Unemployment

[Drachasor]

Since when are all policy decisions only based on their utilitarian weight? Don’t forget that people have rights.

Bah, "rights" are just groups of things with utilitarian weights that vary in a rather complex way...but heck, what isn't?

That said, gotta agree with Fishbob. Policy is pretty crappy these days by any measure except one that assigns positive value to crap.

 

[slingblade]

So. Anyone here hiring?

 

[delphi_ote]

The logic is that the average college grad is young, eager to apply that knowledge they just paid for, eager to make a name for themselves, and thus more motivated.

Ah. As opposed to someone who was already working and has been unemployed for a while. That probably makes sense.

 

[delphi_ote]

This one's easy: time. We didn't get into this mess quickly, and we won't get out of it quickly. Anyone who says otherwise is selling you a line of crap. Just look at the history of the Great Depression: it took the United States nearly 20 years and World War II to get out of that hole.

Just wait and do nothing?

 

[delphi_ote]

For every dollar given to people as unemployment benefits, there are $1.61 in economic activity. As a corollary, every $1 given as tax breaks to the rich generates - wait for it - $.32 in economic activity.

Do you have references for these numbers? I'd like to read more about this.

 

[GStan]

<snip>

Right now businesses are sitting on some $2 trillion of cash. <snip>

Do you have a source for that? Not questioning the accuracy of it, just would like to read more details about it.

 

[sgtbaker]

The logic is that the average college grad is young, eager to apply that knowledge they just paid for, eager to make a name for themselves, and thus more motivated. I'm sure it helps that a lot of colleges have placement assistance. I'm not aware of any study about this. I'm only speculating.

I know a lot of people who had to take pay cuts, just to keep their jobs. A lot of the problems they are having, when looking for a supplimentary income is that they are older, their financial responsibilities are higher, and they are over-qualified for the jobs they are applying for. From the employer's point of view, the long time working applicant is probably going to demand higher pay and eat less fecies for the pay check. Plus, once the economy turns around, they are gone or at least pushing to move up the ladder faster.

 

[followmycaravan]

The level of outsourcing in the US is absurd, cut this by half and I guarantee that unemployment will be at much lower rates

 

[madurobob]

The level of outsourcing in the US is absurd, cut this by half and I guarantee that unemployment will be at much lower rates

Then make it attractive for me to hire or maintain headcount in the US.

If I am a multi-national with employees around the world I would be stupid to not take advantage of significant savings involved in moving certain headcount-heavy operations to low-cost countries where I already have a presence. You cannot expect a multi-national firm to simply be "patriotic" and hold on to US employees because they have a corporate HQ in the US.

 

[TraneWreck]

This one's easy: time. We didn't get into this mess quickly, and we won't get out of it quickly. Anyone who says otherwise is selling you a line of crap. Just look at the history of the Great Depression: it took the United States nearly 20 years and World War II to get out of that hole.

Although Roosevelt's initial actions quickly improved the economy. It wasn't until the second dip caused by his capitulation to "balance budget" hawks after the 1936 election that the Depression was destined to last the decade.

Notice the WWII and subsequent explosion are not significantly steeper than the increase from '32 to '36. FDR basically got the country back to where it was in 4 years, then the double dip occurred.

There are things we can do to turn this around fairly quickly (5ish year). We are not doing those things, in fact, we're behaving counter-productively.

 

[TraneWreck]

Do you have a source for that? Not questioning the accuracy of it, just would like to read more details about it.

Sure:

According to the St. Louis Federal Reserve, corporate profits hit $1.37 trillion in the first quarter -- an all-time high. Businesses are sitting on about $2 trillion in cash reserves. Business spending jumped 20 percent last quarter and is up by 13 percent against 2009.

http://www.washingtonpost.com/wp-dyn/content/article/2010/08/06/AR2010080606238.html

It should be noted that profits aren't at an "all time high" when adjusted for inflation, but they're way up there.

 

[AvalonXQ]

If the problem is that companies are sitting on huge cash reserves, what about taxing unspent cash? Incentivize companies to do something with their money by taking a fraction of what just sits there.

 

[TraneWreck]

If the problem is that companies are sitting on huge cash reserves, what about taxing unspent cash? Incentivize companies to do something with their money by taking a fraction of what just sits there.

I've read some plans to do that, I think it's a good idea.

Especially if that tax revenue goes directly to infrastructure jobs, unemployment support...etc.

The reason I think jobs should be the central concern is that two-years into this, we're basically creating a class of unemployable people. Even if jobs were available, companies and businesses don't want to hire someone that's been unemployed for 18-30 months. Their skills are deteriorating, much less improving with the changes in the job market.

If that money has to be taxed to do it, we need to do it, and fast.

 

[Chris C]

Persistent unemployment is currently a staggering problem in the United States. The NY Times ran a piece today ran a piece today covering how long term unemployment increases the difficulty of finding employment. Unemployment benefits are starting to expire.

I was wondering if anyone had any interesting perspectives or theories on how we might get out of this mess.

Fire the President.

