“Governments are good at creating work, but they are not good at creating value-generating jobs,” is the conclusion from this insightful 3-minute clip from Professor Steve Horwitz. Too often the jobs that politicians ‘create’ are simply to their own benefit. Critically, Horwitz explains that transitions (from agriculture to manufacturing to service to information for instance) are temporarily painful but relatively quickly re-allocated. If, however, politicians attempt to prevent this transition – to stall the free market’s signals – this will halt innovation, growth, and create more poverty (ring any bells). Creating meaningful valuable jobs (something we saw earlier today is not occurring) does not appear too complex – “the best job-creation program in human history is the free market and the entrepreneurship it generates” – it simply means our politicians must get out of the way.
Video description:
President Franklin Roosevelt’s “New Deal,” has long been credited with rescuing the nation from the Great Depression of the 1930’s. Lee Ohanian, Professor of Economics at UCLA, challenges this conventional wisdom in a provocative examination of FDR’s economic policies.
Art Bouvier, the owner of a New Orleans-inspired restaurant located in Indianapolis saw a young man trudging through the early morning snow and ice last week. The teen stopped to ask Bouvier — who owns Papa Roux Po Boys and Cajun Food– how much further it might be to his final destination and was told it was six to seven miles.
“He thanked me and continued on,” Bouvier, who also goes by Papa, wrote of the encounter in a now viral Facebook post. “He could have asked me for money for a bus. In fact I quite expected him to. He didn’t. He just started walking.”
Bouvier continued in his post that 15 minutes later he was in the car and told his wife to pull over when he spotted the teen — still walking.
That’s when he found out the 18-year-old named Jhaqueil Reagan had intended to walk a full 10 miles for a job interview. The Bouviers gave Reagan a ride the rest of the distance — but that’s not all.
“I’m thinking to myself, here’s a kid walking almost 10 miles in the ice and slush and snow for the hope of a job at minimum wage,” Bouvier told Fox 59. “That’s the kind of story your parents used to tell, my parents used to tell, up both ways in the snow.”
Bouvier took Reagan’s phone number advising him to keep his interview, but noted he would see if he could hire him at Papa Roux.
In a phone interview with TheBlaze, Bouvier went on to say he told Reagan whatever the other shop offered him, he would double it. Bouvier then told us that Reagan later learned although he did well in the interview with the other establishment, the position had already been filled.
“It’s been a while since I’ve met someone so young with a work ethic like that!” Bouvier continued writing.
When he saw Reagan walking two hours ahead of his interview to ensure he would be on time, Bouvier told TheBlaze he knew it was a sign of his work ethic.
“I tell every single applicant, I can show you the ropes, but what I can’t teach is work ethic. Show up. Be on time. Don’t disappoint your crew,” Bouvier said, giving the example of poor work ethic as those who call at 9:55 to say they won’t make their 10:00 shift. “You know before 9:55 you aren’t going to make that shift. …I don’t think I’ll ever get that 9:55 phone call from [Reagan].”
Kevin Lunny, owner of Drakes Bay Oyster Company, hugs longtime worker Lupe Guadalupe Arriago after learning the government will not renew his family’s lease in Inverness, Calif., Nov. 29, 2012 (Wall Street Journal)
Obama’s policies are killing jobs, the working poor/middle-class! I wrote on this previously, but reality is here now. Another company gone!
‘I would like to black those days out — does that tell you how bad they were?” says Carl Schanstra, owner of a small Illinois parts-assembly firm. During the recession, his sales dropped by around 50 percent, and Schanstra was forced to take a calculated risk: He downsized considerably, reworked his business strategy, and invested his life savings to tide the manufacturing company through the hard times.
“We laid off 20 people in one day,” Schanstra tells National Review Online. “That day sucked. We got rid of some of the high-level management that was not functioning correctly, as well as our low-level people. We cut and cut and cut. And as the owner of the company, I went without a paycheck for over three months, several times throughout that period. You get to compound on that company’s traumatic experiences, and then add that you don’t have any personal income as well.”
