[mikemike]

Mr. Obama put the problem pretty succinctly...

"Shovel-ready was not as ... uh .. shovel-ready as we expected."

Good for a laugh, but I doubt the unemployed find it funny. And instead of helping businesses cut through the red tape, they just keep adding to it.

EDIT: And I might add, that even though the stimulus didn't create nearly as many jobs as promised, it still managed to spend the money...

---

Last edited by mikemike; 06-13-2011 at 02:53 PM.

[jeffkrol]

Mr. Obama put the problem pretty succinctly...

"Shovel-ready was not as ... uh .. shovel-ready as we expected."

Good for a laugh, but I doubt the unemployed find it funny. And instead of helping businesses cut through the red tape, they just keep adding to it.

EDIT: And I might add, that even though the stimulus didn't create nearly as many jobs as promised, it still managed to spend the money...

AND save a bunch......... you just keep forgetting that. I suppose that since we didn't lose them first there is apparently no way to prove the obvious to you...

[mikemike]

AND save a bunch......... you just keep forgetting that. I suppose that since we didn't lose them first there is apparently no way to prove the obvious to you...

Maybe he picked up his gallows humor at his wall street fund raiser.

Is there anything more virtuous about a bureaucrat paper pusher that doesn't make anything compared to a wall street paper pusher who doesn't make anything? Not in my eyes.

[jeffkrol]

A lot of us are begging, even pleading, with President Obama to focus more on economic stimulus and less on deficit reduction. But let's not kid ourselves. President Obama isn't the obstacle to passing a new jobs program. The Republican Party is.

If you don't believe me, just listen to what Senator Richard Shelby of Alabama said on Sunday, during a roundtable discussion on employment during ABC's "This Week":

I believe that stimulus basically doesn't work for the most part. We've tried that. The market grows the economy. We've grown the government, but we haven't grown the economy.

Just the opposite is true. According to the very best evidence we have, the Recovery Act prevented the economic downturn from becoming a full-brown depression or something very close to it. And private sector employment has been growing, albeit in fits and starts. The primary reason employment overall isn't growing faster is that public sector workforces are shrinking, because low tax revenues are forcing local and state governments to balance their budgets with spending cuts.

If the federal government, which has the ability to borrow money, had simply maintained the assistance it provided after the Recovery Act expired, many more people would have jobs. And what would have worked a few months ago would still work today: Extending new assistance to the states would boost employment, by (among other things) keeping teachers, first responders, and plenty of other government workers from losing their positions.

Of course, economic nonsense from Shelby is nothing new. Remember, this is the guy who blocked MIT professor Peter Diamond from joining the Federal Reserve Board because, supposedly, the Nobel-winning economist wasn't qualified to serve there. But I don't think Shelby's argument, which other Republicans invoke all the time, is really about ignorance. It's about ideological rigidity (government is always bad) and partisan opportunism.

As E.J. Dionne notes today,

For the moment, Republicans have no interest in moving the nation’s debate toward investments in job creation because they gain twice over from keeping Washington mired in discussions on the deficit. It’s a brute fact that Republicans benefit if the economy stays sluggish.

How long are we going to play this game???
The Real Obstacle To Creating Jobs? Republicans Like Richard Shelby Who Oppose Stimulus, Deficit Spending | The New Republic

[jeffkrol]

There was a lot of criticism of the President’s economic policies but no one offered any new solutions on how they would promote job growth. They stuck to the same old playbook- supply-side, trickle-down, cut taxes to create jobs theory that has proven to be a disaster for the poor and middle class over the last decade under George Bush.

The month that President Obama took office we lost 780,000 jobs and the GDP was cratering at 6%. Meanwhile corporate profits wereup 70% while real median family incomes (income for the middle-class family adjusted for inflation) went nowhere actually going down 2% . Moreover, corporate profits over the past decade have skyrocketed at the same time that the gap between the rich and poor grew wider then it has ever been on record. Either the Republican contenders are suffering from economic amnesia or they support growing corporate profits at the expense of the poor and middle class. Trickle-down has trickled-up over the last decade.

Continue reading on Examiner.com Republican contenders offer no solutions but same old tax cuts for the rich - New York Political Buzz | Examiner.com Republican contenders offer no solutions but same old tax cuts for the rich - New York Political Buzz | Examiner.com


A firm of astute economists in London, Smithers & Co. Ltd., is good enough to share their research with me, and last week they issued a report on how budget austerity, and how “Profits will decline over the next few years, as part of the fall in business cash flow which is needed to offset the improvement in government deficits.” (Sorry, no links.)

