New business not creating jobs, and hasn’t for a long time

Is the current economic situation just another in a long cycle of booms and busts, growth periods and slowdowns, and thus something that will correct itself in time? Or does it reflect something more long-term, something more fundamental gone wrong in the economy?

Personally, I think that’s the most important economic question of our times. And these new numbers out of the Bureau of Labor Statistics don’t encourage me much. They suggest that new business establishment, long considered the main driver of job creation, is no longer capable of playing that role. They also demonstrate that the phenomenon is not a product of our current economic struggles, but instead can be traced back more than a decade.

As the BLS commentary notes, “the number of jobs created by establishments less than 1 year old has decreased from 4.1 million in 1994, when this series began, to 2.5 million in 2010. This trend combined with that of fewer new establishments overall indicates that the number of new jobs in each new establishment is declining.”

I don’t know how to explain it, and without an explanation it’s impossible to recommend ways to reverse it. I do know that some will automatically try to blame it on government, because that seems to be the only kind of policy debate we can have anymore. But when fundamental economic change is taking place, it usually swamps any influence that government might wield one way or the other.

bdm_chart2

– Jay Bookman

(h/t Kevin Drum)

305 comments Add your comment

Finn McCool

May 31st, 2011
11:25 am

Companies have learned to do more with fewer people – just pile on the workload, combine 2 or more jobs into 1. People don’t need time to relax.

How important is quality of life when profits are at risk?

Brosephus

May 31st, 2011
11:31 am

But when fundamental economic change is taking place, it usually swamps any influence that government might wield one way or the other.

It appears to be swamping the influence of not only government but that of businesses too. One thing that can be said about the economy is that we’re no longer in Kansas, and I don’t think any amount of ruby slippers will get us back there. The old US economy will only be found in history books now.

Kamchak

May 31st, 2011
11:33 am

IT’S THE FAULT OF ORGANIZED LABOR!

Just thought I’d get that out of the way early

andygrdzki

May 31st, 2011
11:34 am

In business now, it is do more with less, which is driven by investors desiring a greater return on investment. One point..
Another point is wages.. people are demanding higher and higher wages and benefits. And this is a cycle, because other sectors are increasing costs and to live, you need higher wages. Benefit cost are soaring, medical, time off, family leave, etc…. those are associated costs…
Our labor forces, in many cases are unqualified. We can’t find qualified candidates to fill the positions. Many, many job hoppers…
And we have exported jobs out of the country; we have lost our talent base….. Has been replaced with game players…
These are just a few issues. People to blame:, and in no order,,,, Businesses, consumers, investors, Wall Street, Government, or… “We the People”…. We let it happen….

Good little liberal

May 31st, 2011
11:35 am

When I see liberals wringing their hands over the fact that businesses are no longer coming to our shores to bring us jobs and wealth, I am reminded of the abusive husband who regularly beat the stuffing out of his ex wife, but just can’t figure out why she left him.

This administration and its supporters are anti-business as is seen on a regular basis by the posters on this blog. And what a surprise that businesses are taking their jobs to countries that actually offer incentives for businesses to come there.

Adam

May 31st, 2011
11:35 am

Definitely troubling numbers, Jay. Of course I think this probably shows a few things:

1) Less willingness to have risk by having a startup in the first place
2) Less return for startups
3) Maybe less capital? Could have something to do with the decline in small business loans?

In any case, it really is troubling and it can’t be explained by a single factor, but by a conglomeration that unfortunately all leads to the same place.

I also really don’t like the overall trend as it basically shows that establishment is winning versus new ideas and such. And that is going to lead to more bubbles like the one Wall Street just popped.

Dave R.

May 31st, 2011
11:39 am

“I don’t know how to explain it, and without an explanation it’s impossible to recommend ways to reverse it. I do know that some will automatically try to blame it on government, because that seems to be the only kind of policy debate we can have anymore.”

Or maybe because government actually might just BE the problem, Jay. From the WSJ: “The regulatory tax on Americans is now larger than the income tax.”

This is something I have opined about on here and other places for years. Maybe someone will finally pay attention to reality now. When you combine the income tax with the regulatory taxes, nothing good can come of it.

I don’t have an account with the WSJ, but if others do, this might be a good read.

http://online.wsj.com/article/SB10001424052702304520804576347612778787534.html?mod=googlenews_wsj

Brosephus

May 31st, 2011
11:39 am

This administration and its supporters are anti-business as is seen on a regular basis by the posters on this blog. And what a surprise that businesses are taking their jobs to countries that actually offer incentives for businesses to come there.

So would your suggestion for this administration include removing all regulations from businesses and allow citizens to be prostituted out for jobs at $2 an hour? That’s about the sum of the incentives that other countries are offering.

You also forget that the US government is just as complicit in companies taking jobs overseas by legislating and instituting free trade agreements. Do you honestly think companies would move operations overseas if they actually had to pay tarriffs on the crap they bring back?

larry

May 31st, 2011
11:41 am

Hold on……………..werent there over 200,000 private sector jobs created last month?