At first glance, it looks like Schanstra’s sacrifices paid off. Automation Systems Inc. is once again stable, and sales continue to rise. During the recession, the firm was housed in a leaky old building with a gravel loading dock and tarps aplenty to protect equipment when it rained. Three months ago, Schanstra was able to move into a much bigger, light-industrial new building.
But the company now faces a new problem because of the Obama health law. Automation Systems Inc. has expanded to include 37 employees today, and Schanstra says he wants to hire more — maybe as many as 200 or 300 in the next 10 to 15 years. But once the business crosses the 50-employee threshold, it will have to pay $40,000 in penalties, plus $2,000 for each additional employee. That’s because of the so-called employer mandate, a fee imposed on businesses that get too big without providing health care the federal government deems acceptable.
“The government has made it clear with the health-care law that the incentive is to have companies under 25 people, where we can get tax breaks,” Schanstra says. “The mid-range companies with the labor of 25 to 60 people — those companies are going to be impacted by this dramatically.”
Between 2007 and 2010, the U.S. lost 27,409 manufacturing firms, according to data from the Census Bureau, most of the losses presumably occurring during the recession. At its low point in June 2009, American manufacturing production was down about 21 percent from what it had been in December 2007. The manufacturing sector became a symbol for everything that had gone wrong: Why can’t the U.S. make things like it used to? Is the U.S. losing its global edge? Factory jobs were America’s hottest export, as the story went, and furrowed faces personified the trend.
President Obama took up the cause, setting a goal to double U.S. exports by 2015 and to create a million new American manufacturing jobs in the process. Early in the stimulus, politicians on the left pushed for federal aid and Buy America clauses. Most neglected to mention, of course, the regulatory burden and union wrangling that have made these companies less competitive than their global counterparts.
Taxpayer money has since flowed copiously toward the manufacturing sector. Just last July, the president was pushing for a 2013 budget with $11.245 billion in funding for various manufacturing initiatives, and that’s on top of existing programs and the stimulus money.
At first, it seemed to work. Manufacturing has boomed in the past three years, a rare occasion for optimism in the midst of a lukewarm recovery. Though the manufacturing sector faces a skill-set mismatch, it’s one of the few sectors with plentiful jobs available. Deloitte and the Manufacturing Institute reported last year that as many as 600,000 manufacturing positions remained unfilled.
Yet that growth is fragile, as recent news has demonstrated. For the first eleven months of 2012, inflation-adjusted manufacturing essentially plateaued, leading to speculation that the sector was re-entering a recession. The most recent data, collected in November, show that manufacturing remains short of what it was before the hard times hit.
And it’s hard to say which direction manufacturing is headed next, says Alan Tonelson, a research fellow at the U.S. Business and Industry Council, which represents some 2,000 small and medium-size manufacturers.
“We have come back a lot of the way, but we’re not back all the way,” Tonelson tells National Review Online. “And what I find discouraging about this is, we’re still behind the manufacturing eight-ball despite the trillions of dollars that have been poured into the economy by the stimulus and the Obama administration. It seems like that spending should have created much more growth for the buck.”
Even so, a recent survey by ThomasNet found that 48 percent of American manufacturing companies want to hire. But many of these companies will be affected by the new employer-mandate fees, which would certainly give them reason for pause.
Automation Systems Inc. is the perfect example. The employer mandate has made it financially untenable for the business to expand in the U.S., so Schanstra is reluctantly looking south of the border.
“I’m going to do what’s best for the company no matter what, so what jobs we have here, we can keep here,” he says. “As a business owner, I will learn the restrictions that the government imposes. But based on those restrictions, much of my business may no longer be within the country.”
