The President is being hammered on Romney TV spots for saying this. I suppose the attack works for those who aren't paying attention, but by the most commonly used measure, the private sector IS doing fine.
The S&P500 stands at 14,000, about where it was in the summer of 2008, just before the banking crisis crash. So the big companies that were strong before the crash have weathered the storm and are roughly back to break even. The huge majority of investors who didn't panic and who maintained balanced portfolios spread prudently across a number of asset classes have come through fine too, although of course the growth of their investments is still relatively stagnant. But they didn't lose their shirts as the Chicken Little crowd in 08 predicted.
So why hasn't this resulted in jobs, jobs, jobs? Because big business has learned to do more with fewer people. Necessity is the mother of invention. They have also outsourced where they can. Why pay more when you can pay less? They're also scared silly that there could be another crash, so they're hoarding cash and just sticking it on their balance sheets. They aren't doing what they do in a normal business cycle--investing in growing themselves. They know that there is still not sufficient banking regulation, that Wall Street bankers will not learn from experience (well, they'll learn, they just don't care), and that regulators like the SEC and the Fed are toothless tigers. They believe there are scams that are the moral equivalent of credit default swaps happening right now in lower Manhattan, and they don't want to get whipsawed again when they come crashing down.
So big business is doing fine, they just choose not to act like they are.
This makes it tough on the little guys and on the employment picture, for sure. But this is a very stubborn recovery, which is not being helped by the two-ring circus at the OTHER end of Pennsylvania Avenue.
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The private sector could be doing a lot better if people wnated to work.
There are plenty of factory jobs that go un-filled and there are also many jobs for truck drivers that no one seems interested on doing.
These days you can't find a handy man who wants to work.
What I see in young people today is that they are only interested in sitting in air-conditioned offices and nobody wants to get their hands dirty.
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I am surounded by folks looking for those unfilled factory jobs.
Please post them up.. I live next to a automobile factory that closed and all the associated cottage industry around it went belly up. This is not sarcasm, I will pass the info along. Many of these people are willing to move.
I guess if your in the scrap machine business...
I am watching my clients dispoable income dwindle, which directly affects my sales.
In the CA central valley they turned off alot of the water to the farmers and the unempolyment rate is hovering around 20%. (stupid fish)
I agree we should encourage people to work... 2 years of unemployment, really. I have cashed exactly 1 weeks worth of unemployment, my entire life, becasue I am willing to work. I consistanlty make more than unemployment would ever pay. When I say I am willing to work I mean at whatever is paying.. You want to dig up that sewer pipe and it pays 10 bucks an hour... OK where is my shovel.
I have certainly lived through economic "downturns".
The S&P500 stands at 14,000, about where it was in the summer of 2008, just before the banking crisis crash.
Alan, I think you meant to say the Dow!
I think you analysis is spot on. And the ironic thing is, that the big banks were too big to fail in 2008, necessitating the taxpayer bailout, are even bigger now, after consolidation.
Also, since no additional regulations were effected since the financial collapse, and no banks or officers thereof were prosecuted when clearly laws were broken, we've set the stage for the next financial sector collapse.
And the next one will be even worse than this one........
Right. Brain freeze. Actually, I meant the S&P but I added a zero. If the S&P were at 14,000 we'd all be cashing out and headed for the life of luxury. Of course, the S&P is a little north of 1,400, just about where it was in the summer of 08 and about 150 points below its all-time high of 1,565 in October of 07 when many believe it was somewhat overvalued, fair and square.
Live your life in such a way that the Westboro Baptist Church will want to picket your funeral.
All of the above are right to varying degrees. In my opinion, more than others.
An awful lot of people just don't want to work. Combine that with the fact that for whatever reason(s), manufacturing jobs in this country have gone kaput. The city that was the leader of the free world when it came to automobile construction looks as if the 8th Bomb Group just got finished with it in 1944.
