Bad jobs report today? Economy slowing?

What "slowing?" Was there any true growth to speak of? The recession was only ever "over" for those whom it had not affected in the first place. Personally, I don't know a single person, either here or elsewhere, who would tell you that their economic situation was improving. The "recovery" was a myth, perhaps designed to fuel an actual one.

On to Plan B. . .

Can't say you weren't warned. Small businesses account for 80% of the jobs and they're being hammered by this administration. Did you see Jeff Imelt blindside Obama yesterday calling him anti-business?

FT.com / US & Canada - Immelt hits out at China and Obama

"Recovery Summer" seriously?

As to the recovery. That's been more of a manipulative effort (cash for clunkers, census hiring, etc..) Nothing has been done to create lasting jobs and to stimulate growth.

As to jobs, almost all job creation in the US comes from small businesses, especially startups.

AFAIK, we haven't had much support for small businesses since Washington became owned by the big contributors. Obviously small businesses don't have the donation clout of a BOA, or Goldman-Sachs (or BP) etc...

Those of us running small businesses need to form a national lobbying organization so we too can purchase a share in-er-uh- invest in -uh- donate to the Administration and Congress because no one in either organization has any interest in passing laws not backed by big money.

Maybe instead of calling them donors or lobbyists, it would be more appropriate and accurate to refer to them as the politician's Board of Directors.

Manipulative is 1,000% correct, among other things with this Administration. Yes, all eyes on jobs vs. unemployment today. Watch the markets closely; could be a really loooooooong weekend!

And then you have this

Breitbart.tv ? Pelosi: Unemployment Checks Fastest Way to Create Jobs

Those of us running small businesses need to form a national lobbying organization so we too can purchase a share in-er-uh- invest in -uh- donate to the Administration and Congress because no one in either organization has any interest in passing laws not backed by big money.

That's what the Chamber of Commerce is SUPPOSED to do, but it lines up behind big business every time, I guess that's where they get their real money. I cannot fathom some of the stances they have adopted, given that they are supposed to represent "Main Street".

And then you have this

Breitbart.tv ? Pelosi: Unemployment Checks Fastest Way to Create Jobs

Pelosi has this deep seated belief that people will believe anything she says, no matter how irrational (and that accounts for most of what she says) if she waives her hands enough. (Hmm, maybe she thinks she's a magician and the hands distract us )

Remember when she said that distributing condoms is an economic stimulus (lots of hand waiving in this one.)

Pelosi = wingnut.

You know, the interesting thing is I have never heard from anyone who thinks she is productive, helpful, a good leader - I have never heard anyone support her.

I'd welcome any comments from anyone who thinks she is a positive force.

Pelosi = wingnut.

You know, the interesting thing is I have never heard from anyone who thinks she is productive, helpful, a good leader - I have never heard anyone support her.

I'd welcome any comments from anyone who thinks she is a positive force.

I concur; absolutely no one. How did she get to where she is, anyway?

I've been watching this for quite some time and the reason why there hasn't been anything more accomplished for small business is partisan bickering.

