How many jobs were lost whent the tech bubble burst? Then Katrina? If you look at employment from 2000-2003 it was on a steady decline. Bush's tax cuts went into effect in 2003 and the trend was reversed. You can claim it was all due to the housing market and alot of it probably was, but I'm not buying it was all because of that.

That growth was due to the housing market boom that ultimately collapsed. 2% job growth during President Bush's term.

Prior to the 2008 recession GDP grew about 2%.

Some reports say that income went down, even if you just measure the successful years, as compared to 2000 when adjusted to real dollars.

 

1) What do you base that assumption on?

2) What contributed to the housing boom?

I'm genuinely interested in your opinion here though. In your estimation what can Congress or the president do right now to improve the economy?

 

Two things need to happen - European policy makers must get their house in order; the US Budget Committee must come up with a plan that both sides buy in to. If partisanship continues and the Budget Committee recommendations get picked apart by either side or both sides, then our government leaders have completely failed and it is time to clean house in DC. That isn't just Obama, that is every incumbent up for election. With Congress' approval rating at 15% ... yes, 15% ... they better show all of us they can lead this country. The problems are not in the business sector, they are in the government. If government can make some changes, instill some confidence and improve public attitudes then the hiring will follow.

I want to like Immelt because he is a "local" guy, but......http://emergingcorruption.com/2011/08/ge-stabs-the-us-in-the-back/.

 

Sadly, it is that way with all the large multi-nationals. And it is not just the core 'manufacturing jobs'. The 'back office' has been the target for the last few years. Billing, Accounts payable, Accounts receivables, customer service call center, etc. All offshore now in most large companies.

 

Ok, maybe the US does not need to lead the world in the ability to create a correct invoice or pay vendors. But is this massive outsourcing/offshoring an actual threat to our country and well being? According to Forbes - yes.

 

Interesting story on Amazon's Kindle:

 

http://www.forbes.com/sites/stevedenning/2011/08/17/why-amazon-cant-make-a-kindle-in-the-usa/

 

There are 9 parts to the article above.

 

"Amazon/Kindle Part 5: Is Outsourcing A National Security Issue?"

 

http://www.forbes.com/sites/stevedenning/2011/08/30/amazonkindle-part-5-is-outsourcing-a-national-security-issue/

 

I am in the outsourcing industry and have been for over 20 years. It used be about efficiency, core competencies, leveraging repeatable processes. But at the end of the day the work was still done in country by very skilled people. With access to the data and voice services worldwide it has become a game of replacing $50 an hour bodies with $10 an hour bodies. And if it takes twice as many bodies or they are only 50% as efficient - who cares - it is still cheaper. With that mentality the onslaught of not only outsourcing but also radical and aggressive off-shoring started. I see nothing stopping it in the large companies.

 

How does government policy re-enforce the problem? All the 'fixed cost' that come with every named body. Companies are comparing the total 'burdened cost' of Joe in America and Jamal in India. Joe may make $30 an hour, Jamal lets say - $10. That is salary. But salary is only part of the 'total burdened cost' or 'Full Time Equivalent (FTE) cost'. For Joe layer in - a) Social security match, b) 401K match, c) Health insurance, d) unemployment insurance, c) office space / real estate costs. For Jamal - maybe a 401K-like match and office space at probably around half the rate of Joe. So now Joe is not only 3x more costly than Jamal but more likely 4x. Even it takes 2 Jamals to do what one Joe does - the math says offshore it and in most cases that is what happens. There is overhead to offshore, and there is resistance to it. And when the numbers are close most will stay onshore. But when there is substantial cost difference - even after all the overhead and risk factors are worked in it makes it hard to say no to offshoring.

 

There needs to be a recognition that in a global economy anything that adds to the 'cost per body' as the healthcare plan did, as social security 'match' does, and unemployment insurance does etc is hurting US workers in the global arena for now. I call it the 'race to the bottom'. Until the 'race to the bottom' levels out globaly - and it will eventually (that being maybe a decade from now) - the US will not see jobs return and will be at risk of losing more of them.

Edited September 21, 201114 yr by Bluegrasscard
minor edit

1) What do you base that assumption on?

2) What contributed to the housing boom?

 

From what I read the most jobs gained were during the housing boom. Logic says one lead to the other and it was irrespective of taxes. Cheap money/bad loan practices made mortgages too easy to get which drove up housing demand which drove up housing and related jobs.

 

 

These quotes seem reasonable:

 

 

 

"The expansion was a continuation of the way the U.S. has grown for too long, which was a consumer-led expansion that was heavily concentrated in housing," said Douglas Holtz-Eakin, a onetime Bush White House staffer and one of Sen. John McCain's top economic advisers for his presidential campaign. "There was very little of the kind of saving and export-led growth that would be more sustainable."

