economic downturns have not been a result of lower demand, they've been the result of the unavailability of capital funds to businesses (stock market crash, Volker's Fed rate spikes, credit freeze). Businesses' access to expansion funds -- including their own via lower tax rates -- is much more critical than you give credit for (which is virtually no credit).
You seem to have ignored the word "notable". There was nothing notable about the levels of increased consumer spending in 2009 and 2010. In fact considering the depth of the recession, the "bounce" in consumer spending was particularly disappointing as was consumer sentiment.
Again, the only really notable increases in private sector employment (over 150,000) were in March and April 2010. After that the increases largely stagnated. In the months after it became obvious the Bush tax rates would continue, 5 of the following 7 months showed notable employment increases. That wasn't a coincidence.
That is dependent on when you started and ended your regression. Had you started it six months prior to October (October was when it became obvious the rates would eventually be extended) and ran the progression to six months after October, you certainly would see a strong correlation between the extension and hiring.
Many economists -- including noted Keynesians like Christina Romer (Obama's first Chairperson of the Council of Economic Advisers) -- have show in studies that one of the strongest influences on multiplier effect of tax cuts is employment elasticity. If employment elasticity is high (high unemployment) the multiplier effect is profound for tax cuts...much higher than government spending (about twice as high). I think having an unemployment rate hovering around 10% in September 2010 qualifies as highly elastic, meaning the multiplier effect would be strong.
Please feel free to read Politifact's analysis of it. I'm not sure why I'm directing you to it seeing as how you obviously ignored the link last time. I'll make it easy for you...here's the conclusion: "So, our tax experts are skeptical that the $70 billion AMT fix [something that happens every year anyway] should be included in the stimulus bill's tax relief. That would bring down the cost of the tax cuts to about $218 billion. That means about 28 percent of the bill could be described as tax cuts, a little less than the one-third cited by Stewart." I'll note also that this 28% that Politifact's experts stated is based on the original estimate of the cost of the "stimulus" which as we know is more than $100 billion less than what it has actually cost. That would leave the actual percentage hovering around 25%.
Again, only Keysian theory has such a strict "consumer demand above all else" view. Or rather I should say bastardization of Keynesian theory as most Keynesians only focus on one aspect of his work, ignoring almost all of the rest. A business person does not look solely at consumer demand. At least not one who will stay in business long. A good business person will look for profit potential. If investment and capital funds are cheap enough and available enough it may be profitable for him/her to expand (and expand their workforce) even when consumer demand is down and if it's profitable, they will do it (see decreased demand growth, increased savings rate growth and consecutive months of job growth in the 2000s). On the flip side if demand is up and investment and capital funds are expensive and hard to come by it may be not be profitable for him/her to expand and expand their workforce (see early 1980s). BTW, lower tax rates equals freely and highly available capital funds for businesses.
There you go with the assumption of stuffing the mattresses thing again. Business owners will do one of three things with extra money provided by lower tax rates, each of which grows the economy -- particularly during periods of high employment elasticity. They will A) invest it in the expansion of their own business, B) they will save or invest it making other businesses' access to capital funds much easier and inexpensive allowing them to expand or C) spend it creating consumer demand largely for high ticket items. Or maybe they do all three. What they don't do is stick it ion a mattress.
The line "In other non-Keynesian models, consumer demand plays a role, but nearly as critical," should instead be, "In other non-Keynesian models, consumer demand plays a role, but not nearly as critical."
What is Krings plan to remain competitive against the giants? The corporation I work for uses a self service web application (Cliqbook) from another corporation, Concur. No human interaction, all steps are automated. All at fraction of the cost of a conventional agency.
concur.com/en-us/products/enterprise-software/corporate-travel-booking
Long term, that is the key. Can a small business compete long term against their respective industry's 'Walmart'?
Hey Mike,
Appreciate your reply! I probably should have given you the benefit of the doubt on the last thread, although its not common to find a soberly written response. Anyway, I think you failed to actually "take [my post] apart," but I am glad to have the push-back, so here is my reply...
The distinction and comparison to “psychic cold reading” was not about when, but rather what. Nostradamus predicted many things that some argue turned out to be true. Don’t get me wrong, your theory is certainly more specific than his predictions, but merely tries to assign alternate meaning to something the Central Limit Theorem already explains. The fact is that both an auto-correlation and a linear regression (private sector job growth) show no significant unexplained relationship between the turning point in the tax debate and jobs. I have already explained this to you. To demonstrate, prior to the turning point (late October to early November), we had 8 months of private sector job growth and 6 of those months showed an increase in the number of job gains. In fact, taking into account seasonality and the existing trend, the job gains, for the first three months were lower than expected. The next two months returned to the existing trend but then has moderated since.
Even though the trend points in the opposite direction of what you predicted, I do not assume that it was because of the bill, which included extending the cuts and unemployment extensions as well. You should also understand that there are thousands of people making predictions and even when they pan out (which inevitably some will), their reasoning is not always correct. This is talked about sometimes in investing circles especially with regard to stock pickers. A good book (though slow), called Black Swan, actually highlights this confirmation bias as a sub-theme.
I don’t completely reject supply side, but a balanced view is important (While opposed to Keynesian economics, they are not mutually exclusive). The Obama Administration even utilized some supply side tactics.
You should reread my original quote you posted…“ [your] view that all employers higher all at once and then all stop at the same time (in waves). In the real world, employers act on news in different time frames, and assess/react to risk differently.” In other words hiring in waves and waiting is uncommon (and I didn’t say sector specific, but every company’s strategic analysis is different). “When companies hire, they don't do it all at once either, but instead have a continuous plan. Its almost like you are suggesting a guess and check system for employers."
My “utopia” says that employers don’t coordinate this short term wave-like hiring month to month. Not at all to say that employers can’t react strongly to a perfect s*** storm. Sure, the imminent crash in ‘08 created a snowball, but I think we can both agree that the tax extension was a pinprick in comparison. And in case you did not notice, the fall was generally continuous and had minimal wave-like occurrences. Also, reread your last sentence above and think about it for a minute or two.
Even if we assume that the data supported your theory (which, it should be clear by now that it doesn’t) that the “breach” would have caused an immediate hiring spree because of pent up demand, your theory does not sufficiently explain why the stream would nearly dry up in comparison to the original trend line that was established before the imagined demand started to build. Btw, a lot of people, myself being one of them, predicted that the growing employment trend would continue as well. Additionally, just like with technical stock evaluation, highs followed by lows followed by highs etc are inevitable with any channeling event. So yes, you are correct in saying that this is not rocket science.
First, its well understood that consumer demand is “not the be all and end all of hiring.” It is however, important to have rising consumer demand even in supply-side economics (although generally supply-side assumes there is always demand). Second, to think that anyone actually believes that the 2000’s included the longest period of sustained job growth is shocking. The private sector lost jobs for 27 of the of the 48 months (more than half) that made up Bush’s first term. The longest streak in the 2000’s was 48 months and we only need to go back to a decade earlier to beat that with 51 months. Further, from January 2001 to December 2010 (Original Tax cut period), we were down 3.6 million private sector jobs. Even if you want to cherry pick and include only up until December 2007, we added jobs at one of the lowest rates in history at about 47,000 per month. As you noted, consumer demand was slightly muted during that time. Still, I would not go so far as to say that consumer demand caused the stagnant decade, because it was not as substantial as one would think. Also, personal savings significantly dropped during the 2000’s. Still, during the 2000’s only period of growth it was at its lowest, so the data is not entirely conclusive.