Kamchak

May 31st, 2011
11:41 am

…it usually swamps any influence that government might wield one way or the other.

You can tell a “swampy” influence by the smell.

Adam

May 31st, 2011
11:41 am

Dave R: If it were all about taxes, there would be some statistical correlation that could be drawn showing that a decline in taxes is leading to job creation, or that increases lead to less jobs, in a statistically significant way.

There is no such statistical correlation.

Adam

May 31st, 2011
11:42 am

larry: the private sector is a big place. What the chart says is that most of the 200,000 jobs came from established companies.

larry

May 31st, 2011
11:44 am

Ahh, okay. I stand corrected.

Pizzaman

May 31st, 2011
11:44 am

ITS THE FAULT OF THE REPUBLICANS.

Just thought that too should get out of the way early.

Adam

May 31st, 2011
11:44 am

sorry, what the chart IMPLIES, since I don’t have data right there to back that up, is that most new jobs comes from established companies if we have job growth at all.

Good little liberal

May 31st, 2011
11:45 am

Brosephus

The damage was probably already done within the first few months of the Pelosi-Reid Congress when they raised the minimum wage to unsustainable levels, and then this abortion of a health bill which will require that all companies (except the ones that are being given waivers) provide all workers with expensive health insurance, pretty much made the coffin lid nailers have a nail gun.

Now the fed is trying to regulate where companies like Boeing are building plants and of course, trying to drive up energy costs for the sake of the Alaska caribou.

Our only hope is a complete reversal of most of the laws that have been passed since the San Francisco liberal took over the House and the community organizer took over the White House.

stands for decibels

May 31st, 2011
11:45 am

without an explanation it’s impossible to recommend ways to reverse it.

ha. you make the funny. is good!

Dave R.

May 31st, 2011
11:47 am

“So would your suggestion for this administration include removing all regulations from businesses and allow citizens to be prostituted out for jobs at $2 an hour?”

I would recommend this Brosephus: Suspend all regulations for a period of 5 years, except for EPD and OSHA. Make any requirement to extend the suspension subject to a 2/3rds majority of both houses of Congress so that one party cannot ride roughshod over another. Let’s see what happens.

And btw, you won’t have a $2 per hour jobs out there. Only illegals work for those wages, if then.

USMC

May 31st, 2011
11:49 am

“New business not creating jobs, and hasn’t for a long time”–Jay Bookman

What business is going to go on a hiring spree when the Obama administration and Democrats in Congress have signaled that they are going to massively raise taxes and “red tape” on businesses.

No, businesses and “money” are sitting on the sidelines waiting to see which direction taxes and government regulations are going to take.

The Obama administration and Democrats have failed to lead and thereby created the Apprehension and “sitting on the sidelines” in the private sector that we are witnessing.

Get government and excessive taxation out of the way and businesses will flourish and HAVE to hire more people to handle the growth.

josef nix

May 31st, 2011
11:49 am

Business? Got a houseful of plumbers as we speak…couple of young fellers with them…Daddy’s boy’s one of them being trained to take over down the road and another is still in high school, doing this so he will be able to “make a good living” once he gets out…are either one of them getting school credit…nope…sort of ties in with downstairs…

Keep Up the Good Fight!

May 31st, 2011
11:50 am

There are a lot of new businesses that are created that will likely not create new jobs.

A contract employee may create a entity but is already that contract is merely transferred to the new entity and creates no new employment.

Separating business risks by creating new entities such as an equipment leasing company does not create new employment.

I am confident there are many other examples.

CJ

May 31st, 2011
11:51 am

RE: “the number of jobs created by establishments less than 1 year old has decreased from 4.1 million in 1994, when this series began, to 2.5 million in 2010″

I don’t know the reason for this, but I have a theory. Outsourcing.

Some employers not only outsource to independent contractors who are truly self-employed, but many employers are illegally classifying their actual employees as independent contractors to shift the employer’s share of payroll taxes onto the employee and avoid having to provide benefits (I was victim of this scam).

The above adds insult to the injury of millions of employees, including office employees, who are already illegally classify as “exempt” by employers who don’t want to pay overtime wages that “non-exempt” workers are eligible for.

It doesn’t do any good to have laws if they’re not enforced, and the Bush administration went out of its way NOT to enforce laws to protect workers from unscrupulous employers. I believe that the Obama Administration is trying, but Republicans are fighting to cut funding for IRS agents who are responsible for investigating and enforcing these laws having to do with employment practices.

Brosephus

May 31st, 2011
11:51 am

Dave

I was being a tad bit snarkish, but I could go 3 years on your proposal with the possibility of doubling it if it shows productivity before putting the 2/3 rule into effect. If it’s a great idea, you’d have 6 years instead of 3. At the same time, if it doesn’t work, we wouldn’t be stuck with that decision for more than one presidential term.

Dave R.

