The Mercatus Center at the George Mason University has an article by Veronique de Rugy claiming that one reason why unemployment statistics aren’t as bad as some might think is that a lot of people have stopped looking for work. She says more than half a million people have just quit trying. De Rugy does other work for the American Enterprise Institute and Cato, and so might be accused of taking a dim view of the situation, but she cites Bureau of Labor Statistics data for her conclusions.
Using data from the Obama administration’s website Recovery.gov and the Bureau of Labor Statistics, this chart shows the month-over-month changes in the number of unemployed workers and members of the civilian labor force in tandem with the administration’s stimulus spending. By using dual measures of employment instead of simply examining monthly changes in unemployment, this chart captures the magnitude of job loss in America more completely – not only have workers lost their jobs, many more workers have also stopped looking for new employment altogether. According to the Bureau of Labor Statistics, in the month of December alone, 85,000 jobs were lost. In comparison, 661,000 people exited the labor force, or 7.7 times the amount of new unemployment.
For those who stay in the employment game things have gotten tougher. One interesting statistic examined by economist Heidi Sherholtz is the applicants to jobs ratio. In December, 2007 there were 1.7 applicants for every new opening. In November of 2009 that ratio had risen to 6.4 to every availability.
Even the New York Times admits that recovery will be tough. It ascribes the recent increase in GDP to the result of refill orders coming on the heels of the depletion of inventories, off which companies have been living in recent months. But despite the small bump in GDP there is no relief in sight for the jobless, according to the NYT, until new jobs can be created.
with the economy already some 10 million jobs short, there is no job growth on the horizon robust enough to set that upward spiral in motion. And because the economy is already in such a deep hole, a second leg down would mean ever worsening hardship.
The NYT holds out hope that President Obama’s tax credits will stimulate business into hiring more people. But the Washington Post is not so sure. It worries that it will be go the way of Cash-for-Clunkers and hand out a lot of money for no net gain. It notes that a similar proposal was already rejected in 2009 by the Democrat controlled Congress, but notes that President Obama has addressed those issues by including more safeguards against corruption.
The short-term rush of new car sales abated when Cash for Clunkers ended, and it’s likely that home sales will droop, too, when the real estate credit ends this spring. What’s to prevent a repeat of the same pattern with the jobs credit? Will businesses keep their new hires on the payroll once the credit expires and their taxes go back up? Only if market conditions warrant doing so. And just as cash for clunkers conferred a windfall on some people who would have bought new cars without it, the president’s proposal would reward some businesses for hiring decisions they would have made anyway.
As with all such tax breaks, there would be incentives to game the system, which is one reason Congress balked at a similar plan in 2009. The Obama plan, to its credit, tries to reduce opportunities for corruption. For example, to prevent companies from splitting five full-time jobs into 10 “new” part-time jobs, the plan caps the credit for new hiring at 25 percent of a firm’s wage base. But any credit generous enough to stimulate real hiring is probably generous enough to stimulate attempted cheating.
The Washington Post noted that export growth held out greater promise for job creation, but any attempts to be competitive would require President Obama to take on the unions and left the matter there. Bobby Jindal told Fox News that he expects there would be job growth soon — in India.
The President said he didn’t want us to fall behind countries like Brazil, China, India. But, I’ll tell you what, if they pursue card check and cap and trade and this massive health care bill and more government borrowing and more government taxes, we will be sending even more good paying American jobs to those countries.
It’s safe to say the employment market will remain tough into the forseeable future. People are still in the woods and the end of the forest is not yet in sight.
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Amazing. They have handed out millions to no avail, and still, they cannot figure it out. No more Govt handouts, stop the insanity.
Or is the insanity a feature?????
Breaker
Cascade effects: Older people who were continuing to work to max their Soc. Sec. draw lost jobs and then retired at the earlier Soc. Sec. age. Thus more money is flowing out at a higher rate than was expected.
With high unemployment lower tax revenue and higher out flow for unemployment benefits, Medicaid and etc. Retirement funds that were beginning to recover took another hit when Obama bad mouthed banks and the stock market took a quick drop.
People are fearful, eventually fear turns to hate.
Thanks to 1/rule 303
We have the Bush-whack Volunteers
Who carp and gripe and grumble
About the long gone past eight years
As markets and jobs crumble
We listen to the tingle legs
And Olber’s nightly rant
When what the situation begs
Is one Breaker Morant
The Piper leads his children on
Enormous spending spree
Over the cliff and we are gone
But for rule 303
Of course these days we’d surely gag
At thinking the idée
Of civilizing with a Krag
Or rule by 303
http://www.youtube.com/watch?v=p8AAOurTMxM
my carpentry business went in the crapper here in Tucson late last year so this week I signed up for early social security. I happened to read in a magazine that I could get half again for my fourteen year old (ah the bliss of having a kid in midlife) It ain’t much but its breathing room to pay the mortgage and keep the frijoles on the table. I may be on the dole now ,but I’ll still do all I can to vote out these lying grifters in DC.
McCain is running serious ads here in Arizona trying to prove his conservative bonafides. Polls have him vulnerable in the primary. The anger needs to stay stoked.
They measure what they measure.
They only measure people who draw state unemployment insurance money. There are probly over a million people like me. I am unemployed. I have not quit looking, wait a second and I will check my lottery results, no luck so I am still looking. NYS Dept of Labor denied my unemployment claim because I was unemployed last year and took a job, on the Bloomberg campaign, that lasted 7 months. Since I was not employed for 3 continuous quarters at a qualifying level I get nothing. If I had declined to take the job and had extended my prior claim then I would have been fine. At this point I will do anything that is legal but there are no jobs even in retail.
Most government incentives are structured to make someone hire an unqualified person in a temporary role and then terminate them before they can transfer from the subsidized to the regular work force. These programs both trap the unqualified low skill workers, who understandably focus on pleasing their outside political sponsors more than their inside coworkers and supervisors, and they block hiring opportunities for higher skilled workers.
If you really want to stimulate employment among all skill levels there are two things that work immediately and three more that will work over time.
The immediate measures;
1. cut the minimum wage,
2. cut corporate and dividend taxes
The longer term measures;
1. cut individual income taxes,
2. cut regulations,
3. tort reform.
The idea of an “underemployment rate” is at least thirty years old. As a conservative, I find it mildly heartening that young conservatives have decided what was once dismissed as a left-wing fantasy is, in fact, alarmingly real.
It is impossible to account for the current degree of social dysfunction without taking it into account.
Great Britain of the sixties and seventies serves as an important lesson as to what happens when a government decides to tax heavily the wealthier members of society, along with raising taxes on corporations (or outright nationalizing them). Another lesson to learn is from Argentina, 1950s onwards. It’s a shame that more people do not study history, even recent history. Go back even further, and we can see during the fall of the Roman Empire many citizens and even regions left because what Rome offered was worth far less than it was costing.
When a car gets stuck in a snowdrift, it’s much easier to push it out when you don’t do things like tying heavy weights to the bumpers, or remove a wheel or two.
And just as cash for clunkers conferred a windfall on some people who would have bought new cars without it, the president’s proposal would reward some businesses for hiring decisions they would have made anyway.
The money handed out for Cash for Clunkers is also taxable; it wasn’t exactly a windfall:
“When you buy a new car you pay tax on the difference between the new car’s purchase price and the trade-in you present to the dealer. This is an intentional distortion in the law that is intended to favor dealers over private-party used car sales; if you sell your used car privately the new buyer pays sales tax but you do not get the offset on the purchase of your replacement vehicle – the only way to get that is to trade the car. Dealers use this, of course, in negotiations, effectively pocketing the sales tax…
“But the “cash for clunkers” is not a trade-in. That’s a $4,500 check from the government, basically. Specifically, you pay sales tax on the full vehicle price (effectively paying sales tax on the $4,500) and what’s worse those states that tax income (that would be most of them!) might wind up counting this as income for state income tax purposes too, effectively taxing you twice.”
I suspect business also aren’t exactly going to be beneficiaries. Can you say “TARP II”?
Since the ever smart Obama admin folks have little interest in righting the economy except to save their seats and have next to no
This from David Malpass at National Reiew online:
The Small-Business Dilemma
“…the economic forces that are working in favor of GDP growth in the short term are not creating a longer-term reason for businesses — small firms, in particular — to invest and hire.
“The problems facing small businesses remain immense, as evidenced by the job-loss data. The Labor Department’s household survey, which includes small businesses and picks up inflection points better than the payroll survey, found 589,000 job losses in December and still is not showing the improvement needed to signal a sustainable recovery….”
“In the NFIB survey, small companies were asked: ‘What is the single most important problem facing your business today?’ Poor sales ranked first, at an all-time high of 34 percent. Why? A key factor could be the recent rise in government requirements, regulations, and red tape. An increased regulatory burden alters the economic environment, distracting small businesses from their core mission of sales and service.
“The second biggest problem facing businesses today? Taxes, which placed second in the NFIB survey at 20 percent.
“The fortunes of small businesses — perhaps more than any other commercial sector — are tied to rates of taxation on the individual. And individual income-tax rates are set to jump sharply at year-end when the Bush tax cuts of 2003 expire. Put another way, on January 1, 2011, the world’s biggest tax increase ever will arrive on the doorsteps of U.S. small businesses (and a great many others). Higher tax rates on incomes — along with capital gains and dividends — will reduce the incentive, on the margin, for entrepreneurs to engage in the kind of risks that lead to business formation, economic growth, and job creation.”
Cash for clunkers worked for a while because people can always be counted on to move heaven and earth for “free money” from the government, but it ran out. The tax credits for first-time homebuyers is more free money and that’s going to run out. And eventually the free money people are getting for not working is going to run out too. You can’t keep extending benefits year after year. And when that happens, all those folks who have stopped looking for work will suddenly start looking for work again, because people like to eat and pay rent. Then the “official” unemployment will begin to track closer to “real” unemployment.
In Michigan, official unemployment is about 20%, but it’s really 30%. When the official number starts drifting up past the 25% of the 1930s, you’ll see a Republican governor. In Michigan.
In Oregon they just voted to soak the rich to keep the government gravy train rolling. Watch Nike and Intel start leaving for places like Alabama or South Carolina. Watch California become the first state to collapse in US history, followed by austerity measures imposed by the federal government in return for a bailout, as if California was Argentina.
Lazy skanks and freeloader personalities aside, people put a high premium on their ability to earn a living because it allows them to keep a roof over their heads and food on the table for them and their family. Strike at a person’s livelihood and you are one notch away from attacking them and their family.
The powderkeg that we now sit on in America is that the livelihoods of those in the private workforce have been and are being sacrificed to prop up the livelihoods of public sector workers (and the entire bureacracy and nanny state structure that has been erected to keep the public workforce growing and growing). The situation is unconstitutional and unsustainable. Radical dismantling, not cosmetic sham reforms, is likely necessary to save our Republic. But we are back to the rule of human nature: strike at a person’s livelihood ….
The looters, rent-seekers and all others with an immediate vested interest in being the very last ones off the sinking ship USS Leviathan will fight tooth and nail for the lifejacket or any shred of flotsam they can lay their hands on. They have absolutely no intention of doing the honorable thing and riding the ship to the bottom, like Captain Smith, even though they are the ones who steered us into the iceberg and are playing “Lookee! Let’s rearrange the deck chairs!!!” even as we speak.
People will endure hard times with a lot less kvetching if there’s a sense that the burden is being fairly and honestly shared. The national mood seems to be trending in the other direction as far as I can tell. And, though the lefties’ class-warfare rhetoric will always be gullibly received by a certain percentage of the population, I do think more and more people are starting to wake up to the fact that they and their families are getting screwed six ways from Sunday, and it ain’t the CEOs and the bankers who are wearing the Screwer-in-Chief hats.
“People aren’t stupid.” — Scott Brown
Nancy Pelosi, aka “the Madame Defarge of American politics,” can buy her own damn booze AFAIC.
@6 LifeoftheMind
Another confusing factor would people like me who are technically employed (registered with a staffing agency) but not actually working (10 hours so far this month). I’m also still looking, but not at all surprised at how many people have just given up – it’s a demoralizing pursuit. By my count you need to make ten applications to get one interview. And to make matters worse, age and experience do not appear to be assets in the current job market. Happily I have a supportive family and a durable sense of humor but it has to really tough for a lot of people these days
Random thoughts:
1. Given all of the above, I fearlessly predict many Democrats will adopt the following campaign slogan this year:
“Have mercy: Devil Obama hyp-no-tized me.”
2. If current trends hold (an admittedly iffy proposition), I suspect Politburo-level Democrats are now not only worrying about losing both houses of Congress, but also contemplating a massive GOP/Tea Party tsunami at the state and local levels as well. Places like Massachusetts, Connecticut, and Illinois won’t fully jump to the red column this year, but they’ll turn a nasty shade of purple. And, for Democrats, that’ll be bad enough.