I don’t know why I’m suggesting this to you, because you must have ignored it the first time, but you can check any of this data at BLS.gov and BEA.gov. Btw, the natural employment level argument does not pan out, considering the unemployment rate actually increased substantially, and we added jobs much faster in the 90’s, despite a lower unemployment rate.
I am not suggesting that investment is not important, but we need balance. Even supply siders know this. We know that businesses are hitting record profits, but this is not translating into record investment because they need to see economic benefits to invest. We have plenty of funds but no perceived benefits. Companies are keeping more cash (just look at a few balance sheets if you don’t believe me).
Agreed, and the opposite is true as well. Interest rates and opportunity costs are very low right now, but foreseeable benefits are only starting to emerge for most.
Not notable? With five quarters of decreases, any increase is notable. Further the jump was pretty substantial from (-1.9%) to +2.3%. A depth of the recession does not cause consumer spending to bounce any higher or faster. Same with consumer sentiment. However, I did pretty well as rapidly increasing investor sentiment translated to some great gains.
Sorry, you can’t just use an arbitrary limit to hide the rising employment gains prior to the tax deal. There was a “notable” and “significant” trend that showed higher private sector job increases each month. If nothing else, a simple bar chart disproves your statement.
Yes timing matters, but its clear you don’t understand how to use an existing trend as a baseline against an event. Using the timeline you suggested does not clearly distinguish between the before and the after and could not possibly support nor reject your statement. I ran the regression from the point that a trend appeared to exist to October. Since this is subjective (as it always is) I ran a few regressions all giving similar results, that is there was no “notable” upward diversion from the trend line. And thats looking just 6 months out which, which by surprise, is the only date range that keeps you from showing a negative trend.
First, according to the balanced budget multiplier, an equal increase in taxes and spending increases aggregate demand. And its still generally accepted that spending has a higher effect on demand than tax decreases. I would like to see where you read that high unemployment increases tax cuts effects to double spending. There was a controversial piece in the news a few years ago, but it was misinterpreted. And then there is this written by Romer. Read pages 6 and 12. Additionally, like I said before, tax cuts for the poor have a much higher effect than those to the rich, because they have a higher MPC. And there is also the difference between a payroll tax cut and income tax cuts.
So the Politifact skepticism over the AMT was a good point, however like you said that was based on an original estimate, and while you noted the increase in stimulus you did not note where the increase came from. With the AMT adjustment off of the latest CEA stimulus report, its closer to 33%.
Active Army, I will be addressing your post as I have time. I will address this point immediately though:
Are you talking about this report from the CEA as of March 18, 2011??? Because Table 2 of this CEA report shows that as of Q4 2010, individual tax cuts plus business tax incentives was $175.8B out of $608.5B total stimulus out the door. Perhaps not shockingly that comes to almost exactly 28%. Note that I actually document my claims. It would be nice if you did the same.
Mike, I welcome the response, and understand you may not have the time for a quick response.
I was actually talking about this report from the CEA as of July 01, 2011!!! Table 2 of this CEA report shows that as of Q1 2011, individual tax cuts plus business tax incentives was $200.7B (excludes AMT) out of $578.2B stimulus (666.3 less 88.1 AMT). Surprise surprise, 34.7%.
Hmmm...well you can't be talking about the jobs data, since I referenced bls.gov (if you would like me to link that or teach you how to navigate their page, please let me know). And it cant be consumer spending or savings since I referenced BEA.gov.---> "I don’t know why I’m suggesting this to you, because you must have ignored it the first time, but you can check any of this data at BLS.gov and BEA.gov." It cant be the stimulus since I was the one that referenced you to the CEA report in the first place. And since I referenced and linked the Christina Romer paper, Im not really sure what your all upset about.
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You know, I made a New Year's resolution to tone down the condescension on some of my responses, but I'm feeling challenged on that right now. One can only guess how you can so completely misrepresent reality and the facts. I had stated that private sector job creation had stagnated and in fact regressed in the months leading to October. Using regression (at your suggestion) we can show that is a statement of fact. I had suggested 6 months out, but even going to the month you suggested that things were turning positive (Feb 2010) we see mostly a strong negative trend through September. Here is the work for the number of months out from the end of September (with trend line): 7 month regression (negative), 6 month regression (negative), 5 month regression (negative), 4 month regression (positive), 3 month regression (positive), 2 month regression (negative), 1 month "regression" (negative). Doing the same 7 months of testing afterwards we see exactly the opposite of what you claimed happened (with trend line): 1 month "regression" (positive), 2 month regression (positive), 3 month regression (positive), 4 month regression (positive), 5 month regression (positive), 6 month regression (positive), 7 month regression (positive). You'll note that 5 of the 7 trend lines prior to October were negative while all 7 trend lines from October on were positive. I'll just say the change in trend direction is hard to miss and leave it at that.
This is not the first time this has happened. The reaction is pretty consistent. We'll get to that later in my response though.
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I'm not sure where you got this idea that I implied employers somehow got together and coordinated (or planned) waves of hiring. There was pent up demand for labor. Once the dam that was holding hiring back was taken away (positive news for a large percentage of job creators) those job creators -- in an uncoordinated and spontaneous way -- began to meet that pent up demand for labor (your "perfect storm") out of their own self-interest. As would be expected, once this pent up demand for labor was met, hiring leveled off...albeit with a million more active consumers with steady jobs. These newly active consumers naturally had their own pent up demand to meet creating an increase in consumer demand. Again this rise in consumer demand (wave) affects a large portion of job creators simultaneously causing a somewhat simultaneous demand for labor. If uninterrupted, this cycle would likely happen again and again -- although you would expect each wave to have a smaller and smaller effect until you meet an economic norm at which time there would be less good news to influence each job creator in a simultaneous fashion. Like I said, not rocket science.
And as noted and shown earlier, the trend lines in the months leading up to October were predominantly negative.
I don't know if I would say pin-prick, but you're largely correct. As for size comparisons, do you see the creation of 600,000 jobs per month like we had losses? I don't.
Agreed. The argument is largely about how to create a more stable and sustainable long-term growth in consumer demand.
This was reported by several reputable news sources including CBS News as well as the Washington Post and others. Getting data from the BLS online tables is not accurate. What you need to be accessing is the monthly BLS Employment Situation reports. First, on the tables themselves they note that "Data affected by changes in population controls." Secondly, if you're only looking at the "Employment Level" table for how many jobs were created, you're only looking at only part of the equation to derive that number. Other parts of the equation to derive the number of jobs created from those tables would include things like changes in the size of civilian labor force, etc.. Even if we were to accept your claim of 48 months that would still make it the second longest and we would not be going back one decade but rather 2 decades to find the longest. Care to know who would have the longest in that case? It would be your buddy Ronald Reagan.
Also, I'm not a huge Bush fan but apparently you think Bush was a one term president. Let me correct you on that, he wasn't. And it should come as no surprise that Bush suffered job losses early in his presidency as he was handed a recession by his predecessor and the financial markets were put into turmoil by 9/11. Blaming Bush for job losses early in his presidency is like blaming Obama for job losses early in his. Which brings me to this:
...which I think is funny because you seem to attribute to Bush the job losses suffered in the 2001 recession Clinton handed over to Bush while absolving Obama of the job losses suffered in the 2007 recession Bush handed over to Obama. Hmmmmm. Not exactly equitable is it?
Also the Bush tax rates we not immediate as of 2001. Until 2003, they were scheduled to be phased in over a period of 5 years through 2006 meaning you would not see immediate impact. In 2003 they were accelerated and you did see an impact.