It’s a simple argument for those who have studied economics at all, or I should say conventional economics. Gross domestic product is equal to the sum of consumption, investment, government and net exports (C + I + G + X, your textbook told you), and if you take away from any of those components, GDP has to fall, just by the math of it. Smithers explains:

When the fiscal deficit is cut back, households will either have less income from government employment, or pay more taxes. [I would add that businesses will see less revenue from government spending as well.] Unless savings rates or profit margins narrow, consumption will be weak. Weak consumption will stifle growth and increase competitive pressures, which will push down margins.

That’s bad for the stock market, and probably more important, bad for employment:

The fiscal deficit can be reduced either by cutting government expenditure or increasing taxes. If expenditure is cut, then the incomes of those employed outside the corporate sector will fall and an equal rise in corporate employment costs must occur to prevent household incomes from falling.

Smithers notes that an increase in corporate investment could offset the drop in consumption. But that’s not realistic — consumption is about 70 percent of the U.S. economy, and investment is 12 percent. It’s hard to see investment picking up much slack, especially if profits fall as Smithers suggests.
Federal Budget Austerity Will Hurt The U.S. Economy And Corporate Profits - CBS MoneyWatch.com

[Nesster]

And we have that paragon of Republican, private sector Job Creation, Mitt Romney.

First, his claim:
http://mittromneycentral.com/2011/02/21/the-business-of-mitt-romney-a-record...n-turnarounds/

“Frankly, Governor Romney in his career has created more jobs than the entire Obama cabinet combined, so he could actually talk about [the economy].” -Newt Gingrich

The article claims credit for the huge returns and restructurings Romney accomplished - and for the modest size of his golden parachute!

So, let's have a look at his record, and how Bain operated.

As Bain slashed jobs, Romney stayed on sidelines - The Boston Globe

Bain Capital is a private equity firm that invests in start-ups and established firms. It provides venture capital for emerging companies, such as Staples in the 1980s, but specializes in leveraged buyouts. Leveraged buyouts combine small amounts of investors' money with large amounts of borrowed money to buy established companies, increase their value, and resell them at a profit.

more stories like this
Increasing value means boosting profits. That can require a range of approaches including cost-cutting, modernizing plants, adding products, expanding into new markets, and acquiring similar companies.

Bain employed all these strategies under Romney. It's impossible to say precisely if more jobs were created than cut by Bain since the firm does not track employment in its investments. But Bain officials say the companies in which they invested added more jobs than they cut.

Geoffrey Rehnert, a former Bain partner, said Bain often increased employment to boost the value of the company. In one of its first deals, for example, Bain acquired an Illinois manufacturer of medical diagnostic trailers that travel from hospital to hospital, and quickly expanded its national sales force. Sales tripled and employment grew to roughly 150 from 90 in the 27 months that Bain owned it, said Rehnert.

Nice, balanced reporting there, though mostly positive...

Mitt Romney Wish-Washy Past on Jobs and Outsourcing (Romney So-Called Myth that Massachusetts Economy Improved, Sounds Like Reagan Myth He Never Raised Taxes) Frederica Cade's Blog

How'd he do creating jobs while Governor?

Not so fast Mitt Romney from data of Massachusett’s economy and your own statements that in 2006 Massachusetts economy experienced a turned around, don’t add up about your time in office from 2003-2007. According to a 2006 article called ‘Mass. exodus’, Jeff Jacoby of the Boston Globe he wrote “FOR THE second year in a row, the Census Bureau reports, the population of Massachusetts has shrunk. During the 12 months ending July 1, 2005, the Bay State experienced a net loss of more than 8,600 residents, or 0.1 percent of its population. It was one of only three states to end the year with fewer people than it had at the start — New York and Rhode Island were the others — and the only one to do so for the second year running.”
Now I’ve read the stories and articles that say 2006 was a big turn around, but I also read the data that say something different. Could it be what others call a job increase were the fact that a significant people left the state of Massachusetts?
In 2009 U.S. Census Bureau annual dates of state poverty level show no statistically significant change in the overall poverty rate in Massachusetts from 2007 to 2008.
Unlike what has said about a sudden turn around in improvements in Massachusetts economy the data shows that was not true, it only shows that in comparison to other states Massachusetts poverty level stayed the same as other states who all poverty levels remained the same. Massachusetts was ranked then in 41 before and after the study it showed the same. So just how does this adds up to Romney improving the economy when even its poverty level remain the same?
...
Massachusetts’ workforce is declining. A 2006 MassINC report, Mass Economy: The Labor Supply and Our Economic Future, found that between 2003 and 2005, Massachusetts “exported” 120,000 workers. In 2004 alone, the out-migration to other states resulted in a net loss of 29,033 people between the ages of 35 and 54, 14,370 children under 16, and 18,000 people with a B.A. or higher. Over the three years, the state’s workforce contracted by 1.7% while the nation’s increased by 3.1%.
Labor shortages are appearing in every industry sector. An October 2006 Conference Board report showed that Massachusetts, “with 170,100 advertised vacancies, posted 5.05 vacancies for every 100 persons in the state labor force, the highest rate of any state in the nation.”