Also re: federal jobs:
Back in 2003-2005, when I knew I was going to leave California & thus change jobs, I applied for several civilian positions with DoD and so kept regular track of the USAJOBS website. They had a “# of jobs available” statistic on their homepage. During those two years it fluctuated regularly between 12,000 and 16,000.
Although I am no longer job hunting, I still check in on the USAJOBS website for kits and shicks periodically.
By the end of GWB’s second term (early- mid-2008) the counter had reached 18,000+ jobs.
As soon as Obama took office it shot up to 25,000+. By late last year it was 36,000+.
I just tonight checked back in and found that they no longer have the counter on the homepage, or indeed on any other page that I could readily find. I’m pretty sure that’s NOT because the federal workforce is shrinking.
Lifeofthemind,
Sorry to read that you’re unemployed. If you’ll pardon my asking, what was your profession before you lost your job? I live in the San Francisco Bay Area and am fortunate in still being employed (I’m an aerospace engineer). However there are many highly skilled people in the Bay Area who have had their careers terminated. I emphasize “career termination” versus simple unemployment. There’s a world of difference. This recession/depression is different from the earlier ones because a large fraction of the highly trained workforce is facing career termination.
Obama offers no tax cuts, only small tax bribes, $5,000 per extra worker hired. This is far too small to encourage businesses to expand. Businesses are not afraid of hiring people as such, they are afraid of expansion into the environment to come of huge debt, inflation, and higher tax rates.
Ironically, Obama’s offer convinces business to NOT expand, because it shows how ignorant Obama is about how business and the economy work. Still, Obama will claim that he “cut business taxes”, and they still didn’t hire, so the only thing left is to force them in some way.
FDR’s Policies Prolonged the Depression
(And Obama’s policies will too.)
“The Depression dragged on for years, convincing generations of economists and policy-makers that capitalism could not be trusted to recover from depressions. They decided that government intervention was required. Ironically, we show that the recovery would have been very rapid had the government not intervened.”
The bottom-feeders have come home to roost, only Barry’s fantasy ‘stash’ is coming up dry and the well is only going to dry up more when the wealthy close shop and the middle class can’t work.
On a personal note, we don’t know if we’ll keep our home even though we’re one of the lucky ones who aren’t upside down on our mortgage (because we’ve owned it for over 17 years) but being in the construction/carpentry/building industry is NOT happening right now and repairs and remodel jobs are few and far between.
Scary, demoralizing, uncertain times…indeed.
Life of the Mind @ 6 “2. cut regulations”
IAdog @ 10 “A key factor could be the recent rise in government requirements, regulations, and red tape.”
This is a definite line of attack on the Big Government types.
First, cutting excessive regulations has the great advantage of actually getting at a root cause of the de-industrialization that is the source of the current unemployment.
Second, it will be a whole lot harder for the usual suspects to demonize a call to cut regulations than a call to cut tax rates.
If the Republicans were smart, they would promise a Congress that would focus on rolling back laws & regulations, not making new ones. Of course, Congressional Republicans are not smart. But maybe entities like the Tea Partiers and L3′s CLA will show them the way.
I have ideas on how to make money.
This would be a great time to buy up surplus merchant shipping that is sitting at anchorage in places like Singapore. Shipyards are also underutilized right now and this should be a good time to bargain hard for deal if you can bring them work. My idea is to take small to midsize, 6-9000 dwt, freighters and replace the old diesel plants, no one runs steam anymore in a merchant ship, with one of the small sealed nuclear plants that are occasionally mentioned. In addition it should be possible to fit them for modularized defensive systems that could be installed and removed with special teams when transiting pirate infested waters. The two greatest expenses in operating a ship are the crew and the fuel and a third is insurance. Improved technology reduces the crew size and nuclear power eliminates fuel costs as an operating expense, once the plant is installed and subject to refueling once every five years or so. Unfortunately I am not a nuke, and I get to glow in the dark with distressing infrequency. It is my wild ass guesstimate that a 15 MW plant that could easily replace the diesel engine should cost around $15 million. With the cost of obtaining and restoring a suitable vessel, there is no reason to pay for new construction in this market, and the associated engineering and architectural work, the first unit should cost about $50 million and follow units significantly less. Since the economy is so bad this year it is a good time to do the shipyard work and with luck in a 18 to 24 months such a ship could generate profits of $100K/wk. I could see a market for variants that do not even engage in merchant shipping but function as mobile power, desalinization and waste processing plants. They would have lower costs and be in demand around the world.
Anybody have any loose change under their couch?
Eggplant,
Naval officer in Weapons, Operations/Deck and Intelligence, HS History teacher at the worst and second best schools in NYC, in Finance held series #7 since lapsed, worked retail trade, Supervisor for TSA and completed 13 of 15 weeks long course at FLETC for Customs before a minor injury. Also low level politics in several campaigns and Office Manager on campus. Much Red Cross experience in logistics, damage assessment, mass care and shelter operations. Thank you for asking.
To be blogged under the title “Commodore Life.”
Count young people who have never held a job in the unemployed. My 18 year old son has had no luck finding a job. The bad economy and the minimum wage are responsible. What business would hire someone, in this slow economy, at $7 an hour whose only entry on the resume is “dumb kid.” Okay, my son is not really dumb, its just that he has no experience.
My husband was laid off last year. He worked for a small family owned manufacturing company. He has since gone on disability, something that would have happened anyway, given his condition. The recession just sped it up a bit. But I just spoke to someone at the company, and now nearly a year later they are still hurting and have had to lay off more people.
It’s really tough to see so many people go through long term unemployment. I agree with Bogie Wheel that people would be able to endure this if they saw everyone feeling some pain. That doesn’t work when gov’t employees get fat raises, lobbyists live high off the hog, and the banksters take home gargantuan bonuses. Keep that up, and a populist revolt will ensue.
I recommend this article, as it is highly relevant to the topic of this post. Note the title in the URL – “we are so screwed”.
LoTM -
Interesting idea but that is a 10 year return on investment by your own figures. What exactly would we be shipping? Pizza? China has the goods, the resources (because they secure it world wide) the means of production, and they own the shipping companies.
I had a fantasy several years ago that I would start an organization that promoted products that were produced by democracies that exhibited good governance. A consumer democracy would vote for a better world by voting with their wallets. Why buy something a little cheaper produced with slave labor when it puts your neighbor out of business and your property values sink? It is theroethically capable of working except that Americans would rather have thier filthy swag and a failed nation. He who dies with the most Chinese gadgets wins.
Shucks, before I got forcibly retired on the 18th of December, I was down to 18 whole hours a week. And I know of no contract employee at the airport who got more than 24.
This rather represents the employment picture as a whole.
The basic problem is debt—–entirely too much of it. And of course John Maynard Obama
wants everybody to borrow more money. Or is that Herbert Hoover Obama?
Of course building 600-800 F-22s would create a whole bunch of jobs. And since each drilling rig in action directly employs 4 men for each of 3 shifts as well as all the ancillary personnel it takes to keep them a-drilling——well you get the idea.
Those 5000 megawatt coal-fired plants H Reid screwed would have required some jobs to construct and others to operate. BTW mining the coal would have employed more folks than not mining it. Ditto for the Navajo coal no longer being mined because the shut-down 1500 megawatt Laughlin plant is no longer employing anybody.
Aerospace??? Fergetaboutit. Agricultural jobs in the CA Central Valley? That would
disturb a few minnows, at least until after
D Feinstein and company complete their land grab.
Complete Yucca Mountain? Restore grazing permits on BLM land? Whatsa matta? You want prosperity or sumpin?
Since stupid people manage to screw up the right way every now and then, all this is not just bureaucrats and politicians being thickheaded. Somebody or other expects to get what they want not in spite of making others miserable but because they make others miserable.
Those responsible will come to grief. But it will be a pleasure to escalate things at their expense.
Lifeofthemind,
Good luck finding work. Pursuing a job as a HS History teacher might be your best option assuming that you don’t live in California. If you do live in California then moving to another state might be a good idea.
I flat out don’t know what I would do if I lost my job. I’m trained as an aerospace engineer. Aerospace engineering is a notoriously unstable profession with aerospace engineers typically spending months unemployed. I prepared for that eventuality by training myself in computer programming (C and assembly Language) and that second career option actually saved my bacon after a contract ran out during a bad recession. However since the Dot Com fiasco, computer programming is no longer a safe Plan-B. I feel like I’m doing aerobatic flying without a parachute and don’t like it.
As I previously mentioned, I know a bunch of people with masters degrees in electrical engineer and computer programming who have had their careers flushed down the toilet. They are beyond unemployed and need to completely retrain into new careers.
jwillie @ 23 mentioned the “we are so screwed” article. The theme of that article is the world economy is setting itself up like a row of dominoes. Greece is on the very verge of defaulting. Normally this would be no big thing but a Greek default could easily trigger a chain reaction within the European Union. The American economy is hanging on by its finger nails due to our own financial misconduct. If the EU suddenly imploded, it would almost certainly pull the US down with it.
Ok.
I live in the future America, now. It is an area of post WWII retires, who worked for and retired from companies that no longer exit. They voted locally and state wide, as if it is still 1955, that America was getting stronger, wealthier every day. The other main voting block are the iron triangle of cops,firemen and teachers. Other players are union construction workers who are really mobile government construction and road workers. Another big player are private contractors that mostly subsist on gov worker. Prisons, courts and sheriffs make up a nice little group. Other groups are government forced, rent seeking insurance firms, lawyers, tax accountants and so forth.
This still does not included the successful and growing disability industries. Young, old, all trying to get on the dole. Federal payments, free drugs, Section 8, with basic cable and a free cell phone. Not bad non work if you can get it.
It sure beats working in a kitchen and clearing 500 a week, or scrounging for landscaping, or competing against legal and their illegal crews for crappy done, rip them off painting, sheetrock jobs.
So, how do I survive? I don’t pay. I’ve worked under the table for a decade. Every tax, fine, fee, permit that isn’t extracted from me by gunpoint, I just ignore. They can take my crappy truck and beat tools, and throw me in the county anytime they want. I belong in jail. I am an honest to God criminal of the system. The thing is, jail, starch food, like minded sports fans isn’t that much worse than working.
Not everyone, but a lot of people are marginal. And on the margins, disability, getting a town grift job are very attractive. My main hang out bar, a solid working class/tradesmen/small business, I’d say half the regulars are either wholly or partly, under the table. Anything you want. Lobster, engine rebuild, house built, boat fixed.
It is a rotten system, but Adam Smith said there is a lot of ruin in a country, and we’ve just started. I wouldn’t mind …seeing the state house, the county courts burning to the ground. I don’t associate anything useful from the paper generation, rule, tax, fine, fees, edicts, diktat factories. I won’t be the first, but I will be the hundredth.
I’ve been a computer programmer/web devloper for about a decade now. Spent ’07 and ’08 working for a major entertainment company (think mouse), and have spent the last year working for a private business owner, helping him to build a viable web business.
Here’s the rub: My current employer pays me directly, with no taxes taken out. That means come April I’m going to owe a comparatively large chunk of change to Uncle Sam and to the once-proud State of California.
No whining, I’m grateful to be among the semi-employed as opposed to the flat out jobless.
But I think it says something about our current status as a nation that my single greatest source of financial paranoia at the moment is how much of my earnings my own government fancies itself entitled to.
“First, cutting excessive regulations has the great advantage of actually getting at a root cause of the de-industrialization that is the source of the current unemployment.”
THANK YOU. For saying that. It’s made me nervous for years that we have fewer and fewer manufacturing jobs. They feel so much more substantial than these flimsy service-sector jobs.
Among other things, I’m an editor, and have worked (on-staff and freelance) for some of the biggest and most prestigious. Now I’m working for — INDIA. The Publishers outsourced their book-editing to India, and at first the Indians did the work themselves. Now they’re the traffic managers, hiring American and English editors, because their own workforce can’t handle the English-language demands (not fluent enough). Our pay, which was never munificent, has sunk to a level about 1/3 of the way down the ladder toward Bangalore’s.
I must say, though, they’re very polite. But even that work has dried up. I too am partially employed, with three gigs that are dwindling fast.
Black market, anyone?
Ah, I see Paul has already gone that way. There are a lot of us in NYC who barter, do Freecycle, Craig’s List, etc., and work out our own deals. I was laughing at the tax thing up the thread re car deals: No one I know, and I do mean NO one, ever paid tax to the Jokers on a private car sale. Pshaww!!
How are They gonna know, anyway? Well, I guess if They ever manage to outlaw cash money, we’ll have to use seashells instead.
Good hunting, all.
LOTM
I read that you’re fluent in french, you could probably fit a job as a lecturer of english language in the Lycée Français” of New York, or to apply for such a job in whatever universities in France that have english language as a discipline, this could insure you some wages for a moment
A ditch digger with heavy equipment earns a lot more than a ditch digger with a shovel.