Gateway Pundit mentions that thanks to Barack Obama and Democrats, the poor (financially that is) Taco Bell workers will suffer and lose work hours. The Taco Bell in Guthrie, Oklahoma cut its employees’ hours due to Obamacare. (Posted by: Religio-Political Talk)
Yahoo News also mentions that Wendy’s is the latest to follow suit:
Count Wendy’s as the latest fast-food restaurant to respond to Obamacare with a reduction in worker hours. Following some other chains that have made headlines recently, a Wendy’s franchise owner in Omaha, Neb., told about 100 workers in the area that their hours would be cut in anticipation of mandates in the Affordable Care Act (ACA)….
All these egalitarian people that think they are helping are not. For instance, the cost of health care (according to Obama) was suppose to come down… immediately. In fact, the Affordable Care Act is making health insurance rates rise (HotAir). Even BIG supporters of Obama’s campaign are laying people off and closing plants that produce medical equipment because of the cost of Obama-Care (Breitbart). Again, a favored quote of mine comes to mind:
“Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.” ~ CS Lewis
Or put another way, when the cute bunnies attacked in “Search for the Holy Grail,” “RUN AWAY! RUN AWAY!”
Larry Elder shows how offering extended unemployment benefits creates a class of people that get use to “not working for a living.” (Posted by: https://religiopoliticaltalk.com/) I include a call where a caller challenges the idea that this is redistribution of wealth. Larry then quotes Democratic, liberal, libertarian sources that show this to be the case — that is — that unemployment benefits hurts recovery.
For more clear thinking like this from Larry Elder… I invite you to visit: http://www.larryelder.com/
Rick Moran writes on a post by M. Tanner over at PJ-Media:
As we get closer to the day when Obamacare moves from threat to reality, it seems probable that the resulting catastrophe for tens of thousands of businesses, as well as the massive increase in premiums for many families, will propel Republicans to majority status in 2014.
How many businesses will be forced to close shop? How many will cut back on the number of employees to stay in business? How many will refuse to expand, unable to handle the increased costs?
How many jobs will Obamacare cost?
Michael Tanner, senior fellow at the Cato Institute, lays out the grim reality:
Under ObamaCare, employers with 50 or more full-time workers must provide health insurance for all their workers, paying at least 65% of the cost of a family policy or 85% of the cost of an individual plan. Moreover, the insurance must meet the federal government’s requirements in terms of what benefits are included, meaning that many businesses that offer insurance to their workers today will have to change to new, more expensive plans.
ObamaCare’s rules make expansion expensive, particularly for the 500,000 US businesses that have fewer than 100 employees.
Suppose that a firm with 49 employees does not provide health benefits. Hiring one more worker will trigger the mandate. The company would now have to provide insurance coverage to all 50 workers or pay a tax penalty.
In New York, the average employer contribution for employer-provided insurance plans, runs from $4,567 for an individual to $ 12,748 for a family. Many companies will likely choose to pay the penalty instead, which is still expensive — $2,000 per worker multiplied by the entire workforce, after subtracting the statutory exemption for the first 30 workers. For a 50-person company, then, the tax would be $40,000, or $2,000 times 20.
That might not seem like a lot, but for many small businesses that could be the difference between survival and failure.
Under the circumstances, how likely is the company to hire that 50th worker? Or, if a company already has 50 workers, isn’t the company likely to lay off one employee? Or cut hours and make some employees part time, thus getting under the 50 employee cap? Indeed, a study by Mercer found that 18% of companies were likely to do exactly that. It’s worth noting that in France, another country where numerous government regulations kick in at 50 workers, there are 1,500 companies with 48 employees and 1,600 with 49 employees, but just 660 with 50 and only 500 with 51.
New York City’s small business could be particularly hard hit. Of the 238,851 city firms included in a state Department of Labor survey, 96% had fewer than 50 employees. How many of them, given the chance to expand, will look at the mandate and decide they’d rather keep their small business small?
Overall, according to the Congressional Budget Office, ObamaCare could end up costing as many as 800,000 jobs.
You read that correctly: 800,000 jobs. And that’s according to the CBO, a notoriously conservative outfit when it comes to projections. (Its current estimate of Obamacare’s cost from 2014-2023 is $2.6 trillion.)