And at Bain:

But before Massachusetts Governor, a look at Mitt Romney the business person.
It would seem for years Romney’s views of success amount to how well a company did and nothing about how the America people were doing, but how the bottom line was doing. He overlooks things about companies outsourcing and companies shutting down businesses and thinking its a way of life. Somehow I don’t think in tough times or anytime Americans want a leader who truly does not understand what it means for companies to be loyal to their employees and un-Patriotic to their country, vice versus. You could probably described Romney’s approach to the American people losing jobs as very unattached and as mentioned before a way of like he can deal with.
Mitt Romney, former Governor of Massachusetts, stated in a speech in Lexington County, SC that was covered by the Cable Satellite Public Affairs Network (C-SPAN) on Feb. 23, 2006:
“We’re seeing jobs leave our state [Massachusetts] and go to Asia. It’s a wonderful thing in some respects, but a little frightening in others. We’ve had jobs go from our state in the past. Textile came here [South Carolina], and ultimately left here and went off to Asia. We’ve had low end jobs leave our country before… But now we are seeing some high end jobs also leave our country… This is great news that they [developing countries] are getting into the world economy… They’ll be able to buy our products and services from this country. So it’s good news, but it’s also a challenge because we want to make sure that this country always remains the superpower economically and militarily of this planet.”
If in the sports world when a player ups leave after the fans have invested in them as not loyal, so I would think the same of companies guilty of shutting down companies as un-American.

And, for his Governor days, a simple statistic:

Former Massachusetts Gov. Mitt Romney (R) is focusing the early part of his presidential campaign on the economy, slamming Obama’s performance while touting himself as an experienced job creator. But while he assigns Obama a failing grade on his job performance thus far, reports from his time as governor show that Romney’s record as a job creator isn’t as strong as he would like voters to think.

Massachusetts, which Romney governed from 2003-2007, ranked 47th among the 50 states in job creation numbers during his tenure.

And more on Bain:
AMPAD - How Mitt Romney made his huge fortune - Boston Globe expose

In 1992, Mitt Romney was running Bain Capital, a private equity firm. Bain Capital bought American Pad & Paper Co. (Ampad) for $5 million.

Over the next several years Romney's firm bled the company dry. Hundreds of workers lost their jobs. Stockholders were left with worthless shares. Creditors and vendors were paid less than 50 cents on the dollar. While they were exploiting the company, Romney's firm charged Ampad millions of dollars in "management fees." In all, Romney and his investors reaped more than $100 million dollars from the deal.

Romney’s Private Equity Firm Caused Several Corporate Bankruptcies, Thousands Of Layoffs - Democratic Underground

Romney is right to be talking about job creation considering the unemployment rate, but his record in the private sector is one of job destruction. As Politico detailed, Romney’s company, Bain Capital, was in the business of buying up distressed companies, slashing them to bits, and then selling them off, resulting in lots of job losses:

– In 1992, the firm acquired American Pad & Paper. By 1999, the year Romney left Bain, two American plants were closed, 385 jobs had been cut and the company was $392 million in debt. The next year, Ampad was forced into bankruptcy.

– Bain Capital and Goldman Sachs bought Dade International for about $450 million in 1994. The firm quickly fired or relocated at least 900 workers. Over the next several years, it sunk increasingly into debt and laid off 1,000 workers. In 2002 — after Romney had left Bain — it filed for Chapter 11 bankruptcy protection.

– A 1997 buyout of LIVE Entertainment for $150 million resulted in 40 layoffs, roughly one in four of the company’s 166 workers. The job cuts affected all aspects of the company, from production and acquisition to legal and public relations.

– In 1997, Bain bought a stake in DDI Corp., a maker of electronic circuit boards. Three years later, Bain took the company public and collected a $36 million payout. But by August 2003, the company filed for bankruptcy protection, laying off more than 2,100 workers.

22 percent of the money Bain Capital raised from 1987 to 1995 was invested in five businesses — Stage Stores, American Pad & Paper, GS Indusries, Dade, and Details. These five made Bain $578 million in profit, even as all five eventually went bankrupt.

As the New York Post’s Josh Koshman wrote, “there’s little question made a fortune from businesses he helped destroy.” Travis Waldron noted today that Romney’s company also boosted its profits — and thus enriched Romney — by abusing offshore tax havens.

So, a decidedly mixed bag - some successes that actually created viable companies, but many many situations where the terms 'rape' and 'loot' come to mind. Clearly Romney's focus was with big money/capital, he was 'creating value' for them - and for himself and his company. Job creation done this way hollows out the American middle class.

[JohnInIndy]

Mr. Obama put the problem pretty succinctly...