The difference is capital.
Capital is extra money.
The rich have extra money.
Heavily tax the rich (“who don’t need the money”) and they buy government bonds instead of bulldozers.
Government bonds pay unemployment benefits.
The moment of choice is the decision to tax. Which stable system do you want?
http://worldmeets.us/lemonde0000222.shtml
the opening discourse of Davos G20 (video en english
LOTM,
How would I contact you re a business proposition?
I’m unemployed, but not in dire straits, so cry no tear for me. “Something will turn up.”
The damage of an extended economic downturn will be tough on everyone, but the future enormity really hit me in the gut when I discovered Tuesday is Senior Discount Day at Kroger.
The faces of the truly elderly (I’m only in my 50s) are scared, and sad. In the afternoon, the “on sale” shelves for tuna fish, spaghetti sauce, and beans are empty.
And it’s only now that that I realize their plight. Their retirement savings — those little dribbles they stashed in an IRA or home or 401(K) — have shrunk. Rampant inflation lies slobbering and growling ahead. No one is predicting a vibrant economy for the next ten years.
And MANY CAN’T GO BACK TO WORK. Their jobs are gone. They can’t take retraining classes. And even if they did, their opportunities are limited because old folks aren’t favored hires. They have health problems. They haven’t had to keep up. Blackberries are still what grandma put in pies.
And they know Social Security and Medicare are in the cross-hairs, regardless. The big question for them is “Can I at least die with dignity before they start cutting benefits and just issue ‘the pill?’”
This nightmare is just beginning. And my question is whether America will now do to its elderly what its done to the unborn.
“It is my wild ass guesstimate that a 15 MW plant that could easily replace the diesel engine should cost around $15 million.”
http://en.wikipedia.org/wiki/SLOWPOKE_reactor
It’s called a “Slowpoke” reactor. Development was stopped short of conversion to a Marine power plant; AMPS (autonomous marine power source) in the late 80′s.
15 mill MIGHT get you the rights to develop the concept farther. Figure 10 times that to finish development and then another 10x to get it licensed and start-up for manufacturing. Put that deal together and you will be the Bill Gates of shipbuilding for the 21st century.
In the real world, we are all going to have to hold on for another year or so.
I still fear the Usurper finding a reason to cancel elections this November, which he can do with the consent of Congress. I doubt that the Majority of US Citizens will stand by and starve while Congress conspires with the White House to completely destroy the Constitution. It will mean a civil war.
Hopefully, the elections will take place and Congress will flip.
Then the Usurper can be removed legally and we can get back to work restoring America. It won’t be that hard, since the foundation (the Constitution) is still strong. All we need are elected representatives that pay more attention to that Constitution then lining their pockets.
I run a small business and can lend some anecdotal data. We have a very large customer, who has told me that prior to last year’s crisis, he would have been able to put us under a general contract in the seven figure range per year. Instead, because of cost controls, we need to handle things on a piecework basis – think in 10′s of thousands at a time. First, imagine the amount of contracting overhead that increases as a result – which ends up costing all of us more – it is a hidden tax. Second, without the stability that would come from the longer term contract, we can’t grow – how can you commit to bringing on a new person when you don’t know how long you can retain them? Third, together this means that an inordinate amount of time is spent selling and sourcing – talking to people, just in case purchasing decides that engineers in India are cheaper or finding an old friend (unemployed) to do some piecework on a very short term basis. As a business, we are in pergatory. At the end of 2009, we had our best year ever, but the uncertainty and stress was enormous all year long. We knew that at any given point, the cash flows could stop in 60 days. 2010 appears to be no better. And this notion of offering $1k tax credits for hiring new workers? Hah! Our health insurance just got jacked 29%, as the insurance companies were hedging against passage of the health care bill and my liability insurance increased 50%. It ain’t pretty out here. I feel for those of you who want to work, but can’t find anything. I want you to know that those of us running businesses want to expand, but are handcuffed by the uncertainty. Big companies are hoarding cash for the same reasons. One side effect of this is that if/when things do turn, it may be better/easier for me to just sell my business to a larger, cash hoarding company than to continue independently. Time will tell. It’s scary out here. Even if the gov’t cut loose the chains that bind, the mindset is such that I would wait a year to see if it was real and wasn’t going to be pulled out from under us – because the trust is gone.
“The powderkeg that we now sit on in America is that the livelihoods of those in the private workforce have been and are being sacrificed to prop up the livelihoods of public sector workers (and the entire bureacracy and nanny state structure that has been erected to keep the public workforce growing and growing). The situation is unconstitutional and unsustainable. Radical dismantling, not cosmetic sham reforms, is likely necessary to save our Republic. But we are back to the rule of human nature: strike at a person’s livelihood.”
Exactly. You cannot enrich bankers with average bonus pools of 6 million each for the genius of lobbying for government bailouts, while creating tons of six figure salaries with full pensions and benefits in the public sector while the private is wiped out by the money printing and spending required to do that. In other words, recreate the zombie bank and zombie economy of Japan for the last two decades but on an even more gigantic scale. America isn’t Japan and (I hope) we are not as compliant. Nor is American society going to stay stable if all hope of upward mobility outside of government and related nomenklatura evaporates. For one thing, unlike Russia in the Nineties when oligarchs were looting the country most Americans don’t own their apartments/homes outright. That means if income dries up and they cannot meet their mortgage payments they either become renters in their own homes (the lucky ones who can still find decent work at reduced wages) or the repo/eviction men come, but it reaches such a huge mass that police more or less stop enforcing the orders. And some cops may actively engage in civil disobedience, telling the banks to shove it since the homeowner didn’t get bailed out like the bankers did.
It’s why the Tea Partyers are not a fad and will not go away. There are simply too many highly educated smart people as mentioned on this thread who have years of fight left in them but ‘terminated careers’. They will not go quietly into the O’s glorious future. D Carney and his ilk are still too arrogant to realize they are turning people that in normal times might be apolitical or mildly skeptical of the Democrats into hardened anti-state radicals.
hope and change
it’s only fair
we must have obamacare
seiu is waiting for you
hope and change
it’s only fair
life will be great
if you just get obamagate
hope and change
it’s only fair
acorn will count the votes
obama will win the vote
hope and change
it’s only fair
once the house gets it’s deal
healthcare is the new deal
hope change
it’s only fair
unemployment will rise
but the obama govt is on you side
hope and change
it’s only fair
good luck to all this year
“because the trust is gone”
That pretty wells sums it up. The leftists have been saying for years that America is bound to fall and the alternately that it is too big to fail. This dalliance with Marxist ideology was never agreed to by a majority of Americans and would not have gotten this far if it were not for an unhealthy dose of political correctness. If it aint broke you don’t fix it and if it is broke a little you fix it a little. It would appear to the outsider that we are shoring up the dam by trying to chase the clouds away and the current administration is having their childhood economic theories put to the test writ large with the largest economy in the world. A good majority of the nation would like to have our future secured by a cadre of stodgy old men who know how to run a bank, you know, good old fashioned hard work, but even the checked pants Republicans have been tempted with the fruits of money market crack and have lost touch with what has sustained our prosperity for all of these years. Trust is gone and if we can’t claw our way back to it we’ll will indeed be staring into the abyss.
I myself just turned 50 this year, and I too work in the defense industry. I used to design consumer products but we are way too smart as a nation to make those anymore. We are capable of regulating ourselves so that only our competitor can produce and they do so whole polluting the planet more than we. That hardly makes sense. Anyhow, I am at the top of my game work-wise but I am in an ever shrinking pool of sharks in my own department and it is a matter of time before the frenzy for the last stakes takes place. I hope to hold my own but am preparing for the worse.
This nation needs confidence and all we get is the terror of progressivism.
I am in the process of reading Dr. Thomas Sowell’s book, “The Housing Boom and Bust.” No great surprises there; the Belmont Club already knows the truth. So far I have found out that after the enhanced CRA was passed Janet Reno stated she was going to prosecute banks that discriminate against types of people for loans and that Bwany and Chris and Christine were even more in the tank for Freddy and Fannie than I had thought. Also, President Bush promoted a government funded down payment program.
But relative to jobs, I wonder what the economic trajectory would have been if not for the effects of the CRA and related policies. So much emphasis was placed on building and selling and mortgaging homes that people developed job skills and attitudes that were appropriate to that environment. We not only converted a great deal of real and imagined wealth into bricks and mortar and 2X4’s that were not needed but left many people with the belief that the situation was Normal. The really bad part is that people like Trangbang who were not in on the bubble but just earning a living are hung out there now.
In our county there is now a 10-15 year supply of unoccupied housing built up. Given the downturn in local industry and the snowbirds’ 401K’s it is probably worse than that. There is no way that can get fixed any time soon.
As Dr. Sowell points out, the crash was caused by government policies, local, state, and Federal. I fear an attempt to fix the jobs problem by more policies designed simply to create jobs and not support a robust economy. In one Florida county their economy was so based on building houses that a county commissioner suggested taking the emergency fund and use it to build more stuff so to give work to unemployed citizens. They can’t get it out of their heads that the good times were fake.
RWE/40 – “I fear an attempt to fix the jobs problem by more policies designed simply to create jobs and not support a robust economy.”
And this is why all the engineers whose careers have been terminated need to become active politically, running for office and winning to take on public service as a second career. We need people with skills and experience when it comes to solving complex problems within a system of constraints.
These morons with law degrees and sophistry who never created anything that output more value than the intrinsic value of the inputs, who think that the answer to every problem is to throw more money at it or to assert tighter controls over it are done. They have overstayed their welcome and I wish to see them run out of town on a rail this fall through peaceful revolution at the polls.
I have a close friend who is convinced that the Dems, knowing they are on the cusp of getting slaughtered in the wake of what happened in MA, will manufacture a reason to postpone the election. I have my share of tinfoil hat beliefs (i.e., Obama has no proof of citizenship, a Goldman Sachs cabal runs the Fed and Treasury), but I think that trying to postpone an election would be beyond the pale. The Founders knew that the means of preventing violent Rebellion was to give the people two year cycles to voice their discontent. Take that away and boom! I predict that the immediate response would be a handful of states declaring Secession (TX, NH, VT at least) and then some unseemly ends to some highly visible politicians. That would be the end of the Republic. I don’t want to believe it could happen, but I do believe that we are closer than I’d like us to be. Ass Bogie said at 12, the powers that be are skirting the line with threatening the welfare of too many families. And in America, we culturally don’t take kindly to serfhood – it just doesn’t set well.
At this point, I am not quite sure if I would be considered employed, or unemployed, or retired. I have a military pension that pays the mortgage and some bills, but all the rest of my income comes from a trickle of book royalties, from a partnership in a tiny publishing business, and from freelance editing jobs. I gave up looking for regular employment two years ago. My daughter, as a college student on the GI Bill, would like to work part-time, but all she has had in the last two years is a once a month housecleaning gig, and a couple of hours once a week as a handy-man and general assistant to an elderly friend of ours. I guess ‘under employment’ describes us best. Personally, I don’t want to return to straight employment – I’d just like to have more paying clients than I do at present!
Part of the problem with the stimulus, above and beyond the poor reasoning, is a good chunk of the stimulus created jobs are open only to existing federal employees. Also, if anyone has tried applying for these jobs, as I have, many require either some previous federal experience, or else you are supposed to figure out whether you have equivalency to the federal grade experience; and if, like me, you’ve spent your life working in the private sector, it can be difficult to match that experience up exactly with the Federal grade equivalency. It’s a byzantine system for anyone who hasn’t worked in the public sector previously.
By the way, I think that part time jobs are going to be the way to go for many of the unemployed. When I retired from the USAF in 1999 I took a part time job with a defense contractor. It has at times turned out to be a full time job for part time pay but it gave me a lot of flexibility. I got cut back to 50% of my usual work 4 years ago and then 25% of 50% for the next two. Last year I made it up to maybe 40% of what I had known, but also learned some new things. This year looks to be lean, with maybe $4K of work guaranteed, but the boss called on Friday and gave me a new task related to an analysis we are doing for a new rocket, so it may turn out to be a bit more than that.
But I actually have 3 part time jobs, working for the company, consulting, and writing. And aside from that I was even able to pick up a few bucks taking aerial photographs. The writing has not proved to be very lucrative but has been a lot of fun, and among other things I have been able to see to it that some WWII vets were recognized before they passed away.
Multiple part time jobs make a lot more sense and are easier to get than one full time job. I can’t recall who it was but as a teen one famous and very successful investor was unable to get a full time job as an office boy with any of the Wall St. firms, then tried being a part time worker for 3 or 4 of them, was hired and went on to billionaire status.
Novanglus #41: Yes, you are right. DC needs a periodic injection of competence and common sense. Of course, they too eventually will become either corrupted or frustrated but that is why it is a periodic process. And please don’t call Bogie an ass!