May 31st, 2011
11:52 am

“Dave R: If it were all about taxes, there would be some statistical correlation that could be drawn showing that a decline in taxes is leading to job creation, or that increases lead to less jobs, in a statistically significant way.”

First off, Adam, I am not automatically a fan of lowering taxes in expectation of creating jobs. Certainly, the data is contradictory enough on that. But the basis of the article cited was “taxes” but wasn’t clear on that. “Taxes” are the same as “regulatory costs” in this regard.

The cost of time and money businesses must expend in order to comply with all the regulations this government (and state and local governments as well) created is now higher than the effective income tax rate companies pay.

Not good for business.

Doggone/GA

May 31st, 2011
11:53 am

“Do wingnuts EVER tire of just making up sh*t?”

Easy answer: No

andygrdzki

May 31st, 2011
11:53 am

Finn McCool

May 31st, 2011
11:53 am

Beating that tax horse again. The Bush tax cuts have been in place since 2002. Where exactly are those jobs?

Dave R.

May 31st, 2011
11:54 am

Brosephus @ 11:51.

Agreed! Now you call your congressman and senators, and I’ll call mine and let’s get this idea rolling! :D

St Simons - we're on Island time

May 31st, 2011
11:54 am

Let’s see, we’ve got (so far)
a) blame the worker for not wanting to work for $2/hr
b) lower taxes
c) anti-business climate, whatever that is..

just retyping what the fat man on the AM radio says does not make you clever. The jig is up, cons.

Adam

May 31st, 2011
11:54 am

Dave R: Suspend all regulations for a period of 5 years, except for EPD and OSHA.

This “one-size-fits-all” anti-regulation thing is not going to work. I am glad that the Obama admin is being responsible and having this looked at seriously rather than just haphazardly wiping out regulations.

At least you recognize the value of OSHA and EPD. I think perhaps you should learn a little more about some other regulations and you may find that some of them actually are good things.

Good little liberal

May 31st, 2011
11:54 am

CJ

Your post is a perfect example of what I have been talking about. You are worried about employees. We don’t have employees any more. We have management and off shore manufacturing. The managers live in Virginia Highlands and the employees live in Bangladesh.

CJ

May 31st, 2011
11:55 am

By the way, another reason that business isn’t hiring is because 14 million are out of work. That’s 14 million who aren’t spending. That’s a big hole in our economy.

If we didn’t have a media that had it backwards, we could focus on jobs instead of deficits. More jobs, more customers, more economic growth, more government revenues, lower deficits. Cutting spending isn’t the only way to reduce deficits. Growing the economy reduces deficits and we could and should do so with an aggressive New Deal-esque jobs program.

Bosch

May 31st, 2011
11:55 am

“What business is going to go on a hiring spree when the Obama administration and Democrats in Congress have signaled that they are going to massively raise taxes and “red tape” on businesses. ”

“Now the fed is trying to regulate where companies like Boeing are building plants and of course, trying to drive up energy costs for the sake of the Alaska caribou. ”

Do wingnuts EVER tire of just making up sh*t?

Brosephus

May 31st, 2011
11:56 am

Gll

I honestly think the damage was done back in the 80’s and 90’s which would kinda correspond with a peak around 2000 as Jay’s chart shows. That’s when our government went gung ho on protecting the interests of campaign contributors before looking out for the general welfare of the country as a whole. I don’t see it as a liberal or conservative thing, but just Jackassery™ from the political class as a whole.

I was hoping that the change was coming with the Tea Party movement, but I don’t think that will be the case as long as monied interests are in the background pulling the strings. It will take a real uprising by the common folks to get this ship turned around. I just hope that the uprising and turn comes before we crash into iceberg island.

Kamchak

May 31st, 2011
11:56 am

Keep

But then that independent contractor gets to call himself an antreepruunoor, and gets that intangible warm and fuzzy.

Dave R.

May 31st, 2011
11:57 am

“I think perhaps you should learn a little more about some other regulations and you may find that some of them actually are good things.”

Name one.

Brosephus

May 31st, 2011
11:58 am

Do wingnuts EVER tire of just making up sh*t?

Nope.

This has been another episode of simple answers for simple questions. We now return you to your regularly scheduled broadcast. :)

Finn McCool

May 31st, 2011
11:59 am

I’ve said it before, any business person who complains about regulations is either totally out of ideas or just plain lazy. Every company he/she competes with has to follow the exact same set of regulations – this effectively levels the playing field.

Every good business person knows all the regulations that he or she is operating within and accounts for those in business planning and setting expectations. If you fins you have money invested with a company where it’s employees are constantly whining about regulations, move your money out of that stock as fast as you can.

Good little liberal

May 31st, 2011
11:59 am

CJ

The rest of the world is pretty much booming. There’s a huge market out there, but we just don’t offer reasons for companies to build anything here.

Good little liberal

May 31st, 2011
12:00 pm

Brosephus

The peak of manufacturing was right after Clinton went conservative and pro-business, backed by a Republican group of lawmakers.