In aggregate, this is not true. Savings rates dipped precipitously starting in 1999 through 2001 moving from roughly 5% to roughly 2.5%. Following that period the savings rate rebounded to the upper 3s for the early 2000s. It temporarily dropped dramatically in 2005, but rebounded quickly and by 2008 the savings rate was hovering around 6%...above what it was through almost all of the '90s.
As noted earlier, the problem is you're not checking all of the appropriate data. You're pointing me to incomplete data. In fact the appropriate data is not easily come by. For instance, to check accurate monthly job creation data you have to look at the monthly Employment Situation reports put out by the BLS. To get to these archived reports (as they are not readily available on their site), you have to figure out and manipulate their file naming convention to pull them up one-by-one online.
So let's be clear on the history. Clinton came in during a period of high -- but already recovering -- unemployment. As the economy recovered from the early 1990s recession his unemployment rate dipped from 7.3% in January 1993 to 5.5% in December 1994. It then stagnated and hovered around 5.5% for 2 years. Not surprisingly it was when Congress began discussing and enacted a large tax cut -- one that primarily helped the wealthy, I may add -- that unemployment nosedived to levels not seen since women began to enter the workforce an masse. Again, just so we're clear historically.
I whole-heartedly agree. But please note in my original post that I say there is a time to raise tax rates and a time not to raise tax rates and with unemployment over 6% it is not time to raise them.
Please do not confuse large corporations with being the engine for job growth, which is small to medium sized businesses (create over 70% of jobs). Large corporations are flush with cash and they A) did not receive benefit from the rate extension and B) don't create the majority of jobs anyway.
While I disagree with their conclusions and think they -- purposefully? -- ignored what was right in front of their faces Iqbal and Vitner evaluated all of the recessions from WW II on. When evaluating the 10 recessions/recoveries between WWII and the current recession/recovery and listing them in order of depth correlating with the list of strength of recovery this is what you'll get:
What you should notice is how highly ordered that list is with the exception of the Nov. '73 recovery. Yes, big drops almost always equal big bounces and big bounces come with big rebounds in spending...well, except this time.
It's not an arbitrary limit. The 150,000 number is generally accepted by economists as the number of jobs a month the economy needs to create just to keep up with normal population growth. Numbers below that threshold are generally only notable in that they increase the unemployment rate as the economy fails to keep pace with incoming workers. It is a critical number.
You can see my work. There is a clear positive change in direction in the trend lines from the months prior to October and the trend lines from October and those after.
Generally accepted by Keynesians, you mean...in spite of their own data sets (see below).
For one, from Christina Romer herself in her work concerning the effects of tax increases to economic output.
"In terms of consequences, there are six main findings. First, tax changes have very large effects
on output. Our baseline specification suggests that an exogenous tax increase of one percent of GDP
lowers real GDP by roughly three percent. Our many robustness checks for the most part point to a
slightly smaller decline, but one that is still well over two percent." - Romer and Romer
Interesting that you take this stance considering your own touting of Clinton's unemployment record which came after tax cuts that largely benefited the rich and also the extremely limited economic boost that the 2009 "stimulus" tax cuts brought which hardly benefited the rich at all. And there you go with consumer spending being the be-all and end-all again completely discounting the effect of easy capital generated by higher savings and investments rates. There should be an acronym MPI -- "marginal propensity to invest" -- which is every bit as important as the propensity of somebody to upgrade from ground round to ground chuck.
Hey, I'm not against a temporary payroll tax cut. (BTW...I don't think any tax rates should be permanent no matter at what rate level). However, it should be noted that conservatives tried to advance this proposal in 2009 only to be blocked by the Dems. They wouldn't even let it to the chambers' floors for debate. Of course Obama picked it up and claimed it for "his" in 2010. Again though, you're largely talking about people upgrading from ground round to ground chuck or super-sizing their value meals in the big scheme of things.
Enjoy it while you can as the tax cuts are through, but the spending continues. The estimate is that the total cost will be $850B - $90B AMT = $760B...$201B / $760B = 26.4%. Hell you could add another 6% to the tax cuts and still be under 28%.
You know, I’m proud of you for trying to hold back your condescension and, to reciprocate I will also tone down the patronizing comments (Yes, Im being ironic). In all seriousness though, I will take it as a sign of good-will until proven otherwise.
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So, Im glad you decided to take my advice and break up the regression into separate trend lines in order to compare the existing trend to the post October trend. Unfortunately, the analysis is still flawed. I am sure the flaws were due to hastiness rather than ability, so you should understand that this is not meant to belittle you. There really is no “nice” way to say it, but what you described above is nothing close to a valid regression analysis.
As I originally suggested, one of the first steps is to identify a potential trend (Before that you want to, of course gather data and plot it on bar chart and scatterplot). By doing this, you increase the fit and applicability of the trend line.
As you will see, there are two obvious strongly positive, linear trends that lead us through October 2010 (and further): a short term trend begins in May 2010 and a long term trend begins somewhere between April and July 2009 (You might also notice, what looks to be a logarithmic or parabolic trend starting in April 2010, but one that is less indicative of future results as Ill explain). Anyway, you’ll notice that the long-term trend includes two outlying months: March and April 2010, which reduce the fit of the trend-line; and, if emphasized by selecting them at or near the start of the regression they can be used to misrepresent the short-term trend. One measure that should have alerted you when conducting the regression is the p-values for the (F-Statistic and T-Statistic) which shows .3933 (MAR through SEP 2010), .6281 (MAR through OCT 2010), .5314 (APR through SEP 2010), and .8014 (APR through OCT 2010). You could have also seen that the correlation coefficients (R) are .3853, .204, .3237, and .1178, respectively. These values corroborate the observable lack of fit that you should have noticed when comparing the trend lines to the corresponding bar charts or scatter plots in the first place.
So, now that we have established the appropriate trends to measure we will analyze the associated data. Well, our p-values have significantly improved to .01 (MAY to SEP 2010) and .0008 (MAY to OCT 2010) and our r coefficients show the values .9588 and .9762 respectively. Already, a keen observer might notice, that the month of October matched the existing trend-line so well, that the p-value and r-coefficient actually improved from .01 to .0008 and .9588 to .9762. Still, you might ask what about the following months? Well first, as an additional measure we might want to note the slope and equation of the trend-line and extrapolate: With the equation (Predicted Gains)=34.9+(16.7*Month) [Given MAY 2010 = 1, JUN 2010 = 2…and SEP 2010 = 5); if the trend continues we expect to see approximately 135,100 private sector job gains in OCT 2010, 151,800 in NOV 2010, 168,500 in DEC in 2010, 185,200 in JAN 2011, 201,900 in FEB 2011, 218,600 in MAR 2011, 235,300 in APR 2011, 252,000 in MAY 2011, and so on. Obviously, the trend will eventually level off, or may change due to the various underlying fundamentals (variables), the business cycle, etc. Still, since our regression was so strong and job gains were not close to approaching the common ceiling (at least 350,000) we can work under the assumption that at least in the short term, a continuation of the trend can be expected. So moving on, you will also notice the Margin of Error on these numbers with a 95% confidence level approximates ±30,000. Next, you should notice that the first month to diverge from the trend-line significantly (in consideration of the Margin of Error, due to normal variations), is JAN 2011 showing a large negative divergence. The divergence was a 91,000 jobs move in the negative direction and was followed by the only significantly positive divergence of 59,000. You will also see that every month from MAY 2011 on, is significantly lower than if the trend continued. This negative downgrade could be the result of numerous variables, one of which is the likely occurrence of approaching that ceiling (which can be temporarily lower then expected as a result of any number of other variables).