23. Annoy Mouse:”…I would start an organization that promoted products that were produced by democracies that exhibited good governance. A consumer democracy would vote for a better world by voting with their wallets. Why buy something a little cheaper produced with slave labor when it puts your neighbor out of business and your property values sink? It is theroethically capable of working except that Americans would rather have thier filthy swag and a failed nation. He who dies with the most Chinese gadgets wins.”
Excellent idea, and one that we should expand upon. Actually, now is the time to buy American. We don’t need any more cheap crap – we can’t afford it economically or politically. If it isn’t made in the USA, or, if pressed, Canada, I will not buy it. Sure has cut down on impulse purchases. I do a lot of reading at the library, too – won’t buy books made elsewhere (that hurts).
Actually, I think there are a great many Americans who “get it” and who are ready to buy American, or from democracies. The American consumer is 75 percent of our economy. This is the same thing as voting – except with our wallets.
What we need is a stealth campaign to begin with, one on the order of the O campaign signs. Doesn’t take much to make a bunch of signs with a memorable tag line and stick them up around the country. And we all need to “just do it”! Who is John Galt?
Real Homes of Genius – Culver City Home selling for $744,500 but Neighbor Home is Renting for $2,250. The Rent versus Buy Analysis and 40 Years of Mortgage Data.
RWE:
“They can’t get it out of their heads that the good times were fake.”
Link above shows the tenacity with which some hold onto that notion.
House in question, a 3 Bdr, 2 Bath starter home built in 1950 in Culver City is listed for $744,500 !
The good doctor pencils this out, showing that the monthly nut on this gem would be
5 thousand dollars @ 6% interest!
Needed Income to qualify: – $214,000
Average Income in area: – $82,000
Cost to rent in same area, around $2,200/month!
Meanwhile, inland areas in SOCAL have reverted to National Averages, making buying more attractive than renting.
Dreams Die Hard,
Especially when subsidized by the Feds.
Meanwhile, unemployment in California is above 12 percent and rising.
The condition of the State’s Economy?
Comment by MJL @ above link:
“This weeks Barron’s lists California as the 10th riskiest “sovereign debt” in the world, on the same list as Dubai, Greece, etc. The credit default swaps impute a risk of default on California bonds of approx 25%. If this should happen, besides the general mayhem and imploding real estate values, what effect would there be on Proposition 13 taxes?“
Larry Summers, economics adviser to US President Barack Obama, probably coined the most memorable phrase of this year’s Davos when he said the world was experiencing a “statistical economic recovery, but a human recession”.
I understand the human recession part but I would love to hear someone breakout the meaning of “statistical economic recovery”
Presumably that means that paper assets are getting better fundamentals since they are based on stats. Which means that the relationship between the paper and the underlying assets is on the mend. (that doesn’t mean that this relatinoship has been restored.) Recall that in 2008 there was no way to value a lot of mortgages on the books.
I am a big proponent of nuclear power – because of the certainty that the supply of fossil fuels will some day run short of demand. Four decades ago, the US could build the large steel vessels needed for nuclear reactors. Today, those factories are gone, as are the steel mills that fed them. Only Japan can build those vessels today. And we wonder why there is un/under-employment in the US.
Drill, baby, drill! There’s the answer. Yet the huge floating platforms needed to develop discoveries in deep water Gulf of Mexico are fabricated in Finland. And transported to the Gulf of Mexico on specialized ships built in Norway. Neither of those Scandinavian countries is seen as a cesspit of pollution, yet they manage to support job-creating heavy industry.
The sensible way forward for the US is a massive roll-back in excessive regulation, followed by a rollback & simplification of business taxes. Once the economy has been restored, then we can get back to arguing about dividing up the pie. But no business, no economy can support the level of overhead of our current regulatory burden.
Of course, even if the US pursued a scheme of sensible regulatory rollback, it would take years to correct the situation. And in the meantime, the very rickety structure of our society will be highly susceptible to an outside shock. We live in interesting times.
Back when the “great recession” first hit I figured unemployment would be a big problem.
I suggested eliminating Social Security Taxes (“payroll taxes”) and other business taxes and replacing them with a sales tax — introduced gradually after the tax elimination as a form of broad based economic stimulus. The taxes eliminated are already in the price of the products we buy. Replacing them with a sales tax will make these taxes visible — and thus be unfair to politicians and those dependent on them (who will scream that a sales tax is unfair to the rest of us). Of course, it is important that the other taxes be eliminated first (if they are only reduced they will be raised later) and the sales tax be “revenue neutral.”
The sales tax will fall on imports but not on US exports. The other taxes will be eliminated from the cost of our exports. That would make US labor and businesses more competitive in world markets. And this is very, very important. Why?
Because we need to finance our government deficits from domestic savings and our citizens need to save more for retirement. Right now, a big chunk of the financing comes from foreigners. Like addicted gamblers and drunkards, our leaders seem determined to destroy our credit rating and livelihoods rather than stop the borrowing. As President Obama might put it: “I will not quit borrowing, spending, taxing and regulating! You must quit lending, selling and producing! Because I will not quit! I’m going to keep doing it! I’m talking to you! Get it? I don’t care if ruination comes down on all our heads! I WILL NOT QUIT!” or words to that effect.
But let us assume that we adopt a more sensible approach to our financing of government borrowing. This means domestic consumption will go down and savings go up — which means we have to export more and import less (the balance of trade must swing toward “surplus”) to keep both production and employment up.
Next, we must control spending. As a general rule, economies show robust growth where government at all levels spends less than 30 percent of the GDP and experience sluggish growth — or no growth at all — above 40 percent (and decay and collapse as it heads above 50 percent). Right now the US is above 40 percent and, if the effects of regulations and unfunded mandates are added in — is perhaps at the 50 percent level. A good initial goal would be to get US spending back to under 36 percent (where it was a few years ago).
The income tax can be made flatter and many deductions for upper incomes be eliminated.
I can state with confidence that when President Obama speaks of encouraging the development of nuclear energy and our oil resources he is saying things that just ain’t so. Certainly his past behavior argues against believing him. There may be some legislation that seems favorable to these industries but roadblocks will be put in the way. In other words, it is another manure ice cream Sunday for the US economy. However, if we were to develop our oil resources and expand our refining capacity, hundreds of thousands of high paying new jobs will be created and it would also help our balance of trade while bringing down energy prices. But the DC Democrats are still — “objectively” as the left would say — the most important members of OPEC because they keep more oil off the market (i.e. the North Slope) than any other member of the cartel. Based on current behavior, they will have to be booted out of power before the US develops its energy resources.
The US economy is a like a race horse and the Democrats think, “if it is fast it can carry more weight.” And so they turn it into a pack horse for their immediate purposes. And they figure as long as the pack horse is heading across the field they will attach a plow to it. Someone or something needs to take the blame for the predictably poor results. How about we pin it on Free Markets and business?
I once stood in a line while unemployed of about 300 people for any job available from a new plant that made injection molded Toys, slides and swing seats which at it’s opening day would not employ more than 34 people.
Back in the bad old days of the late 70′s gas shortage time.
Doug #46:
Dr. Sowell gives as an example a 2 bedroom bungalow in Oakland, CA, bought in 1954 for $11,500, turned over to the kids of the buyers years later, refinanced multiple times to take advantage of the equity and finally lost by the family in foreclosure in 2005, with a total of $450K owed on it.
And that is Oakland, not San Francisco, Santa Barbara, or even Palos Verdes.
snip…
snip…
OH Boy…Obama has stepped in it now. Of Course Congress would never approve it but by even mentioning this in a shused voice on a Sunday (hoping nobody would notice it) he and his administration will bring the frustration and anger of American Mothers that choose this plan.
They choose to do this and ignore hundreds of billions of dollars to pork and wasted (shovel ready) funds.
Do they think that your average American worker can run construction equipment?
Papa Ray
P.S. I would like to know the source [IRS?] of those figures. I don’t think they are correct. In thinking about it does changes in IRS code have to go through Congress?
Anyone who doesn’t think this is the worst and longrst depression in the lifetime of anyone of working age needs to wake up and smell the coffee. This administration is also doing the very same things that Rooosevely did to ensure that we would stay in a depression until something truly cataclysmic like a world war came along.
There are several imbalances here. First the government is sucking up all available credit by running huge deficits thus depriving the economy of job creating capital, and guaranteeing that it will stay deprive for a generation. Second China by artificially propping up the dollar and keeping the Yuan low is engaging in predatory trade practices that in the long run are not sustainable. The hidden hand may not move quickly but it does move predictably. China will eventually pay the price for sure but so might we all if this imbalance sucks the world into a war as the last wordwide depression and trade war did.
I have teetered for some time trying to decide if Obama is a hard core ideologue or just an idiot. He might be both. He did get degrees from Columbia and Harvard after all. But whatever he is I am very afraid for my country that we will not survive three more years of this administration.
We need to cut spending. Cut taxes. Drill wherever there is domestic oil or gas to be found. Get control of our borders, prosecute the war on Islam vigorously and with the tools that will succeed and get back to leading the free world. We are the only ones who can do it. We are the city on the hill and the last best hope of mankind and this slobbering, self-absorbed, narcissistic, manchild who has never held a real job, met a payroll, built, farmed, manufactured, or fought for his own or anyone else freedom is a disaster not just for us but for the world.
http://www.dailymotion.com/video/x32cxf_yuri-bezmenov
some might have already seen Yuri Bezmenov explaining how the Soviets managed to transform a western society into “zombies” in one generation
it reflects what you are experiencing now
Doug/46; re that 25% risk of California sovereign default.
Good to see Veterinarians are protected, tho, Buddy!
My dad had some fake “Peace Officer” Badge that might have been of some use at USC Trojan Booster Club Events.
“The United States had 2.3 state and local government employees per 100 citizens in 1946 and has 6.5 state and local government employees per 100 citizens now.
In 1947, Hodges writes, 78 percent of the national income went to the private sector, 16 percent to the federal sector, and 6 percent to the state and local government sector.
Now 54 percent of the economy is private, 28 percent goes to the feds, and 18 percent goes to state and local governments. The trend lines are ominous.
Bigger government means more government employees. Those employees then become a permanent lobby for continual government growth.
The nation may have reached critical mass; the number of government employees at every level may have gotten so high that it is politically impossible to roll back the bureaucracy, rein in the costs, and restore lost freedoms.“
I was listening to a real estate broker the other day who told us that he had placed an ad in Craig’s List for a part time clerk. He received over 900 responses in 48 hours.
What’s coming down the pike scares the bejesus out me. Living in Metro LA will not be the place to be when the fertilizer hits the impeller. My brother wants me to go to Montana. I hate cold, but better cold than dead, plus I can hunt for my dinner.
21- elby
If you can’t afford to send your son to community college where he can either learn a trade or get credits for further education or if he just doesn’t want to go that route, consider sending him to either an Air Force, Navy or Coast Guard Recruiter. Have him take the tests and see what happens.
Although all of the above have their risks and all are trained as “Warriors”, they stand much, much less risk than those of the U.S. Army and Marine Corps.
If he wants to truly get in the fight then let him see the Army and Marine Recruiters. If he is 18 he can join of course without your permission. He will get a small salary to start, plus everything else he needs to prosper and learn to not only be a man but to learn a productive needed skill set. Then of course the U.S. Taxpayer will pay for his college and other advanced training when (of if) he decides to return to civilian life.
Disclaimer: I served in our U.S. Army and I have two grand sons presently serving and one about to be 14 y/o, who wants in the fight as a United States Marine.
Papa Ray
Doug: “Now 54 percent of the economy is private, 28 percent goes to the feds, and 18 percent goes to state and local governments. The trend lines are ominous.”
I have to pull a “Rufus” and call Bolshevik on your figures Doug. I know this is a popular conservative meme, but no one seems to be questioning the actual math.
The USA has a labor force of 155 million people who average $46,000 a year, totalling more than $7 trillion dollars of payroll.
The portion of that which is federal government is 2.77 million employees with a payroll of $185 billion, so they average $66,000 a year.
The portion which is state and local government is 3.8 million employees with a payroll of $224 billion, so they average $59,000 a year.
Total government payroll therefore is only about six percent of the US payroll and three percent of the economy at large. Total government employees, state, local and federal represent only four percent of the total workforce.
In conclusion, the United States is still a market-based economy with limited government influence. We do not have 46% of the workforce at the government teat, and we are not in danger of tipping past 50% and thence sliding down the slippery slope to Banana Republichood. We would not be the largest economy in the world if we were anywhere close to that situation.
