Saturday, June 05, 2010

Employers on strike

WSJ: Employers on strike:

Almost everything Congress has done in recent months has made private businesses less inclined to hire new workers. ObamaCare imposes new taxes and mandates on private employers. Even with record unemployment, Congress raised the minimum wage to $7.25, pricing more workers out of jobs. The teen unemployment rate rose to 26.4% in May, and for those between the ages of 25 and 34 it rose to 10.5%...

Ms. Romer said yesterday that to "ensure a more rapid, widespread recovery," the White House supports "tax incentives for clean energy," and "extensions of unemployment insurance and other key income support programs, a fund to encourage small business lending, and fiscal relief for state and local governments." Hello? This is the failed 2009 stimulus in miniature.

It's always a mistake to read too much into one month's jobs data, and we still think the recovery will lumber on. But if Ms. Romer wants this to be more than a jobless recovery, she and her boss should drop their government-creates-wealth illusions and start asking why so many private employers remain on strike.

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16 Comments:

Blogger sykes.1 said...

By adopting European socialism, we are also adopting European unemployment rates. The base rate overall will be pegged at 10%; there will be no jobs recovery.

The unemployment rate for teens and young adults will stablize where is now is at around 25%. This includes college graduates, most of whom have purchased useless degrees in the humanities and social sciences, and who are burdened with hugh debts.

Eventually, the house of cards will collapse into another truly great depression.

9:31 AM, June 05, 2010  
Blogger fred said...

I do not intend to get into a pissing match about the right versus the left etc but I do think it is worth noting that many economists dealing with this sort of thing note that there are a lot of jobs, employment that simply will not be coming back, and that has almost nothing, or nothing, to do with the govt/or the private sector. The way things get done is changing, and thus to ignore this is to waste a lot of time in a blame game.

10:00 AM, June 05, 2010  
Blogger Topher said...

Hate to be a one-note song but this is analogous to American marriage.

1. The legal (rape of divorce) and social climate (less pressure to marry, can get sex outside of marriage) make fewer men interested in marriage each year. That means that...

2. The pressure and anxiety within a female social circle to "get a good man" and not "settle" increases, causing an increase in the checklisting and demands in the hopes of catching a fish in a shrinking pond.

Strangely, the gals are pulling an Obama and _raising_ the price of entry against dwindling demand. (Some supply-side economics would come in handy.)

Ostensibly they are demanding more expensive engagement rings, other money transfers, and emasculating deference as "commitment insurance," making the man show he's not a pump-and-dumper...

But in reality, it just increases the market costs and drives more men away from the exchange - just like employers buried with more regulations.

Like Obama overvalues the power of his own personality, these gals overvalue themselves. It's really a perspective conflict - the girls think they are the ones selling, but in reality they are buying. Interest in marriage is low that the man who is fit for marriage is now setting the price.

11:02 AM, June 05, 2010  
Blogger Topher said...

Fred,

I have wondered about what you are talking about, if the "total capacity" of the economy has simply contracted.

11:05 AM, June 05, 2010  
Blogger Roman Wolf said...

Admittedly, I'm on the job hunt(just graduated from college) and I'm having quite the hard time. Still trying to get in shape so I can perhaps join the Army and do a few years there as an officer.

Furthermore, as an economist, I must say, I have very little hope that a recovery is on the way. I simply don't see it, the underlying factors that caused the collapse in the first place simply have not been fixed. Fanny and Freddie are still allowed to do anything they want...and not enough major banks were allowed to fail. Not to mention what happened in the auto industry.

So I see far more bad days on the horizon and the government, as usual will make things worse in the name of helping.

4:45 PM, June 05, 2010  
Blogger Micha Elyi said...

"...many private employers remain on strike." There's another phrase for that, isn't there?

5:48 PM, June 05, 2010  
Blogger TamMcfee0鄭 said...

Man proposes, God disposes.........................................

6:05 PM, June 05, 2010  
Blogger Micha Elyi said...

