Business

Jobless Woes Persist, Government Can’t Fix

By DAVID R. FRAZIER, editor
BOISE GUARDIAN

We visited a “job fair” recently, but rather than an arena full of employers recruiting workers, we found countless private and public educational institutions vying to take the last nickel from the pockets of the unemployed through assorted training offers.

There were several charitable organizations seeking volunteers, verterans advocates, and even “debt consolidation” services. There weren’t many jobs being offered with the exception of police and military recruiters.

On the drive home, the radio news in my American-made Japanese car reported the U.S. Post Office was about to layoff 120,000 workers and close 3,700 offices. The same newswcast noted conservative congressmen and business leaders were seeking tax cuts and elimination of “government regulation” to CREATE JOBS.

From the City Councilor in the tiniest city to the President of the USA, politicians all want to CREATE JOBS. Simply put: Government can’t CREATE JOBS shy of massive depression-era public works projects. Jobs are created when business has a product or service consumers wish to purchase.

Like the job fair, far too many “businesses” want income, but they are unable to produce a product or service. We have become a consumer nation saddled with paying for telephone minutes that are never used, fees to access our own money from a bank, late fees, restocking fees, dealer document fees, transaction fees, wire fees, surcharges…the list is endless. And none of these CREATE JOBS.

Problem is we get NOTHING for most of those fees and don’t think twice about paying them!

Government has lowered interest rates and plowed newly printed money into financial institutions with no new jobs. Government lowered interest rates with no new jobs. Government has lowered taxes with no new jobs. Their common defense is “it could have been worse.” Major U.S. corporations are offered tax cuts at all levels only to CREATE JOBS in a foreign land.

Given the penchant for lowering interest and taxes in the hopes of CREATING JOBS, the
Post Office should logically lower the price of stamps to save 120,000 jobs.

The problem at the Post Office is really a microcosm of the entire economic crises facing the country–things are different. The internet, e-mail, and Fed-X– combined with “electronic payments” and assorted iPhone coupon schemes have dealt a near fatal blow to the Post Office as we once knew it. Same for the job market.

American Business is able to profitably conduct its affairs and manufacture its goods “offshore,” but still depends upon a domestic consumer base. Until that situation changes no one will be able to CREATE JOBS.

Comments & Discussion

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  1. Eye on Numbers
    Sep 8, 2011, 12:18 pm

    The days of a Henry Ford coming to town to build a manufacturing plant to employ 50,000 workers are over. We simply don’t build very much in this country anymore for two big reasons. High labor costs and energy costs.

    We will never be able to compete with China’s labor costs and before that it was Japan, Korea, Taiwan and other cheap labor havens. I am not sure how a highly regulated economy like German and the Swiss are so vibrant but they are and that might be a place to start looking at to see how they do it and we can’t. Germany is bailing out Greece just about every other week, they also absorbed all the worthless currency when Germany was reuified with East Germany when the Soviet Union collapsed. I don’t know how they pull it off but one aspect is the size of their military which is not huge drain on their economy.

  2. Rod in SE Boise
    Sep 8, 2011, 5:34 pm

    Dave, I agree with much of what you wrote.

    Tax cuts are not creating jobs – never have, never will. That is not the purpose of tax cuts – in spite of what some people say. Giving more and more money to the so-called “job creators” has not worked, they just bank it

    Lower interest rates are hurting retired people, and helping nobody.

    Infrastructure spending will create jobs, but nobody is willing to do it. Those who do propose infrastructure spending propose new railroads, and not roads and bridges, which are really what is needed.

  3. Brian Vermillion
    Sep 8, 2011, 7:04 pm

    I cringe when I see commercials for any of the for profit schools. U. of Phoenix etc. People need to realize that there are no jobs for the positions they are signing their life away to pay for after they “graduate”. They will still only be qualified to work minimum wage but now have a 30,000 school bill to pay. Please people, think twice before signing on the dotted line. These schools do not care about you, only your signature.

  4. I agree with Brian!

  5. As long as interest rates remain so low, banks will not lend. Interest rates need to rise to get money in the economy flowing. The ruse is, low interest rates are good for business. OK so ask a small business person if he can get financing. The big corps are so awash in money they can finance any thing they want but don’t know where to invest. The rich buy gold to protect the value of their cash. Investing in gold does not create jobs.
    Bottom line is things have to get a whole lot worse before the economy gets better because of the huge surplus of cheap imported goods. How many shoes do you have? How many shoes did your father or grandfather have? More giant corporations have to fail because the economy and tax laws are rigged in their favor if things are ever going to change.
    Also, get used to high unemployment like the rest of the world. Careers in trades associated with repairing infrastructure and possibly healthcare are the only way to go if you want your kids to have a good job.
    The economy is dead, long live the economy.

  6. One of the better pieces I’ve seen the Guardian produce. Years ago I began wondering who would buy a company’s products when they hired cheap overseas laborers to produce items that fewer and fewer Americans would be able to afford. That scenario seems to be coming increasingly true as household income in the U.S. trends in the wrong direction. Getting nothing for something — as suggested in this article — appears to be the newest form of economic craziness.

  7. We have Food, Water, and Energy in abundance. We mostly have an orderly society based on trust of thy neighbor. We had a great society up until it was choked out by an over abundance of government and fools with law degrees who say the constitution is flawed and should be bypassed…. and citizens who let it happen.

    I pray for a leader who will shut his pie-hole and do right by this nation. I pray for an honest media outlet.

  8. Eye on Numbers
    Sep 9, 2011, 8:48 pm

    Walter Ruther, head of the UAW in the 1950’s was shown one of the first robots to do auto assembly by management. Walter’s comment was, that’s just fine but what happens when there are no workers to buy your cars? This may not be an exact quote but it is close and the point is, we don’t make stuff in the USA anymore. Our open door trade, NAFTA and the other things to take jobs elsewhere have been very successful at one thing…destroying jobs and the American worker’s ability to make a decent income.

    The sad part is the rich don’t think they have been given enough breaks and want even more money any way they can get it. Ross Perot had it right….the giant sucking sound as jobs leave the country.

  9. I am not thrilled with the “new” jobs plan. We have already been there and spent that with previous stimulus plans. I see two options for getting this economy going. First drop the corporate income tax rate so all companies are comfortable spending, including the small businesses that could really drive this economy. The “mom and pop” businesses are part of the solution and they are commonly ignored in DC. Secondly, get rid of the red tape and regulations that prevent good ideas and projects from happening.

  10. Not to worry. The world is about to become a much more dangerous place. We will get another 50 years of prosperity from building up a war machine and crushing the two easiest targets in the middle-east, the Arabs will love us and will give us oil for free… err oh wait, that’s what Bush jr. thought he was doing… Hmmm?

  11. He didn’t start it but has not made it any better: (Read the chart halfway down the page) Perhaps this is why he does not bring the troops home… they would flood the jobless market.

    http://online.wsj.com/article/SB10001424053111904583204576544712358583844.html?mod=rss_com_mostcommentart

  12. Now Zippy, you know perfectly well that Pres. Bush never stated we would get oil for free!!! In fact, V.P Cheney stated very clearly that we would be paid back for the cost of the war through the sale of Iraqi oil……………never mind!

  13. The problem is simple, our desire to regulate everything, everyone, and every activity has passed a tipping point. When we created ‘regulatory’ agencies decade ago no one considered they would sit at desks for 8 hours a day 5 days a week for decades and regulate everything with no chance of stopping…It takes a year to even simply read the regulations in existence. We are past the point where stopping the madness will work…we need to reduce it.

  14. Jerry Jones
    Sep 14, 2011, 4:13 pm

    Three (3) common local Idaho assumptions:

    1. Too much regulation

    2. Corporate taxes too high

    3. Labor unions to blame for everything, including high manufacturing costs

    C’mon. We’ve all been guilty of buying into these simplistic, election year bromides to some extent over the years.

    But bromide #1 seems increasingly illogical: After all, does any sane individual still believe that “too much regulation” in the investment banking sector caused a devastating $8 trillion dollar housing bubble to expand artificially and then… finally… burst? Too much regulation? Or not enough? Some interesting insights might be gained by a casual viewing of the documentary “Inside Job” here:

    http://www.sonyclassics.com/insidejob/

    Meanwhile, bromide #2 also seems suspiciously illogical when one reads the content of the New York Times article at the following link:

    http://www.nytimes.com/2011/03/25/business/economy/25tax.html?pagewanted=all

    As the preceding 2011 New York Times story reveals, America’s largest corporation, General Electric, paid no 2010 tax!

    And how about bromide #3? That theory seems especially popular in Idaho, but I’m afraid the story is somewhat more complex. Take, for instance, the relative value of our U.S. currency. Those of us who call ourselves United States citizens seem to have an obvious trade deficit problem whether we want to admit it or not. Isn’t $550 billion per year too expensive for us to finance each year into perpetuity??? That’s the huge U.S. trade deficit number on which most economists seem to agree and you’d think we’d start to talk about our trade deficit problem on the news a little bit more than we do now. I mean, let’s face it, a gaping trade deficit of that magnitude seems to relate directly to the value of our dollar vs. other currencies. Think about that. That equates to about 4% of U.S. GROSS DOMESTIC PRODUCT! We buy more from them (China and other countries) than they buy from us, forcing us to *borrow* the difference. Right? See economist Dean Baker’s article here:

    http://www.guardian.co.uk/commentisfree/cifamerica/2011/apr/22/economics-economy

    I’m talking about the trade deficit and not the U.S. budget deficit.

    But next time you talk to your elected official, ask him why he seems to believe savage cuts to your Social Security and your Medicare and how imposing “austerity” will do anything to reduce our trade deficit, which really seems to be at the heart of our problems.

    The Chinese are shrewd from a business standpoint and certainly smart enough to know it is in their interest for their currency to remain artificially low relative to our dollar precisely because it’s a highly-valued dollar that puts U.S. based manufacturing at a cost disadvantage and favors Chinese-made products! Labor union concessions won’t change that. Doesn’t an over-valued dollar clearly make American-made products more expensive than comparable products made in China? Isn’t that the key reason our U.S. manufacturing is being vacuumed away?

    (Remember Perot’s famous line? “That giant sucking sound…”)

    Therefore, doesn’t that lead to an obvious policy suggestion?

    Rather than waste our time complaining about the few labor unions that still exist, and rather than waste our time cutting taxes on corporations that already do not pay any taxes, and rather than further weaken regulations in ways that might tempt the Wall Street barons to devise even more nefarious “heads-I-win-tails-you-lose” shenanigans, let’s do something that might make a positive difference: Let’s consider a dollar with a slightly lower value. Economist Dean Baker estimates the U.S. dollar may be approximately 20% over-valued as he stated in this April interview with Bloomberg:

    http://www.bloomberg.com/video/69078850/

    Isn’t it possible our traditional strong dollar policy may be wrong-headed? In my view, Baker makes a decent argument (in FLASH or PDF format) here:

    http://www.cepr.net/index.php/publications/reports/7-things-debt

    Dave Frazier wrote:

    “Simply put: Government can’t CREATE JOBS shy of massive depression-era public works projects.”

    Quite true. I agree, Dave. But as I’m sure you are aware: that’s precisely what the most recent “stimulus” wasn’t. Anybody can do the arithmetic: The collapse of the housing bubble translated into a loss of $1.2 trillion in annual demand. The stimulus only amounted to around $800 billion. Not big enough to close the gap. And only about two-thirds of this “stimulus” was for public spending anyway. The rest was tax cuts. Nobel prize winning economist Paul Krugman famously and publicly warned the stimulus was too small in 2009:

    http://www.nytimes.com/2009/01/09/opinion/09krugman.html

    But, unfortunately, too much ideology and not enough bold action by both parties led to the inadequate stimulus that the country got.

    Sadly, many unemployed who want to work still can’t find a job. Maybe if we fix this trade deficit issue, our unemployed might have better prospects. I’d like to see our country lead the world in things like light rail manufacturing and the manufacture of solar and wind energy technology.

    EDITOR NOTE–Any more comments this long and I will have to purchase more band width just for storage! Glad we got you to thinking, however.

  15. The only president who will be able to change the status quo and create a new economy needs to be a black and gay Republican. Since this will never happen, I suggest you figure out how you will survive the next 5-10 years.

  16. JJ, It’s called corruption. And both parties are swimming in it. It is the natural progression when one or two professional career/organizations have control and ignore the will of the people. It does not end well, but it can plod along for a long time before the masses get hungry and angry enough to stop it. Also, please remember that several media outlets like NYT and WSJ and anything on TV have huge political agendas. If they did not they would not employ hacks like they do.

  17. JJ, Americans don’t want to understand economics. We are the most religious nation in the world and cling to belief systems rooted in Judeo/Christianity. Arguably, the Islamic world is slightly more religious but they have an understanding of economics. It’s why criminals like Osama knew he could bleed us out economically with wars etc. and out military would get giddy with the opportunity.
    Zippo, you forgot Fox News!

  18. Jerry, you wrote “But bromide #1 seems increasingly illogical: After all, does any sane individual still believe that “too much regulation” in the investment banking sector caused a devastating $8 trillion dollar housing bubble to expand artificially and then… finally… burst? Too much regulation? Or not enough?”

    Let me ask a simple question…Is there a single activity or thing that is not regulated, taxed or both?

    The answer is, no. That leads to the second question…If every single activity is regulated or taxed already, do we really need more regulation.

    When do reach reach ‘enough’..You are aware that these things have a cost? Hundreds of billions a year.

  19. Subsidizing the American Dream is not the answer. Regulations and a broken tax code have created a non competitive marketplace that thrives on subsidies. We need to support capitalism and revive the dream, through less government intervention. We may fail once, twice, or even three times, but capitalism will prevail. Idaho is one of the only states that does not require a percentage of it’s energy production to be from renewable resources. Yet 20% of our energy is renewable, and 60% comes from hydro power. This is what we can do on our own.

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