So, does this mean that the tax increases have a negative effect? No, all it means is that the data fails to support your original hypothesis. It does not falsify it, but it does suggest a lower probability that, in this instance, the taxes caused the job growth rather than the measures that were already in effect and driving the change (some of which were tax drivers and some spending).
One might also ask, what if I had predicted that the tax cuts would have caused this negative move? Still, the answer is “no”, there are many variables that can have affected the moves in our economy, and just because I found a correlation does not mean that taxes had anything to do with the negative divergence. An example of this, which comes from the book I mentioned earlier (Black Swan), is an investor who beat the market for an unheard of 30 years in a row (when asked, he explained that he based his investment on who won the super bowl each year). I found a similar interesting story on snopes. Or you can try this under the section “Investment Genius.”
Another issue is reducing subjectivity such as deciding between September, October, November, or December for the predicted change or specifying one, two, three or four months of elevated job growth followed by one, two, three, or four months of stagnancy, followed by one, two, three, or four months of elevated growth, etc. For instance, check out some of these articles from September through December 2010.
In addition, with so much data out there, the ability to reverse engineer a theory can undermine the sanctity of the analysis (you seem to understand the dangers of reverse engineering, but the disclaimer is still important).
Now getting back to the analysis, there are two other ways we can compare the existing trend to the post-trend. First, we can test for a trend from OCT 2010 to present or we can try to identify significant individual trends. Since the p-value is .9627 for the post-October trend, it is clear the data is too scattered to be significant. What you might notice is that the average gains have been 155,000 jobs since OCT 2010, which is lower than the expected job growth the original trend suggested we would have surpassed in DEC 2010.
Also, there are two overlapping post OCT 2010 short-term trends that seem to exist that we can check on. The first, from OCT 2010 to APR 2011 shows no significant difference from the previous trend (The p-value for this trend is .0777, which in most applications is not a very significant trend as well). The second trend, from FEB 2011 to JUN 2011, shows a change that moves strongly in the negative direction. This is not just in terms of our baseline, but even to the point that the previously rising gains started to fall. The p-value of .0332 is considered significant. I also included a parabolic regression that shows a negative, though insignificant, trend as well.
Now, the last step we can take is to observe the trend line adjustments that happen each month after the original trend-line ended. Not surprisingly, the slope of each one of these trend-lines is lower than the original slope. In addition, a significant negative parabolic trend was established between MAY 2010 and JUN 2011.
To sum, a proper regression analysis shows a negative change to the baseline and therefore does not support you hypothesis. As shown, the date ranges that you used to support your argument are illegitimate (seemingly cherry picked) and your method of analysis (counting the number of negative/positive regressions from each side) lacks credibility and fundamentals.
For fun you can also see a similar supporting positive trend-line from MAY 2009 to OCT 2010, although, it would be a reach to assume that there is just a single reliable relationship between then and now.
I know I’ve touched on a lot more than what I quoted above, but this was the only way to try to keep my post brief (not so) while touching on your previous statements.
Maybe synchronized would have been a more apt word to use. Let me repost the quote and highlight a few words you must have overlooked: "Even if we assume that the data supported your theory (which, it should be clear by now that it doesn’t) that the “breach” would have caused an immediate hiring spree because of pent up demand, your theory does not sufficiently explain why the stream would nearly dry up in comparison to the original trend line that was established before the imagined demand started to build.” In addition, let me explain away this cycle non-sense. You seem to be trying to explain the concepts related to the velocity of circulation, as well as the same concepts behind the multiplier). Throughout the tax debate, the probability of the tax cut extensions increased and decreased sporadically. For arguments sake, I will allow your assumption that the probability generally grew in the eyes of employers. Since employers respond to risk and all of the other societal variables (of similar magnitude) differently, especially small business, they would have all began hiring at different times, if we assume the taxes actually did cause employers to hire more (maybe September, October, November, December, or January). Now if we were to pretend that instead they were generally synchronized, we could ask how they would all hire. If you answered that most employers have a continuous plan and span hiring out based on your financials and continued opportunity, you would be correct. But lets now pretend that the average employer decided to hire all at once and within the same few months (Lets say, October, November, and December). You can now ask, what will their new employees do with the money? If you answered spend it at different rates then you would be correct (as in prolonged rates of additional spending). Now if we pretend that they all spend it at once (All in December), and allow the cycle to continue like this, we might be able to accept your hypothesis. Then again, we would also have to expect elevated rates of hiring as well because of the tax benefits on-going nature. As we have done earlier, we can look at the overall effects the tax cuts had, over a prolonged period of time. But, we will get to that in due time.
600,000 jobs per month?!?! Must not be a net measurement, but I cant wait to hear what time period you think we had gains of 600,000 jobs per month.
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First, your CBS article says that Bush claimed he created 52 months of increases. Now, at risk of being mislabeled (which has already happened a few times) as a “Bush hater,” I am going to say that I do not see him as a reliable source (just as I don’t trust everything that comes out of Obama’s mouth).
Second, the BLS tables come from one of two surveys, the household data and the establishment surveys. The data in the establishment survey table is straight from the revisions on the situation reports. Unlike the household data, this data is not affected by population controls. Plus if you were going to question the accuracy of using these tables, you probably should have also questioned the method that you suggested to validate strong employment in the first place. The number of consecutive months of growth is not an accurate measure of performance, which is why I also included the tax period averages.
Additionally, all of the information from the situation reports can be found under the Economic Releases tab (Although I offered, I really did not expect to have to explain how to navigate this page). Anyway you seem to be confusing employment rate with employment level or perhaps confusing the two types of surveys.
Using this data, the longest consecutive private sector employment gains (which as I established, is a weak summation of each decade’s employment data) were from February 1996 to April 2000 (51 months). Under Bush, we had 48 months and Reagan was 37. And since 51 is bigger than 48 is bigger than 37, your ordering is off. And for the record, just because I don’t idolize Reagan does not mean I was completely against him. Again, I am not blaming anyone, just stating documented jobless gains under each relatable period. In fact, judging by your clear misrepresentation of the time periods, it would seem you are the one who was hoping to pass the blame.
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Lets not play the blame game. We both know that my statement has nothing to do with blaming Bush. Your overly defensive knee-jerk ignores the fact that we were assessing the observable effects tax decreases had on the economy. However, I am glad to finally hear a conservative not blame Obama for something. As to your protest over the economy, recessions are to be expected in any span of 10 years (with one exception). And the associated decline in activity is in line with most previous decades.
To an extent you make a decent point. A smaller portion of the cut was phased in, in 2001 (Although, the 2001 and 2002 cost was relatively large historically). The phasing in continued in 2002, on top of an unrelated business tax cut (which I am not protesting). In 2003, the remaining 2/3 of the tax cut (not measured by overall effect) was activated, which as you stated is the same year we saw growth. Although, a regression analysis for the period gives inconclusive results, a moving average offers some support for a correlation between employment and the 2003 taxes, albeit only in the short term. With that said, even if we just look at the growth period from 2003 through 2007, employment gains were low for an expansion period at 127,000 per month (and that includes the gains from the housing bubble).
In aggregate, this is true (Bea.gov). The 1990’s average savings rate for instance was 5.5%. The 2000’s average was 3.85%. However, on a quarterly basis, your timing is correct, and the rate stayed low for most of the decade (as reflected in the average). In 2005, after reaching 3.6%, the savings dropped to 1.5%; and in subsequent years 2.6% and 2.4%.