Strangely, the gals are pulling an Obama and _raising_ the price of entry against dwindling demand. (Some supply-side economics would come in handy.) -Topher (11:02 AM)

An excellent analogy, Topher.

Increasing numbers of women treat the State as a 'substitute good' for a husband. Thus, as the State swells its cradle-to-grave programs the likelier any given female swells her checklist of demands a potential husband must meet. Such behavior is easily predicted by the most basic principles of microeconomics.

(Females) are demanding more expensive engagement rings, other money transfers, and emasculating deference as "commitment insurance" making the man show he's not a pump-and-dumper...

In this era of unilateral divorce, the one who most needs commitment insurance from the other party to the marriage is the man.

But in reality, it just increases the market costs and drives more men away from the exchange - just like employers buried with more regulations.

Funny how things work out like that. And what's more, the Lack of Good Men crisis these females feel doesn't go to waste in the socialist camp's efforts to expand the State's reach and make everything personal, political.

6:19 PM, June 05, 2010  
Blogger Micha Elyi said...

Zoom up the legislated minimum wage and see more workers out of jobs? Wow. This relationship confounds the most intensely schooled members of America's new mandarin class such as Ms. Romer.

When the minimum wage goes up, so do the "self-service" signs. I call it Jacobs' Law after its author.

6:36 PM, June 05, 2010  
Blogger george said...

I am trying to time it so that I can wind down my business when Obamacare goes fully into effect. I employ about 15 people in a small business. Here are some of my thoughts;

1: Most small business owners would never have started a business under the laws as they are now. I would do it all over again if the laws were the same as when I started but now I would not attempt it. I have given literally hundreds of people jobs over the last 15 years but it would not be worth the hassle to go through what a person has to put up with now to do the same thing. The deck is stacked against you.

2: The amount of credit available is not a problem. You can loosen credit all you want and it won't do squat. You are pushing on a string already. I have people offering me loans several times every week. The problem is there is nothing worth investing in because we don't know what sort of ridiculous bullshit the government is going to pull from one week to the next. Everyone is just holding onto their cash because what you have in your bank account is the only thing you have control over anymore. There are fewer opportunities to make money than I have ever seen in my lifetime. But there are plenty of opportunities to lose money if you are foolish enough to part with it.

3: NOTHING was done to fix the mortgage problem. Throwing money at it does not count. The government is still pushing and underwriting loans to people who have no means to pay them.

4: Keynesianism is a euphemism for what is more commonly known as as "throwing good money after bad".

5: Had Obama set out to destroy commerce he could have done no more thorough a job of it than what he has done.

6: Many small businessmen feel a moral obligation to not participate in this economy or support this government.

7: The costlier it is to employ a person the fewer people will be employed. This is obvious to everyone but those with the "best" educations.

8: The economy works now largely to the extent that small businesses are willing to ignore the rules. Were we to be made to comply with every regulation on the books we would all shut down tomorrow.

9: There is no way in hell I am sending a tax statement to every business with whom I did more than $600 of business last year. If the IRS presses us on it we will just shut down all the sooner. And just who the hell would I send one to at Office Depot anyway? What the hell would they do with it?

10: One of the biggest attractions to running your own business is that you get to make your own decisions. To the extent that this power is usurped by the government the less people will be likely to make the sacrifices needed to start a business.

My kid and her entire generation are screwed. What the government has done in the last year and a half will not be undone in several lifetimes even were we to start in earnest tomorrow.

I would tell my daughter to learn a foreign language to prepare her for what is to come but which one should she learn? There is no place left on earth where a person may be free. There is no Helm's Deep to which decent people can run.

We lost the Republic in the last election. Gondor fell. Now we are no better than any run of the mill European kleptocracy. I fear the American ideal is dead. All that remains is to see what replaces it. I certainly don't labor under any illusion that the Republicans will set things straight even should they win both houses of Congress after the midterms.

6:49 PM, June 05, 2010  
Blogger Topher said...

