The American Dilemma and How We Can Fix It

Posts tagged ‘unemployment’

THE POWER OF POSITIVE CONFUSION

Obama Logic

BIG BROTHER

There was a time in America, not too long ago, that people believed that if they worked hard and they worked smart, they had a chance of doing well for themselves and for their families.

Some of these people worked for others and realized that self-sacrifice was necessary.  They saved some out of each paycheck and spent less than they earned.  They built a nest egg and many bought small houses in which to raise their families.

Others, resounding with the pioneer spirit that built America were more adventurous than those who accepted a wage for a living.  They were entrepreneurs who took the risk, trusting in their own ideas and in their own abilities to create something where previously there had been nothing.  Some failed, yet many succeeded and in so doing collectively gave employment to millions of their fellow Americans.

I have been a member of both classes of these American workers and am appreciative that I had the opportunity both to find a job when I needed one and to found a company and offer jobs to many others.  Whether it was as an employee or as an employer, I always tried to do my best – putting forth more than the amount of effort my employer expected – and challenging myself as the employer to offer a better product and better service to ensure both my and my employees’ security.

Things didn’t always go exactly as planned – there were recessions which threw us off track – but somehow through sheer determination and a lot of faith I was able to struggle through and at the end of the day things worked out okay.  I must admit that I felt proud of both my accomplishments and my record.  It made up for the many sleepless nights wondering how I was going to meet the payroll during our worst economic times.

I cannot imagine the reaction that people who are entrepreneurs today must have had to the recent declamation by President Obama concerning their businesses that, “You didn’t build that …”  Beyond the insensitivity of the remark is something far worse – pure and blatant stupidity – which seems to run rampant in an Obama speech when he is deprived of a teleprompter.  And this coming from a man who’s career is distinguished by a lackluster stint in the Illinois and U. S. Senates, preceded by a couple of years as a “community organizer.”  When the history books are written, he will probably be remembered as the person who was most responsible for attempting to destroy the “American dream.”

Let’s look, for a moment at how this prescient President began his post-school career.

As a community organizer on Chicago’s Southeast Side, Barrack Obama accomplished several things.  First, he was involved in helping to develop “neighborhood watches” to improve the security of the residents in the high crime rate areas which were within his purview.

Security and personal safety are obviously worthwhile goals and are important to all of us.  But the reason that there was a need to develop neighborhood watches was because the residents of these communities had very limited education resulting in a high rate of unemployment and a consequent large dependence on welfare to sustain their existence.  The thugs who threatened them met the same demographic and found, since they had no useful skills, that it was easier to band together in gangs and either sell drugs or steal from others.

As an adjunct to the neighborhood watch, there were the neighborhood “clean-ups” which Mr. Obama set in motion.  By clean-up I refer to getting volunteer residents to pick up the debris which littered their streets – the refuse that came from irresponsible people tossing the containers that originated in fast food restaurants and which had been discarded wherever the purchaser decided it was most convenient for her.

It is this “business background” and resume which apparently enables the President to have a keen insight into what it takes to run a business.  Frankly, if he applied to my temporary service for a position, I doubt that I would have felt comfortable recommending him to any of my clients – except, perhaps for a low-level job in the mail room.

Given President Obama’s view of things, none of us should be surprised that small businesses, the backbone of economic growth and employment, are not hiring and the economy is stagnant.  But at least one good thing came out of his comments.

Unlike so many other issues on which he has flip-flopped repeatedly to appear in the favorable light of momentary public opinion, I think we do have a good idea of what this man is all about through his statement about small businesses.

Hang in there all you entrepreneurs.  You are a credit to yourselves and to a country that allowed you the opportunity to be all you could and chose to be.  You’ve had to endure tough times before but your faith and diligence carried you through.

And as with all things, even with Big Brother, this too shall pass.

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“X” MARKS THE SPOT

There is a stock listed on the NYSE which has one of those most coveted of all ticker symbols – a single letter. In this case the symbol is “X” and it represents the United States Steel Corporation.  It has maintained that distinctive symbol for a century.

There was a time in America when economists and investors waited anxiously for U. S. Steel to report its earnings.  A good report could mean a surge in the general stock market.  A bad report could mean a nasty selloff.  Of course, this was at a time when America owned a large share of the global steel industry.  Those times have passed.

In the decade beginning in 1910, the amount of steel that was manufactured in the United States gradually increased as a percentage of worldwide steel production to the point where we consistently produced between 30% – 50% of all the steel made in the world.  Cities like Gary, IN became boom towns – welcoming workers to the state of the art mills that had been built.  Good jobs were plentiful and the steel industry was the backbone of American prosperity.

But things changed.  Other countries learned how to manufacture steel of equal quality to our American product – and they learned to make it less expensively than we could.  One of those countries was Japan.

If you know anything about that island nation you know that Japan, unlike America, is blessed with few natural resources.  The raw materials to manufacture steel have to be shipped in from other countries where they abound.  Despite that additional cost, Japan has still been able to manufacture a quality product at a fraction of the cost of its American counterpart.