To clarify further, the average unemployment rate during the 90’s was 4.8%. We began with 5.4% and ended with 4.0%. Oddly enough, even with the tax hikes – largely falling on higher incomes - in 1993 we still managed to gain 230,000 to 260,000 jobs a month depending on how far you would like to go out. In 1997, the tax cut in capital gains and tax credits for children and education (for lower incomes) were the major highlights of a bill that initially affected 0.11% of GDP (compared to the 0.83% affect you brushed aside in 2001). Unemployment dropped from 5.4% to 4.9% before the cuts passed. The trend remained unchanged after the tax cuts. Further, the more telling trend, "employment gains/losses" also remained stable throughout the 90’s. The "stagnation" in 1995 boasted average gains of 187,000 jobs/mo. The assumption that the tax cuts caused the gains to continue increasing (doing what they were already doing) is just as wrong as it was when you assumed it for 2010. Just so we are clear.
I can say the same thing about cutting spending
Your statement does not contradict my point. My point is that without consumer demand, investment opportunity is limited, as can be seen in company balance sheets.
What’s funny is instead of looking at changes in consumer spending, during multiple periods, you decided to look at an aggregate measure of strength. When you look at changes consumer spending, you’ll notice big bounces don’t have much to do with the depth of a recession.
In response to your attempt to diminish the success of our recovery, it seems you have not considered the savings rates before the recession or the fact that we never hit true bottom. It would also seem that you ignored the whole regression piece showing a strong positive move in employment trends.
Im not debating whether it is "critical," depending what the analysis is. Also, the range of estimates falls between 90,000 and 160,000 (and actual working age population growth falls toward the low end), but that’s besides the point.
Ignoring all months that do not change the unemployment rate, shows a lack of understanding trend analysis. A move from -800,000 one month to -600,000 another is certainly worth noting. A consistent rise in employment gains by 16,000 each month for six months is certainly notable. It’s not the number of gains in a given month, but rather the change in gains that we are identifying (think of employment gain as a derivative of the unemployment rate). This way we can gauge the trend. By saying that we can not see trends until we hit your arbitrary limit is merely an attempt to hide from the data.
Your link does not work, and your quote says nothing about the comparison between tax incentives and increased spending.
Interesting you take this stance considering you failed to properly analyze the Clinton years, as I have shown above. I can see why you felt the need to overstate my MPC comment, as well. Once again, the mere mention of consumption causes an involuntary response that ignores our need for balance. Currently, our capacity utilization is just 77.8% of capacity (from a low of 67.3%). In other words, we have left over investment, but not enough demand to make use of it. If we were closer to 82% I would seek to control our M1 supply.
Since I have already made the point about the availability of investment capital in comparison to consumption, I should not have to explain that increasing demand is important. In case you did not know, accessibility to investment capital has improved with newer debt/equity communities and interest rates on borrowing is so low, its almost free. And characterizing the additional consumption in upgrades at the ground round is funny. Sure, some additional consumption will go into the food service industry, some into commodities, some into manufacturing, etc. Additional employees will buy additional goods, and so on (the investment cycle [almost like you explained earlier] would run concurrently as well).
Btw, the measure of “MPI” you want is actually expressed as what is called MPS (aka 1-MPC). I have even heard some people use MPI to express a similar measure, but MPS is the expression I think you are looking for. That should be good news, no?
If you are implying that both the Democrats and Republicans have switched roles, you would be correct. Once the Democrats embraced the idea the Republicans decided to try to use it as a bargaining chip, rather than just accepting that this is what they wanted in the first place. I should also add that Republicans rallied against pork in 2009 as well, but that seems silly now.
Active Army, First let me apologize for not being able to respond until now. I had two of my larger clients with projects on hold become suddenly motivated to have the projects completed. Business come first, I'm sure you understand. Actually I tried to respond a couple weeks ago when I had a few spare hours only after a couple hours of research, typing and putting the response together, I accidental clicked on one of your links which of course erased everything seeing as how you don't have your links open in a separate window. Note: it would be nice if you did that, especially on your longer responses, so the people you are addressing can more easily flip back and forth to your research and sources and you don't have accidental button clicks that erase hours of work.
I was disappointed that I wasn't able to put out the effort to respond to you, thinking that you had spent a good bit of time putting out such a thoughtful response to me. That is, I felt bad until I actually looked at your response and underlying data. Once I did that, it was plain to see just how wildly inaccurate your data was. Of course the inaccuracies exclusively benefited your side of the argument. I'm not talking a little inaccurate or on insignificant data points either. It seems the more significant the data point, the more wildly inaccurate it was. For instance May 2010 may be the most significant data point in your research. The problem is that it is off by 75%! June 2010? 40%!. October 2010? 35%! I could go on, but then I would just be beating a dead horse, now wouldn't I.
Your response had no validity because of your use of this grossly invalid data. I'm sure your can use the BLS tables to get the real numbers, but for convenience sake here are the BLS raw numbers, here is the month to month job gains, and here is the BLS confirmation of my data ( Total private All Employees (in thousands), Seasonally Adjusted Over-the-month change as revised (BM2011)).
I'll also note that -- while not as important as your obvious data issue -- I have to question your seemingly random use of May 2009 as a starting point. It's not like there was any significant event surrounding that month. I can see using March 2009 since that's when the initial tax money from the "stimulus" started showing up in peoples' checks. I can see using April 2009 since that was the first full month after the stimulus funds started showing up. May however does not seem to have any significance other than it makes your numbers more tidy.
Having said noted this and in an effort to move on, I think maybe the best thing for me to do is to address your slide presentation slide by slide. You'll be happy to know that I find nothing wrong with slide 1 of 9. That's kind of where it ends though.
Starting on slide two there are problems. Again, other than your wildly inaccurate data, you seem to lament "outliers" which skew the line upward, particularly noting March 2009 and April 2009. This shows either a lack of understanding about the nature of the data or an ignorance of it (not to mean stupidity, but rather purposefully ignoring it). The nature of this data is not the same as...say...a series of random coin flips or acts of God. We spent nearly a trillion dollars to make sure the "coin" came up heads. That it came up "heads" a lot is not a coincidence. That people were hired in the last week of April instead of the first week of May is. This bears out in the revisions that the BLS has done, lowering the job growth in April 2009 from their original estimates and raising the job growth in May 2009 from their original estimates. Either way those people were going to be hired in that immediate time-frame meaning your "outliers" aren't really outliers. They also -- virtually -- do not skew your trendline at all if those two months are included. Go ahead, flip the April and May job numbers. Your trendline is still almost exactly the same. Another way you could account for the immediate timing coincidences is by doing what the BLS does with the initial unemployment filings numbers. They create a moving 4-week average.
Another problem with this slide is that you completely ignore what it right in front of your face. Look at your trend line. Look at the data points leading up to and including April 2010. Then look at the data points starting in May 2010 moving to September 2010. What you should notice is that you have one set of data points on one side of the trendline growing more and more divergent immediately followed by another set of data points on the other side of the trendline also growing more and more divergent. This is not indicative of one trend, but rather two. March and April 2010 are not outliers, they are the last two data points of a strong trend. The only way they become outliers is by applying data points of a second separate trend. You'll note that your random May 2009 baseline date to April 2010 shows a very strong trend with little divergence and if we take it back to an non-random, event based baseline date of March 2009 to April 2010, we see an extremely strong trendline with the line virtually bisecting the March and April 2010 data points. We can also look at the separate trend past that. Even if we don't use April 2010 as we should for a baseline and instead use May 2010 as the baseline, it is easy to see a flattened trajectory and that the slope is much lower than the previous 2009 - early 2010 trend. Using the March and April 2010 data (as we normally should as a baseline) actually shows a negative slope, but you already knew that.