I think it is very much conservative versus liberal and if you don’t believe me, read the posts at 11:35, 11:41, 11:51, 11:55, 11:59, etc.

Put yourself in the role of a tycoon trying to decide where to build that new cell phone plant and read those posts. Where would you build?

Dave R.

May 31st, 2011
12:00 pm

“Growing the economy reduces deficits and we could and should do so with an aggressive New Deal-esque jobs program.”

Wasting almost a TRILLION dollars wasn’t enough for you, CJ?

Government cannot create long-term jobs, period. It can only create short-term jobs that put us further into debt.

And debt of our size to GDP is no longer sustainable.

Left wing management

May 31st, 2011
12:01 pm

Is the current economic situation just another in a long cycle of booms and busts, growth periods and slowdowns, and thus something that will correct itself in time? Or does it reflect something more long-term, something more fundamental gone wrong in the economy?

No question about it, Jay. It is THE question facing us today.

Just consider one fact, which in and of itself is really quite stunning. We currently have a Democratic president during what has been the most severe economic downturn since the Great Depression. And yet, even with this president, who ran on a transformational agenda of fundamental change, yet who is derided by some cynical critics as a socialist intruder bent on eating the marrow of virtue from a pure, unsullied, organic American culture, the notion of a WPA type employment program has never so much as even been put on the table. In other words, this president is as far from socialist as it’s possible to imagine a Democratic president being.

But the fact is that the Keynesian consensus which was defeated in the 1970s and replaced with a “Washington Consensus” of market fundamentalism reached its conclusion in the crash of 2007-8 and should by all accounts be an utterly bankrupt and spent force. And yet, do we see the representatives of this failed ideology skulk away in shame? Far from it, of course. What we’re seeing is the exact opposite: they’re more emboldened than ever and are launching the most virulent and brazen attempt to re-engineer the society we’ve seen yet (in Wisconsin and Michigan and Florida, for ex.). Like so many pocket Pinochets.

The social ‘pact’ that was forged in the Depression and WWII years, and was marginalized starting in the ’70s, has now been finally wiped from the slate of the political discourse. The Pocket Pinochets want to take us back to an era preceding that whole era, to the 19th C really. And given that Obama and his party are either unaware of this or lack the will to fight it with a real alternative of their own (probably because they’re in the pay of those same forces themselves), we don’t even have a language to bring the issue to the public. So it leaves a dangerous vacuum. Krugman is right. The Washington ’serious people’ elite has no inkling of the monsters lurking in the swamp of hopelessness we’re creating with long-term unemployment of this type.

USMC

May 31st, 2011
12:01 pm

IT’S ALL GEORGE BUSH’S FAULT… OH… AND DICK CHENEY’S!

Just thought I’d get that out of the way early :-)

arnold

May 31st, 2011
12:01 pm

CJ-”I don’t know the reason for this, but I have a theory. Outsourcing.” I agree. Too many are not being counted as employees simply because they are treated as independent contractors.

Tee

May 31st, 2011
12:03 pm

What about these GOP gov. who are changing how people vote in there states?

Jefferson

May 31st, 2011
12:04 pm

One thing for sure, the GOP dang can’t fix anything, they make it a point to cause trouble if they aren’t in power…

Keep Up the Good Fight!

May 31st, 2011
12:05 pm

Absolutely Kam… all warm and fuzzy.

And there are some who think we only manage offshore jobs now. How do you enjoy being a manager and off shoring all your jobs? Bet you are surprised to hear that you are a manager.

Normal

May 31st, 2011
12:06 pm

Sounds like it might be time to brush off the rule book for FDR’s Civilian Conservation Camps again, but don’t limit it to just unmarried men. Government jobs to make America beautiful again…and fix our sagging infrastructure…

Good little liberal

May 31st, 2011
12:06 pm

Left wing management

The WPA produced temporary jobs for infrastructure. We need careers.

Good little liberal

May 31st, 2011
12:08 pm

Normal

FDR’s civilian conservation camps?

Left wing management

WPA?

My God. We are so screwed.

Brosephus

May 31st, 2011
12:09 pm

The WPA produced temporary jobs for infrastructure. We need careers.

That infrastructure also allowed America to expand into an economic powerhouse. Without infrastructure, where would we be now?

josef nix

May 31st, 2011
12:09 pm

left wing

“…the notion of a WPA type employment program has never so much as even been put on the table. In other words, this president is as far from socialist as it’s possible to imagine a Democratic president being.”

Which is exactly why I tell those hurling that “socialist” canard…would that he were!

Grasshopper

May 31st, 2011
12:10 pm

B-b-b-but Obama keeps telling us that things are looking hunky-dory. He trots out Axelrod and Plouffe every Sunday to tell us so.

Is he not being truthful?

Good little liberal

May 31st, 2011
12:10 pm

Brosephus

The United States is a Representative Republic which relies on capitalism for an economic base. We don’t need more government workers. Look at the stats which relate this administration’s penchant for increasing the role of government and the overall economic condition of our country.

