jobs

The Sinking Ship

October 6th, 2010 9:54 pm  |  by  |  Published in Big Government, Health Care, Humor, Immigration, jobs, Obama, Politics  |  Comments Off

As high profile White House personalities like chief of staff Rahm Emanuel and chief economic advisor Larry Summers hog the spotlight as they leave the Obama administration at midterm, there are also lesser known, yet just as important, figures departing. They have toiled tirelessly in their positions but now merit nary a glance from the press as they exit through the wide White House doors.

For example, there is Albert Springwater, who is the president’s teleprompter cleaner. “It’s a very important job,” he says. “Without a clean and readable screen, the President might go from talking about oil drilling to reciting the Gettysburg Address. In fact, I let one of my assistants go the other day when, because of careless wiping, the president mistook the word ‘France’ for ‘Venezuela’ and threatened to put a sea blockade on Paris.”

But what really lured him away from his prestigious White House job? “There was an opening at Best Buy that I just could not ignore. Aisle after aisle of TVs waiting to be dusted off and sprayed with glass cleaner. How could I pass up an opportunity like that?”

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Don’t Doubt the Double Dip

September 10th, 2010 3:47 pm  |  by  |  Published in Bailouts, Banking, Economics, jobs, Money, unemployment  |  Comments Off

by Neeraj Chaudhary, Investment Consultant in the Los Angeles branch of Euro Pacific Capital

A few weeks ago Nouriel Roubini, widely regarded as one of the more pessimistic figures on Wall Street, made headlines by raising his forecasted likelihood of a “double dip recession” to a terrifying 40%. The vast majority of “mainstream” economists (although I would argue Roubini himself is part of that pack) described these predictions as far too gloomy.

Although there are some dubious current statistics that the desperate could cite to make an optimistic case, many simply are falling back on the extreme rarity of past “double dips.” But, in an unprecedented time, the lack of historical precedent hardly seems to matter. What is far more significant is a raft of new data that point downward.  As the high from last year’s monetary and fiscal stimulus wears off, there is a good deal of evidence that shows the U.S. economy plunging into an abyss.

Unemployment continues to batter the nation. Last week alone, the Labor Department announced that initial claims for unemployment benefits fell to a mere 473,000. While US stock index futures rallied briefly on this news, these numbers are not far off the peak of the 2001-2002 recession.

We’ve spent trillions of dollars on bailouts, stimulus programs, and Cash-for-You-Name-It programs, and we still have nearly half a million new people filing for unemployment every week. As Billy Joel would have asked:  Is that all we get for our money?

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Why Government Spending Increases Unemployment

September 9th, 2010 9:43 pm  |  by  |  Published in Bailouts, congress, DownsizeDC.org, Economics, government spending, inflation, jobs, Obama  |  Comments Off

In this message . . . why increased federal spending destroys more jobs than it creates.

President Obama has unveiled yet another, $50 billion government program to “create” more jobs.

But, as the letter below indicates, government spending actually destroys more jobs than it creates!

This is why Obama’s new program should be opposed, and why Congress should take immediate steps to cut federal spending.

Please use DownsizeDC.org’s Educate the Powerful System to tell Congress to stop this next stimulus plan and cut spending.

You may borrow from or copy this letter . . .

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Why Not Another World War?

July 19th, 2010 6:45 pm  |  by  |  Published in Economics, government spending, jobs, Liberty, Peter Schiff, Politics, unemployment  |  Comments Off

by Peter Schiff, president of Euro Pacific Capital and author of the new bestselling economic fable, How an Economy Grows and Why It Crashes

There is overwhelming agreement among economists that the Second World War was responsible for decisively ending the Great Depression. When asked why the wars in Iran and Afghanistan are failing to make the same impact today, they often claim that the current conflicts are simply too small to be economically significant.

There is, of course, much irony here. No one argues that World War II, with its genocide, tens of millions of combatant casualties, and wholesale destruction of cities and regions, was good for humanity. But the improved American economy of the late 1940s seems to illustrate the benefits of large-scale government stimulus. This conundrum may be causing some to wonder how we could capture the good without the bad.
If one believes that government spending can create economic growth, then the answer should be simple: let’s have a huge pretend war that rivals the Second World War in size. However, this time, let’s not kill anyone.
Most economists believe that massive federal government spending on tanks, uniforms, bullets, and battleships used in World War II, as well the jobs created to actually wage the War, finally put to an end the paralyzing “deflationary trap” that had existed since the Crash of 1929. Many further argue that war spending succeeded where the much smaller New Deal programs of the 1930s had fallen short.
The numbers were indeed staggering. From 1940 to 1944, federal spending shot up more than six times from just $9.5 billion to $72 billion. This increase led to a corresponding $75 billion expansion of US nominal GDP, from $101 billion in 1940 to $175 billion by 1944. In other words, the war effort caused US GDP to increase close to 75% in just four years!