In the period after the flattened trajectory, we see a trendline who's slope -- while not as steep as the 2009 - early 2010 -- increases again using September 2010 as a proper baseline through April 2011. In fact if you want to argue that October 2010 is a random date not tied to events and the real date should be January (since legislation passed in late December) your May 2010 to December 2010 trendline is just as flat as the May to September and the December 2010 to April 2011 trendline slopes upward in a renewed surge of hiring.
Well, I said I was going to go slide by slide, but ultimately you need to redo each and every one of them with valid data. I will be very interested to see these same slides only using accurate data for a change (especially slide 4 of 9).
I did one more for fun, since you seem to discount the "wave effect" of the hiring. This graph shows hiring from Sep. 2010 through Dec. 2011 using a moving average. You see a surge of hiring followed by a pull back followed by another surge of hiring as the newly employed from the initial surge improve economic conditions by spending on new goods after re-establishing a financial foundation. As for having to explain pent up demand to you, I find that rather...I would say sad, but let's just say "unexpected". If you have 100,000 job creators who want to hire but share the same risk and are putting off hiring because of that risk -- in this case a raised tax rate -- then that risk goes into all of their financial planning and view of continued personal opportunity. When that risk is taken away, it simultaneously changes all of their financials and all of their views of continued personal opportunity simultaneously. This means that while they may have different internal rates of hire, they will all put those hiring plans in motion nearly simultaneously. For that group it doesn't change for one person but not the next. You have to purposefully be blinding yourself not to see that.
The same goes for pent up demand for consumers. If you have 500,000 people who are out of work, most of them are putting off purchases until they see sunnier skies. Over the course of the average of 9 months of unemployment and very limited income, people put purchases off. Some may have refrigerators that are breaking down that they put off replacing. Some will have cars that are breaking down that they put off replacing. Some will have home repairs that they need to do but they put off doing. Some will have worn clothes that they put off replacing. Some will simply have 3 day mini-vacations that they put off taking. Now, suddenly there is a surge of hiring and these 500,000 people get hired. What do you think will happen? Do you think the people will continue putting of replacing that refrigerator? Or that some will wait in some random amount of time before getting chilled food? No. Those people need that refrigerator replaced as soon as they can. Those people need their car replaced as soon as they can. Those people need to repair their roof as soon as they can. Those people need clothes that are free of holes as soon as they can get them. So what pray tell do you think that creates? The correct answer is a surge of pent up purchasing, not some flat water Lake Placid. This is Economics 101. Like I said, I find that I have to explain this to you unexpected.
So, what it boils down to is A) your data is extremely inaccurate, B) the more the BLS refines their data, the more it supports my position, and C) you need an economics teacher to refresh your memory about pent up demand in all forms.
I'm not going to address your whole posting in one sitting but I do want to address one more thing at this sitting. You've referenced or alluded to the concepts advanced in Black Swan more than once. While I haven't read the book, judging by your statements, this is what I think: It is an easy go-to rebuttal for any position that anybody is against. Disregarding the falsehood of the man who beat the market for 30 straight years by picking the Super Bowl winner (this has never held true for 30 consecutive years), people make projections and decisions based on expectations all the time...multiple billions of times a day globally. Picking out one or two of a thousand correct projections and highlighting them as random completely ignores the 998 that were made based on solid thinking and past experience. So a man says to a doctor "My wife ain't havin' no baby." The doctor says "Yes, she is." The wife eventually has a healthy baby. The man says to the doctor "Lucky guess. Coulda been a duck." According to Black Swan the man was right. Just because for the past million times the experience has held that an ultrasound has correctly projected an image of a baby on a screen doesn't mean that it will hold for the 100,000,001 time. Black Swan apparently allows the cut-off between luck and a well thought projection to be made by the reader (making it an easy go-to rebuttal for positions you don't like).
As for Investment Genius, I find that interesting but maybe not for the reasons you think. First there is the apparent randomness of the investment game. It seems there was no actual thought to be made that could influence your investment decisions since the market didn't move on news but rather it moved randomly or maybe rather made it's own news. If one played the role of market mover in this type of game, he/she would likely do well as others followed behind with their investments. Me? I watch the news in anticipation of expected animal spirits and do quite well because I anticipate well and I get there before others. Using the randomly moving stock exchange that this test used -- which is not realistic -- I most probably would not do as well (if I didn't take a market mover role). Another thing I found interesting in their conclusions is that only roughly 30% did well and 70% did not do well. If it was strictly by chance one would expect a virtual 50/50 split. The article then completely writes off whatever the "+" investors did as "luck" (without interviewing them or trying to find out their strategy) and completely ignores what the "-" investors did (which was probably make moves behind the movement curves). My guess is there are 1/3 of the people who may not be prepared to compete on that stage and therefor lose, 1/3 who think they are as smart or smarter than the really smart guys and therefor lose, and 1/3 who are really smart and take advantage of it. As for Dow pros only beating the DJIA 51% of the time, I don't find this particularly earthshaking considering a vast, vast majority of trades on the DJIA are made by other pros. You should also note that the Investment Guru piece while citing investorhome.com somehow missed including this: "The pro’s picks look more impressive when the actual returns of their stocks are compared with the dartboard and DJIA returns. The pros average gain was 10.8% versus 4.5% for the darts and 6.8% for the DJIA."
BTW...a counter to Black Swan might be the field of Game Theory (or probability theory) which Black Swan apparently doesn't put much stock in
If all hiring stopped today the unemployment rate will still drop until everyone is no longer counted.
Fortunately, we've added private sector jobs for 22 consecutive months. 3 Million jobs since we hit rock bottom.
Darn it! That stimulus worked after all!
Too bad GOP.
Obama had stopped the economy from going down completely and was slowly turning the economy around and would do it faster, if the Republicans didn't try to stop him at every turn. They only want to unseat Obama, not create JOBS. The stimulus was working, SLOWLY but surely. It's just the Republicans took advantage of the slow working stimulus and did a razzle dazzle on impatient Americans and were able to squeeze out more tax breaks and tax loopholes for the super rich & corporations, AGAIN! (STILL NO JOBS) but they got MORE greedy and went after the seniors, the middle class and the poor. Now the tables are turning because even the Republicans that are seniors, and middle class, see that if they are not super rich, that their interests come LAST, IF AT ALL.
Where are all these mysterious jobs that the White House propaganda machine keeps talking about? Its all smoke and mirrors. In reality, less than a million jobs have been created. And all for the low low price of a trillion taxdollars. What a joke.
I wish someone would determine the REAL unemployment rate. These adjusted figures do not reflect what I see in my neighborhood or among my co-workers (I am lucky to have a job). According to that I would say it's closer to 20% than 8.6% but of course some have been off unemployment for a year and others have pretty much given up. They aren't counted.
If the month of Dec gained 325k jobs(mostly seasonal christmas jobs i assume) and the last weeks unemployment applications was 372k where is the upbeat outlook in that?
Maybe I'm looking at this data with common sense but it seems to me that the governments way of keeping "score" here is the same way they do their "bookkeeping".
No Joebob, you are misinterpreting the data. The jobs gain is a "net value" and considering the average December gain is 100,000, 70% of it has nothing to do with seasonal jobs. So much for common sense.
Blackbox,
It is true that only some of the jobs that were promised actually materialized. It is also true that a good portion of the stimulus money was not governed and pissed away on stuff that didn't matter.
However, it can be strongly argued that had there not been a stimulus, we would have had a depression and global meltdown and people would have said, "Why didn't the president do something? Why didn't he pass some kind of stimulus bill or something?"
It really is a case of damned if he did and damned if he didn't. Something HAD to be done and no action would have been the worst action of all.