As a very wise person once said, the trouble with socialism is that you eventually run out of rich people. We still have plenty of rich people. they just don’t invest their money here and if you try to make them, they will just leave.

getalife

May 31st, 2011
12:10 pm

The wealthy donors are happy.

The game is tilted to keep making them happy.

Bow down.

retired early

May 31st, 2011
12:11 pm

It all started with school integration……….!!!!!!!!!!!

josef nix

May 31st, 2011
12:13 pm

GLL

Are you familiar with, and use, those infrastructural projects accomplished by WPA and CCC…not to mention they took the steam out of the Reds’ appeal…

Finn McCool

May 31st, 2011
12:13 pm

Regulations are like easy street – regulations represent “knowns” that a company must deal with in order to operate and make a profit. Those are possibly the only actual “known” speed bumps to prosperity that any company will face in a given year. You can plan for this known, set aside adequate funding to cover the costs of some regulation, etc. It’s the “unknowns” that throw curveballs.

Seatbelts in cars – most of us moaned about that for years, then it became second nature – and we realize it’s meant to save lives. A little inconvenience for something that might save your life. Not letting photo processing shops at drugstores pour their chemicals down the drain or out in the gutter behind the store.

Adam

May 31st, 2011
12:13 pm

I don’t feel like having a public debate on this blog regarding issues that the other side has already decided what their answers will be, and finding ways to pick apart anything I might say, or just result to insults. Not today, not after what happened downstairs. Maybe later. MAYBE.

Better that you just do the research in private and learn something rather than trying to score some sort of victory here. I really do believe that is the goal of someone who has already made up his/her mind on EVERY issue.

Left wing management

May 31st, 2011
12:13 pm

GLL: “The WPA produced temporary jobs for infrastructure. We need careers.”

The WPA is just a lifeline for those in career free fall.

Do you realize, GLL, that the main reason people can’t get hired now is increasingly the simple fact of being unemployed? We’re approaching a point where joblessness is in and of itself a virtual career death sentence.

Good little liberal

May 31st, 2011
12:14 pm

josef nix

The workers of the War Powers Act built my high school stadium and a nearby dam. They worked for two years to build both and then they were unemployed again, until we went to war and several war related manufacturing facilities moved in.

We have enough government workers. We need to have private companies so we can tax them and pay our government workers, but they are all leaving. See, the math is really easy if you just think about it.

Dave R.

May 31st, 2011
12:15 pm

“I’ve said it before, any business person who complains about regulations is either totally out of ideas or just plain lazy. Every company he/she competes with has to follow the exact same set of regulations – this effectively levels the playing field.”

And I’m constantly amazed at your ability to deflect or ignore a valid argument about government failure, Finn.

Businesses care about profit and customer satisfaction (which creates more profit). Period. The argument about too much regulation isn’t about leveling any playing field, it is about making profit more efficiently and producing more effectively. You don’t do that with higher costs. If you have to hire 5 people to comply with regulations, that’s probably 4 people you can’t afford to hire for production. Four people EVERY company of that size can’t hire to produce. Or lower advertising budgets to sell people on your products.

Have you ever run a manufacturing business, Finn? If so, have you ever looked at the cost of compliance with each and every regulatory agency the Feds, state and local governments have? Smart business people do, and they KNOW to the penny what the cost of compliance is. And the WSJ just said it’s higher than the income taxes companies pay right now. Not a surprise to me.

Adam

May 31st, 2011
12:15 pm

And btw, there is no “translation” for my 12:13 post. Read it and comprehend.

Adam

May 31st, 2011
12:16 pm

RB from Gwinnett

May 31st, 2011
12:17 pm

“Companies have learned to do more with fewer people – just pile on the workload, combine 2 or more jobs into 1. People don’t need time to relax”

And right off the bat the socialist/communist chimes in on yet another topic he/she/it knows nothing about. If you had a friggin’ clue, you’d know “NEW” businesses, which is what this post is about, spend the better part of their first year just trying to break even with the hopes of someday making some profit. And, yes, they are doing the work of 2 or 3 people because they don’t have spare money lying around to pay unneeded people with.

But don’t let that stop you from continuing on with your fantasy world of “open business, make lots of money, screw employees” and keep leaving out the “risk your life savings” and “work you arse off for no or little income” part of the equation.

Idiot.

Rightwing Troll

May 31st, 2011
12:17 pm

“This administration and its supporters are anti-business as is seen on a regular basis by the posters on this blog.”

Can you quantify your drivel please?

St Simons - we're on Island time

May 31st, 2011
12:18 pm

Through thah glorah of supply-side-jaysus, today we’re all entrep-manures.