WASHINGTON ? A $30 billion government fund would be available to community banks to increase lending to small businesses under a bill passed by the House Thursday as congressional Democrats tried to revive their election-year jobs agenda.
House Democrats projected that banks would use the fund to leverage up to $300 billion in loans to small businesses, helping to loosen tight credit markets. Republicans called the bill another bank bailout that would do little to increase lending to small businesses.
The bill passed by a vote of 241-182 as congressional Democrats struggled to balance election-year concerns about high unemployment with voter complaints about the rising national debt. Only three Republicans voted for the bill.
The bill now goes to the Senate, where Democrats tried to round up support for legislation to renew pieces of last year's economic stimulus bill. The measure would combine jobless aid for the long-term unemployed, aid to cash-strapped state governments and the renewal of dozens of popular tax breaks for businesses and individuals.
Congressional Democrats began the year with an aggressive agenda of passing a series of bills designed to create jobs. One has become law, offering tax breaks to companies that hire unemployed workers. Others stalled as lawmakers, after hearing from angry voters, became wary of adding to the national debt, which stands at $13 trillion.
House Democrats emphasized that their small business bill would not add to the debt, according to projections by the nonpartisan Congressional Budget Office.
Banks that tap the $30 billion fund would issue preferred stock to the Treasury Department, paying dividends based on how much they increase lending to small businesses. The more they lend, the lower the payments. The stock would have to be redeemed within 10 years.
President Barack Obama said the lending bill "marks a new and significant step toward getting small businesses the financing they need to start up, expand and hire more workers."
The bill would provide $2 billion to assist states in their efforts to increase loans to small businesses. It would also authorize the Small Business Administration to match up to $1 billion in private investment in small startups.
"In a world where revolutionary new products are conceived in dorm rooms and companies are started in garages, we need new ways of meeting businesses' capital needs," said Rep. Nydia M. Velazquez, D-N.Y., chairwoman of the House Committee on Small Business.
Republicans said the bill offers no guarantee that small business lending will increase.
"It's really just another bank bailout," said Rep. Virginia Foxx, R-N.C. "What you are doing is, you're creating government."
The bill will now be merged with a package of tax breaks to encourage investment in small businesses that passed the House on Tuesday. The package, which goes to the Senate as one bill, would provide about $3.6 billion in tax breaks over the next decade.
Long-term investors in some small businesses would escape capital gains taxes. New small businesses could take larger tax deductions for startup expenses.
The bill includes tax increases that would offset the tax cuts and pay for the lending bill. The main tax increase would limit taxpayers' ability to avoid gifts taxes by setting up trusts known as Grantor Retained Annuity Trusts, or GRATs.
Across the Capitol Thursday, Senate Democrats easily turned back a Republican effort to cut money from the president's economic stimulus package and other government spending to pay for an extension of unemployment benefits and aid to doctors.
Republicans were on the losing end of a 57-41 vote on the measure, which would have cut stimulus dollars and other spending to finance a six-month extension of unemployment checks for people who've been out of work for more than six months.
The vote came as Senate Democratic leaders tried to shore up support for a scaled-back version of their jobless aid bill, which would renew parts of last year's economic stimulus package.
Obama renewed his push for the measure last weekend, warning that "hundreds of thousands" of state and local government jobs could be lost without $24 billion in Medicaid money to help states balance their budgets and $23 billion more to prevent layoffs at local school districts around the country.
The Senate bill includes $24 billion for Medicaid, but none for teachers. The bill would add $55 billion to the deficit over the next decade, according to a Congressional Budget Office estimate.
"It's moving in the right direction but it's not there yet," said Sen. Susan Collins of Maine, a key GOP vote sought by Democrats.

It may be a smart move because most business owners do not like going to the SBA for loans. They'll look for private financing or borrow from family or their retirement funds. You also probably had the larger Banks lobbying against giving funds to community Banks because they are afraid they will bolster their balance sheets with the money instead. I do not know if this includes credit unions, but many more people are using their local community banks and credit unions.
Whether this will work or not is yet to be seen. Many people would be skittish to start up a new business in this economic climate; and the ones that are currently in business who need money may not be using it to increase their production or update old equipment.

Is cutting taxes the answer, I do not know. I do know Nydia Vasquez is an idiot and shouldn't be a Rep., never mind Chairman of the Small Business Committee.

I've been watching this for quite some time and the reason why there hasn't been anything more accomplished for small business is partisan bickering.

I have a simple question on the content of that article:

House Democrats projected that banks would use the fund to leverage up to $300 billion in loans to small businesses,

There's nothing in the bill that compels the banks to borrow and use this money. It actually forces any bank that wants to use the money to give up some ownership and control in their bank to the government.

Banks that tap the $30 billion fund would issue preferred stock to the Treasury Department

The banks have seen how interested the government is in the compensation plans of businesses that they have their fingers in. Why would the banks suddenly use this money to help small business and invite the government in?

I think that the key phrase of the article and the only basis of this projection is captured at the very beginning:

A $30 billion government fund would be available to community banks to increase lending to small businesses under a bill passed by the House Thursday as congressional Democrats tried to revive their election-year jobs agenda.

"Projected" to help small business isn't much of a commitment in my book.

Turns out I have a second question.

Hundreds of billions of dollars to bail out big banks and Wall St but only $30Billion to help the sector that creates almost all new jobs in America?

What's up with that?

As an owner of two small businesses with a total of about 100 employees I can tell you that the main reason I'm not hiring is due to the looming tax increase that will hit on January, 2011. I haven't had to lay anybody off due to the fact that the wages I've paid my employees have remained level (they would rather have a job than a raise) and the fact that I've lead with my heart and not my head.

I fear that 2011 will be nightmare. Art Laffer had a great article in the Wall Street Journal recently. I think that he got it exactly right.

Arthur Laffer: Tax Hikes and the 2011 Economic Collapse - WSJ.com


I would love to hear from other small business owners as to why they are not hiring.