Disclaimers: I am a GS-11 in the Dept. of Defense. Government teat figures may be higher due to unemployment. Some figures come from the CIA “fact” book, and we all know they are a Democratic Party front
Lordy, where to begin. How about that we’ve outsourced 50% of IT jobs to India, and outsourced another 40% of the jobs to H-1Bs who work here, and the resulting 10% jobs still held by Americans are paid at 50% of the salary levels of the 1990s? Nursing and construction jobs can’t be outsourced, but are performed by legal and illegal aliens, again eliminating jobs for citizens and cutting the salaries by half or more for those who do get work. I’ve been doing contract IT work but have not found a decent-paying gig for six months, but have never filed for unemployment – not sure whether I qualify or not. So, I don’t show as unemployed.
But the economy, and jobs, and the financial breakdown, are three distinct but overlapping areas. In regards to the real estate crisis and whether the economic infrastructure can last, how about this:
http://townhall.com/news/business/2010/01/31/watchdog_bailouts_created_more_risk_in_system
So, the federal reserve has pumped yet another TRILLION into the markets over the last year, to keep us as strong as we are – with 10% or 17% or 25% unemployment, underemployment, whatever it is.
I’m not sure what that means – must they continue to pump like that or we sink, or have they bought everything there is to buy, and do they have to unwind it at some point, or is it all wonderful and OK and magic? All I’m really sure of, is that billions of that trillion are going as compensation to the likes of Goldman-Sachs, and when it comes to that, I only wish Obama would live up to his leftist post-colonial self-image – or I wish the Republicans would get on board whatever wagon they need to get on to save the capitalist system from these outrages – before it comes down to pitchforks and torches on both sides.
Um, do I have a bottom line? I dunno. I just want to revert to my first point. There are a lot of influences of globalization in our current problems, both in jobs, and in finance. Greenspan blames the Chinese for loaning us our money back at too low rates! Greenspan was also a proponent of the H-1B program, that has helped cut salaries in IT by 50% in ten years, 75% over twenty years (OK, maybe some of that was going to happen anyway as a “maturing industry”). Not to mention steel industry outsourced in the 1960s to 1970s, consumer electronics and automobiles outsourced … no manufacturing, and we wonder at a jobs problem?
So I can’t see any small or easy solutions.
“Stimulus” won’t do it, the money will just flow overseas.
MC/54; –on Feb 25th of 2009, the House Committee on Foreign Affairs held a hearing titled “From Competition to Collaboration: Strengthening the U.S.-Russia Relationship.”
Here’s that title’s result as a google search term and here it is from Bing.
Here’s a snip from the intro of the top item on the google search:
Testimony
of
Andrei Illarionov,
Senior Fellow, Center for Global Liberty and Prosperity,
Cato Institute
before the
House Committee on Foreign Affairs
From Competition to Collaboration: Strengthening the U.S.-Russia Relationship
February 25, 2009
Chairman Berman, Ranking member Ros-Lehtinen, Members of the Committee,
Thank you for the opportunity to share with you my views on the current status of the U.S.-Russia relationship and on possible consequences of its strengthening in near future.
Disclaimer
First of all, I would like to provide you with a necessary disclaimer:
•I am a Russian citizen.
•For number of years I worked at different posts at the Russian government and the Administration of the Russian President.
•Since my resignation from the positions of the Russian President’s Personal Representative to the G-8 (Sherpa) and Adviser to the Russian President in 2005 I was not employed by any Government and did not receive any payment from neither Russian Government, nor the US Government, nor any other Government.
•For last two and half years I do work for the Cato Institute here in Washington that is a non-partisan think tank not associated with any of political parties existed in the US or in any other country in the world. According to its Charter the Cato Institute does not accept financial support from any government, government agency or government-related program.
•As a Russian citizen and a Cato Institute employee I am not in a position to advice either the US Government, or esteemed members of the US Congress. Whatever I will say here today, should be considered as background information that you are welcome to use as you find it suitable.
•Whatever I will say here, should be considered as solely my personal views on what I see as the best interests of the Russian people on a way one day to create and develop Russia as a democratic, open, peaceful and prosperous country, respected and respectable member of the international community, reliable partner of other democratic countries, including the United States. I solely bear responsibility for everything that I say here today.
In my testimony I touch upon three issues:
•challenges from the past of the U.S.-Russia relationship;
•challenges to the Russian people, neighboring countries, and world peace from the current political regime in Russia;
•forecast of what could happen if the approach that is been announced and taken by the current administration will be fulfilled.
(end snip)
Tough to know what to make of it, but at least we can know what the House Committee on Foreign Affairs heard about a year ago.
***
Mz T, doug’s figgers came from the link in comment #55 –
I have been looking at the Fair Tax concept as a way to shift the economy back towards real productive activity. There are reasonable arguments raised against it regarding compliance and other issues. Perhaps this could be a case where Federalism should be put to work.
Paul,
At #26 you have described the problem well. The only way to cut that knot that I can see is my idea of withdrawing the franchise to vote in any federal election in which the aspirant Elector has received the majority of their income during the any 12 of the preceding 24 months from funds disbursed at that level of government, with an exemption for enlisted members of the armed forces. A similar restriction should apply to persons who draw the majority of their income from funds drawn from the state treasury.
To be blogged under the title “The Fair Tax?”
26 Paul
For over three quarters of my working life I held three jobs. The U.S. Army, Installing auto windshields for three months and then going to work for Big Blue and staying there for twenty nine years and one half months. (yea, they did that on purpose) until being forced to retire along with 29,000 others that same year.
I had lots of money saved, invested and otherwise squirreled away. I owned two homes, three vehicles and enough other crap to fill three large storage buildings. I had more toys than some would say was legal. I even had a big ass houseboat with two smaller fishing boats and two spare engines. I could go on, but it would just be bragging.
Has beens and once wases bragging is embarrassing and unseemly.
A long time later, after many good years and many misfortunes plus two ignorant mistakes and then the latest disaster.
I’m nearly broke today and all my assets are almost gone.
Plus I have had another family to take care of and raise for the last eight years. Which is my two sweet little grand daughters and their near worthless mother.
I have worked part time at various jobs and projects under the table since I was retired. Cash or barter only.
All of my friends are ol’ Vets like me, long retired and/or disabled. We take care of each other and run business or deals to/from each other from other circles of friends or acquaintances. Plus we have went in together on a few deals and on all but one made money.
But we are all nearing the end of this wonderful journey.
In the next few years you will see much, much more of this because there just won’t be any jobs and families must be taken care of one way or the other. Of course some will just hang on to the nanny tit but usually it’s not enough to get by on and it sure won’t fix your ol’ car or replace your water heater or air conditioner or many many other things that are needed for a faimly.
There are many resources on the web on how to get by in a moneyless society.
People should start reading up on it now because it is not going to get better before it gets much worse.
Papa Ray
marie claude,
(who thought I was fluent in French)
Regrettably moi can pas parlez.
If I ever had the money to build my dream school I would keep the kids in class at least 8 hours a day over 210 days a year and spend at least a third to half of that time on language studies. It is my regret that I do not have language skills and I think that an educated person should know, and I mean really know as a tool, English, Latin, Greek, German (for the science texts), Japanese, Hebrew and one more Romance and one non-Romance language. Sorry to disappoint but my ideal would be Italian (for the opera) or Portuguese (for future commercial opportunities) and Chinese but I can understand arguments for other choices. Each language module would be a 25 minute session every day for a total of 400 hours per language over 4 years.
For the rest I would have 3/4 hour a day each for History, Math, Science, Arts, Engineering/Practical Arts, and Athletics. This should keep people busy from 7:30 in the morning until 4:30 in the afternoon. The atmosphere would be deliberately old fashioned and the intent would be to focus on learning, not holistic ego empowerment. The faculty should be retired professionals who would be paid next to nothing but who would be allowed to actually teach.
Now how to marshal the resources to do this in a setting where the government is kept out of the loop? I even have thought of the name of the place since it would draw on the resources of my small hometown. It is a great dream.
To be blogged under the title “The Gotham Academy.”
Josh/60; Tomorrow, on CNBC, @ 5PM EST, The Kudlow Show will interview Hank Paulsen about ‘what happened’. I understand that ‘what happened’ is past and what’s important is the future –but to me, imho, there are some ghosts lingering in the machine and we need to find them –if for no other reason than confidence –confidence that our efforts going forward within the system can mean something, and not wind up Act III in Gotterdamerung of the American system. If the latter, then for starters Tamquam ought to move to Montana.
***
Papa Ray –raising younguns being the very heart of the future –despite the situation, you’re about as far from being a relic of the past as anyone can be.
***
LotM/64; do it on the web ?
Couple of points. First:
Leftists/socialists seem to believe privately-owned business is unnecessary–that whatever goods or services people need, government can provide them as well as the private sector could. Moreover, they seem to believe that products made by government-run industries would cost less, because govt wouldn’t insist on that icky, nasty *profit* thingy.
As a result, Leftists believe it’s absolutely fine for government–at all levels–to squeeze businesses by increasing taxes, fees, regulations or outright banning the activity, since this a) gives govt more power; b) rakes in cash for govt to use as it wishes (in the case of raising taxes or fees); and c) ultimately kills off companies–all of which are perfectly fine to Leftists.
Second: Almost no one realizes how delicately-poised a modern economy is. Reason is that we’ve all lived in one all our lives, and it never cratered before (except for that mythical “Great Depression” the Ancient Ones spoke of, and that was probably just to scare the kids), so the natural (and stupid) conclusion is that the economy’s gotta be extremely durable, right?
Hmm… A moment’s reflection will show that this “logic” is garbage.
Okay, that was just a bit harsh. The economy *is* durable in that it’s managed to survive a *lot* of abuse by the asshole politicians; but there’s a limit to how much abuse it can take.
And we’ve passed that limit.
The economy is, as they say, “gut-shot”–fatally wounded but still stumbling forward on inertia.
Blame politicians. Who voted for “free money” statist programs in order to get re-elected. And the stupid voters who voted to re-elect them also deserve a share of the blame.
Any reasonably bright 16-year-old would have known that government can’t spend more than it takes in in virtually every year, without *some* sort of eventual reckoning.
Unfortunately, roughly half the electorate is not bright enough to reach this obvious conclusion. These are the “looters”, and no amount of painful reality will ever get them to admit they were wrong, or stupid, or uneducated about the result of what they consistently voted for.
After all, they were voting for what looked like “freebies” for themselves, eh? So what could possibly be wrong with a strategy like *that*?
Stupid, stupid, stupid.
I work for a company specializing in bankruptcy, restructuring and real estate problems. Business is booming and my company is hiring and opening new offices weekly overseas. However, the new employees seem to be fresh out of school newbies, and I’ve noticed a disturbing trend the last few months of hiring “consultants”, which I’m interpreting to mean the company doesn’t want to put mature people on full-time and have to pay them benefits.
Nevertheless, if you’re looking for a new career, you might want to look at bankruptcy and restructuring which don’t appear to require either a law degree nor a CPA certificate.
(My real estate guys are all predicting that a turn around is still 2 to 4 years out.)
LOTM,
How would I contact you re a business proposition?
If both of you can see the Tocque it has a “send a message” to this commenter function which allows you to send a private message to a person.
For what it is worth (after all it is free advice).
Embedded systems – Look it up!
Arduino – Look it up!
Zigbee – Look it up!
Learn C programming language.
Learn to read circuit board diagrams.
Learn to use an oscilliscope.
Look up Android operating system.
Learn to use Eclipse (Look it up).
Think about how to use hand held “smart phones” to contol motors, read sensors, etc. via wi fi web servers.
Google, Itunes U, YouTube are your friends. Don’t spend so much time on politics. You only have limited time. Don’t waste it.
Okay, your turn to give a pep talk. Remember Reciprocity Rewards Revolutionaries (or some such).
End of Free Advice.
(Edit note: All of the above information is Free on the web, just for the finding and downloading, except for the actual Arduino microcontroller which is cheap)
Teresita @ 59 and Doug:
You may both be right. Doug is talking about total expenditures, Teresita is citing payrolls only. Lots more gets spent at all levels of government than diest payroll.
I have two very small businesses. Our payroll in the construction business has gone from over twenty prevailing wage workers to zero, with me and one guy working part time on administrative stuff. Our structural engineering firm has gone from six people to three and one part time. I don’t get paid because we are still trying to dig out from the hole created when a large client stiffed us. We are suing them, which takes forever and costs more money.
We are in the SF Bay Area. There is a surprising amount of residential remodeling going on and because of the new (2007) building code, much of it now requires engineer’s calculations and stamped signed plans. (Architects can also do this but most don’t want to do the calculations.) And, there is some government and large commercial work going on that has been in the pipeline for years and is finally getting built. No new private commercial or industrial work.
Ditto in the construction business. (We are steel erectors). The only work advertised is government and it is mostly “streets and sidewalks”. Residential trades, who are almost entirely non-union and sometimes “off the books”. Also hordes of unlicensed scam artist “handymen” all over craigslist.