Again..the REAL unemployment numbers are double this 8.6% malarkey.
Again, everyone understands the point and what these numbers actually mean, but we have historically used the current method and to switch during already high unemployment would create misplaced fear and outlook. Apples to apples.
If its headed in the right direction that's a good thing..........
Just keep spinning it the GOP way!
That is until the dollar bubble bursts and the government no longer has the ability to print its way out of the recession.
Hey Blackbox, what does the private sector creating jobs and your bogus claim of the government printing money have to deal with each other? That's right absolutely nothing. When are you whiners going to stop complaining and painting the doom and gloom game.
Hey "ItsAboutTime-3704531", are you really a liberal telling a conservative to stop painting the doom and gloom game? LOL that's some funny sh!t !!!!!!
@Bevo
Why do you seem to hate America so? It's as if there can never be any good news about anything...
I love America!
Joebob made me laugh! Even he knows the conservative staple is doom and gloom. Gold Standard anyone?
joebob, do not waste your time explaining to others why printing money does have to do with job creation, they will never understand the concept, not matter how well you explain it. These are the same folks that had no issues with our government advocating everyone is entitled to a home and turned a blinded eye to sup-prime loans (until the bubble burst).
We will come to a point that the dollar is worthless and Americans we will pay higher interest rates. With higher interest rates, business will have less money to use for wages/benefits, but most Americans will not understand or agree to that.
In a self absorbed culture, many of the comments posted are only expected and should not worry you. Focus on truth, realize that situational ethics or personal truth over absolute truth will never work- all it does is give us the right to pursue our pleasures.
Decay can bring many back to reality and re-birth. Although I pray it does not come to decay, all actions demand a reaction.
have a good week.
Atlas,
I'm not a doom and gloom person - I think we can find ways over adversity, but I agree that all of this money printing is going to come back to bite us in the form of higher interest rates. Hopefully it won't be as bad as the 80's, but I wouldn't be surprised if it is. For people like my wife and I - that like to save - the high interest rates won't be that big of a deal (it may even be beneficial if we can get safe returns at more than the inflation rate), but to the average person, it's going to be rough.
Ron, your are correct- a working congress that can cut spending or raise revenue or both can resolve our debt crisis. Our government can roll out as many new programs they want as long as they are always assuring we have the funds to support them. Many programs I would be glad to pay more taxes if I knew our govt could manage the program cost effective.
you are right again that we will see higher interest rates and the saver should benefit but inflation may may eroded those gains. With high inflation, people will want to have little fix rate loans, low debt, emergency funds to cover inflation increases and keep on saving (if possible).
have a good week
From Joebob
From Atlas
Some logic!
Btw...limiting regulation on sub-prime loans was not a democrat initiative. And if you think it was just Fannie and Freddie loans regulated by the Community Reinvestment Act, you need to read more...And you'll be surprised to know that just because we don't agree with you, does not make us stupid. In fact, lets here your logic...this will be fun.
Here are just some quick fundamental facts you overlooked in your previous post which, considering your obvious genius, is shocking.
The Federal Reserve, carefully controls the interest rates and will not allow it to raise faster than what is responsible.
Less money circulating leads to low rates of inflation and possibly deflation. As inflation rises we are tempted to invest to benefits from it. That is jobs, research, tech, etc. And no matter what, if you lock your money in "savings accounts" you are going to lose against inflation. Again, the Federal Reserve can help to moderate inflation.
And the problem with assuming your beliefs true, and everyone else's untrue is that its close-minded. Instead, focus on inquiry rather than on just advocating your own beliefs and reinforcing them so that you can no longer see objectively. How do you know you are right and everyone else is wrong?
If we had national health insurance for all, you'd see a lot more small business pop up. Now, people stay in dead-end jobs so they don't leave their benefits. Try paying $1500-2500/mo for health insurance; especially if you have a pre-existing condition!
Why can't we model after Germany? 4x as many exports, makes the best products in the world arguably, low unemployment, lots of vacation, unions, and higher quality of life.
Because the GOP says that if everyone has insurance that is BAD and "socialist".
Indeed, Germany also has private healthcare, as I recall. But it is heavily regulated and universal access is achieved by simply making insurers and medical providers play fair.
None of our major corporations or industries would be in the mess they are in if they stopped to concern themselves for the people in their communities.
We could model our system off of practically anyone, and it would be an improvement.
Because we're fat lazy Americans.
Speak for yourself, Tex. Lots of us skinny ambitious Americans support single payer health care for this country. Even some with a little more weight on our bones.
Why not like Germany? Because you've never been there to work and are talking out of your @ss. That's why.
Go on over there and try to find a job...then let us know how its going...and then stay there.
I believe the topic was replicating Germany, not moving there, SloppyJoe.
But you liberals want our country to be like anything but America. So why don't you LEAVE instead of ruining it for the those of us with common sense?
LMAO blackbox, after reading several of your comments on this article alone, the only one with no common sense is you!
Jack TX
"Because we're fat lazy Americans."
Actually, I've worked with Germans in Germany and here in the states. Believe me, we're not the lazy ones. It would blow your mind if you knew how much time they get off a year.
Yeah, then why don't they have the immigration problem we do if it is so great there? oh yeah because most people there that are what we consider middle class pay taxes at 45%. Try that here and see how the people accept that!!!!!!!
Satisfaction rates poll higher in those countries...Don't get me wrong this is a great country, but the TP and new age Republicans are trying to take us back in time. If you hate federal gov't so much LEAVE and form a Feifdom, like in the good old dark ages. Or secede or something. And in the mean time, stop rooting against our economy.
Taxes in percent of your income are a relative measure. Now I am going to pull some numbers out of my head.. but consider this:
If I earn $50,000 in the US and pay, say, 20% tax, I am left with $40,000.
In Germany, paying 40% will leave $30,000.
Now.. In the US I have to get health insurance... Let's say $1,000 a month for an average healthy 40yr old.
That leaves $28,000 net.
In Germany health insurance is free, mandated by the government.
In the US I will have, at some point, to pay for my prescriptions... Say $60 a month average... (my example has no pre-existing condition). That leaves $27,280 (prescription in Germany are free)
In the US I definetely use a car to go to work... Gas, insurance, maintenance say another $300 a month.
That leaves $23,680...
In Germany, with their massive urban transportation system you hardly need a car to go to and from work but it will cost around $100/month for fairs... That leaves $28,800...
Like I said I am pulling some numbers at random but you get my point... there should be a happy medium between taxation and social services.... In the US it seems that this does not exist. Either you are extremely rich and don't care about the costs or you are "poor" and you never get out of the hole.
you are right fpn, I spent 19 months in Germany and their public transportation in amazing. I traveled all over by train and it was clean,timely and efficient. Even being on active duty you could travel all over because the public transportation was so available and dependable.
spoke to a German citizen working in the US and he loves the German health care, he like the thought that if he gets a terminal illness it will not bankrupt his family. The downside is that it is had to get care if you are sick; his bottom line is that it is great if you stay healthy/poor if you get sick.
While visiting Germany, you can tell that the German people are more health conscience than Americans. Does anyone know how we compare with heart desiease, diabetes, cancer, etc? Now some may thinks these desiease are not a problem in the US and/or cheap to manage, and that can be why what works in one country will not work in ours.
Would I like to Obamacare to work- who wouldn't. The question is can we afford it? I believe that our issue is less about Obamacare or social medicine and more about Americans POOR lifestyle/health. health care reform that targets life choices that impact health care cost will be the only way to get cost under control. If we keep believing that Obamacare will lower cost w/o doing something about the contributors to health care cost (smoking, alcholism, STD, high sugar/fat diet, obesity), keep dreaming.