 

"It's sad to say, but we really went nowhere for almost ten years, after you extract the boost provided by the housing and mortgage boom," said Mark Zandi, chief economist ofMoody's Economy.com, and an informal adviser to McCain's campaign. "It's almost a lost economic decade."

http://www.washingtonpost.com/wp-dyn/content/story/2009/01/12/ST2009011200359.html

 

 

I'm open to other possible reasons for ignoring the correlation between job growth and the housing boom. It just seems logical to me.

Another way to look at it is lower taxes and higher job rates helped the housing boon as both more people had more jobs and more disposable income, thus were inclined to move up in their lifestyles.

I'm genuinely interested in your opinion here though. In your estimation what can Congress or the president do right now to improve the economy?

 

One: President Obama can stop and retract the rhetoric that folks on Wall Street, in oil exploration and in the health insurance industry are nothing but a bunch of greedy sons of a gun. He unfairly paints with an awfully broad brush. Wall Street was not solely responsible for the housing/mortgage loan crisis. Legislation by members of his own political party played as much of a role in the crisis as those greedy folks on Wall Street. Yet those folks escaped his scathing criticism. To listen to President Obama, the mortgage loan crisis was business's fault; not Congressional support of Fannie and Freddie by legislators including Democrats (think Rep Frank here) that had a role. http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2008/09/28/franks_fingerprints_are_all_over_the_financial_fiasco/

http://www.usnews.com/opinion/blogs/sam-dealey/2008/09/10/barney-franks-fannie-and-freddie-muddle; http://articles.boston.com/2010-10-14/news/29309414_1_fannie-and-freddie-freddie-mac-fannie-mae; http://www.realclearmarkets.com/articles/2010/08/19/barney_frank_fannie__freddie_must_go_98631.html

 

Yet does anyone remember President Obama publicizing criticizing Rep Frank for his foolish and continued support of Fannie and Freddie and being partially responsible for the crisis? Does anyone remember President Obama publicly criticizing individuals for foolishly borrowing 100% or more for the purchase of a home and being partially responsible for the crisis? If he did, it was in passing and had nowhere near the venum that his public criticism of business, the private sectors and of Rs for de-regulating lenders. Dang it, how can you lead Congress when you unfairly criticize one party and don't criticize members of your own party that arguably played a bigger role in Freddie and Fannie's contribution to the economic crisis?

 

Two: President Obama should meet with what's left of moderate Republicans (he's pushed a lot of them towards the extreme fringe of the party) and tell them he was wrong for cramming Health Care Reform down their throats in spite of their objection to the legislation. Unless he rebuilds a relationship with moderate Rs, he's begging for stalemate on any legislation that could help improve the economy.

 

Three: he needs to stop the practice of throwing ideas out there and stepping back out of the fray while the Rs and Ds in Congress fight it out. He needs to be a leader. He knows that raising taxes on millionaires isn't going to be acceptable to the Rs and he knows IF it eventually passes, it will be accompanied by compromises from the Ds. He should have been meeting privately with R and D leaders to determine what it will take to pass before he ever publicly suggested the idea of raising taxes on millionaires, and if couldn't have led a compromise and support of such legislation by leaders of both parties in Congress, he should have never floated the idea. Given the concern and fallout over the debt ceiling issue, the last thing this country needs is more public and open warfare in Congress between the parties. It is demoralizing and scary to Americans and business owners/leaders. We need optimism, not fear and concern. We need cooperation between the leaders of both parties; not press conferences where they are throwing bombs at one another. We need President Obama to be the catalyst to make that happen. His actions went a long way to electing Tea Party believers to Congress in 2010. He needs to find a way to rebuild the moderate factions of each party and to get them to cooperate. Crap, how can you ask European countries to enact more stringent austerity programs, raise taxes on the wealthy and lend more money to save countries like Greece, Spain, Ireland, Italy, Portugal, etc from financial disaster, when as the President of the United States you can't get it accomplished in your own country?

 

But he's campaigning; not leading this country. Hell, I'd support raising my taxes tomorrow if the raise had a sunset provision in it saying the increase went away when unemployment went down to, say, 6%, AND if there were defined decreases in spending in entitlement programs AND if there was a detailed explanation of how jobs would be created as a result of the increased federal dollars available caused by the increased taxes and decreased spending. I might even be fine with the legislation allowing the decreased entitlement spending to be reinstated once certain metrics are met. But he instead just lobbed another grenade out in public and left it to Congress to fight it out (which is similar to what he initially did with health care reform). It's like his handlers have told him: don't get into the fray because that might hurt your re-election chances. Float the big idea out there. If it passes you'll get the credit. If it doesn't, you can blame it on the Rs". Dangit, I want someone to lead and put the country first, ahead of his own interests.