Government Policies Pushing Towards Depression

July 15th, 2010 10:27 pm  |  by  |  Published in Bailouts, Big Government, Economics, government spending, jobs, Money, Obama, Politics  |  Comments Off

by John Browne, Senior Market Strategist, Euro Pacific Capital

Despite several quarters of rising GDP, and the upbeat exertions of Administration spokespeople, the National Bureau of Economic Research (NBER) has yet to announce the recession is over. Their reluctance is well-founded. It is beginning to dawn on even the more optimistic analysts that the tepid growth we have seen over the past three quarters is only an interlude in an otherwise grave and prolonged recession. Moreover, the respite will cost dearly as the United States has racked up a generation worth of debt for dubious benefit.

The paltry number of new jobs currently being created still fall far short of the 375,000 per month needed to offset the 125,000 new entrants to the job market due to population growth and to erode the 8 million people laid off in the past year alone. Meanwhile, house prices continue to fall and credit continues to contract. With retail sales dropping in June and the Leading Economic Index (LEI) standing at minus 7.7 per cent, it should be clear that the US economy is heading back towards recession, following a temporary distortion created by some $1.3 trillion in federal stimulus. In short, the stimulus has failed.

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The Phantom Recovery

June 7th, 2010 4:16 pm  |  by  |  Published in Big Government, Economics, jobs, Money, Peter Schiff, Politics  |  1

by Peter Schiff, president of Euro Pacific Capital and author of the new bestselling economic fable, How an Economy Grows and Why It Crashes

In recent months, GDP numbers have rebounded – primarily as a result of record low interest rates reliquifying the credit market and government stimulus jolting consumer spending. Although the “positive growth” has delighted Obama’s economic brain trust, it has done little to boost the fortunes of Main Street. As I have said many times, GDP largely measures spending, and spending is not growth.

Last Friday we received the latest indication that the real economy is not recovering in the slightest. The Labor Department reported that non-farm payrolls increased by 431,000 jobs in May. In a press statement, the President himself crowed at the news, noting that the official employment rate fell to 9.7% from 9.9%. However, just inches below the headline, red flags were everywhere. Only 41,000 of those jobs were generated in the private sector – far below the median forecast of 180,000. Even more troubling was the fact that the Census Bureau alone accounted for 411,000 new jobs, which were almost exclusively temporary positions.

Rather than a recovery, the jobs data seems to indicate that we are still mired in the first economic depression since the 1930s. Back in 1931, two full years after the Crash of 1929, there were still very few people who thought that the recession then underway would one day be called the Great Depression. (See my commentary from March 1st “Don’t Bet on a Recovery)

Increased spending, financed by unprecedented borrowing, will prove to be just as temporary as a US census job (unless, in the name of stimulus, Obama decides to make “people counting” a permanent function of the US government.). When the bills come due, the next leg down will be even more severe than the last.

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Key Indicators of a New Depression

June 3rd, 2010 10:11 pm  |  by  |  Published in Banking, Economics, gold standard, jobs, Money, Obama, Peter Schiff, unemployment, War  |  Comments Off

by Neeraj Chaudhary, Investment Consultant, Euro Pacific Capital

With the mainstream media focusing on the country’s leveling unemployment rate, improving retail sales, and nascent housing recovery, one might think that the US government has successfully navigated the economy through recession and growth has returned. But I will argue that a look under the proverbial hood reveals a very different picture. I believe the data shows that the US economy is badly damaged, and a modern-day depression has begun. In fact, just as World War I was originally called The Great War (and was retroactively renamed after World War II), Peter Schiff has said that one day the world will refer to the 1929-41 era as Great Depression I, and the current period as Great Depression II.