What little work ethic in this country just a few years ago has itself disappeared. I used to have literally well over 100 young able people come into my office on a regular basis because they had heard they could live in these beautiful apartments for free, that the government would pay for it! When I asked a single mother why she wasn't working her reply invariably was, "I need to raise my baby and my boyfriend left me a year ago." These people had a car (who paid for the gasoline, insurance and registration?), cable TV (who pays the cable bil?l), a cell phone (before the government gave them away to just about anyone who wants one?), who oheated and powered their former residence., etc., etc? The end is almost endless.
Would you believe, and I kid you not, that when I would ask who would pay for all of these services, the answer invariably was either "the government" or one form or another of "big business." People, I was confronted with this situation every single day!!!
Do millions of our countrymen need help? Absolutely they do to varying degrees. Do some need virtually everything? Yes some do! But it is nowhere near the numbers we see in the press and on TV!
I honestly don't know what the answer is, but throwing the taxpayers money at everything has just got to stop because in effect, there is no more taxpayer money!
Do big business and corporate coffers bear some of the blame? They most certainly do. But our government, regardless of where you stand politically, is spending money that it doesn't have so fast that there is no way on earth we can even make a dent in the problem. Tax the rich every single cent they make? Fine! It still woouldn't mean a tinker's damn! It wouldn't even begin to pay the interest.
And while Wall Street plays a large part in all of this mess, if you took all of their money you know what you'd do? You would absolutely destroy the retirements benefits for those millions who still are lucky to have them. And then, where would you stand?
I don't know what the answer is and wouldn't begin to guess. I don't have a college education, I am not a financial wizard and I certainly don't have any money.
But I shall close with this. Somebody better come up with a really true answer (regardless of how much it might hurt for awhile) or there just isn't going to be any reason to come up with any answer.
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There are jobs available throughout the U.S. The oil fields in North Dakota and Texas are booming. Wyoming and Colorado are states with oil field work too. The problem is that these are dirty tough jobs where you work alot of hours for your pay. Too many people are planted where they grew up and are not willing to leave their areas to find the work. We have come along way from the days of the pioneers travelling across country in a wagon to find a better life.
I am in the trucking industry and can tell you that over 90% of people who go through truck driving school to drive a truck do not stay in the industry for a year. Most people are not willing to make the sacrifices needed to do the job of a trucker.
With the anti illegal immigrant laws passed by Alabama 2 years ago many mexicans left the state. Farmer hired people to replace them but they couldn't keep employs because "It was just too hard work in the Alabama sun" As long as the government hand feeds those who don't want to work then jobs like these will only be filled by the illegals.
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AR said in reference to companies hoarding cash...
They're also scared silly that there could be another crash, so they're hoarding cash and just sticking it on their balance sheets. They aren't doing what they do in a normal business cycle--investing in growing themselves. They know that there is still not sufficient banking regulation, that Wall Street bankers will not learn from experience (well, they'll learn, they just don't care), and that regulators like the SEC and the Fed are toothless tigers.
Sometimes the truth is so clearly evident it just baffles me that people don't see it.
Most of time I actually hear CEOs identifying why they are not hiring it is specifically because of Obama himself. It is not the lack of regulation -it is the fear of some kind of unknown regulation which could happen in the future which scares them the most.
Two good examples: Obama wants to raise the corporate tax rate and capital gains rates. Both of these are SOLID Obama policies that he refers to constantly.
If either happens stock prices will suffer badly -
If corporate tax rates go up profits go down. Isn't it VERY possible companies are hoarding cash because they know their corporate tax rate is about to go from 20% to 35% if Obama is re-elected? I can't think of a better reason to be hoarding cash right now. How would you like to hire and build out for $100-million capital expenditure only to find out the IRS wants that money next year? The IRS doesn't exactly make exceptions.
And that brings up a good point - why not give the private sector INCENTIVES to hire new people. I mean real incentives, not gimmicks.
And if capital gains go up no one will trade stocks.
All of this "anti-Wall Street" rhetoris dangerously ignores one basic facet of capitalism - the stock market is the greatest invention since the dawn of civilization. It allows the individual to share in the profits of a company, and to invest in their future. It also allows companies to raise capital from individuals without having to go knocking door to door.
I just don't think Obama gets capitalism, I really don't. He sees it as a Ponzi scheme or something. He doesn't realize that for everything bad that has ever happened on Wall Street there have been 1000s of millionaires made.
And this is bad because of why? Why is Wall Street inherently bad? I am so tired of this rhetoric, that people who understand high finance are just plain corrupt.
Hey -Warren Buffet pays the same tax rate as Mitt Romney - why isn't he vilified as a bad guy?
I won't even mention George Soros, oops, I just did.
I am the editor, but I also speculate, ask questions and play devil's advocate. I reserve the right to change my mind.
Had Wall Street stuck to the stock market I don't believe they would have been viewed as evil at all. It was when they expanded into new business and came up with schemes to enable them to make more money, they screwed up.
And they did so, with no thought to whether their actions were moral, or legal.
The scandal is that the guilty parties were never made to answer for their actions. The result, all of them are looked at as untrustworthy.
The Dow has gone from 6,000 to over 13,000 in 4 years. Wouldn't that be considered "doing pretty well"?
Last week Mitt Romney himself said that big business is doing just fine. That it is small business that is suffering.
Small businesses rely on being to sell things. To be able to sell things, one needs customers. With the exception of a couple of "pockets" the world economy (including China, moreso every day) is in the crapper.
The market for goods and services has been shrinking. Even though the US has a huge population base, there is no way for it to improve completely relying on trade within the country.
There's all sorts of infuences on the economy and on jobs. Automation and technology, while opening up all sorts of opportunities, have also elimininated many job opportunities for those who weren't able or willing to upgrade their training.
To my mind it's all obviously a very complicated problem. One that isn't easily determined by tax break or a tax hike.
Business is always uncertain. It's always about taking risks in hopes they lead to reward. So the "uncertainty issue" is a bit of a red herring I think.
As far as Soro, Buffet, etc. There's plenty of billionaires in both parties. Sheldon Adleson, Koch Brothers on the right for example.
The problem this time is allowing billionaires to use those billions to influence the electorate with no limits on how and why.
I honestly don't believe anyone is willing to give $100,000,000 to "their candidate" simply for the good of the country.
I'll tell a story, because I know the facts in this particular instance very well.
Our economy here is doing VERY WELL! Pretty near every industry is HOT!
My best friend of 30+ years is a franchisee of a national restaurant chain, which also has 250 or so locations in the US. The locations here are doing much better than locations in Eastern Canada, or the United States.
BUT, he's finding it almost impossible to find staff. That industry of course only offers low income jobs.
The unemployment rate here is around 7%, so you'd think there would still be people looking to work. But they aren't looking for low paying jobs.
Awhile back the Canadian government began a "Temporary Foreign Worker Program", allowing business who could prove (set criteria) that they had attempted to hire citizens, but were unable to find anyone to fill the positions.
The franchisor coordinated with it's franchisees, and brought in thousands of foreign workers from all over the world, who were willing to fill those jobs.
Their "temporary visas" allowed them to stay in the country for 2 years, before they had to leave or renew their visa application.
Now many of those visas are running out, and some of the regulations have been tightened. My friend (who has been very successful) is truly upset that the governent is making it more difficult for him to retain his supply of "affordable labor".
I played devil's advocate with him (well, I was teasining him)... telling him he must not believe in the "Free Market", because if he did, he would pay his staff what the prevailing market calls for, rather than the low wage he's offering.
He said he would go broke if he had to increase their hourly pay by two or more times. And he would have no job to offer anyone.
I believe that is true!
So, he wants the government to continue to help to supply him with affordable labor.
Thus, he really doesn't believe in "free markets". By necessity he believes in Capitalism, supported by the actions of his government, to the benefit of his benefit, and eventually to the benefit of the government and country by virtue of the taxes he pays.... when his business stays profitable, instead of closing its doors and paying no taxes.
So,what is really the right thing?
This example is not much different than the situation in many areas and industries in the United States.
From the worker's point of view, it's not necessarily that people don't want those low paying jobs. But they are unable to survive and support their families on those wages.
The answers just aren't as simple to real life as politicians make them out to be.