Thursday, September 1, 2011
Random ruminations from your resident curmudgeon...
We hear so many numbers that are reported that it is easy to just practice cognitive dissonance and tune them out. One of those numbers that we often hear is the unemployment number, which is currently reported at 9.1% of our work force. Like anything else, there is more to the number, and I thought I would share some perspective. The 9.1% number that is reported is the "U-2" (no, not the Irish band) number, and represents those that have lost their job and are drawing unemployment benefits. The federal government has several measures of unemployment, however, and although you have to dig around for the data, the number that you should focus upon is the "U-6" number. Why? Because that is the number that reflects the real status of unemployment in our country. The government no no longer counts someone as unemployed if their unemployment benefits run out; they do not count the under-employed, those that are over qualified for a position but have taken a job just to draw in income; and they do not count those that have just stopped looking for a job. If you counted all of those individuals- and readily published that information- Americans would see a real unemployment rate of around 17.5%. This is why it is so vital that Washington remove burdensome regulations an impediments to creating new jobs in this country.
When I graduated from college, I thought about going into the hotel industry, but I had reservations.
For the sake of argument, let's use the government's 9.1% reported number for unemployment. Based on the current size of the U.S. workforce, that is 13.9 million people. There are those dang numbers again, so once more, let's try to put everything in perspective. If the total unemployed in this country were a state, only Florida, New York, Texas, and California would be larger. There are more people unemployed currently than the population of Wyoming, Vermont, North Dakota, South Dakota, Alaska, Delaware, Montana Rhode Island, Hawaii, Maine, Idaho, New Hampshire, and the District of Columbia COMBINED. The total number of unemployed in the U.S. would be the 68th largest country in the world. And those comparisons are just based on the reported number. Remember: the real number is much larger. Now you have an idea of why our economy is struggling to grow.
One of my dearest friends is an electrician, but I have currently lost contact with him.
One of the keys to getting job growth restarted is to remove the barriers to companies expanding their business and ultimately hiring more workers. They will not do that in the face of regulatory or tax uncertainty. One of the problems this administration has is that they explicitly have made the business environment more difficult with more regulations and burdensome laws, and they have implicitly signaled that the environment is going to get tougher. How so? Look at President Obama's nominee for the top economic advisory post in the White house, former labor economist Alan Kreuger. Kreuger has long been a proponent of adding another layer of taxation on top of our already onerous tax code, and that is a value added tax (VAT) that will tax businesses at every step of the production process (Know this- those additional taxes will be passed on to you and me). In 2009, Kreuger proposed a 5% VAT as part of his economic "recovery" plan. Not only does this demonstrate that this administration and its economic advisors are hopelessly out of touch with reality, but they are also clueless about what it takes to put an economy into recovery mode. A higher level of taxation is not the way to do that, and proposing a "solution" such as raising taxes does nothing but continue to put our job creators on the defensive.
I have a friend that just got his medical degree as a dermatologist. He is now starting from scratch.
And that, my friends, is my view.