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
UK Water RatesYOU CANNOT BE DISCONNECTED FOR WATER RATES DEBTSWater... Read More
For years I have been amazed as I've listened to... Read More
California Attorneys and politicians are to blame for the energy... Read More
Airlines do not allow cell phones on board, but they... Read More
How can any human being today, anywhere in this world,... Read More
As you can see from some of our previous articles,... Read More
With the recent threats from Bin Laden and Al Queda... Read More
At the start of the US involvement in WWII Joseph... Read More
We know that the International Terrorists like the idea of... Read More
As the death toll in the avalanche-hit Jammu and Kashmir... Read More
Nothing could be more alarming for Americans than what I... Read More
Currently when we transport troops we use large cargo planes... Read More
Alexander Hamilton ? Policy Separated from Politics:I am related to... Read More
In a recent report on the status of the Franchising... Read More
As more and more cities and states set up websites... Read More
INTRODUCTIONPERHAPS the sentiments contained in the following pages, are not... Read More
Conor MacDari was a Mason but his Masonry deplored the... Read More
Just because we have been leading the World in innovation... Read More
Why did the California energy crisis happen? Who is to... Read More
It is a law that we register deadly weapons with... Read More
Water Conservation in larger cities is less of an issue... Read More
The US Homeland Security is worried about Hydrofoil or Skimmer... Read More
All the indicators show an improving economy and, finally, the... Read More
The trade deficit with Canada is now 50 Billion per... Read More
Amnesty International comments on the proposal that has been laid... Read More
Baylis taxi from Midway ..Ted Stevens (R-Alaska), chairman of the Senate Commerce Committee, has... Read More
United Liberation Front of Assam (ULFA), one of the most... Read More
Back-Dooring the CSIS:The US and Israel have admitted they back-doored... Read More
Many people make a lot of money in war. In... Read More
The Iranian elections are certainly interesting indeed. The ruling party... Read More
China maybe stopping some of the SPAM coming into the... Read More
As we watch fewer Americans voting it is no wonder... Read More
Websites designed to help people overcome their gambling addictions have... Read More
All government regulators or diplomat who are in high risk... Read More
An interesting conversation that I thought I must share with... Read More
"It is the duty of every citizen according to his... Read More
I had the benefit of getting an interview with Mr.... Read More
I am personally calling for a total disbanding of the... Read More
With people living longer we have some problems as those... Read More
A friend of mine, who lives in the thick of... Read More
I would like to pose a question. I am unsure... Read More
The entry by telephone and cable companies into the Internet... Read More
The Second World War was the continuation of World War... Read More
It is important as populations expand to work on the... Read More
It is time for a change. A change in philosophy,... Read More
I have to be honest. It is time to come... Read More
The number of countries in the world at the moment... Read More
Their arrival portends rising local prices and a culture shock.... Read More
America has some monetary issues, which need to be addressed.... Read More
The Justice Department is at it again; promoting themselves in... Read More
Political |