Individuals and families who will be forced to buy their own insurance when companies drop their health insurance plans will be in for a shock. Even with subsidies, some families will end up paying nearly 10% of their gross income for health insurance.
The bottom line is mass confusion. Put simply, the American people are unprepared for such a massive change in their lives. Most people don’t realize that their current insurance coverage is inadequate. They actually believed the president when he looked into the cameras during his 2010 State of the Union address and assured citizens that they could keep the insurance plan they have now. Instead, government-mandated coverage for a wide variety of services that many current insurance plans don’t cover will radically alter health insurance for millions.
Many economists are already predicting a recession as a result of implementing Obamacare. Coupled with voters doing a slow burn over the sheer complexity and maddening bureaucracy that will come with Obamacare, the Republicans, if they play it right, should find themselves in an excellent position to put a stranglehold on Congress and set themselves up for an excellent chance to win the White House in 2016.
Since it’s not a web ad featuring a super cool, hipster-celebrity making suggestive analogies about President Obama’s oh-so-dreamy and glamorous political qualities, I doubt it will get nearly the same traffic as Team Obama’s recent Lena Dunham ad — which is most unfortunate, because rather than a cotton-candy, war-on-women appeal to the youths, we actually see the real-world effect that Obama’s policies have had on hardworking, middle-class Americans.
President Obama’s policies have been brutal to the business world, and small businesses in particular. An onslaught of red-tape regulations, ObamaCare, the threat of higher taxes, generally poor economic growth — none of these have been kind to entrepreneurs or owners trying to grow their outfits. Despite the Obama administration’s several showy moves to come to the aid of small business, their vital signs just haven’t picked up, via Bloomberg Businessweek:
The measure estimates employment at independent companies with fewer than 20 employees that use Intuit’s online payroll product. Companies with fewer than 20 workers make up nearly 90 percent private employers in the U.S. …
Companies with fewer than 20 employees have actually shed jobs during the economic recovery; the Intuit Small Business Employment Index was 0.9 percent lower in October 2012 than in July 2009. Moreover, since May, the index has moved in the opposite direction from BLS estimates of overall employment, with Intuit reporting a loss of 10,000 small business jobs in each of the last two months alone. …
Compensation and hours are similarly weak. Adjusting for inflation and seasonality, monthly compensation for all employees (including the owners) at businesses with fewer than 20 employees is 10.2 percent lower than when the president took office.
California is in a worse boat that Virginia, for instance, we [California] have ranked dead last 8-years in a row as far as a business friendly environment goes:
It was alarming the first three or four times California was ranked last among 50 states for business environment. Now, Chief Executive magazine’s annual ranking, based on a survey of 650 chief executives on taxation, regulation, workforce quality and living environment, again places California dead last, 50th of 50 – for the eighth year in a row.
Eight years in a row ceases to be alarming. It now is a defining status.
[….]
Gov. Jerry Brown insists those who say California is unfriendly to business are wrong. But Mr. Brown, of course, is not the chief executive officer of a private business. He is the top executive of a deficit-burdened, intrusive, bloated government bureaucracy that has perfected squandering other peoples’ money while botching delivery of services such as education and lavishing public employees with unaffordable pay and benefits.
California public school teachers are the nation’s highest-paid, while their students’ performance ranks among the worst. The state’s various unfunded pension and retirement health care benefits promise to bankrupt the already overextended government.
As chief executive opinions go, Mr. Brown’s are considerably less credible than CEO magazines’ private-sector leaders.
“California’s enduring place of perpetual decline continues in this year’s ranking,” the magazine said. “Once the most attractive business environment, the Golden State appears to slip deeper into the ninth circle of business hell.”
The CEOs aren’t alone in their harsh critique. The state got an “F” grade in January from Thumbtack.com and the Kauffman Foundation in a survey of 6,000 small businesses across the nation, and the Tax Foundation ranked California 48th worst on business taxes.
There is little prospect of improvement. Despite finding itself in a hole, state government keeps digging. This week the state Senate Judiciary Committee killed a California Chamber of Commerce-sponsored job-creator bill to protect employers from inappropriate litigation.