Not complaining: because I have substantial equity in real estate, I’ll pull thorough, but I am having to sell things into a depressed market to pay for legal bills. Not real happy, but it could be a lot worse. Also postponing going on Social Security, since I can’t afford to stop working.
And, considering the state of the State of California, it probably will. I am concerned that the electorate has become too dumbed down and degraded to make informed votes. Yes, I recognize that at some point there will be a sea change in our politics, but will the new rascals be any better than the old rascals, considering it will be the same electorate?
I have one daughter who is an engineer, working for a public agency, where they continue re-arranging the deck chairs on the Titanic, designing and planning projects which either will not be built or won’t be worth anything when they are built. I have another daughter who is a attorney specializing in corporate filing compliance and structuring corporate mergers and stock offerings. She is out of work and not much out there. I think this is a pretty consistent story.
I am very skeptical of the 5.7 fourth quarter GDP number. Of course, GPD includes government spending, so maybe that partly explains it. I agree that we aren’t going to see the beginnings of a recovery in real estate for at least the next year and probably more. Office and warehouse vacancy rates here are about 30%. House prices in the better neighborhoods have pretty well stabilized at about 2005 levels. Prices for cheaper neighborhoods are still not low enough for the average working couple to buy in, although tis is probably not true anymore over in the Central Valley.
That’s the news from here.
I have worked as an engineer the automotive semiconductor business for 37 years. I was lucky and found work at an automotive lithium battery startup after nine months of being unemployed. But I know too many engineers in their 50s who are sitting at home looking for any work. All of us should be working at peak salary to put money away for retirement. Instead we are cashing in the 401k to scrape by. Such a waste for the country and the individuals.
Most of us who are working are contract with no benefits. We’re making far less than market rate and pay a fortune for health care benefits. Employers are just too uncertain about the future to convert contracts to full time employees.
Meanwhile my college educated daughters aren’t making enough to even pay their student loans. It’s damn near impossible for young folks to start a life in this environment. The future looks bleak here in the midwest, far worse than the early 1980s recession. I can’t see what is going to turn this thing around.
The comments here are making it sound positively grim. If the learned here can’t find work, what’s a poor schlub like me to do if my business goes belly up?
It would be interesting to know how the percentage of BCers who are employed, unemployed, students, or retired.
As I listened to Meet the Press this morning they were discussing government created jobs. I was wondering how many jobs would be created by the private sector if government restrictions were lifted on the energy companies, coal, drilling, natural gas, nuclear, even wind turbines. This is not my field it is yours. Do you have an answer on this? We need some leaders who will talk about this problem of job creation.
A cousin of mine is an attorney. Decent guy other than that, but anyway. He told me a story about a client of his last year. But first set the wayback machine to 2005. A guy buys a condo in Seattle, No-doc, no-down, blah blah. Moves in. Never makes a single mortgage payment. Never makes a single property tax payment. Or condo association dues payment. Two years later, the bank forcloses. Eventually it goes to auction, and Cuz’es client buys it. Pays back taxes, dues, etc. Goes to tell the deadbeat (who’s still living there) that he bought it, needs him to move out, etc. At this point, the buyer didn’t reaize the guy had never made any payments, just thought he’d hit some back luck, and was trying to be nice. Deadbeat says he’ll need some time to look for a new place.
Keeps saying that, week after week. Finally, buyer get’s fed up and call Sheriff about evicting the guy. Well, this sits on the Sheriff Dept’s priority list about half a notch above jabbing a hot needle in their eye, so it takes some time (quite a bit of it billabe to Cuz). Eventually, 18 months after the auction, the deadbeat is evicted. He’d “bought” the place with no intention of ever making a payment and lived rent-free for over 4 years in a luxury condo.
Bad enough, but the real kicker is, it was the third time the guy had done the same thing. And no, he wasn’t arrested and nobody has charged him with anything.
Just another datapoint in how the scammers are living off the rest of us and suffering no consequences.
Papa Ray
I am in with all that. Thanks.
This is a physically beautiful country, and we still have enough core people to turn this around. Even the people ‘in the system’ know it’s no good, and not good for them. If the Soviets can back out of Communism, we can undo our present racket.
I’m not going anywhere, I like this fight, it’s not that hard and I plan on having fun doing it. If everyone does what he can, as they see fit and are able, we got this in the bag. What ever is going on, the Tea Party, what ever, let’s velvet/beer/barbecue our way to a peaceful revolution.
I’ll see you on the beach some day, we’ll burn some driftwood, drink beer, grill sausages and reminisce til dawn. Count on it.
F/72; re your wondering about situations, i for one, without any change in daily activities, have gone mentally from feeling ‘comfortably retired’ to ‘retired too early, unemployed fool’ –what’s missing is growth –and frankly, the prospect of growth –the markets are just scary as hell anymore. for example the latest swoon, the vix went from mid-teens to high twenties in about three days –the volatility sentiment is in a new world –unmoored to any set of facts and just floating freebird in the blue sky. I’m still ‘in’ but taking hits and sweating blood all day every day. hanging on in the system and wondering what will be the sign to pack a boogie bag and head for the hills. If you lose everything first the commitment will have to stick when you finally go waltzing matilda. But on a cheerful note, i think sites such as this select for the type that feels better plumbing the depths of what could happen under the worst case, rather than pretending that no such case exists.
Observations from an old programmer:
Right now, there are (at least) three strong currents running in the ocean of global software development and maintenance.
One: Depending on how contracts between large corporations were written, the fluctuation in the value of currencies due to the global economy strongly impact on profitability for either the Corporation or the off shore service provider. In either case, general unhappiness arises which leads to rethinking on the part of the Corporation about the cost effectiveness of off shoring work. In the current economic environment, extra expense is not to be tolerated.
Two: Off shoring work to other countries has led to situations that should be familiar to executives here in the USA. Competition for valuable resources (i.e. skilled and well trained developers) has caused a rise in the salary expectations of those resources (Consider the number of cars being bought in China, for example). It has also led to constant turnover from one offshore company to another as these companies scramble to find skilled people to staff their contracts with American companies. This puts pressure on the offshore companies to increase their charge out rates. As in point one above, this causes a cost increase for companies tied to offshore contracts.
Three: This is a very personal and somewhat biased observation, but generally the work performed by the offshore software companies is very seldom satisfactory. This is based on personal observation and anecdotal evidence from other stakeholders in projects involving offshore software companies. My best guess as to the reasons for this are the subject of an entirely different paper.
To sum up, a very quiet opportunity (nobody likes to admit to misjudgments) has materialized in the software business. Many American firms (at least the ones still doing business) are looking for local software support for new development AND for experienced hardcore software gurus to come on board to fix the existing unsatisfactory systems.
Just my two cents.
Programmer
Josh/60; Tomorrow, on CNBC, @ 5PM EST, The Kudlow Show will interview Hank Paulsen about ‘what happened’.
Thanks, Buddy, but I wouldn’t expect him to say much – and not much about jobs, directly, at least not beyond the usual airy handwaving.
And as you say, it’s the future that counts.
Having worked in the private sector my entire life, first as an employee and for the last 22 years as a business owner, I’ve observed the following.
1. Business owners and leftist politicians both realize that any regulation that requires money in order to achieve compliance is a de facto tax, but pretty much everyone else doesn’t know or care.
2. The money that changes hands due to regulatory burden may go directly to the government (OHSA or EPA fines etc.) but more often than not it goes to a third party industry or a union employee who are always beholden to those politicians who promote the regulations, and they will always lobby for the same.
3. The public sector has made the calculation that any amount of tax revenue they receive by removing the regulatory burden from a private business and having the business become more profitable is ultimately less than they will receive (see #2) by continuing or increasing the regulatory burden.
We’re lucky– left the US in 2000 and never looked back. Australia’s economy no prize but unemployment’s at 5.5%. Not supposed to go up past 7% worst case. One of the benefits of a resource-based economy and being so close to China, I suppose.
One thing I do know– it is very hard to contemplate filling out a return this year. Not with BHO running the show.
Never thought I’d get here, but starting to feel like a sucker. A damn sucker.
Bet I’m not the only one… here or in US.
PS The stories I read here break my heart. Family/friends back in US not faring well at all. Mass. election was a ray of light. As Ledeen says, faster please.
unemployed since 10-2001
nobody wants to hire anyone over 40
from my resume
Objective:
Return from retirement to provide leadership, mentoring, and operational capabilities in quality assurance for software systems using advanced technologies with which I have more than 20 years of experience.
Skills:
• Validating the correct behavior of distributed, multi-user, multi-threaded, parallel, and vector processing systems running on high-performance computer clusters.
• Assuring that complex software systems ported to new platforms behave identically to the original system.
• Producing test plans and documenting conformance with those plans to the standards required for software produced under government contracts for military use.
• Leading and mentoring other team members.
• Testing and developing testing tools for graphical, simulation, and scientific applications.
• Reviewing source code in several languages.
• Specifying and purchasing software tools and platforms.
PROFESSIONAL SUMMARY
Software engineering, QA engineering, research and software development, specializing in computational methods, parallel and scalar optimization, using diverse computers and operating systems, developed complex systems in advanced signal analysis, communication, and optics, utilizing state-of-the-art parallel and vector processing computer architectures.
EDUCATION
Bachelor of University Studies, Computer Science / Math, University of New Mexico
Programming Languages/Operating Systems
FORTRAN, C, C++, Perl, JAVA, HTML, UNIX Shell Scripting, UNIX, IRIX, SUN Workstation, PC
SECURITY CLEARANCE
TOP SECRET/SSBI (not active since October 2001)
Buddy,
Andrei Illarionov preached in a convinced audience, his article doesn’t allow any aleatory windows of hope to get along with Russia, one would say it is what he wished, may-be he isn’t that free to return to Russia, might be sumthin he can’t revendique there as “patriotic’s “.
Russia is that he discribed, but not only that, when I read some french expats’ blogs there, seems that they enjoy their life, but they never talk of policies. It is like Chineses, I remember when the manifestations against China occured in Paris because of the olympic games and Tibet, I had the opportunity to talk to a Chinese store holder, I wanted to buy a bag, and oddy that this guy had the leathers’one with european labels, not those imitations made in China. He told me people shouldn’t talk and or make politics, but businesses. So the moral of the story, if you can’t make things change, because they don’t depend on you, then adapt, and mind your own business.
Of course this isn’t our education, since more than 2 centuries we can express our discontentment for the good and the bad, we can change our leaders, but little of the policies, which are more of an underground stream that whoever is on the scene can hardly reverse, administrations have some unavoidable inerthy rules. Though tyrany isn’t a thing that we can support for ourselves, may-be it’s becuz we have different genes.
Otherwise Russians in history hardly moved towards west, but rather towards east, Siberia is their “far-east” and their pionners adventure.
This is why an invasion in our countries isn’t to be expected, though they will press on us for trades, so we must be prepeared for tough discussions.
“At #26 you have described the problem well. The only way to cut that knot that I can see is my idea of withdrawing the franchise to vote in any federal election in which the aspirant Elector has received the majority of their income during the any 12 of the preceding 24 months from funds disbursed at that level of government, with an exemption for enlisted members of the armed forces. A similar restriction should apply to persons who draw the majority of their income from funds drawn from the state treasury.”
You know that you would have to overturn the Voting Rights Act of 1965 to do that, don’t you? Since that’s considered one of the landmark pieces of civil rights legislation in this country, I think that’s gonna be kind of difficult to do. Some of the provisions were time limited – but George Bush signed a 25 year extension in 2006, so we’re not even going to have a national conversation about this until 2031.
Whatever we’re going to do, we’ve got to figure it out long before then.
LOTM, uh open a madrassa, you’ll get subventions from Saudi
F@81: nobody wants to hire anyone over 40
Let alone 50, or 60, both of which are still young(ish) decades if you have your health, good family, and a few close friends.
Anyway.
RE: Paulson. He’s Writing a Book. Due out January 2010.
erc rodson: Teresita @ 59 and Doug: You may both be right. Doug is talking about total expenditures, Teresita is citing payrolls only. Lots more gets spent at all levels of government than diest payroll.
I cited payrolls (and also total employees) because the issue is the tipping point when more voters are supported by the public sector rather than the public sector.
In 2005 revenues at all levels of government was 27.5% of GDP, and this compared very favorably with most other nations, as seen in this chart. No doubt with the recession, this percentage has crept up slightly in the last five years, but I believe the relative standings are the same, and I don’t believe that the United States has become anything like Denmark or Sweden, where the figure is over 50%.
Payrolls, by the way, are only about half of GDP. The rest is mostly income from investments, which ties back to profits. And all those things are well ensconced in the private, not public sector.
Off-topic, but always interesting when The TRUTH inadvertently appears in the New York Times: U.S. Speeding Up Missile Defenses in Persian Gulf
He also described a first line of defense: He said the United States was now keeping Aegis cruisers on patrol in the Persian Gulf at all times. Those cruisers are equipped with advanced radar and antimissile systems designed to intercept medium-range missiles. Those systems would not be useful against Iran’s long-range missile, the Shahab 3, but intelligence agencies believe that it will be years before Iran can solve the problems of placing a nuclear warhead atop that missile.