As an owner of two small businesses with a total of about 100 employees I can tell you that the main reason I'm not hiring is due to the looming tax increase that will hit on January, 2011. I haven't had to lay anybody off due to the fact that the wages I've paid my employees have remained level (they would rather have a job than a raise) and the fact that I've lead with my heart and not my head.

I fear that 2011 will be nightmare. Art Laffer had a great article in the Wall Street Journal recently. I think that he got it exactly right.

Arthur Laffer: Tax Hikes and the 2011 Economic Collapse - WSJ.com


I would love to hear from other small business owners as to why they are not hiring.

I have hired some, but I'm trying to limit it and use sub-contractors who only get paid when they work and who I don't have to lay off. I had to do a couple of rounds of layoffs and a round of wage cuts last year and I don't want to do that again.

Regarding the article (which I agree with) I see how people can accelerate many things to avoid the tax increases, but that seems like an awfully harsh way to avoid the increase in estate taxes....

I and two of my best friends aren't hiring because we already closed.

As an owner of two small businesses with a total of about 100 employees I can tell you that the main reason I'm not hiring is due to the looming tax increase that will hit on January, 2011. I haven't had to lay anybody off due to the fact that the wages I've paid my employees have remained level (they would rather have a job than a raise) and the fact that I've lead with my heart and not my head.

I fear that 2011 will be nightmare. Art Laffer had a great article in the Wall Street Journal recently. I think that he got it exactly right.

Arthur Laffer: Tax Hikes and the 2011 Economic Collapse - WSJ.com


I would love to hear from other small business owners as to why they are not hiring.

Arthur Laffer usually does get it right.

Arthur Laffer usually does get it right.

Laffer's vaunted supply side economics has questionable record at best.

Under Reagan and Bush2 it succeeded mightily in raising federal deficits.

Remember Reagan backed away from supply side economics, his SS tax increase was by the largest peacetime tax increase in history. I remember it well because I had a lot of seasonal workers...and paid more taxes.

Reagan also raised gasoline taxes and estate taxes because he was a pragmatist, I guess. But he definitely increased taxes.

Bush2's tax plan HAD to expire in 2010 - the option was soaring deficits that why it was written with a sunset provision.

Of course, we may have nothing to worry about Vice President Cheney said that "deficits don't matter".

Arthur Laffer usually does get it right.

From the article:

In 2010, without any prepayment penalties, people can cash in their Individual Retirement Accounts (IRAs), Keough deferred income accounts and 401(k) deferred income accounts. After paying their taxes, these deferred income accounts can be rolled into Roth IRAs that provide after-tax income to their owners into the future. Given what's going to happen to tax rates, this conversion seems like a no-brainer.

---------------------------------------------------------------------------------

A Roth conversion is far from being a no-brainer.

For some people it makes sense for others it doesn't.

A generalization like this one is imprudent and ill-advised.

I have a simple question on the content of that article:

There's nothing in the bill that compels the banks to borrow and use this money. It actually forces any bank that wants to use the money to give up some ownership and control in their bank to the government.

The banks have seen how interested the government is in the compensation plans of businesses that they have their fingers in. Why would the banks suddenly use this money to help small business and invite the government in?

I think that the key phrase of the article and the only basis of this projection is captured at the very beginning:

"Projected" to help small business isn't much of a commitment in my book.

They are claiming that is not TARP related, but you can't put lipstick on a pig. However, although small business is the crux of our economy, would you personally feel comfortable with our government handing out money to make potentially risky loans without any form of being able to get that money back? What they could have done was increased the program to the SBA instead where, it's my understanding, that the loans are guaranteed up to 90%. However, as I stated above, the statistics show many existing business owners will not go to the SBA, but will be more inclined to go to community Banks. I do not have default figures on SBA loans, but they are being utilized, but those loans are not easy to get. Also, it was suggested by Obama to go the SBA route and increase the loan size and include commercial loans, but Nydia Vasquez balked at that claiming " "With loan defaults on the rise, we should not base our strategy on increasing the size of the least stable SBA lending program," Velazquez said. "SBA Express has acted as nothing more than a giveaway to Big Banks and expanding it will neither further economic recovery, nor create new jobs." But she wants to go the "no, this is not TARP route". :roll:

Frankly, I think it was brilliant to make her Chairwoman of the House Committee on Small Business, since she has NEVER owned a business; unless you call frequenting bodega's in Queens business experience.

I do not think this Bill will pass muster with the Senate and the revised Bill will most likely include other incentives, like making the gains on small-business stock acquired through next year tax-free, limiting penalties for violating tax shelter rules and increasing the deduction for start-up expenses to $20,000.