Mr. Brown’s Air Resources Board is ratcheting up costly new regulations and preparing an ill-advised cap-and-trade carbon-emissions auction to coerce private energy providers to do things the government’s way. The governor and other Big Government champions also are advancing proposals for the November ballot to extract upwards of another $20 billion per year in taxes.
As CEO magazine’s poll shows, the state’s failings are obvious to business people. But Mr. Brown and California’s other governmental leaders just don’t get it.
“I will not rest until everyone American who is able, and ready and willing to work can find a job. And a job that pays a decent wage and has decent benefits to support a family.” ~ Obama
It was just words. In fact, despite serving as president during the “Greatest Recession since the Great Depression” Barack Obama has spent more time on the golf course than in economic meetings.
Obama Hasn’t Found An Hour For His Own Jobs Council In The Last Six Months:
“President Obama Is At Odds” With His Jobs Council And Has Not Met With The Council In Six Months. “President Barack Obama is at odds with some of his handpicked outside advisers on hot-button election topics such as regulations and corporate taxes. Many of the recommendations at issue stem from the president’s Council on Jobs and Competitiveness, a group of business and labor leaders with whom Mr. Obama hasn’t met in six months.” (Carol Lee and John McKinnon, “Jobs Council Is Sidelined As President Courts Voters,” The Wall Street Journal, 7/19/12)
White House Press Secretary Jay Carney: “There’s No Specific Reason, Except The President Has Obviously Got A Lot On His Plate.” “‘There’s no specific reason, except the president has obviously got a lot on his plate, but he continues to solicit and receive advice from numerous folks outside the administration about the economy about ideas that he can act on with Congress or administratively to help the economy grow and help create jobs,’ Carney said in the White House’s first on-the-record response to a POLITICO story noting the hiatus.” (Josh Gerstein, “White House: Obama’s Plate Too Full For Jobs Council,” Politico, 7/18/12)
What’s President Obama Found Plenty Of Hours For? More Than 100 Fundraisers To Help His Re-Election Campaign:
President Obama Has Attended 106 Political Fundraisers Since The Last Meeting Of His Jobs Council. (National Journal’s “Daybook,” 7/18/12)
While President Obama Can’t Find A “Specific Reason” To Meet With His Jobs Council, Americans Are Struggling In The Obama Economy:
The U.S. Economy Continued Its “Slowdown” In The Third Quarter With Factory Activity Contracting And “New Claims For Jobless Aid Surging Last Week.” “The slowdown in the U.S. economy persisted early in the third quarter with factory activity in the U.S. Mid-Atlantic region contracting in July for a third straight month and new claims for jobless aid surging last week.” (Lucia Mutikani, “Data Shows Economy Mired In Weakness,”Reuters, 7/19/12)
CBS News: We Are Experiencing “The Worst Economic Recovery America Has Ever Had.” CBS’ SCOTT PELLEY: “Good evening. This is the worst economic recovery America has ever had. We’d been looking for hopeful signs, but today the chairman of the Federal Reserve threw a cold splash of reality on those hopes.” (“CBS Evening News,” 7/17/12)
“The American Job Machine Has Jammed” And Has Settled Into A “Summer Slump For The Third Year In A Row.” “The American job machine has jammed. Again. The economy added only 80,000 jobs in June, the government said Friday, erasing any doubt that the United States is in a summer slump for the third year in a row.” (Paul Wiseman, “US Economy Adds 80,000 Jobs In Another Weak Month,” The Associated Press, 7/7/12)
“The Weakest Job-Adding Quarter In Two Years…” CNBC’s JOHN HARWOOD: “Just 80,000 jobs added in the month of June, Michelle. 8.2% unemployment rate, unchanged, 12.7 million unemployed people, also unchanged. That makes the second quarter the weakest job-adding quarter in two years, an average of 75,000 jobs added in the second quarter of this year.” (CNBC’s “Squawk Box,” 7/6/12)