How is that possible?  Perhaps the answer lies, at least in part, in the demands and entitlements which American unions have been able to extract from U. S. steel companies.  The cost of labor is an essential component of the way that any product is priced.  And if your costs are significantly higher than your competitors’ you simply will not be able to offer your product at a price that is going to be attractive to buyers.

Recently I’ve been covering the flap about “outsourcing” as it pertains to the presidential race.  Although I think this should have about the same level of importance as getting a peek at President Obama’s college transcripts, allow me to play devil’s advocate and assume that there is something that is actually material in this conversation.

Let me further assume that Gov. Romney’s Bain Capital outsourced some jobs to countries overseas.  How many jobs?  Well, considering the nature of the companies that Bain owned I am going to take a stab at estimating that number.  I’m going to suggest that number is between a few hundred and a few thousand.

By contrast, the number of American workers employed in the steel industry shrank from 500,000 to 224,000 in the period between 1980 – 2000 – a loss of 276,000 jobs that were essentially outsourced to countries overseas.  Thank you union leaders for your excellent work.  You certainly deserve to be recognized for your achievements.

By 1980 the United States’ share of global steel production had declined to 12%.  By 2000 our market share had declined further to 8%.  Today it stands at 2%.  And that once great boom town of Gary, IN has an unemployment rate of 13.1% which is more than half again as much as the national average.

Given these statistics, even if Gov. Romney is an “outsourcer”, he is a veritable neophyte at it.   He needs to sit in on a few AFL-CIO leadership meetings to see how it really is done.

If we want to make outsourcing an issue in the November election, let’s look at the real causes and perpetrators of it.  Our unions which demand that their members earn wages and benefits which make our products globally uncompetitive; our politicians who enact onerous rules and regulations which detract from productivity and add significantly to cost; and ourselves, for being willing purchasers of products manufactured overseas because they are less expensive and we can save money.

Harry Truman said, “The buck stops here.”  I guess that was back in the days when “X” marked the spot.

THE RIGHT PERSON FOR THE JOB

John got home a little later from work than usual and when he walked in the door he could smell the wonderful dinner that Mary was getting ready to serve the family that evening.  He thought to himself, “How lucky the kids and I are that I found such a wonderful woman to be my wife and their mother.”

As the family sat at the table, John asked Mary, as he usually did, how her day had gone.

She said that it had gone fine – other than the fact that she had experienced the worst tooth cleaning of her life.  John asked her what had happened.

Mary said, “Well, it’s probably my own fault.  I should never have gone to Al’s Auto Repair to get it done.”

Mary would occasionally cross over into the slightly-warped dark side of humor and John thought that statement was one such foray.  He put down his fork and he and the kids began laughing at the joke Mary had made.

Mary looked annoyed – which was unusual for her.  So she said, “You think that’s funny?”  Then she retracted her lips and to the shock of her family they could see that her once pearly-white teeth were streaked with grease.

Of course you realize I fabricated this story, my point being that it is important to try to select the right person for any particular job.  Perhaps even more frightening than Mary’s selecting someone totally incapable of doing what she needed done was that they actually attempted to do it knowing full well that they didn’t have the expertise.

I have hired a great many people over many years of owning my own business.  I always put a great deal of thought into the individuals who were interested in joining us because I felt that we had to be mutually-comfortable in the commitment we would make to each other.

I viewed our relationship not so much as one between employer/employee but as a marriage.  We had to be compatible and we had to share a basic philosophy and work ethic.  Lacking those elements, our relationship was ultimately doomed to failure.

As I’ve said in previous posts, I always viewed the failure of any employee as my failure – not his.  Either I had made a poor hiring decision based on what I perceived to be the nature and character and potential of the person whom I had hired; or I had failed to inculcate our corporate philosophy in that individual or they were unwilling to accept it.  Whatever the case, it necessarily meant that we would part ways – sometimes through my choice and at other times through theirs.

Letting an employee go was the part of my job that I hated the most.  It was difficult for me emotionally because I knew that my decision would have a major impact on the employee’s life – at least in the short term.  But I also had to consider that by getting rid of some dead wood the whole tree had a greater chance to survive and flourish.

Admitting that I had made a mistake was as difficult for me as it is for most of us.  But when you see the handwriting on the wall, an intelligent person should not fail to read and act on the message.

Have we hired the right person to lead this country?  To what can our employee, the President point as being justification for keeping his job?  Are things better or worse than they were when we voted for him based on what he said his nature and character and potential were?  If not, it’s time to prune the tree of the dead wood so that it has a greater chance of surviving and flourishing.

Admitting that we have made a mistake is always embarrassing.  Choosing to pretend that we haven’t is simply ignorant and is likely to lead to disaster.  Given those two options, I’ll select a moderate case of dealing with egg on my face.  Because I know, it’s always important to try to find the right person for the job.

THE FIRE

You had a hard week at work.  Everything that could go wrong did and at the worst possible moment.  But that’s done with and you’re driving home, looking forward to spending a pleasant weekend with your family.