 

I may not have slept in Motel 6 last night, but it seems to me that if business owners/leaders are the bad guys because they are the people capable but unwilling to create jobs, that is an explicit acknowledgement that the business owners/leaders should be the people President Obama is most concerned about if he wants to create jobs for Americans. I know of none, zero, zilch of my business clients that feels President Obama is more concerned about them, their businesses or developing a pro business environment than he is concerned about unions, entitlement receipients and now getting re-elected.

 

Want to know the ironic thing? When President Obama got elected, I was concerned, make that extremely concerned about how he handle foreign policy and national security issues. I was more optimistic that he'd do a better job on domestic matters because he had the charisma to appeal to the American public and leaders of both parties in Congress. Ask me today and I'd say he's done a decent job on foreign policy and national security issues (certainly better than I expected) but has done a poor job on domestic matters such as the economy and leading Congress.

 

How will the points I enumerated above help the economy? Again, I'm a big believer that the economy is as much psychological as it is numbers and I based that what I am told over and over by the business owners I represent and almost every one of them is concerned that President Obama is more interested these days (i) in rallying his union and more liberal voting base and trying to make the Rs looked like the boogeyman to the moderates to scare them into voting for him, than he is (ii) in developing a pro business climate in America to help them succeed nationally and internationally. My business owner clients are also genuinely concerned with how liberal his agenda might turn if he gets re-elected for a second term and what affect it will have on their businesses.

 

When you are the business owner that has to risk your net worth in order to expand your business and to hire more employees, you go about it very, very cautiously. If you don't like what you see and feel, you hunker down, cut expenses (jobs), hoard cash and avoid additional debt. From my legal experience, the biggest business gamblers are those that either have nothing to lose or have so much money they can afford to lose an investment without the loss affecting their lifestyle and financial security. That applies to very, very few business owners in America. Which by the way is the reason banks are not lending to businesses much these days. It's not because bank leaders are terrible folks. The banks I represent are loaded with cash. They want to lend (that's how they make money; they don't make near as much money sitting on deposits) but credit worthy borrowers are not interested in incurring additional debt to expand because of their perceptions of the economy. Again, perception is reality and the perception of President Obama by the business owners I represent is that he is not supportive at all of them and of a pro-business climate. Think "the only thing we have to fear is fear itself". It takes a leader to allay those fears and in my opinion, as much as I don't want to come across as a President Obama basher, he has done a poor job leading.

 

All of the above stated perceptions and beliefs may be wrong or without foundation in some folks opinion, but I am absolutely positive that it is what my business owner clients feel and believe.

Another way to look at it is lower taxes and higher job rates helped the housing boon as both more people had more jobs and more disposable income, thus were inclined to move up in their lifestyles.

 

Disagree.

 

Incomes didn't go up much if at all. People with low income and high debt suddenly became eligible for loans not just for a house but for a house that was WAY over their means. So, people started building these houses since they were easy to get. That led to a lot of jobs.

Disagree.

 

Incomes didn't go up much if at all. People with low income and high debt suddenly became eligible for loans not just for a house but for a house that was WAY over their means. So, people started building these houses since they were easy to get. That led to a lot of jobs.

 

Didn't say income, said disposable income which did go up with the lower tax rates. Family making $60,000 had about $3,000 or so more to spend. That $250 per month bought a lot more house. More disposable income and greater employment led them to look to move up. It's all circular.

From what I read the most jobs gained were during the housing boom. Logic says one lead to the other and it was irrespective of taxes. Cheap money/bad loan practices made mortgages too easy to get which drove up housing demand which drove up housing and related jobs.

 

 

These quotes seem reasonable:

 

 

 

"The expansion was a continuation of the way the U.S. has grown for too long, which was a consumer-led expansion that was heavily concentrated in housing," said Douglas Holtz-Eakin, a onetime Bush White House staffer and one of Sen. John McCain's top economic advisers for his presidential campaign. "There was very little of the kind of saving and export-led growth that would be more sustainable."

 

"It's sad to say, but we really went nowhere for almost ten years, after you extract the boost provided by the housing and mortgage boom," said Mark Zandi, chief economist ofMoody's Economy.com, and an informal adviser to McCain's campaign. "It's almost a lost economic decade."

http://www.washingtonpost.com/wp-dyn/content/story/2009/01/12/ST2009011200359.html

 

 

I'm open to other possible reasons for ignoring the correlation between job growth and the housing boom. It just seems logical to me.

Jobs were also gained after the bush tax cuts went into effect so logic would say that was the reason.