Of course, when President Obama cancelled missile defense in Poland and Czechoslovakia, and SecDef Gates told us that the new AEGIS/STANDARD SM-3 missiles would be better and cheaper than those dumb old big missiles, we all knew it was bullshit. Exactly the same as when these same fellows told us the F-35 would be better and cheaper than those dumb old F-22′s they cancelled.
GL @ 85: RE: Paulson. He’s Writing a Book. Due out January 2010.
Aha.
Well, I wonder even there what he will say. Lot of stuff treasury and fed have done, for reasons they were always afraid to say publicly, and probably half of it against the law. I think he’ll still not want to scare us, and maybe that’s almost as good a thing as he thinks it is. He’ll probably support Bernanke, right? And say he did NOT do it all to save all his wall street buddies, and maybe he should have saved Lehman. That’s it, right? No mistresses, no love children, no drugs. And probably very little on how it all came about, or about what is still going on.
J@88: No mistresses, no love children, no drugs.
Cross your fingers there’s no sex tape.
For 12 years I worked as a contract GIS analyst with a federal research agency. The last few years I was engaged in Afghanistan energy sector economic recovery assistance. (The Russians left a huge, confusing mess … ) My contract was not renewed for fiscal year 2010 and I have been looking for a job since September.
The contract was an artifact of Al Gore’s “Reinventing Government” policy. There was an enormous RIF (Reduction in Force) at this agency and contractors were brought in to implement new technologies. Although Pinocchio really did want to become a real boy, everybody became too comfortable with the situation.
Perhaps inevitably, the Obama administration’s purge of government contractors has concentrated on independent contractors such as myself rather than the high profile, and influential, *Halliburtons* that progressives so love to demonize.
During my time in the belly of the beast I came to despise most federal employees. The lack of accountability, the sense of entitlement and the surreal territoriality are truly disgusting. (Every taxpayer ought to know about the scramble to spend “end of year” money at the termination of the fiscal year. Rather than rewarding thriftiness when surpluses remain, the federal ethos is to spend *my money* to ensure that even more money will be available next fiscal year. Each September is a virtual Oklahoma Land Rush as unneeded computers, peripherals, office furniture and gadgets are purchased. The primary occupation of GS12 and above is the acquisition and control of budget – there really is no consciousness that the cornucopia ultimately derives from the involuntary contribution of the taxpayer. These bureaucrats work hard for their piece of the pie and that is their primary work product.)
While sending out a ream of resumes, I have occupied myself the last three months in compiling a digital political and demographic atlas of the State of Colorado. (Sparce posting in BC because I’ve been working 12-14 hours a day trying to get a product ready by the Primary season.) This has given me some dandy visual aids for job interviews, but the labor market remains brutal.
I don’t see any action from this administration that would benefit me, I don’t look for any action, except perhaps tax simplification and reform. Times are hard but I remain confident in my skills and that I will find or create a niche for myself.
Anybody need any well crafted maps? Lets try this Toque thingamajig …
None of this HAS to happen. It is al a product of government monkeying around one way or another, and it is not juat the product of the last few years.
The solutions are simple enough to implement onces the political will is found.
The FT has run a number of articles skewering the notion that exports can be the way for the industrialized world to recover.
China, Japan, Germany, France, the UK, Vietnam, Malaysia, Singapore, the US, Brazil, and India, all plan to export their way out of financial troubles. What is wrong with this picture?
There are four requirements to get employment back up and the economy moving again:
1. Lower taxes on business activity and especially Job Creation.
2. Lower regulation on business activity and esepcially Job Creation.
3. Cheaper OIL!
4. Military Spending.
ONLY all of these together will work, the experience of Japan during the lost DECADES and the US in the Depression show public works have no effect on employment or the economy.
Building a bridge (even in the Depression) would take only a few thousand men. Building an Aircraft carrier can take up to 60,000, when factoring in indirect stuff. Building two can take more than a hundred thousand. Immediate military spending on planes, ships, and tanks puts factories, shipyards, and the like to use immediately, at high paying jobs, and often with round the clock shifts. The benefit is also huge: a stick to threaten (wisely) enemies, adversaries, and others to avoid war.
Obama is falling apart not because people loathe socialism, or don’t like him meddling in the BCS, but because he’s creating a crappy economy. Spending all his time on Health Care which is not a core concern.
Paulson’s book is already out. He mentions that Russia in 2008 asked China to crash Fannie-Freddie (China declined) and that Alistair Darling, the UK Minister, deep sixed Barclays purchasing Lehman.
programmer said:
“Learn C programming language.”
The C Programming Language has been very good for me as has been Unix/Linux (note that I’m advocating C and not C++). Many of my coworkers insist on using Fortran and working with Microsoft products. My guess is that doing so has dropped their productivity by at least a factor of two and maybe even a factor of three. I suspect that Microsoft has set back computer science by at least a decade and continued use of Fortran has had a similar impact on scientific computing. If I was emperor, I would require all useful scientific software written in Fortran to be translated into C. After the last useful Fortran program was translated, I would require that all Fortran compilers be deleted along with all Microsoft products.
Beverly @ 28 I recall a book written a few years ago by an IT guy in some West Coast city who outsourced his life management to India. He hired several very competent English speaking Indians to write code and do all his work for him so he could spend all his time skiing, snowboarding, chasing biological clock previously careerist thirtysomething women at the ghost bar, whatever. Now you seem to have reversed that situation, though I doubt your Indian bosses are living it up quite the same.
http://pajamasmedia.com/richardfernandez/2010/01/30/jobs/#comment-28
Cheaper oil is not going to happen. If oil becomes so expensive that oil substitutes like natural gas and coal gasification are by comparison cheaper, we may actually be able to use the resources we have domestically in spades. We really haven’t started getting into the Marcellus and Haynesville shales, much less the full range of our coal and oil shale deposits. From an energy costs standpoint we are starving at a banquet, and this is before we start considering the fortune in reclaimable nuclear fuel resting in storage ponds at nuclear reactors around the country. There’s no way around the fact that oil will be more expensive when our economy picks up, the question becomes what else can we use for transportation that costs the same or less, and leave oil for genuine petrochemical uses. I keep hoping the Bussard Fusion people will make a breakthrough, but I’m not holding my breath.
Lower regulation and lower taxation will work far better than government spending programs, for one thing there aren’t a lot of shovel-ready workers to be had compared to the Roosevelt era. Our workforce is far less oriented to construction and manufacturing than it was 80 years ago, is the government really going to directly create programming jobs, or management jobs in the numbers that we need today?
I say keep the F-22 line open, and while you’re at it keep the F-15K assembly line going and replace all the F-15Cs with structural damage. Those jobs are mostly domestic, don’t require retraining, and can be filled tomorrow. The Army could build out some more of its FCS programs that were recently scrapped, and the Navy could have enough Aegis ships and subs to do whatever they wanted. If the Marines could settle the design of their AAV, we could even buy them something new for a change.
70 erc rodson
I’m late to the remainder of the thread, but mention this because it concerns JOBS and real estate, particularly Commercial properties.
This is related and the only reason I know something about it is because I am managing a project for a local community service that takes care of the homeless that live and travel through here. They are going to start trying to keep track of them and manage their assets better to get aid and medical services for them and other services.
They have told me that their numbers of homeless has more than doubled in the last year. I and a couple of my buds are assisting them. I’m hardware and project manager, another is software and the third is an all around smart aleck know it all (and he practically does) who is in charge of helping them sort the wheat from the chafe and my assistant.
We get free meals, lots of love (no, not that kind) and much appreciation. NO pay but who is counting now a days when men women and children are living and sleeping in their cars.
Anyway, they own several commerical properties and what erc rodson brought to my mind that I would like to share for him and others is a website I found looking for answers to how our local community service might handle or maximize those properties in these trying times.
Webcast: 2010 Commercial Property Outlook
The outlook for this year is grim and if things don’t improve, which many don’t think they will or at least enough, the bottom is going to proverbially fall out next year on most of these properties.
So, I guess the gist of why I posted this is for those that own commercial properties to be listening to those podcasts at the link above. I don’t know if a heads up and general info is needed but thought I would share anyway.
Papa Ray
Konyok #90: Yeah, you got that right. Reinventing Government was a disaster in many ways, but perhaps most of all it forced government civilian employees to focus on protecting their positions. Few people have heard of that mess. I work for a defense contractor myself and it is clear that government workers are now really worrying about how to make sure the money stays in their shop and does not go out to hire someone.
Programmer #69: I fired up an Oscope for the first time in decades the other day to troubleshoot a radio. I bought an old 15MHZ Tek on ebay for $35 and already had a nice 100MHZ Tek with built in freq counter. It was fun and enabled me to briefly feel like a technically competent adult. And I just talked to a guy in Texas with the radio so I did get it working, or sort of, anyway.
While I think that portable nuclear power plants will be a big winner in this decade coming–
I don’t think the nuclear power industry–in the USA or anywhere else– is for amateurs. Right now, in the USA just the regulatory issues are a game of 14 dimension chess–because the regulatory bodies haven’t written the rules for them yet.
I’ve got a brother in law who is thinking about jumping into the nuclear power plant game but he’s got a degree in nuclear physics and he’s been an energy trader for a power utility for the last 4-5 years–and he’s +-40 years old.
#61 buddy larsen jeez, the Russian CSP could provide Obama great ideas using Interpol and his goons working for them. He already has control of our Mass Media and through electoral fraud and cunningly effective placement of democrat control in our State governments, is working on total control of all competitive elections.
And like the Russians he regularly has harassed, intimidated, and in some cases has his “enemies” (the American public) beaten by his security forces {Unions].
The next activity for him to engage in is the same as the Russian one– Terror. It would be easy for him to disguise targeting killings as “Terrorist Attacks”.
That is as far as I have read so far on the link that you left. I recommend everyone read it.
Know your Enemy.
and buy more Ammo.
Papa Ray
Papa Ray:
What I can’t figure out is why, with so many empty storefronts and even some huge buildings (e.g., the local Circuit City), they are still building new commercial properties. They built a new strip mall a couple of miles away in the last year and have a sign showing another one going up a half mile down the same street. Are these people clueless or what?
And I just bought another 280 rounds for my Soviet-made handgun.
Darren said:
“Cheaper oil is not going to happen. … We really haven’t started getting into the Marcellus and Haynesville shales, much less the full range of our coal and oil shale deposits.”
Our extensive coal deposits should be used to produce artificial petroleum as we convert from foreign petroleum over to nuclear power as a primary energy source. Unfortunately the shale deposits are a nonstarter. It’s my understanding that shale produces almost as much energy as required to extract the shale and dispose of the tailings.
Energy Return on Investment (ERoI) dictates the usefulness of an energy resource.
Many “green” energy concepts are bogus if you examine the entire process that is driving them, e.g. manufacturing and waste disposal energy costs. Natural petroleum such as exploited in the 1930s is a very difficult act to follow because the ERoI of that era’s natural petroleum was huge. We dug ourselves into a very deep hole after creating a world economy and population based upon the EroI of (formerly) abundant natural petroleum.
RWE said:
“What I can’t figure out is why, with so many empty storefronts and even some huge buildings (e.g., the local Circuit City), they are still building new commercial properties. ”
The neighborhood around Moffett Field is loaded with office buildings that have been empty since the Dot Com. I once did a running count and about 1/3 of the buildings there had “For Lease” signs posted. Despite this, some idiot built these big office buildings next to Moffett Field called “Moffett Towers”. These buildings have never been occupied. In the Bay Area such high rises are called “see throughs” because one can look through them since they’re empty. Obviously this is a huge drain on the economy. I have no clue why people do this stupid stuff unless it’s represents some form of corruption, i.e. an investor is being scammed about the buiding’s true value.
A word to the tragically depressed. I have my church which has been my church for 32 years. Lots of our folks are struggling here in Tucson, but having a supportive community like this is priceless. Went through a rough patch the last month or two (no work, zero,zilch,nada- walking around with pocket change-ain’t been this broke since I was living on Red Mountain wine, white crosses and seconal in Venice Beach in 1971) But in the midst of my relative poverty, every Sunday and Wednesday I went to church and was loved and encouraged. Now the fog is lifting a little, but I ‘ll be like the 1 leper and go back and say thanks. If you’re down and depressed find a loving community to dig some roots.That may be all we got when the darkness descends.