Due to Obama's over reaction to the Gulf Oil Spill and freezing contracts he has crippled any chances of people that lost jobs before the oil spill of getting back to work offshore anytime in the next few years. There was roughly 500,000 people that lost jobs in the 2 years leading up to the oil spill that worked offshore or had worked that was connected to offshore drilling. The industry was on its downside. After crippling the industry even further with the freeze, those 500k people are still outa work.

Repeal Obamacare. Companies are just not going to take any chances with hiring until that program is destroyed.

 

[NewtonTrino]

For every dollar given to people as unemployment benefits, there are $1.61 in economic activity. As a corollary, every $1 given as tax breaks to the rich generates - wait for it - $.32 in economic activity. So giving money to the rich helps the economy how? The wealthy have:

Source?

a) been getting much wealthier over the last decade
b) had the tax cuts in place for the past decade and haven't been hiring
c) won't hire until demand goes up but demand will only go up when the middle class has money to spend

I hire as many people as I can afford. I could afford to hire more people if taxes were lower. If I was to move my business to Canada or Europe there are a lot of places where the government will kick in ~30% of any salaries for a number of years. If I picked up and moved tomorrow I could probably increase profits by quite a bit. This is the competition the US has right now.

So now I'm supposed to believe that just because they don't know whether or not their taxes will go up 3% next year is the reason they aren't hiring? What a load. We were a much more prosperous nation (and had much more stability) when tax rates on the rich were much higher.

Just the difference between 15/20% capital gains is actually having a distortive effect on the market.

The wealthy do not need more money, they will not hire if given more money,

If things go according to plan I expect to hire ~40 people in the next year. It could be more if the economics were better. It could also be more if the immigration system wasn't so screwed up (bring the best brains from other countries is a great strategy for the US but hot damn do they make it a pain).

we will be in astronomically worse shape if they get more money, "trickle-down" economics is a scam (even Warren Buffett, the noted leftist/socialist, says so in so many words), severe economic inequality is not a good thing and we're still rewarding the Wall Street crooks with the largest bonuses they've ever seen while everyone else suffers. Remind me again why the top 2% need a continued tax break? Rational explanations will do; keep the ideology to yourself.

I simply don't believe the government does a better job of spending money than I do myself. I want a smaller government, period. I'm firmly convinced that it doesn't matter how much money the government takes in, it will always find a way to spend it. Give me the money and I guarantee I will create new jobs and new products (that we can even export!!).

 

[pgwenthold]

If the problem is that companies are sitting on huge cash reserves, what about taxing unspent cash? Incentivize companies to do something with their money by taking a fraction of what just sits there.

That's basically what is already done. Businesses get to deduct business expenses from their tax liability. So if Joe the Plumber uses his surplus cash to replace his pickup, he can deduct that cost, and doesn't have to pay taxes on it.

This is basically the point. Right now, things are to where it is better for businesses to sit on their cash and pay the taxes on it than to invest it in their business (either through capital or human resources). As drkitten has pointed out, the thing we NEED to do is to INCREASE the taxes on those people, to try to encourage them to spend their money as opposed to hoarding it.

 

[paiute]

"A rising sea floats all boats." -- a platitude from the 1980s

But where are the customers' yachts?

 

[pgwenthold]

I hire as many people as I can afford.

Why? Are you stupid or something? Or do you just enjoy frivolously spending your business's money?

 

[NewtonTrino]

Why? Are you stupid or something? Or do you just enjoy frivolously spending your business's money?

Yeah, I'm stupid, that's why I'm making the big bucks. Feel free to come back and call me stupid when you build a few multi-million dollar companies.

The equation is really simple. If I have more money to spend on hiring people I can create more products. When I invest in new products I can generate revenue and make more money. If you gave me $100M tomorrow I could invest it into products that would give a nice return. Since we sell our products worldwide this also helps with the trade imbalance.

 

[TraneWreck]

Source?

Every $5 in new food stamp benefits generates almost twice as much ($9.20) in total community spending.

http://www.fns.usda.gov/cga/FactSheets/SNAP.pdf

I hire as many people as I can afford. I could afford to hire more people if taxes were lower. If I was to move my business to Canada or Europe there are a lot of places where the government will kick in ~30% of any salaries for a number of years. If I picked up and moved tomorrow I could probably increase profits by quite a bit. This is the competition the US has right now.

Then business is booming for you, that's awesome. There is obvious danger, however, in thinking your situation is representative.

I don't know exactly what you do, so let me answer anecdote with anecdote. As a lawyer, one extra client a year would make me more money than the tax cuts. Thus, if more people have money in their pockets to avail themselves of my services, I make more money than I do by getting my taxes cut.

Thus, using my tax dollars to provide food stamps, unemployment insurance, or jobs programs would be profitable. The data shows that this is true of most businesses in the country. Aggregate demand needs to be increased. That will not happen by cutting taxes on the wealthy.

I simply don't believe the government does a better job of spending money than I do myself. I want a smaller government, period. I'm firmly convinced that it doesn't matter how much money the government takes in, it will always find a way to spend it. Give me the money and I guarantee I will create new jobs and new products (that we can even export!!).

That's nice that you feel that way. Clearly you're view is not shared by the business community as a whole, which is why they're sitting on $2 trillion of cahs.