USMC

May 31st, 2011
12:19 pm

Well, I don’t pretend to “know it all”, but this is a pretty clear picture of the inadequate private sector experience in the Obama Administration:

Obama administration has FEWEST Cabinet Appointments with Private Sector experience:
http://www.zerohedge.com/sites/default/files/images/user10/imageroot/obamacabinet.jpg

Pretty Telling stuff!
Please, Don’t tell us this FACT has nothing to do with Comrade Obama’s Dismal record on the economy.

Good little liberal

May 31st, 2011
12:19 pm

Rightwing Troll

I understand that by posting what I had posted earlier to someone who thinks my argument is drivel is pointless, but just for fun, give it a read. there have been quite a few posts since, but it’s not like you are going to accept anything other than what you already believe.

I think it is very much conservative versus liberal and if you don’t believe me, read the posts at 11:35, 11:41, 11:51, 11:55, 11:59, etc.

Put yourself in the role of a tycoon trying to decide where to build that new cell phone plant and read those posts. Where would you build?

Kamchak

May 31st, 2011
12:21 pm

Keep

Well, I did “manage” to get six tomato plants and five rows of seeds in the ground in the last couple of weeks.

Dave R.

May 31st, 2011
12:21 pm

Just for a little historical perspective, the WPA and the CCC were programs designed to build infrastructure we didn’t have for a marketplace that was being developed (roads for cars, water and irrigation for larger farms, electricity to rural areas).

Guess what?

Already have those things. With no new marketplaces that require development of infrastructure.

While you might replace a bridge or two or the occasional dam, you’re not going to have the valid projects that were needed back in the ’30’s and ’40’s to justify the cost, and you can’t add more to this deficit and debt.

USMC

May 31st, 2011
12:22 pm

“New business not creating jobs, and hasn’t for a long time”–Jay Bookman

ANSWER:
http://www.zerohedge.com/sites/default/files/images/user10/imageroot/obamacabinet.jpg

Next!

Brosephus

May 31st, 2011
12:22 pm

The United States is a Representative Republic which relies on capitalism for an economic base. We don’t need more government workers.

Yet without those “government workers”, we wouldn’t have the interstates to ship commerce around the country that aids that capitalism that you revere and worship. Without those “government workers”, we wouldn’t have the power infrastructure that allows those capitalists to ply their trades in this country. Your statement is nothing more than regurgitated rhetoric that is nowhere nearly based in factual truth in today’s society.

I’m not advocating “socialism”. What I’m advocating is giving people a damn job so they have money to spend. That puts money into circulation in the economy. When the private sector doesn’t want to do that, where else do you have to turn to give people a damn job? Our problem with our economy has a lot to do with lack of demand, and the underlying reason for that lack of demand is that people don’t have sh*t to spend for the things they would demand if they had a job.

USMC

May 31st, 2011
12:24 pm

“And btw, there is no “translation” for my 12:13 post. Read it and comprehend.”

Words of the NARROW-MINDED :-)

Good little liberal

May 31st, 2011
12:24 pm

Brosephus

“Yet without those “government workers”, we wouldn’t have the interstates to ship commerce around the country that aids that capitalism that you revere and worship”

The interstates are built and repaired by private companies, paid by the taxes of private individuals.

“Without those “government workers”, we wouldn’t have the power infrastructure that allows those capitalists to ply their trades in this country.

Power companies are almost all privately owned including the Southern Company which is reliably pumping power into your home to enable you to post on this blog.

When our private sector can no longer deal with the regulations put upon them by a constantly growing government, perhaps taking a look at the career politicians and social activists that we have put in office would be a good first step.

jconservative

May 31st, 2011
12:25 pm

Jay I believe this is way beyond a government solution. We have been moving toward a global economy for decades. And with the advance of the PC and its children we have entered an environment where fewer people are needed to complete a task. This is just another piece of evidence that the old world is gone.

In 1969 I worked in an office of 41 people. Of the 41, 8 were secretaries, took dictation, typed letters, answered the phone, etc, etc. How many secretaries do you know today? I have not seen one in over 20 years. A skill no longer needed.

There was a day when the US produced 30% more jobs than it lost. Now that is gone. Today new jobs created equal jobs eliminated and we have zero job growth.

We have spent the last 30 years stuffing our individual pockets with money that once upon a time went to the Treasury. Now we put that money in our pocket. But, no one got around to cutting the amount of bills Treasury has to pay, in fact, they increased the amount Treasury’ has to pay. And now Treasury, if needs money they just borrow it or, worse, just print some more.

And so we have arrived at the place where we are.

Dusty

May 31st, 2011
12:26 pm

Awww another chart!!!

I thought all of you would be out picking peaches today. New jobs? How about working the old jobs? I think the onions are ready to go too. Go get yourself a nice sun tan and bring me a basket of peaches when you get back. Thank you.

PS I think Burger King has some openings. . You aren’t out in th hot sun either. .Just don’t burn my French fries..

Paulo977

May 31st, 2011
12:28 pm

Finn
How important is quality of life when profits are at risk?

That of course is a vampire’s moral compass!!