I guess my question to business owners would be: If you got a large tax deduction, would you use it to hire more employees? or what would you do with the money to increase your business so you could? or is the reality of a tax decrease that it will just go back into the owners pocket for a rainy day or buy more umbrellas for rainy days?

They are claiming that is not TARP related, but you can't put lipstick on a pig. However, although small business is the crux of our economy, would you personally feel comfortable with our government handing out money to make potentially risky loans without any form of being able to get that money back? What they could have done was increased the program to the SBA instead where, it's my understanding, that the loans are guaranteed up to 90%. However, as I stated above, the statistics show many existing business owners will not go to the SBA, but will be more inclined to go to community Banks. I do not have default figures on SBA loans, but they are being utilized, but those loans are not easy to get. Also, it was suggested by Obama to go the SBA route and increase the loan size and include commercial loans, but Nydia Vasquez balked at that claiming " "With loan defaults on the rise, we should not base our strategy on increasing the size of the least stable SBA lending program," Velazquez said. "SBA Express has acted as nothing more than a giveaway to Big Banks and expanding it will neither further economic recovery, nor create new jobs." But she wants to go the "no, this is not TARP route". :roll:

Frankly, I think it was brilliant to make her Chairwoman of the House Committee on Small Business, since she has NEVER owned a business; unless you call frequenting bodega's in Queens business experience.

I do not think this Bill will pass muster with the Senate and the revised Bill will most likely include other incentives, like making the gains on small-business stock acquired through next year tax-free, limiting penalties for violating tax shelter rules and increasing the deduction for start-up expenses to $20,000.

I guess my question to business owners would be: If you got a large tax deduction, would you use it to hire more employees? or what would you do with the money to increase your business so you could? or is the reality of a tax decrease that it will just go back into the owners pocket for a rainy day or buy more umbrellas for rainy days?

I've been in business for 30 years and have always used every opportunity to invest back in my business - whether it be employees, property, plant, equipment etc. My father was a great businessman who always used to say "take care of your horse and your horse will take care of you".

Andy Grove: How to Make an American Job Before It's Too Late

Bloomberg has an article by Andy Grove called "How to Make an American Job Before It's Too Late".

Andy used to run a company called Intel, So he is a big business, multi-national kind of guy. Yet his article is all about how we shouldn't be sending our manufacturing jobs overseas. He sees this as a threat to our existence. Andy is actually a first generation immigrant. He and his family came legally to America from Hungary in the 50's and he has experienced the "American Dream".

Towards the end of the article, he proposes placing a tax on offshored labor. This of course flies in the face of many economists, one-world politicians and their shareholders (donors) but it is an interesting position for an immigrant with multi-national experience to propose. (As an aside, I believe we should apply a 'competition' tax on any foreign imports created under rules less stringent than those of our labor, safety, environmental, financial, etc.. rules.)


Some quotes from the article (Any bolding is my emphasis):

Bay Area unemployment is even higher than the 9.7 percent national average. Clearly, the great Silicon Valley innovation machine hasn?t been creating many jobs of late -- unless you are counting Asia, where American technology companies have been adding jobs like mad for years.

The underlying problem isn?t simply lower Asian costs. It?s our own misplaced faith in the power of startups to create U.S. jobs. Americans love the idea of the guys in the garage inventing something that changes the world. New York Times columnist Thomas L. Friedman recently encapsulated this view in a piece called ?Start-Ups, Not Bailouts.? His argument: Let tired old companies that do commodity manufacturing die if they have to. If Washington really wants to create jobs, he wrote, it should back startups.

Mythical Moment

Friedman is wrong. Startups are a wonderful thing, but they cannot by themselves increase tech employment. Equally important is what comes after that mythical moment of creation in the garage, as technology goes from prototype to mass production. This is the phase where companies scale up. They work out design details, figure out how to make things affordably, build factories, and hire people by the thousands. Scaling is hard work but necessary to make innovation matter.

The scaling process is no longer happening in the U.S. And as long as that?s the case, plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs.

...
As time passed, wages and health-care costs rose in the U.S., and China opened up. American companies discovered they could have their manufacturing and even their engineering done cheaper overseas. When they did so, margins improved. Management was happy, and so were stockholders. Growth continued, even more profitably. But the job machine began sputtering.