For starters, look at unemployment. During Great Depression I, unemployment broke 25%. If government statistics are taken at face value, the current unemployment rate is 9.9%, but a closer look reveals that the broadest measure of unemployment is currently at 20% – and rising. So, today’s numbers are in the same ballpark as the ’30s even though the federal government is using unprecedented measures to keep the economy afloat. Remember, in Great Depression I, FDR never ran a deficit nearly as large as President Obama’s. Moreover, the Federal Reserve of the 1930s still had a gold standard with which to contend, while today’s Fed has increased the monetary base with impunity. Yet even with all that intervention, unemployment figures still indicate that we have entered depression territory.

What is demoralizing to an unemployed person is not simply being let go, it is being unable to find a new job for an extended period of time. And this is where Great Depression II really rears its ugly head. According to the US federal government’s own data, the median duration of unemployment is now over five months – and rising. This is the highest it’s been since the BLS started compiling this statistic in 1965. As workers start to go this long without jobs, they eat into their savings. Eventually – and especially in a country with a savings rate as low as ours and debt as high as ours – they run out of cushion and hit the street. Formerly middle-class people have to make decisions never thought possible: do I eat in a shelter or go hungry in my home?

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One unemployed man equals four new jobs created?

May 28th, 2010 9:36 am  |  by  |  Published in Big Government, jobs, Liberty, Politics, unemployment  |  Comments Off

Not surprisingly, the U.S. Census bureau is using statistical tricks to inflate the job creation numbers.  Each time they hire a new employee, they are able to report it as a job created, even if that same employee is fired an hour later.  In fact, one man reports to have been hired and fired four times by the bureau, each time being paid to go through training:

I am on my fourth rehire with the 2010 Census.

I have been hired, trained for a week, given a few hours of work, then laid off. So my unemployed self now counts for four new jobs.

I have been paid more to train all four times than I have been paid to actually produce results. These are my tax dollars and your tax dollars at work.

Undoubtedly, they bureau has been directed from higher up to take such actions.  If we continue lying to ourselves about how we’re really doing as a nation, how can we ever really expect to improve?

Unlocking the Jobs Dilemma

March 9th, 2010 9:35 pm  |  by  |  Published in Economics, jobs, Market Regulation, Money  |  Comments Off

by John Browne, Senior Market Strategist, Euro Pacific Capital

Productive, private-sector jobs – the lifeblood of a sound economy – are under assault by politicians in the United States and Western Europe, who have unwittingly taken a number of steps that make future job losses a foregone conclusion.

In the 1980s, as a Member of the UK Parliament and elected Chairman of the Conservative Small Business Committee, I led discussions on the issue of job creation. At that point, the British labor market was dealing with technological advances that threatened traditional industries and an influx of highly competitive Eastern European workers who drifted westward in the waning days of the Cold War.

Pushing back against those who wanted to preserve an untenable status quo, the Conservatives recognized that defensive measures like excessive regulation, high taxes, and favored bidding for government contracts were antithetical to business growth. Fortunately, Margaret Thatcher was Prime Minister. Her understanding of economics, combined with her ability to communicate and lead, resulted in the adoption of pro-business polices.  The British economy soon flourished, creating many profitable new jobs.

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More Government Equals Fewer Jobs

February 5th, 2010 2:37 pm  |  by  |  Published in Big Government, Economics, government spending, jobs, Market Regulation, Peter Schiff, Politics  |  Comments Off

by Peter Schiff, president of Euro Pacific Capital and author of Crash Proof 2.0: How to Profit from the Economic Collapse

With today’s unexpected decline in December payrolls, the cry for more job-related stimulus will grow even louder. But the sad truth is that any new stimulus or jobs bills will ultimately swell the ranks of the unemployed, thereby raising calls for an even bigger federal effort. If we are not careful, government regulations, subsidies, and spending, all designed to fight unemployment, could push the labor market into a death spiral.

Regulation acts like a tax on job creation. By subjecting employers to all sorts of extra expenses when they hire people, regulations increase the cost of employment far beyond the wages employers actually pay their workers. In fact, some regulations are specifically tied to the number of workers employed. This provides some employers with a strong incentive to stay small and not hire.

The minimum wage law, which is really just a very visible workplace regulation, actually makes it illegal for employers to hire certain individuals and destroys entire categories of jobs. For instance, faced with high labor costs, some restaurants will avoid hiring dishwashers by switching to plastic utensils and paper plates. On a larger scale, factories may decide to switch to robotic assembly lines if human labor gets too expensive.

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