Doggone/GA

May 31st, 2011
12:31 pm

“When the private sector doesn’t want to do that, where else do you have to turn to give people a damn job? ”

It always comes back to this: government has to step in when the private sector fails to step uo.

Cons hate to hear it, but it’s how things work in the real world. If the private sector doesn’t want the government to institute something like a WPA or CCC, then let them try sacrificing short-term profits for a while in order to invest in our economy and increase the chances of long-term profits in the future.

If they won’t, then the government WILL have to step in.

Brosephus

May 31st, 2011
12:31 pm

Dave

With the slate of natural disasters we’ve seen as of late, there are some WPA-type projects that could be done to aid cities that have been damaged/destroyed. It’s also one of those instances where some of the regulations could be suspended in order to allow people to rebuild without overburdening red tape. Granted, it wouldn’t be collossal programs like those of yester-year, but it could be something as simple as providing a city, such as Joplin, a chance to re-invent themselves to attract new business opportunities.

Jimmy62

May 31st, 2011
12:33 pm

Two things:
First, I bet if you could somehow account for higher gas prices, you’d see that job creation, or lack thereof, would be doing fine if gas would stay down. This latest rise is killing our recovery, and the first rise helped get our problems going.

Second, that’s the wonderful risk of capitalism. Sometimes industries get destroyed due to innovations, and those jobs are gone forever, but eventually new industries arise to employ those people. However, our race is in a period of stagnation. Instead of pushing to get humans living in space and colonizing the solar system, we spent three decades wasting time and money on dead ends like the Space Shuttle. Thankfully commercial operations are slowly fixing that, and in a few decades there will be jobs aplenty, if we can make it that far without destroying our ability to do so through welfare states and cradle to the grave stagnation causing policies.

The only way to progress is to leave some behind. That’s a fact seen again and again throughout history and no amount of welfare is going to change that. If we spend all our energy making sure every single person is happy, we create a situation where no one is happy.

Obama is over

May 31st, 2011
12:33 pm

Our entire tax structure needs to be be redone. It is broken. At this moment, the members of the S & P 500 are sitting on a record amount of cash- most of it held in offshore subsidiaries. The U.S. corporate tax rate, at 35%, is the 3rd or 4th highest in the world. In a global economy, the U.S. corporate tax rate needs to be lowered to reflect the competition. If corporations were allowed to repatriate that money at competitive rates, then the cash could either be distributed to shareholders in the form of dividends to be spent by the consumer, or used by the company for growth agendas. Another problem with the corporate tax code is that there are too many tax loopholes in the system. GE took TARP money, yet paid no taxes last year. The corporate tax structure needs to be simplified with lower rates and fewer deductions to compete globally. The individual code needs to be addressed as well. A WSJ editorial last week pointed out that Senate Democrats are considering a 3% millionaire surtax on income over $1mm. Combined with the Bush tax cut expiration and the Ga. state income tax, that would create a top tax rate on earnings of 64%. Not quite 70% like the Carter years, but close. Like the corporate tax structure, maybe this high rate is a strategy by Obama to solicit campaign contributions in exchange for government tax breaks while looking good to everyday workers. We would save a ridiculous amount of money if the tax system were simplified by lowering rates and reducing deductions just like we did in 1986 so people (and companies) would not spend so much time gaming the system trying to avoid paying taxes. The fatal flaw the Dems are making right now is that they fail to realize that small business like the ones you are describing are generally taxed at individual rates. So facing the prospect of taxes going from 35% to 64%, small business owners are hesitant to hire. As you point out, this has been going on for a long time and tax reform certainly won’t be accomplished by 2012 with the talking heads we have in Washington.

Paulo977

May 31st, 2011
12:34 pm

josef
Which is exactly why I tell those hurling that “socialist” canard…would that he were….. oh I agree!!

Kamchak

May 31st, 2011
12:35 pm

Our problem with our economy has a lot to do with lack of demand, and the underlying reason for that lack of demand is that people don’t have sh*t to spend for the things they would demand if they had a job.

And sooner or later we reach the point where this cycle feeds on itself. Not to mention that thirty years of cheap money (low interest rates) fueled much of the three decades worth of demand.

Brosephus

May 31st, 2011
12:35 pm

GLL

I’m guessing that it was private companies that built that stuff from scratch. Nevermind the fact that government deregulated the utilities and got almost completely out of running them. Seems like TVA comes to mind…. http://www.tva.com/abouttva/history.htm

:roll:

robert

May 31st, 2011
12:37 pm

“But he emerged from the day’s solemnity to go golfing for the 12th time this year and the 70th time of his presidency”

we have gone from “shovel ready” to “groundskeeper ready” projects.

JKC

May 31st, 2011
12:37 pm

What we are witnessing is the US becoming a Banana Republic – with the wealthy at the top taking most of the nation’s wealth, and ordinary working people at the bottom. This is due to the policies enacted since the Reagan administration, which sanctioned union busting and the outsourcing of manufacturing and now professional and clerical jobs.