We want our cake and eat it to (pardon the pun)
have a good week.
Oh, that's what this article is leading up to- another gov't report set to come out Friday stating that jobs are coming back, yada yada yada. How many times have we heard that one before only to be told a week later that unemployment claims rose the prior month. It's the same old smoke & mirrors propaganda. Believe it when you see it and not before then!
How many times? Probably about 22 since thats how many months in a row that we have added jobs.
'Added jobs'...interesting concept but where are these jobs and what are they exactly? There's a difference between a real job that pays a living wage with benefits versus the majority of low-skilled crap jobs paying below the minimum wage.
Sure, I bet its just an "interesting concept" to some. They are broad based slightly lower than historical wages. Better than nothing. At least they aren't the minimum wage jobs Perry "created" in Texas. The same ones that won over a third of the Republican base before he made a complete fool of himself. Hope that helps.
Texas counts jobs, even if they don't even make it up to minimum wage. That's the GOP rallying call, baby.
That's why we have to do everything in our power to save the middle class, including government intervention in the bleeding of good jobs to other countries.
China is experiencing labor shortages...
They increased their minimum wage by around 10% and are now requiring ALL International Companies doing business in China to be Unionized...
She is running a successful business. Good for her. Stay out of her way. You don't have any input in her decision making.
^ Before the GI bill put millions of Americans thru college- the college degree rate was only about 5% in this country.
Without government assistance we would have a country of perpetual underemployed unskilled workers.
This workers would have no money to support hiring at a small business.
And thousands of small business like this would go bankrupt.
When will trickle down idiots learn, that you have to build the economy from bottom up, and *not* from the top down!!!
The economy is slowly turning around. That's good news for real Americans and bad news for republicans.
I'm certainly doing my part!!
Good to hear Obamanomics is starting to take off.
We can't find people to hire...they have to add, subtract. Use WORD, EXCEL and be able to walk talk and chew gum.
When we find these, they are young punks who want $50,000! And a 40 hour work week with comp time off.
Then if we hire them, they are on their iPhones texting and socializing all day instead of working and want two weeks vacation almost before they earn their first paycheck.
Oh you mean jobs are a lagging indicator? Like every downturn in history has taught us? Oh so when the President (and ever economist in the world) was saying that jobs would come back slowly as with ever other downturn in history he was right? Who would've f'n thunk it??!!
Makes perfect sense that small business, run by real people would be the ones to step up. Big business with record profits seem to be in on the whole GOP agenda of making Obama look bad at any cost.
Bet you don't say that crap when your retirement investment goes up. The ignorant masses of this country bash the corporations with one hand while holding their other out for the profits.........WTF?
Since its small businesses that are doing the hiring, maybe the Republicans and the tea baggers were rightt!! Less government and bigger tax breaks for small businesses!! More jobs were not created by the feds spending billion so let the market rule.. I am a Democrat who once voted for his change and I am over him..How many trillions do we owe Chine???
Because the Republicans (as well as the Democrats) really do not want such things. They are both in the pocket of the large global corporations. Both parties have passed numerous legislation that benefits the monopolistic large companies and hurt the small start ups. Both parties are responsible for the Insurance companies power. What other country (and they may pay lower taxes) REQUIRES you to have insurance?
How many trillions do we owe Chine???
Check with Bush because he borrowed most of it. And don't give us this BS you're a Democrat.
Gas just dropped below $3 a gallon in Colorado!
http://www.denverpost.com/breakingnews/ci_19660406?source=rss
The stock market is up over 50% since Obama took office ( closed today at 12,415 as compared to 7949 when Bush left),
http://www.amazon.com/forum/politics/Tx3EMO5AMB3JO0U?_encoding=UTF8&cdForum=Fx1S3QSZRUL93V8
...and now news that jobs are coming back thanks to small businesses.
It's beginning to look a lot like an Obama victory in 2012!
And this is a surprise to Congress. Imagine if they actually worked to remove the barriers to small business, removed SOX enforcement below $150m in revenue, forced banks via Fed Reserve to loan to small businesses or loose lucrative borrrowing rates, created incentives for Venture Capital (not Hedge Funds and Private Equity who lack a longer term investment strategy and prefer an M&A flipping mentality at the expense of the employees and founders) and FINALLY realize that small businesses have been the job growth creation engine for over 40 years before they stepped in and helped with regulation favoring the major corporations; could we see economic growth? mmmmm I don't know I am sure they will find a way to screw up that.
So many easy things to promote business in the US and hire US citizens. Its sad that congress can't agree on anything !!
really? small business. gee i thought only big gubment was hiring? like that useless bureaucrat just hired along with his $500 million budget the American taxPAYER has to pay...what do SEC and consumer protection agency bureaucrats do for a paycheck? small business huh? shame on those capitalists who take risks!
YES, shame on the Big Business capitalists who took risks and brought down the American Economy. Now with almost 50% in poverty, they have done enough damage. NEED MORE STRONGER CONSUMER & WORKER PROTECTION LAWS.
define poverty? you mean american poverty? you mean 99 weeks of unemployment checks? ever hear of savings? you mean jimmy carter, barney frank, and Chris dodd who forced banks to give bad mortgages to losers who cannot pay their mortgage? ever hear of a born renter? banks sell high risk assets everyday. you see, they have to make a profit. welfare rats do not. they get their "checkie" regardless. dont like capitalism and risk? move to Russia. i am sure you will fit right in @ the salt mines.
Hey jilted, these libs don't know poverty. They heard on the news that 50% were below the poverty level and they believe what they see on their flat screen while munching doritos from the welfare benefit card.
But i told you - obama is an economic genius. He has done everything right for the last three years and then some. He is beats fdr by a wide margin in time to full employment. But it shows how mr grover, the gop, & the rushbo have been lying to you about the obama economy.
I'm glad to hear small businesses are hiring. Unfortunately in WI our Gov decided to chose Corp. America over a small business, maybe that's why small businesses are afraid to do any business here, and why we are seeing 5 straight months of job loses, way to go Scottie!
Time to beam Scottie out.
THIS is so Much BS!
Small Minority/Female/Disadvantage Business?
ALL Federally funded or subsidized -- Who's kidding Who - Stupid?
PS - And do they provide a Living Wage and Benefits?
yeah laura, just like gubment motors and their failed chevy volts that cost taxPAYERS $250k/unit. must be nobamanomics. no wonder his admin, who has YET to pass a budget, has run up more debt than all past presidents combined. why should you care lefty? as long as you get your welfare "checkie". go press your nose on a walmart window.....oops, that's not til the 31st
Watch it Hanks and jilted, you're beginning to whine. LMAO
Of course small business is leading the way, hiring people. Big business is too busy supporting the stock holders.
Not to mention lobbying for corporate welfare.
and lobbying for deregulation and monopolies to shut down small businesses. LOL
Like I said...
As I read these comments....I hope the words I read do not represent the intellect of the labor pool. If it does, Ms Kringl better look overseas for someone with at least double digit IQs.
Yeah, don't hire Meridith...lol
This is great news. But can it be sustained? We need 400K new jobs every month to keep even with the population growth. Unemployment is a function of money supply. When the money supply deflates, people cannot possibly be employed at levels that allow them to earn the monetary bubble level incomes. Google for "unemployment kondratieff wave" to see another way to look at unemployment: Count who is actually employed.
No, 150,000 added jobs will keep up with the population growth. Needs more than that to reduce the number unemployed. They are just blowin smoke up your skirt until the January numbers come out. But the rose colored glasses are nice for a change. From the article: