Economic Suicide or the Job Summit

Great take on a serious subject. too bad all they can do is blame and point fingers instead of doing something constructive about increasing business' and jobs! Sp[end and Tax, Spend and Tax Spend and Tax. UGGGGHHH!

I'm not too surprised by the December numbers, but thought it might be a little better. A lot of stores etc. hire extra help for the Holidays. I hope it doesn't jump back up again after...?

That's true. I hadn't thought of that.

I saw the figures and Retail employment actually went down in a month when retail normally hires.

Retailers are being very cautious right now. My store's allotted hours (from corporate) are just about the lowest they've been during my time with the company, and we usually get more hours during the Christmas season than in the summer.

Media has played that game of relativity for some time and one just needs to shut it out. At least during this administration, I don't see it changing.

However, you have to realize the Repubs also are to blame for these problems we are having and to pretend otherwise just invites another round of such. Bush and the Repubs could have turned the deficit around but ignored it and spent almost as fast as LBJ during his heyday. So to think the Repubs will automatically do better may be a forlorn dream. Many of them are no better than Dems in wild spending or power grabbing.

So far, many Repubs that are running in 2010 seem to be a breed we should support. More than a few are libertarians and small government hawks which is our best hope. Also they are challenging Repubs currently in office too. So there is hope but don't get too excited that things will turn around anytime soon in DC.

Goggle for your local chapter and join up. Its usually about $25 a year. Some states have very active ones such as Georgia and Alabama. Others are growing. Listen to the GOP candidates if that won't work for you and let them know your views. Many GOPers running in 2010 are not the normal Dem lites and many are outright libertarians.

Write letters to the local newspapers. Talk to people, many of both major parties are highly dissatisfied with the way things have been going for years. Send money to local candidates of any party that come closer to your views. Even some Dems are starting to make libertarian noises.

Biggest thing is sound off. The Repubs lost the small government vote in 2008 and they need it back. Many of those voters supported 3d parties or stayed home. So they are listening to us at least with one ear for now.

http://www.lp.org/

Oh I'd be a Dem if the party hadn't morphed in 1932 to the Big Government Party. It was the traditional small government party for over a hundred years until FDR.

I'd classify myself as a classical liberal but few even know what that means anymore. You are right how close the two parties are on the basic idea of power though!

It is bad....but it is still not as bad as Jimmy Carter let things get.......

In 1978, the unemployment and inflation rate combined were barely 12 percent.

It only took Carter two years to get it up to 22 percent by the middle of 1980........
.

Geeze, husband worked at GM then and we felt NO impact. How things change.

Wow, it was really bad under Jimmy. Remember, no raises allowed. It was a great way to start a new married life. Great socialist. Rotten president.

I was in the house building business then, Linda. Mortgage rates were around 20% so that should tell you how that business was doing. I wound up traveling far and wide for remodeling jobs. Left that and started a landscaping/mowing business and had to buy gas by the barrel, when I could get it.

What amazes me most about this administration is that Obama has surrounded himself with like minded people, but his administration and advisors have the least private sector experience of any administration since Washington. You would think that knowing he lacks business managing and ownership experience, he would have put people into place that did. One sign of a good leaders is knowing to surround yourself with the people who have the traits or the experience you lack. Early on, I realized that Obama didn't get that.

At his jobs summit, he brought together big business, government people, and some liberal college professors. He left out small business people, even though 3 out of 4 jobs created today are created by small businesses.

I read that one fast food restaurant whose corporate people were included in Obama's summit proudly proclaimed that they had learned to create jobs by job sharing. Seriously? They took one 40 hour a week job and first reduced it to 35 hours. Then they split the 35 hours between 2 people and gave them each 17.5 hours. And that's creating jobs?!?!?!?

I do want to post what we discussed at the Real Job Summit with Newt Gingrich the other day. The American Solutions folks have some great ideas.

Speaking of great ideas. Obama is supposedly open to our good ideas about how to create jobs. Just contact him through whitehouse.gov.

He said the original stimulus plan would create 4 million jobs... that didn't happen.

Yet. How long did he predict it would take to create those jobs?

Larry, government cannot create jobs. And they have to make a climate that is friendly for businesses to create them.

AND of the jobs they are boasting they did "create", I know for a FACT they were minimum wage summer jobs for kids, and not jobs that put food on people's tables and paid peoples bills.
My son (he's 14) had an "obama job" at a community center. The director told them from day one it was an "obama job" (exact words he used)
and that it would only last 10 weeks, for 25 hours a week, at minimum wage. There were hundreds of kids in the area who had these "jobs." They were bussed too and from work (except for the kids from the suburbs who had to get their own rides)
While I'm glad my son had the "job," because he learned about responsibility and a little bit about how the working world works, I am not happy that the administration tried to boast that they "created jobs" with the stimulus purchased with money that my great grandchildren will be paying back many years from now.

Thanks, Joy. Here many of the jobs were summer internships as well.

Larry- part of my point on the stimulus comment was that apparently not even Obama believes his own words on this 4 million jobs. In fact he said it was the most important part of the Bill, and why to pass it.
Why have a summit if you still believed it...?

http://www.cbsnews.com/stories/2009/02/10/politics/100days/main4789627.shtml

Why didn't he pay 4 million people with the money he spent at least they'd be rich and creating jobs. Instead we're all drowning.

Economies don't turn around on a dime (which is worth about a penny compared to my childhood). Go back to January 2008 and see what the projections for unemployment were then. The unemployment rate now is roughly what was predicted at the time.

Next, whatever gave you the impression that Obama controlled Congress? Does the health system legislation look like he controls Congress?

Next, what makes you think that anyone in the Administration is willing to realize what to do to increase employment? They have shown no more ability to understand it than Congress or that group of "give me the money and unemployment will drop" group they had at the White House the other day.

Finally, the obvious way to increase employment is to give money to the undeserving poor (and perhaps some who deserve more like our military dependents). They spend, the economy booms.

Larry, American Solutions, run by Gingrich has some great ideas about how to create jobs.

Giving the poor money INSTEAD of creating jobs? We want to get jobs for the poor! If the govt would stay out of our businesses with their mandates, jobs would be created through the free market.
Handouts just prolong the agony.

That is so true. There are many here in Michigan who want a hand UP not a handOUT. There are NO jobs here... our unemployment rates are over 15% and that doesn't count those whose benefits have expired.

Our jobs are all gone here, because the administration raised tax rates so high the businesses couldn't afford to pay them, so they left. I personally know two people who ran businesses that closed down because the taxes got so ridiculous they were losing money.

Until the government steps back AWAY from the problem, instead of digging their claws further into it, there will not be resolution.

There will not be jobs until the poor have money to spend. There will be no hiring until sales increase. Sales will not increase so long as the poor have no money to spend. When sales increase, that provides the profit incentive to the rich to hire more employees to get more money from the poor.

All of that is obvious if you think about it. Cutting government spending just reduces the number of people employed. Government spending goes to private companies. Without those government contracts, lots more people are out of work. Reducing government spending reduces the number of government employees. That's more people out of work.

Reducing the taxes on businesses does not increase sales by those businesses. Unless there is demand for more of a businesses products, there is no reason to hire more people to work in that business.

This isn't rocket science. It's bloody obvious. Think, people.

Larry, reducing taxes allows businesses to hire and expand business. Then, once people have jobs they can spend money. Our country has the least favorable climate for businesses. It's no wonder they're leaving.

Marilyn,

The rich have plenty of money to hire and expand business already. THEY ARE RICH! But they do not do so because they do not expect to get back more than they invest. It's called capitalism. It's called the profit motive. It's called the free market. Reducing their taxes will not make them hire more people, it will just let them keep more money. The only thing that will make them hire more people is greater sales.

Think, Marilyn. How many people would you hire to produce Christmas goods now knowing that retailers are ordering 3% less goods this year than last year? You would be a foolish business owner to hire people to produce goods no one will buy. You are too smart for that. You wouldn't do it. But you would keep the money and not spend it because times are tough now so you are spending less.

Larry,
That is true. The rich are rich but scared of being poor, so they hang on to what they have.

It's just human nature and as certain as the sunrise. So why do we ignore that in trying to fix the economy? Because the government is not trying to fix the economy. The powers that be (the big money folks) control government. They are trying to gain still further advantages (see the health bills) and really don't care what happens to the economies of others.

The biggest simple fact in this is that the poor don't hire people to work for them, don't invest in ways that make our money grow in the economy, don't make a dent in any one company's hiring practices, etc... because we can't.
We don't make new expenditures when we get "extra" money from the government... we pay the bills we've built up, or bill collectors come and take it from us through wage garnishment, property seizure, and so on. "Extra" money for us isn't ever extra money... it's all ready spent on the electric bill, the gas bill, the car payment, or wherever else we're behind because we're poor. If we "create" any jobs at all, it's in the collections industry.
The economy is not bottom driven and it never will be.
If government is to do anything to help the job situation, (and government isn't going to create jobs, either... but it can stop killing them) it has to stop taxing our employers to death under the guise of protecting us from them. It isn't helping, and it never will.

Hannah,

The poor are essential to the rich and every business. They are the customers.

The economy is bottom driven but top controlled. That's why it fails so often. The problem with our current economy is not that there is too little money at the top, but that there is too little money at the bottom. Those bills we pay provide the incentive to the rich to invest in hiring people because they can gain more money that way.

Why hire people when there are no customers?

Show me how a reduction in business taxes will increase the demand for the products/services of those businesses. Show me how giving money to the owners of those businesses will increase the need for more employees of those businesses. Can't do it can you.

"The poor are essential to the rich and every business. They are the customers."

That's a laugh! The poor, essential to business... as customers no less! Do you have any idea where I shop... where most folks in my situation shop? Do you think Goodwill and the Salvation Army constitute "the rich?" I don't even go to McDonalds... can't afford it. I haven't bought anything at K-Mart or Walmart in months... can't afford it. I buy off the "expires-tomorrow-gotta-go-now" rack at the grocery. I'm a from-scratch cook, a tap-water drinker, a walker to wherever I can, a wearer of hand-me-downs. I go to the cheapest, bottom-rung places, squeezing every penny until it drips out a double in my budget. Who do you think is making money off of my spending? The profit fairy?

The folks who really patronize my employer's place of business, and who patronized my family's business... those are and were not the poor. Those were the middle class and up... people who can afford to shell out a few extra bucks for something convenient, or something artistic.

First, it's totally irrelevant whether a reduction in business taxes increases demand for services. What it does do is decrease the loss of business capitol to an unproductive source.
When taxes are increased, my employer cuts hours available to our store for scheduling employees to work. My boss cuts the hours of each employee to make it all fit. Over the last year, we've lost two positions.
Those positions existed when taxes were lower because the business had that money to invest in our store. It's a direct effect... and it's not that those positions aren't needed in the store. There's work enough for them to be there. My employer just can't afford them.

Second, a reduction in business taxes, by increasing the available spending capitol a business has, creates a circumstance in which decisions may be made within that business to make purchases for that business which might not otherwise have been made.
The store where I work has a monthly budget. Our monthly budget is down this year from last year, despite an increase in some sales. My boss has made the decision to put off purchases of items for the store each month due to that budget cut.
I can even name a specific item; non-slip rugs, which are rented from a company which does nothing except rent out non-slip rugs to stores like the one where I work. My company has made the decision to cut down the number of non-slip rugs we use in the store. Over the last year, we've gone down from six rugs to two. In doing so, the company slashed their rug-rental budget at all 1500 stores by a huge amount... and slashed the rug-rental company's profit from business done with us by an equal amount. One of my neighbors, who worked for that company until late this year, is now collecting unemployment.
In the case of the family business, the same thing happens; new cameras, lenses, lights, etc. aren't purchased when they are needed because tax dollars eat up the money available to spend on them... or, if they are purchased and in the process too much money (or credit) is spent, it can spell disaster for the business later when sales don't pan out as intended.
In the meantime, the little camera store where my family does their business suffers the loss of those sales, along with their sales to other professionals who are in the same boat. The food service warehouse which caters to the store where I work suffers the loss of sales to our store, along with the company's 1500 other stores. That loss of sales cuts into each example's profits, and if that loss is big enough, it'll cause them to cut their budgets, cut hours, cut jobs, etc. Each time those hours and jobs are cut, that's one more person or family whose budget for spending just got smaller, meaning that they'll contribute less to the overall economy.

Conversely, as businesses are relieved of the burden of excess and punitive taxes, they re-invest in themselves, which involves spending money on equipment, renovation, supplies, and personnel. That money supports businesses which carry and sell equipment and supplies, or supports the businesses with which those employees spend their pay, thereby creating in both cases a demand for products and services in businesses by reducing business taxes.


Punitive taxes hurt everyone.

Hannah,

Sorry to be so long in responding but yours is a big comment and it deserves serious consideration.

Let me begin by agreeing that punitive taxes do hurt everyone.

Now you say that business taxes have increased. I have heard nothing about that on the news nor even here on Gather. I would have thought that if such a federal tax had increased it would have been big news here on Gather. So I am assuming that the tax was a local one.

You indicate that it is irrelevant whether a decrease in business taxes increases demand for services. You indicate that an increase in business taxes (during a time of low demand for services) can result in layoffs. I agree with that. But that is different from a decrease in taxes. With low demand for services, the business owner has no reason to hire more people since the current employees can easily meet the current demand. To hire more people would not increase company income.

Now under what circumstances does a smart business owner hire more people? When the current employees cannot meet the current demand. When the business can expand to serve more people and thus generate more income for the company than the increased expense of new hires. That is the only reason for adding employees that makes sense.

The same reasoning applies to replacing capital goods or adding to them. Naturally, the company will have a regular schedule of capital replacement as it ages, breaks, and becomes to expensive to maintain for its output. That is part of normal overhead. It is a current expense regardless of the tax situation. Therefore, a reduction in business taxes does not change that purchasing significantly. In fact, such purchases reduce the taxes that are paid by reducing profits.

In the case of your company's non-slip rug rentals, you say the company budget was lowered. I'll bet that reduction in budget was a result of reduced sales. That is, there was less company income. That budget reduction could not have been from higher taxes because only profits are taxed, not overhead.
Therefore, it was the lack of customers at your stores that cost the rug companies their rental fees. It was not taxes at your stores.

Taxes on businesses are only taxes on profits. They do not consume money for capital goods such as lenses. I am confident that you can see this point as well as I do. It is because sales are down that these companies do not invest in more capital when they would prefer, not because of taxes on income they don't have. It is the reduction in sales, not the taxes on profits, that reduces purchasing by the company.

Your description of the ripple effect of reduced sales can easily be reversed if the folks who buy products increase their purchasing (which the poor as a group will definitely do when they get money to spend). That is why I say that putting money in the hands of the poor will benefit all those above them in the income pyramid. The poor spend. Companies have greater income. They hire more employees. Those folks spend and so forth.

Companies only invest in themselves in the expectation of greater sales. Without that demand there is no investment. That's how the buggy whip companies declined in business and why almost no one makes buggy whips any more. It didn't matter whether taxes on those businesses went to zero. They would still have failed when people stopped buying buggy whips.

All you've done is provide the perfect argument for an overall reduction in taxes. Not only should businesses have their taxes reduced, but citizens at all levels of income which pay taxes should also have their taxes reduced.

As for the rest of your response, it's pretty obvious that you either skimmed my comment, or read it through opinion colored glasses, especially based on your theory about the rugs.

I don't know about what kind of business you ran, but all of the money used in my family's business came from the customer... lower profits meant lower capitol because it all started out from the same place. There wasn't some secret stash of "other" money from which they could draw to invest in the business. When profits were taxed at a higher rate, it absolutely affected everything else the business did financially.

As for your ripple effect, again, lack of reading - I am the poor. I'm the working poor. I'm an example that is right in front of you. You can't reduce my income taxes at the federal level because in the end, I don't pay any. My tax refund is bigger than the amount my employer pays out of my check into the federal tax system, because my family is eligible for EITC. Even in getting that money, we aren't shoppers at stores like mine. I can't afford to shop where I work.
Even if you reduce the taxes I do pay (state and local, sales) you're still not going to significantly change my spending habits. I owe too much money for that. Instead, I'll pay off the back-owed electric bill debt, the credit card debt, or other debts owed by my household. No profit there... only the end of an existing cost.

I've seen the numbers for my store. We get to see those in classes we take as we train for higher positions, even at the bottom of the management scale. Our numbers are higher this year than last year. We've increased our sales in nearly every area in the store even more than expected.
Sales in my specific area are the highest they've been since the program in which I am working began.
Still, they cut hours, cut budget, cut supplies, and are now even cutting some provided services. We've got greater sales, and they're not investing. They're cutting back, instead.

I know Ohio had a tax that went up, because my SIL, who works at the tax office in her area, saw the result of it. There were businesses and farms in her area which were really hurting because of it. My employer is large and small at the same time. We're a "big" corporation, but we're not national, only in something like 5 states. It was right about the time that my SIL began telling me about the new tax that the changes began taking place where I work. They don't tell us much at my level, but I asked the Regional manager and got confirmation that the company had been hit this year with tax expenses which were much higher than previous years.
It really boils down to this; when government takes too much money out of the private sector, it hurts the economy. They're doing that now, and things are getting worse. You have to ignore reality to not see that.

The so called job summit did not include the small business admin. they are the ones who can help turn this economy around...

They only invited the union type people who want government to create low paying jobs so we can all be miserable together.

I will only vote Republican after this big mess.

Just research the candidate before you vote. I know what you mean, though. We had a long term Republican Rep & and was time for him to go - so the Dem was elected and she sided with the Dems on ALL major votes - and I am sure she was intiminated to do so. So, got rid of a career politician only for it to bite us in the buttox!

I agree with Linda.
That's why I consider myself an independent.
I always take the time to check into a candiate, what they stand for and what they have done in the past. You can't ever go on campaign promises, you have to investigate a candidates life, what they have stood up for and what they have shown is important to them.

You're right, Linda. Once I voted for a Democrat. I really study the candidates and this guy was right on, but he changed to Republican. At least I tried.

And the bite was a big one!

I heard in Michigan, especially Detroit, houses are literally burning, so the banks don't get them. This is scary. Job summit?

So do you all want a HANKY

No, we want Obama to grow up and do as he promised or get out of the way.

He has done what he has promised,stop the shedding of jobs,bringing the soldiers home from Iraq,is starting the end in Afganistan,working on healthcare refrom and lowered taxes,at least I did not have to pay any more like I have under Bush.
What is it that he has not done for you?

It is the Republicans that are doing all the stalling!!!!
Don't you agree.

Politicians are great at making promises. He's just like the rest of 'em.
I'll believe it when I see it.

I do not understand why, this government doesnt take some of this money and start fixing our many bridges that need repairing, redo some of the houses or buildings in some of the areas and put low income apartments in them.. Because, we need afforable places and when I say affordable, I really mean within someones reach, not based so high that they still would struggle to survive.. but yet not at a charity level either.. there is so much fixing that needs to be done in this country and it would create jobs.. Pay them decent wages and lets get this country back on its feet...
Then, start giving factories and business owners some tax breaks to get the business back into this country, not overseas or Mexico... Stop the flow of illegals... its now a matter of charity starts at home, but people who is able to work on welfare to work... This would save the government loads of money.

You know November girl.. you are right.. I hadnt thought of it in this way, but if ordinary people(such as myself) who doesnt have a degree in law or rocket science can figure this out, then its something to think about.. Remember, these are the ones who are so smart with all their degrees etc.. and look at the mess this country is in....

It is a shame but I think this goverment will be in a mess for the next few years, well way longer than that...we are being depressed more and more each day, the common, ordinary people like a lot of us Vickey understand the way it should be but the liberals that obama hires just don't get it, they can only see as far as there finger tips and then they get there blinders put on!

I heard him talking about creating green jobs, however I'm not so sure that it would be American jobs. Coming back from visiting a friend at South Padre Island TX we saw the vast windmill farm along the coast. Beutiful and graceful, reminded me of pictures of Holland. I thought hey that's great, we need more and that would provide jobs. Then I later found out those giant beuties are made in China.

So much for American "Green" jobs...

Wow, made in China? That hurts. I'm going to look into that more.

I'm not going to claim to have all of the answers here, but I can say this: Every time the Democrat party's Robbin Hood philosophy on economics is applied, my financial situation suffers. Whoever I'm working for at the time cuts hours, puts holds on raises, eliminates positions, drops benefits, and otherwise changes policy in ways that reduce the amount of money the business has to spend on employees.
When Ohio last raised its minimum wage, the company I am working for now really cracked down on employees working overtime. Managers were discouraged from "calling in" full-time employees to replace those who call in sick. Instead, they're supposed to pressure part-time employees, many of whom are part-time due to their hours of availability (some going to school, some with kids, second jobs, etc.) to come in and work those hours, or to work those hours themselves. Managers are on salary and don't get paid extra if they work overtime.
When Obama signed the "stimulus" bill, they cut hours so much that several full-timers were scheduled to work less than full-time hours (against company policy) for weeks at a time. They also didn't replace lower management positions as people quit or transferred, leaving a largely untrained staff at the store until late this summer, when the manager had to have someone in a second-in-command position.

What the Democrats are doing isn't working. They're making things worse. I don't expect the Republicans to make things better because, well... they're not really Republicans anymore. Everyone in the party... at least those active in politics... seem more interested in their moral agenda than they are in any kind of economic agenda. I don't expect anything to get done at this rate!