U.S. Versus China

Today, manufacturing employment in the U.S. computer industry is about 166,000 -- lower than it was before the first personal computer, the MITS Altair 2800, was assembled in 1975. Meanwhile, a very effective computer-manufacturing industry has emerged in Asia, employing about 1.5 million workers -- factory employees, engineers and managers.
...
Tragic Mistake

Should we wait and not act on the basis of early indicators? I think that would be a tragic mistake because the only chance we have to reverse the deterioration is if we act early and decisively.

...

Making the same calculations for a number of Silicon Valley companies shows that the cost of creating U.S. jobs grew from a few thousand dollars per position in the early years to $100,000 today. The obvious reason: Companies simply hire fewer employees as more work is done by outside contractors, usually in Asia.

Alternative Energy

The job-machine breakdown isn?t just in computers.
...
Last year, I decided to do my bit for energy conservation and set out to equip my house with solar power. My wife and I talked with four local solar firms. As part of our due diligence, I checked where they get their photovoltaic panels -- the key part of the system. All the panels they use come from China.

Advanced Batteries

There?s more at stake than exported jobs. With some technologies, both scaling and innovation take place overseas. Such is the case with advanced batteries. It has taken years and many false starts, but finally we are about to witness mass- produced electric cars and trucks. They all rely on lithium-ion batteries. What microprocessors are to computing, batteries are to electric vehicles. Unlike with microprocessors, the U.S. share of lithium-ion battery production is tiny.

...

...
Offshore Production

Consider this passage by Princeton University economist Alan S. Blinder: ?The TV manufacturing industry really started here, and at one point employed many workers. But as TV sets became ?just a commodity,? their production moved offshore to locations with much lower wages. And nowadays the number of television sets manufactured in the U.S. is zero. A failure? No, a success.?

I disagree. Not only did we lose an untold number of jobs, we broke the chain of experience that is so important in technological evolution. As happened with batteries, abandoning today?s ?commodity? manufacturing can lock you out of tomorrow?s emerging industry.

...

No. 1 Objective

Such evidence stares at us from the performance of several Asian countries in the past few decades. These countries seem to understand that job creation must be the No. 1 objective of state economic policy. The government plays a strategic role in setting the priorities and arraying the forces and organization necessary to achieve this goal.

...
Job-Centric Economy

How do we turn such Asian experience into intelligent action here and now? Long term, we need a job-centric economic theory -- and job-centric political leadership -- to guide our plans and actions. In the meantime, consider some basic thoughts from a onetime factory guy.

Financial Incentives

The first task is to rebuild our industrial commons. We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars -- fight to win.)
...
Unemployment is corrosive. If what I?m suggesting sounds protectionist, so be it.
...
Choice Is Simple

Every day, that Palo Alto restaurant where I met the Chinese venture capitalists is full of technology executives and entrepreneurs. Many of them are my friends. I understand the technological challenges they face, along with the financial pressure they are under from directors and shareholders. Can we expect them to take on yet another assignment, to work on behalf of a loosely defined community of companies, employees, and employees yet to be hired? To do so is undoubtedly naive. Yet the imperative for change is real and the choice is simple. If we want to remain a leading economy, we change on our own, or change will continue to be forced upon us.

Laffer's vaunted supply side economics has questionable record at best.

Under Reagan and Bush2 it succeeded mightily in raising federal deficits.

Remember Reagan backed away from supply side economics, his SS tax increase was by the largest peacetime tax increase in history. I remember it well because I had a lot of seasonal workers...and paid more taxes.

Reagan also raised gasoline taxes and estate taxes because he was a pragmatist, I guess. But he definitely increased taxes.

Bush2's tax plan HAD to expire in 2010 - the option was soaring deficits that why it was written with a sunset provision.

Of course, we may have nothing to worry about Vice President Cheney said that "deficits don't matter".

Only one man's opinion, Buz. You are certainly entitled to yours.

Why is raising the estate tax such a bad thing? It is rather easy to legally transfer assets and property to the next generation through gifts, taking advantage of tax benefits, trusts etc - if you plan long term.

I do think that small businesses are struggling because it is damn expensive to have employees, let alone give them benefits.

But how do we change that w/o adding to our debts and deficits?

So one and half years out post the largest federal spending spree in our history encompassing nearly two trillion in added federal debt, a plan the democrats have promised is "working". Yet, last month the United States economy lost 125 thousand jobs, a rather depressing number. (Better though than if you include the magical number of employees the federal government dropped from the books - 600 thousand, who are apparently no longer considered seeking employment.)

Time for some more change me thinks. This Keynesian experiment is over, and it has failed miserably.

Bloomberg has an article by Andy Grove called "How to Make an American Job Before It's Too Late".

This is a great article.