06 October 2010

Whatever Happened to Jobs?

Two months in a row, jobs have disappeared. There is no more important economic issue we face right now and the parties need to define why this is and what they will do to address the problem.

From 1980 to 2000, the American economy created almost 2 million jobs per year. For the first decade of this century, the economy has LOST about 200,000 jobs per year.

George W. Bush stimulated the economy enormously - jacking up spending and lowering taxes. In spite of that, during his administration, jobs were created at about 1/10th the rate as during Clinton's administration. And of course, the slow creation of jobs under Obama's policies has reversed, and on net, job losses each of the first two years has been about 2 million.

I have some theories about this but they are just that - theories. I do have some facts, though. The Republicans have shown themselves irrelevant to this problem by clamoring for deficit reduction - calling for budget cuts in a time of near-double digit unemployment. Whatever questions we have about how to create jobs, we can be pretty sure that this is a good way to destroy them. The Democrats, too, have shown themselves irrelevant to this problem. They ask for more time for their stimulus package to work (or, rather, put Americans to work) but are unable to explain why massive stimulus has had so little effect on the economy. And they holler about candidates who dabbled in witchcraft.

This problem of job formation would be problematic in the best of times. It is compounded by the fact that the media is all about defending or attacking the major parties rather than exploring a problem for which there appears to be no obvious solutions.


Bald Al said...

It truly is amazing that as corporate profits do continue to improve, new jobs are not necessarily being created. In the past when we've had companies continue to increase profit each quarter we also had job growth. Not this time. Some of it has to do with our collective fixation on trying to reign in CEO pay, as in trying to put in rules requiring CEO pay to be linked to profitability. And some of it has to do with fear of Stockholder lawsuits against those CEO's not increasing stockholder assets.

So what's a CEO to do? Cut costs wherever possible + don't invest in new, potentially risky ventures. In other words, keep the company's revenue stream healthy and whittle away at costs, with the #1 cost being employee overhead costs. Employees aren't necessarily going to complain about added responsibilities because of potential job-less fears.

Crazy as it may seem, we really do need to support CEO's taking risks. We need job growth & that may mean some risk taking. Not every CEO is Steve "Midas Touch" Jobs.

We also need our government to start Leading instead of always seeming to bash the hell out of each others party. I know this will never happen but I wish We the People could tell our elected officials *THEY* don't get paid until we see X% of sustained job growth in the U.S. Right now there really is zero incentive for our elected officials to truly start working for those who elected them. And it doesn't seem to matter who we elect into office. The end result continues to be the same.

sigh . . .

Damon said...

Productivity rises as jobs are cut and people work harder to protect their incomes. Plain and simple, the american work force is currently more efficient and productive, therefore the need to replace previous positions is negated. But you already knew all that.

Secondly, I love what Merkel has done in Germany with cutting spending/debt to much lower levels than before. I am of the belief that the reason their unemployment rate is low as it is as well as the relative strength (compared to the rest of europe) of their economy is, in a large part, due to their austerity efforts.

That said...that is STILL relatively one insanely taxed nation. seriously. tax for having a dog. a tv. a RADIO. etc.