We have read about the unemployment rate being high. Really anything around six percent is pretty good and it is less than that now according to the statistics, but some politicians say it is terrible and others say it is reasonable. It depends upon which side of the isle you sit.
Our Washington geniuses claim they are working on finding more employment. We have lost 2.7 million jobs over the last 3 years. That doesn't matter if you are NOT one of them. Finger pointing by everyone in our capitol blames "the other guy", but especially China and India. The total of jobs going overseas is only 300,000 out of the 2.7 million. Where did the other 2.4 million jobs go?
As the economy slowed down in 2000 due to the increasing interest rates companies had to do something to keep profits. The work week could be shortened if you did not have a production line, but that doesn't work for service businesses. All unnecessary workers were laid off. As business contracted machines became idle and more people were chopped. But that was not enough. More production efficiencies were put in place so that fewer workers would be able to turn out the same amount of goods.
Production dropped from the 92% to about 75% of capacity today. When a company has 100 machines and only 75 of them are producing there is no incentive for management to buy more machines.
Sir Alan can try to stimulate further by lowering rates even more, but how much below 1% can you go? He could buy long-term bonds to further reduce rates to continue to stimulate the housing market, but financial stimulus does not create wealth. The banks borrow from the Fed at 1% to buy long-term government bonds that yield 4.2%. If I were a banker and could lock in 3.2% with no risk why should I make loans to businesses? And beside that I can fire all my loan officers to save more money.
But we need more employment. How? The Federal government is hiring more people every day. These are new jobs, BUT they do not contribute to the overall economy. In fact every new government worker is another tax. In a factory a worker turns out products that adds to what is called Gross Domestic Product. A government worker turns out nothing and adds zero to the GDP and even has to give back part of his salary in taxes. The IRS takes in the money, gives it to Congress who creates burocracies that hire people to recirculate the cash. Every government worker is a tax.
This makes the employment numbers look good, but adds nothing to our economic production. It is a way to keep money flowing. It puts money in peoples' pockets that keeps us marching in place. Until real productive job are created by business we are just fooling ourselves.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
1-888-345-7870; http://www.mutualfundmagic.com
The Bill of Rights to our Constitution caused -- and... Read More
It is widely known in the Homosexual Male Populations that... Read More
OH MAN!Here we go again. I guess now the "proof... Read More
Proposed changes to the Sex Discrimination Act ("SDA") 1975 and... Read More
Streamlining Homeland Security with a Free market flair? An idea... Read More
The UnbornWith all this cloning in the news one can't... Read More
In an age of terrorism, guerilla and total warfare the... Read More
Fearful that terrorists will next target Australia, Prime Minister John... Read More
1. Why is it that no one seems to notice,... Read More
I always have to remember to take a deep breath... Read More
"Had there not been outsourcing and utilization of cheaper resources... Read More
Their arrival portends rising local prices and a culture shock.... Read More
As the populations expand in Colorado outside of Denver, Las... Read More
Having been to every city in the country over the... Read More
Currently when we transport troops we use large cargo planes... Read More
SYNOD OF DRUM CEATT (494 - 5):It is interesting to... Read More
Alexander Hamilton ? Policy Separated from Politics:I am related to... Read More
Dust from Deserts and Particulate ControlThe greatest contributor to particulate... Read More
President Bush and Secretary Powell should hang their heads in... Read More
The debate to raise minimum wage in California is totally... Read More
As we watch fewer Americans voting it is no wonder... Read More
The current field of political sciences is dominated by a... Read More
The process of researching this topic has been an interesting... Read More
The TSA seems to have completely missed the ball at... Read More
Are you happy with all this so-called security after 9-11?... Read More
shuttle from O'Hare Alexander ..They do not allow the criticism of the president in... Read More
The first reaction of economies in transition is a sharp... Read More
Let the reader be reminded, that this document we are... Read More
Just because we have been leading the World in innovation... Read More
Elliot Spitzer, recently said he wanted to drive a stake... Read More
Ted Stevens (R-Alaska), chairman of the Senate Commerce Committee, has... Read More
Conor MacDari was a Mason but his Masonry deplored the... Read More
The United States and other first world nations have been... Read More
Publicity is correlative to your position in the community. Seldom... Read More
The use of religion is well-documented as a social engineering... Read More
In typical bureaucratese, the pensive EBRD analyst ventures with the... Read More
September 11, 2001 could have been prevented. We could have... Read More
As global warming continues to escalate the concerns of today's... Read More
Is it just me or are you concerned that illegal... Read More
We all know Elliot Spitzer is going to run for... Read More
Most politicians are completely out to lunch and totally Machiavellian... Read More
The great leader and Senator from New York and wife... Read More
I'm getting a little tired of being lectured by that... Read More
Bosnia-Herzegovina (heretofore "Bosnia") is an artificial polity with four, tangentially... Read More
Economy is called the dismal science because it pretends to... Read More
Incompetence is all too obvious at the trade shows of... Read More
Close to 500,000 people - one in four - live... Read More
Sodomy is against the law, yet goes on every day... Read More
Submiting the Criminals to The ICC!Everybody concerns about justice in... Read More
How much oil can travel through a pipeline? It depends... Read More
Political |