Micha,

I met Joanne Jacobs at a press event about five years ago; she was keynoting and I was very impressed with her drive and her sass.

"In this era of unilateral divorce, the one who most needs commitment insurance from the other party to the marriage is the man."

I made the exact same point last week. Some woman said a pricey engagement ring was a necessary symbol that the man is "serious" - when it's largely the women who are begging for the "commitment." I noted that in today's era simply asking for marriage is commitment enough for a man. Then she accused me of "fear of commitment" and mistrust! This after she was the one who claimed a woman can't trust a man to be a serious husband unless he blows three months' salary on a bauble.

You're not going to get a lot of business when you are desperately asking for a buyer, but also setting a high price. Of course, then they'll tell you it's "not romantic" to make a marriage about money, when it's them who are counting the pennies.

7:18 PM, June 05, 2010  
Blogger Rob said...

Jobless recovery!

LOL!

An oxymoron of the highest order!

8:39 PM, June 05, 2010  
Blogger Rob said...

"Jobless Recovery" is like saying that Mexico is surpassing the USA in wealth, because the richest man in the world now resides in Mexico.

Turn off your Tell-A-Vision.

Buy Gold!

It's what your Founding Fathers would have recommended.

8:43 PM, June 05, 2010  
Blogger Rob said...

Of course, wait for the upcoming Father's Day speaches.

Will we hear that dead-beat dads are on the rise?

We ought to, since un-employment is not an excuse for the ex-douche and her ill-begotten spawn to be forgone the male atm machine.

Yes, indeed, women have fared two times better during the recession - because they are employed in useless, non-manufacturing, bullshit-tax-on-man-labour-jobs like gov't and HR.

Is there any relief this father's day for newly unemployed fathers? A call to the unnaffected female workforce (employed by gov't guarantee, in otherwords, "Aristocracy") that they won't be turfed into jail for falling behind on their "obligations" to "some woman's" children?

Of course not!

It is called stimulus!

Throw a million unemployed men in jail, and then hire 100,000 women, at 30% higher than market place wages, to "process" the bastards.

Yee haw! This stimulus! She's a workin'!

Now read this, and remember, something like 70% of gov't employees are female!

http://www.foundingfathersfoundation.com/page10.php

Fire.

Them.

All!

9:06 PM, June 05, 2010  
Blogger Jeff Y said...

Going Galt. Tax free living. Debt-free. Simplicity.

I'm unproductive. I mostly hang out and do mathematics and write a little. I pay zero taxes. I have almost unlimited leisure.

It feels a little strange, but I haven't the slightest guilt. I'm sick and tired of people stealing from me.

That includes both big businesses and the government. Well, nowadays there's no difference between them. We live in a crypto-fascist mercantilist state.

While the faith-based free market economists are slow to catch on to this fact, and update their analysis of comparative advantage, the rich have stolen the economy. Well, that's what monopolists do. They don't just influence government. They become the government, so they can steal legally.

O, well. Thank you, Barry Soetoro. You wrecked the economy, you made most work unprofitable, you're looting the American middle class, but you gave me license to loaf.

10:43 PM, June 05, 2010  
Blogger Uncle Bill said...

I do not intend to get into a pissing match about the right versus the left etc but I do think it is worth noting that many economists dealing with this sort of thing note that there are a lot of jobs, employment that simply will not be coming back, and that has almost nothing, or nothing, to do with the govt/or the private sector. The way things get done is changing, and thus to ignore this is to waste a lot of time in a blame game.

Of course there are a lot of jobs that are not coming back. This has always been the case, as the economy grew and changed. Think of jobs like telephone operator, or blacksmith, which basically do not exist any more.

The problem is that the current economy is not creating any new jobs. And a major reason for this is that the government has made it so difficult, so expensive, and so risky to start new businesses or expand current businesses. Pointing this out is not a 'blame game,' it is explaining reality.

5:29 PM, June 06, 2010  

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