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The Incredible Shrinking Jobs America

By John Batchelor on December 6, 2009 at 12:30 PM in Current Affairs

Editor’s Note: Tune in to John’s syndicated radio show tonight at 11:00 p.m. ET to catch NoQuarter’s Larry Johnson on the experts panel, via iTunes (select Radio, then scroll to and select News Talk Radio, and scroll to and select KSFO-AM).

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Cash for Caulkers.

Spoke Neil King, WSJ, re the White House Jobs Summit on Thursday 3 and learned incredible details about how the Obama administration is open to “new ideas” to answer the high jobless rate (November held in double digits at 10.0%) that is projected to continue another six to eighteen months.

The new ideas are breath-taking.

King told me that the Obama administration is passionate about Cash-for-Clunkers and regards it as one of its successes in the year, and so there is a suggestion to use the concept to revive the construction business, especially home construction, in a program now called Cash for Caulkers.

I am not making this up. I asked King if Home Depot or Lowe’s executives were present among the 130 dignitaries, and he didn’t think so. Another notion is to revive and remake labor by granting the unions a package of $400 billion for unnamed programs that sound to resemble the WPA.

Another notion, advanced by Mrs. Pelosi, is to use the so-called unused TARP remains, about $75 billion, to revive loans to small businesses. There are no restrictions on the TARP that anyone can find, and using the TARP avoids the politically clumsy necessity to ask Congress for money to give more loans (grants, hand-outs, bail-out) to so-called small businesses.

There were few if any small owners at the White House function. President Schmidt of Google, presidents of reps from S&P 500s, but not folk who own start-ups or independent truckers.

Any Port in A Storm.

The jobless number today is a quiet warning that there is no growth in hiring and that the next six months are likely to be much higher jobless rates.

Evan Newmark told me Wed 2 that 11% jobless with 11k on the Dow is possible. (The market rewards corporate profits, and cutting costs and workers does lead to profits for awhile.)

The number I watch is average hourly workweek. It has been holding at approximately 32 hrs. It rose this month to 33. That is the correct direction, because when it gets high enough, businesses need workers. But 33 is not promising, just no longer a crater.

The CEOs have consistently told the Obama administration that the overhang of healthcare, cap and trade, and the bank bailouts that have left banks richer but not in the loan business, just the borrowing from the Fed at 0% and buying T-Bills business.

From the Jobs Summit reports, it appears the the Obama administration does not perceive that there has been a fundamental shift in American workplace from industrial and post-industrial to information., from large industry to guerilla shop.

My information from a trusted voice is that the Obama team is treating the jobless problem as if this was FDR’s America on the go, when it is the Internet’s America on-line. We are fluid, borderless, competitive and truly global.

Unions proposing TV versions of the WPA is satire except that it is genuine — the Obama team thinks it might work. The detail I liked almost as much as Cash-for-Caulkers is the idea that Treasury Sec Geithner is open to the House idea of taxing Wall Street transactions to pay for jobs programs. Robin Hood in the Oval Office. The administration is frustrated that nothing it has done in eleven months, — stimulus, budget, TARP, GM and Chrysler — has stemmed the incredible shrinking job market. It may be we are watching a secular change.

The jobless rate may be above 8% for years. What does this mean for FDR’s heirs? Grinding, shrugging, numbing partisan blame-shifting and perhaps a deal of misdirecting and grandstanding about climate and healthcare. And also a fierce sense of grievance against the banks and their familiars and the politicians who need them.

Katrina vanden Heuvel told me Tuesday 1 that POTUS is a “reluctant war president” who often carries on as a “corporatist.”

Docelder

Cash for Caulkers

Busy work for the career government dependent. Plus friends and contributors can supply all the caulk. Win-win, for the government and it’s minions. Private business can pay a caulk tax. Hope and change indeed.
hokma

“My information from a trusted voice is that the Obama team is treating the jobless problem as if this was FDR’s America”

My biggest fear with Obama was that he would be another FDR.

Amity Shlaes in her book The Forgotten Man went back and historically analyzed the Great Depression. Others have done the same.

There has always been this great myth about what FDR did which is in great part not true. FDR took over a severe recession and his reckless government actions protracted and deepened the problem. In fact, it created a second recession and prolonged high unemployment until the start of World War II

As John Boehner said, how can we expect Obama/Pelosi/Reid to know how to create real jobs when they never had one themselves.

The last thing we need is a repeat of the FDR Administration right now.
Docelder

reluctant war president” who often carries on as a “corporatist.”

This administration epitomizes the emerging government corporatist partnership. Cut out the lobbyists altogether. we no longer need them, their corporate Presidents can just make deals directly with ours.
John Smith

I guess slashing spending by the government to force people to invest in something other the government bonds did not cross their mind.

It is not that far away when they will have no choice but to do just that. Next week we will hit 12.1 Trillion deficit and this is only manageable because the US Treasury is issuing short term debt at 0 per.cent int.rest. The estimates are that it will hit 10 before to long. How in the hell will they pay a 1.2 Trillion interest bill. That is not mentioning that Medicare is now drawing on its funds at about 500 billion a year.

Unfortunately the party is over. They might be able to delay it an other year maybe two but we all better get ready for high unemployment, gas and food shortages and an ever growing uneducated population.
John Smith

My last post did not go through. What is going on here.
John Smith

I guess slashing spending by the government to force people to invest in something other the government bonds did not cross their mind.
TeakWoodKite

Seems in keeping with this article, that my local school district has decided to shorten the school year by a week. This will apparently save the district 500k. I do not “blame” the school district, in that the state is punk ass broke.

It just seems that educating our children is a priceless endeavor. Along with prolonged joblessness comes the end of hope. Hope doesn’t feed a family, it won’t educate our children, it won’t keep our elderly alive.

Now the the jobless parents can spend some quality time with their school-less prodigy.
wbboei

A very accurate assessment. Not what you will hear from the Obama worshiping big media, but the truth of the matter.
TeakWoodKite

An interesting chart making the rounds.

The lack of leadership skills of BO combined with the fact his cabinet has very little private sector experience do not bode well for the unenjoyment lines.
Banned in Beantown

Thaks for that. It is nice the see the lack of experience quantified and compared to previous administrations.

Turns out, it really is not just our alarmist imaginations, the Obama cronies really are clueless.
AF catfish

Cash for Clunkers – um … did this really help the economy long-term?

Now it’s “Cash for Caulkers”? Can we say … intellectual laziness?
Sassy

Bush 1 was ridiculed for being unfamilar with grocery prices.
That was harmless compared to what this historic President is ignorant about!
Obama Rama Ramen

Among my friends, I’m just one of several unemployed and a dozen others employed at temp jobs paying half what those individuals made last year in permanent positions.

What we’re seeing in our high-tech field is not that the total number of jobs is shrinking dramatically, but that outsourcing to India and China workers, either overseas or in the US via H1-B visas, has picked up at the expense of age-35-plus (20-30 years from retirement, raising families, not at death’s door) citizens. This, combined with no increase in the total number of jobs, means more unemployment for citizens who in some cases spent 6 or more years at university to qualify to work in their field. Seems to me, given that more and more citizens and permanent residents are out of work, that it’s time to provide incentives to business to hire people who are already here, and disincentives to bring in more overseas workers. I’m not saying that the march toward globalization needs to stop, just that it needs to slow down and give the economy and labor force a chance to catch up with the new reality.

As another poster points out, this is no longer FDR’s America. It’s a more complicated one, because we can’t control what’s happening outside our borders.
Docelder

outsourcing to India and China workers, either overseas or in the US via H1-B visas, has picked up at the expense of age-35-plus

Yes, even the people who made prudent career choices and who have worked hard their entire lives are at risk from India and China here. This is what I was saying in another thread. India and China aren’t outperforming us, they are just at a competitive advantage with us with the cost of labor. On the contrary, they aren’t as skilled as U.S. workers are, they just work cheap. The skilled services are seeing the same bloodshed that the manufacturing sector faced. The end result of this will be a homogenized world, everywhere the rate of a days labor will be the same. Is this what we want? It doesn’t matter what we want. Nobody listens to us anymore, they don’t need to. We are voiceless, so whatever Nancy wants I guess.
hokma

That is a great chart but it is frightening considering it affects our jobs.
Docelder

Obama is creating jobs. Jobs in China and jobs in India. Wait and see if the end result of healthcare reform isn’t that doctors won’t be able to afford to train here with the high cost of education and also work here with the controlled reimbursement. So, we will have our doctors trained in India from now on where it is cheaper. Less high paying jobs for us, and more money being sent “home” and out of our national economy. We are being globalized is what is happening here. This goes beyond jobs. America itself is being deconstructed before our eyes.
lark

That is correct. Now what does that mean to kindergarten students?

I believe that a new curriculum needs to be designed and implemented that explains in detail to elementary, middle and high school students the meaning of globalization. It means that if they are unable to learn to compute quadratic equations, the inventions will be all outsourced to foreign countries and they would have to be happy with gouging American consumers with false claims of service costs.
lark

I think you are wrong here Dolcelder. Wrong in the sense that there is a difference between Indian and Chinese and American workers. Forigners learn to solve problems at school because many of their natural ways of life and culture are complicated and require memorization and practice skills. American students are now accustomed to not learning anything in school, just going over the subject matter, and having to make zero effort to pass from one grade to another. Like Obama, all that is required is to be “PRESENT.” Eventually, manufacturers and technology industries that require people savvy in problem solving become scarce. Manufacturers and technology companies can hire incompetent workers for a while, but eventually the incompetence start to hurt them badly.