If we would return tax rates to the Clinton Era; and tax companies that pay none, it would help the economy and the work force. Not just the rich and corporations.

Mr Right

May 31st, 2011
12:39 pm

According to a March report by the GAO, the federal government spent $1.9 billion on new vehicles in fiscal 2009, and burned through 963,000 gallons of fuel a day with its fleet of 600,00 vehicles. Now thats job creation!

Dave R.

May 31st, 2011
12:39 pm

Brosephus.

Natural disasters are largely covered by private insurance companies (with the exception of those who don’t purchase flood insurance), so government projects really aren’t involved. And disaster designations allow some regulations to be relaxed already.

Brosephus

May 31st, 2011
12:39 pm

Cons hate to hear it, but it’s how things work in the real world. If the private sector doesn’t want the government to institute something like a WPA or CCC, then let them try sacrificing short-term profits for a while in order to invest in our economy and increase the chances of long-term profits in the future.

That would violate the 11th commandment: “Thou shall not forsaketh profits for any thing or man. Let thou who is down, pulleth thysef up by thy own bootstrap.”

BlahBlahBlah

May 31st, 2011
12:40 pm

The almighty president O. has flopped on the economy, so now it’s obviously bigger than him. I’d love to see the archives from 2008-2009 and note the drastic difference in tone from the left.

@@

May 31st, 2011
12:40 pm

The cost of doing business in America. What goes up must come down.

‘Tis the gravity of our present day’s circumstance.

Who’s ready to withstand the descent?

Doggone/GA

May 31st, 2011
12:41 pm

“That would violate the 11th commandment: “Thou shall not forsaketh profits for any thing or man. Let thou who is down, pulleth thysef up by thy own bootstrap.””

yep, it does. But it’s always a choice: step up voluntarily…or be prepared to pay higher taxes to the government to do it for “you”

josef nix

May 31st, 2011
12:41 pm

DAVE

That NRA WPA CCC infrastructure is crumbling, Brosephus’ disaster relief idea is sound and rational, there’s plenty of places in need of all those things we put in place back then…shoot, just cleaning up the garbage dumps would put a good number to work…and me? I’m for it as a means of implementing a two-year national service program to teach a little civic responsibility…

Good little liberal

May 31st, 2011
12:43 pm

Brosephus

When Tennessee was a frontier state, the government was great at running wires and building dams. Things have changed a lot in the past 80 years. I read where you thought that a WPA type program would be great for rebuilding area destroyed by storms. Why not employ private companies to do the same thing? (Which is what actually happens)

Your mindset that the government needs a hand in everything is maddening. Everything I have ever had to do with any government was horribly inefficient and wasteful and more than anything else, incredibly selective out of their group of brothers and sisters and cousins instead of looking for more qualified people.

Hill

May 31st, 2011
12:44 pm

Nice…

GRAPH: While Slashing Aid To Main Street, GOP Drops Tax Rate For Richest To Lowest In 80 Years

http://thinkprogress.org/economy/2011/05/31/231317/graph-gop-budget-tax/

Brosephus

May 31st, 2011
12:44 pm

Natural disasters are largely covered by private insurance companies (with the exception of those who don’t purchase flood insurance), so government projects really aren’t involved.

What do you do when those private insurance companies abdicate their duties? Katrina was more than 5 years ago, yet the Gulf Coast remains a shell of itself. I carried State Farm Homeowners before Katrina and paid my premiums faithfully. However, when they decided they were not going to cover Americans on the Gulf Coast, I decided they would not cover me either. Private companies do not always do what they’re supposed to do, however we don’t hold their feet to the same flames as we do the government when it doesn’t do what it’s supposed to do. I don’t think either should be given a free pass.

Also, private insurance doesn’t cover the infrastructure repairs to those communities does it? Based on past performances, I won’t hold my breath on private companies doing what they supposed to do in Joplin, Ringgold, or Tuscaloosa. That’s just me being a cynic though.

Good little liberal

May 31st, 2011
12:46 pm

Brosephus

“That would violate the 11th commandment: “Thou shall not forsaketh profits for any thing or man. Let thou who is down, pulleth thysef up by thy own bootstrap.”

This posts illustrates why we need regime change. This demonizing of profits by your political leaning is the complete problem. Profits feed kids, make jobs and build manufacturing facilities. In spite of what the activist in the White House preaches: profits are not the problem.

LACK OF PROFITS. That’s the problem.

Doggone/GA

May 31st, 2011
12:46 pm

“That’s just me being a cynic though”

Cynic….and realist

josef nix

May 31st, 2011
12:47 pm

DAVE
Joplin and all those towns gone with the wind across ZamVet’s much beloved “Deep” South.need schools, hospitals, parks, bridges, streets, sidewalks, new trees, post offices, police stations, and on and on and on….a lot of which is not covered by the same insurance that some of the private homes and businesses have…not to mention such things as “falling water” versus “rising water” etc., etc.