"Shovel-ready was not as ... uh .. shovel-ready as we expected."

Good for a laugh, but I doubt the unemployed find it funny. And instead of helping businesses cut through the red tape, they just keep adding to it.

EDIT: And I might add, that even though the stimulus didn't create nearly as many jobs as promised, it still managed to spend the money...

Mike, it did create a ton of jobs.

In China

What do you think of when you think of job creation?
President Obama apparently thinks: subsidies, regulations, lobbyists, government contracts, and even, China.
Today, Obama toured the LED lightbulb factory of Cree, Inc. In my column today, I discussed Cree's revolving-door lobbyists pushing lightbulb regulations that profit the company, as well as Cree's dependence on government contracts. But there's plenty that I never got to.
How about the $39 million in special tax credits that the National Center for Public Policy Research reported on. And Amanda Carey at the Daily Caller has this gem:
We will continue to invest here for both human talent and the most state-of-the-art technologies,” Swoboda said. “We have committed that in the coming three to five years, we will continue to expand our operation in Huizhou.”
Swoboda also promoted the company’s new strategy as “Cree Chip, China Heart,” adding that Cree will “push the health, scientific and orderly development of the LED industry in China … and make many more contributions to energy savings and emissions reductions in China.”
Moreover, Swoboda told his Chinese audience that though it is a U.S. company traded on the Nasdaq, “Cree management never runs this company as a U.S. company.” This despite the millions it got from American taxpayers.
It seems as if "jobs" doesn't matter to this president as much as dependence on government.

The mens room at the Washington Examiner recently received an energy-saving device: a motion sensor switch for the lights. In Europe, every public accomodation I visited had timed lights or motion-sensor lights in the bathrooms. I bet they pay for themselves in energy savings.
But the Examiner men's room also has fluorescent bulbs -- both the compact fluorescent and the old-fashioned tube ones. The CFLs take a second to turn on, and about 30 seconds to get to full brightness. The tube bulbs take about 15 seconds to stay on, and they flicker for another 30 seconds.
Either technology on its own is acceptable, but together, they make visiting the bathroom very annoying. In other words, the slow warm up for the fluorescents wouldn't matter if it happened once or twice a day, and the room being dark when you walk in wouldn't matter if the lights were bright right away. If a coffee shop or library I visited had similar bathroom action, I wouldn't return.
So as California outlaws the traditional incandescent next week, and the U.S. begins its move down this road a year later, we should ask, will forcing fluorescents on people deter them from getting timed or motion-sensor lights? If so, will the energy savings of this legislation be wiped out?
There are plenty of other unintended consequences related to the lightbulb law that will offset the gains in energy efficiency. Off the top of my head:

• Citing this law, GE has closed its incandescent plant in Virginia. For the coming years, while they're still legal, Americans then will be buying their GE incandescents from Mexico. This probably means less efficient manufacturing and more shipping.
• GE makes its CFLs in China. The factories are likely dirtier and less efficient, and certainly there will be more shipping costs.
• Because of the warmup time for CFLs and the knowledge that they use less energy, people are more likely to leave them on for longer, I imagine.
• In northern latitudes, incandescents' inefficiency is not wasted. Think about it, in Alaska, summer nights are very short, and winter nights are very long. That means a vast majority of light-bulb time happens in the winter. The incandescents waste energy in the form of heat, but if it's cold, that added heat slightly reduces your need to use a furnace.

These offsetting factors are all small, and they may not negate the energy savings of the federal and California laws, but they will certainly reduce the savings. All corners of environmental policy have similar offsets -- think ethanol subsidies leading to deforestation, or electric car subsidies driving up coal demand. On top of these predictable effects, there are plenty of negative consequences we can't foresee.
These unintended consequences are why I think that simpler, dumber tariffs and taxes would be better than this hodgepodge of subsidies we have now. If we want Americans to use less energy, create a BTU tax. If we want to use less foreign oil, put a tariff on oil.
But then, what would the lobbyists do if things were simple?

[GeneV]

Mike, it did create a ton of jobs.

In China

Yes, and even more of those jobs were created by tax cuts for the rich that preceded the stimulus.

[JohnInIndy]

Yes, and even more of those jobs were created by tax cuts for the rich that preceded the stimulus.

We've been creating jobs in China since Clinton. And China's largest company is homed in Little Rock.

[GeneV]

We've been creating jobs in China since Clinton. And China's largest company is homed in Little Rock.

And we've been using tax cuts for the rich as our stimulus since Reagan.

[JohnInIndy]

You might be right Gene. Instead we should have salary caps for people. Let's see, how would that be designed.

CEO's $100,000
Non union workers - No cap
Union workers 50,000
Lawyers - $35,000
Politicians - 62,450
Lawyers who are politicians $5,000
CPA's - $1m
CPA's in politics - No cap