73 Ruth
How many jobs? Well, it would take more than me to give you a real definitive answer but I can tell you just in the oil business alone it would be many thousand and they can be trained at the job site or the ones that do the actual heavy lifting can. The others the geologists, engineers and assorted professions are actually in short supply right now because of the previous, previous oil bust in the U.S. Many of these professions retired or retrained in other fields. We have brought a few out of retirement in West Texas and other areas of the S.W. but still good men with experience are hard to find and some of the field work is just to much for these older guys even with proper transport and accommodations. But they are making do right now and trying to get the kids to get these degrees and get into the oil patch.
But with the last two presidents they just couldn’t get past the defensive battle lines of lawyers that the eco-terrorists have erected and Obama and his thugs don’t want America to be energy efficient unless it is with electricity somehow magically produced by wind, solar or hot air and of course completely controlled by them. And don’t forget that they hate petroleum in any form.
But if all you listed where given their freedom to act, borrow, invest and produce it would be millions of jobs in any sane person’s opinion.
That of course excludes all of the eco-terrorists and their lawyers.
Papa Ray
Papa Ray (#96):
You wrote:
They have told me that their numbers of homeless have more than doubled in the last year…
Remember when the MSM had great fun inflating homelessness statistics during the Republican administrations of Reagan and Bush I?
A curious silence seems to have descended on the land this time around!
Jamie Irons
It’s the Super Jumbo Cone of Silence!
re, California:
They’ve turned off the water, shut down the oilfields, run off most of the employers, and dumbed-down the electorate.
What’s not to like in a Liberal Utopia?
…most of the growth came from rebuilding inventories, which is transitory and unlikely to be duplicated in the next quarter.
Personal Consumption Expenditures contributed most of the remainder.
Where the GDP Growth Came From
“Inventories were the big story, contributing 3.39 points to growth, up from just a 0.69 points in the 3Q. Inventory investment is the lowest “quality” form of growth, since a big increase in one quarter is generally followed by declines in subsequent quarters.”
103 trangbang68
Couldn’t agree more about the importance of spiritual support in a church community and also a network of friends in different churches. I reread Ephesians 6:10ff. a lot these days. And you are so right about the importance of giving thanks, too, for God’s presence and the blessings that come our way even in evil times.
Eggplant writes:
Our extensive coal deposits should be used to produce artificial petroleum as we convert from foreign petroleum over to nuclear power as a primary energy source. Unfortunately the shale deposits are a nonstarter. It’s my understanding that shale produces almost as much energy as required to extract the shale and dispose of the tailings.
I agree with you 100% about turning coal into oil, and making the transition to nuclear power. But who knows what technologies will spring up in the future? Right now some new methods are being used to get rather large supplies of natural gas out of shale formations, which was considered to be too expensive using older technologies, and you can turn both methane and coal into gasoline.
And yeah, the idea that we can supply this countries energy needs by wind and solar power borders on insanity. But I don’t think its really insane, rather, its a scam.
85. Geeze Louise: F@81: nobody wants to hire anyone over 40. Let alone 50, or 60, both of which are still young(ish) decades if you have your health, good family, and a few close friends.
Papa Ray has mentioned barter several times, and at least two folks above (Trangbang and PA Cat) mentioned church support. There are plenty of fraternal organizations out there that could be part of the support net too.
For most of us, the cradle to grave jobs aren’t coming back. Ever. We have to get that out of our heads. We are going to have to exist as did our forefathers in the 19th century: numerous jobs, flexibility, a positive outlook, family, and – community.
Now is the time to get out of the major cities and move back to the smaller communities, preferably communities with your family, if possible – before we lose our shirt in the cities and have to run from them.
If you have some cash, community colleges and trade schools exist – they need students and we need transferable skills. Skills allow you to barter.
Hire American and buy American. Buy local, as close to your community as you can.
Those of us who can help – must help. We’re all going to have to reach deep. Things aren’t going to get better by someone else’s actions. They will improve because of our action.
Doug said:
“re, California: They’ve turned off the water, shut down the oilfields, run off most of the employers, and dumbed-down the electorate. What’s not to like in a Liberal Utopia?”
I’m a second generation native born Californian, i.e. a “prune picker”. When I was a child, California was easily the best place on Earth to live. Unfortunately too many idiots moved into California. I remember seeing a bumper stick back in the early 1970s that said:
“Welcome to California, Please go home”.
Doug commented on the recent GDP growth figures. Obviously the numbers were bogus, refer to:
http://market-ticker.denninger.net/archives/1915-GDP-Theres-Your-Inventory-Bounce.html
I’m really getting tired of being lied to by our government and the MSM. One of these days our government will realize that if it keeps telling obvious lies then people will stop paying attention to it. Along this line, I pay no attention to anything Obama says. I assume that anything he says is some sort of lie cunningly contrived for maximum advantage with the MSM. If Obama were as skilled as an executive politician as he is a demagogue/liar, we’d all be in serious trouble. As it stands, he’s wasting our time during the four years he serves in office.
OS@109: Papa Ray has mentioned barter several times, and sat least two above (Trangbang and PA Cat) mentioned church support.
My religious beliefs are confined by agnosticism. But I judge not, lest, well you know the rest.
My biggest gripe is that I’m willing to relocate, but I would like to keep my *brilliant career* at least one plane hop from an aging family that might need me at any minute, while unfortunately the jobs are on another coast far far away.
tcobb/108; re ‘scam’ i recall some info awhile back in Financial Times about a Sicilian solar panel/windmill mafia money laundering scam –here’s a pretty *narrow* search –why Pelosi keeps running over there after every election? –gotta have that face-to-face?
***
eggplant, it’s soon gonna be Spring –wonder how that minnow is getting along –the one that shut off water for 100 miles of the valley and put fifty thousand poor folks out of work?
Eggplant
There is a way to cheaply extract shale oil while the shale is still in the ground that shows promise. Not that we will ever be allowed to do it. Fortunately, they have shale oil in the middle east, too.
http://www.futurepundit.com/archives/002981.html
This is from the Rocky Mountain news in 2005:
On one small test plot about 20 feet by 35 feet, on land Shell owns, they started heating the rock in early 2004. “Product” – about one-third natural gas, two-thirds light crude – began to appear in September 2004. They turned the heaters off about a month ago, after harvesting about 1,500 barrels of oil.
While we were trying to do the math, O’Connor told us the answers. Upwards of a million barrels an acre, a billion barrels a square mile. And the oil shale formation in the Green River Basin, most of which is in Colorado, covers more than a thousand square miles – the largest fossil fuel deposits in the world.
They think they can make money at $40 a barrel.
OS@109: community colleges and trade schools exist
First, I don’t mean to pile on but you need to update your mindset.
Second, I changed careers midstream allready in my late 20′s more than half a lifetime ago.
Third, even if one were delusional enough to think that anybody would hire a 50-yr old newbie over the 20-something, there is the small matter of the escalating cost of those “community colleges and trade schools”. Two year degrees go for $30K to $40K easily in exchange for the opportunity to hunt for work at age 58 instead of 56.
As I said, this *career course change* thing is for the younger set. Been there. Done that.
Fourth, this site is not for unemployed whiners, but I make one observation before returning to my Marlene Dietrich garden of faded but well-tended memories. This (2008) recession cut more deeply into the middle class than the past ‘downturns’. Witness the Tea Parties. The attention of the 401K and IRA portfolio-holders has been piqued.
Fifth, “cradle to grave” employment? Please reconsider who you are talking to.
Eggplant@110
Back in the day a popular sticker in my neck of the woods was: “Don’t Californicate Colorado!”
Of course, back then the point was to oppose economic development. Now it’s more true than ever. Our local Democratic establishment is moving heaven and earth to repeal our Tax Payers Bill of Rights (TABOR) which is a constitutional amendment that limits state government spending increases to population growth and inflation while requiring a vote of the taxpayers to raise taxes. Thanks to TABOR we measure our budget deficits in the hundreds of millions rather than the billions. The game that they’ve been playing is semantic: what is a tax and what is a fee?
hdgreene @ 113 said:
“There is a way to cheaply extract shale oil while the shale is still in the ground that shows promise. …. They think they can make money at $40 a barrel.”
Hdgreen’s comment piqued my curiosity. To dig shale out of the ground, cook out the kerogen in a retort and then dispose of the tailings was a process discovered over a century ago and abandoned as uneconomical. However processing the shale in-situ (process it in the ground where it is found) is an interesting concept. I did a Google search and not surprising, I found the best articles to be in “The Oil Drum” (the best information source about Peak Oil on the Internet). The people behind the Oil Drum are a mixed bag of petroleum engineers, actuaries, doomers and moonbats. The information quality there ranges from extremely high to utter drival.
The following links are of interest:
http://www.theoildrum.com/story/2006/7/4/152228/4811
http://nyc.theoildrum.com/node/3969
It’s not a given that “in situ retorting of shale oil” is economical. Apparently the destruction of aquifers is an unwanted side effect. However it’s still an interesting idea. I’ll be paying closer attention to the concept.
buddy larsen said:
“it’s soon gonna be Spring –wonder how that minnow is getting along –the one that shut off water for 100 miles of the valley and put fifty thousand poor folks out of work?”
Groan…. At least the drought appears to be broken after all this rain. We’ll be blessed with the delta smelt for another year. Maybe all the unemployed electrical engineers from the Silicon Valley can find work in the Central Valley picking tomatoes?
I know why this is, having both worked with immigrant tech workers from overseas and managed outsourced programming work. It’s simple, and really nothing new. If you’re a really good programmer living in India and you find a way to get a job in the US, you make US wages (maybe low end of the scale, but still on the scale) which are 5-10x what you’d make in India. So if you’re good and motivated, you’ll almost certainly find a way to get a job in the US.
So anyone still in India doing the outsourced work lacks either skill or motivation, maybe both. We’ve pulled the best over here already, the ones left to do the $2/hr outsourced work are going to dissapoint you one way or another.
I don’t know if this will remain so, with liberals doing their damndest to destroy our economy. But it’s an old phenomenon, the US “stealing” the best young talent from other countries by offering them a chance to get ahead that their own stratified cultures couldn’t.
Eggplant #102:
Nice to see that the insanity is not limited to Florida.
I could sort of understand thet if you have a company that builds things it is better to build them and produce something than send everybody home and have neither a company, a capability, nor any income.
The thing I can’t figure out is who is paying for all those empties. But I suspect it is me and you, one way or another.
RWE asked:
“The thing I can’t figure out is who is paying for all those empties. But I suspect it is me and you, one way or another.”
That’s the $64,000 question. I’m hoping it was the Chinese who were scammed. However I suspect it’s another one of these crooked deals where the banks fronted the money, then repackaged the debt and fobbed it off onto the bond market. That would mean that we all paid for it through our 401Ks and retirement funds. Supposedly the Commercial Real Estate (CRE) market is primed and ready to implode. Unfortunately, there are so many things primed and ready to implode that I’m losing track. There are so many chickens coming home to roost that it’s getting down right crowded with roosting chickens.
The CRE market is already exploding. Tishman in NYC just gave back the keys to 11 buildings they bought for $5+ billion to the lenders, because it is now worth about 1.8 billion. Major losers include CALPERS, one of the big California pension funds. See http://www.calculatedriskblog.com/ for daily doses of bad economic news. We are just getting started. There are many 3 and 5 years ARMs resetting this year, along with many interest only loans.
After reading countless personal tales, I don’t want to just pile on. However, so far the tales have not covered situations like mine.
Yes, currently I am still employeed. By a large (think multinational) company.
The company had been shedding its old-fashioned (read manufacturing) core businesses that produced revenues for the past seven/eight years, and betting on the newfangled Green business model (energy, fuel, etc.). The problem of course is that the company won’t committe to the next phase of expansion. Who would, under the circumstances?
So here we are, some projects were eliminated, the rest in limbo. So far the company still retains the skilled employees, but no new work or projects were initiated. Likely this will get resolved quickly. I would not be surprised to hear the chopping block for a large chunck of my company soon.
Commercial & Industrial loans, the so-called C&I (‘seeing-eye’ har har) category is normally 5 year term, at which time all but the small fraction closing out were (in past times) ‘rolled -over’. Why the big wave of hell now is that the C&Is made at the top of the asset bubble are coming due. So, in 2005 you paid five million for a building worth five million, and took out a very normal C&I with a very normal 80% ‘loan-to-value’ (the ‘LtV’ acronym you hear alongside the ‘C&I’ acronym)? Well now you still owe most of the four million you borrowed, and when you go in to roll it over as usual, you learn that the bank’s appraiser has marked the value of the building down, from 5mm to 3mm (about nationally normal). Your old 80% LtV is now (depending on how much you’ve paid off) 125% or so, and you need to come up with the cash to get back to the 80% range. If your building is cash-flowing, and/or you have the cash to close the LtV gap, you’re okay –unless the frightened bank has tightened credit in other ways too.
This is why you keep hearing “cash is king”. And king cash is in the market now, quietly concentrating wealth more and more into smaller and smaller groups. The royalists do this to the boojwahzee every time they get the chance, it’s the story of the Second Millennium.