A few miles from your home the traffic turns into a jam.  You think to yourself, “Well, that’s kind of typical of the way this week went.”  And then you see the reason for the stall.  There is a dark cloud of smoke ahead – and it’s coming from the neighborhood where your home is located.

“Oh please, God –  please don’t let that be my house that’s on fire,” you exclaim out loud.

Your anxiety builds as the traffic crawls forward in the thirty minutes it takes to move one half way to the billowing smoke.  Even with the air conditioner running at full throttle you can feel the perspiration dripping down the side of your body from your underarms.  In the distance you can see the fire equipment which has been deployed to combat the blaze.

Another half hour passes.  The police and a fireman are directing traffic on the street that feeds into your street.  At that point you breathe a sigh of relief because you can see that the source of the fire is a house that is two blocks away from yours.  Perhaps the week didn’t turn out as badly as it might have.

Most of us who found ourselves in this situation would probably, almost involuntarily, react the same way.  “Oh please, God – please don’t let that be my house that’s on fire.”  But what are we really saying in making that plea?  Simply that we are perfectly content for this tragedy to have befallen one of our friends or neighbors – just as long as we remain unscathed by it.

We have asserted our moral superiority to prosper at the expense of someone else who is not as fortunate, gifted or entitled as we are.  We have passed judgment that our interests are more important than the interests of others.

After the  tragedy of this event we might find it in our hearts to make a small donation to the family who’s lives were affected or perhaps put together a bag of canned goods for them to eat.  And in these ways we assuage our consciences and tell ourselves that we really are “good people.”

I offer this lesson in “situation ethics” as a prelude to a discussion about which there has been much and will be more conversation.  That topic is outsourcing jobs.

As I see it, there are three categories of people who are involved in this conversation.

The first are those people who really don’t want to make the effort to get a job and find this a convenient excuse for their own idleness.  As far as I am concerned, they are a part of the problem and in no way contribute to a solution.

The second are those people who have a job and are breathing a sigh of relief that their employment does not appear to be in jeopardy.  They may have a view on outsourcing and indeed be empathetic to a co-worker who’s position was outsourced – but in their hearts they’re saying, “Oh thank you, God for letting me keep my position.”

The third are those people who are actively seeking work but cannot find it.  They are bitter that a potential job has been shipped overseas.  We hear a lot of this from OWS.  They also have made the moral judgment that they have a greater right to life and prosperity than some other worker who happens to live in another country.

Now the facts are that many of these outsourced positions are low-level and low-paying.  A large contingent of OWS protestors are frustrated people who are college educated and are unable to find work using their degrees.  I suspect that none of them spent four years in college so that they could get a minimum wage job working in a fast food restaurant or in a customer service call center.

In fact, I doubt that if offered that kind of position so that they could support themselves until things got better they would even consider accepting it.  I say this based on several conversations I have had with OWS members.  The people with whom I spoke considered that type of work as being “beneath them.”  Personally, if I were in their position, I would humbly accept the work and be grateful for it while I continued to look for something better.

So is outsourcing immoral?  Let me introduce a fourth group that carries the most weight in this discussion.  That group consists of our President and the Congress.  You see, if they had the sense to understand the nature of the recession and to work proactively at fixing it – rather than spending two years going off on tangents and bickering, we might not be having this discussion at all.

As bad as the June Jobs Report was with an overall unemployment rate continuing at 8.2%, things got worse for the very people whom President Obama counts as his core constituency – blacks and Latinos.  The rate of unemployment for blacks increased to 13.6% from 13.0% and for Latinos to 11.0% from 10.3%.

It is truly difficult for me to understand how these unemployed minorities can support a man who has done so very little to assist them – and, in fact, who has by omission,  done so much to prevent them from entering the work force.

This fourth group, our politicians needs to tend to their knitting – rather than trying to blind each other with their knitting needles.  They need to be honest with themselves and with us – and if they are incapable of that, they need to be replaced with thoughtful people who will work toward finding solutions.  The blame game is not only not productive – it is counter-productive.

We have seen what happens when a people learn to distrust their politicians’ ability or willingness to address problems in a serious manner.  That life study comes to us from a country called Greece.  We saw the fires that raged in the streets of Athens – and those streets are only a few thousand miles and a couple of years away.

If we don’t take the responsibility to elect people of quality and vision this November I predict that it won’t be long before we’re all saying, “Oh my God, our country’s on fire.”

(NOT YET) FAMOUS QUOTES – XII

BmprStck25605

IS IT REAL OR IS IT MEMOREX?

Today we had another poor Employment Report for the month of June.  While the 80,000 jobs which were created was a small improvement over May’s 69,000, these numbers are obviously far short of the 200,000 we need to create monthly just to keep even with the number of net new workers entering the job market.

The Administration, which is the architect of our stagnant employment situation and an unemployment rate of 8.2%, had it’s usual response that we should not be too concerned with any one month’s data.  I agree with that statement.  There are variations which can be due to any number of external factors in any given month (although I would exclude President Bush from the list).

At the bottom of this post I have listed the White House’s official response to 30 months of Employment Reports as can be found on its website.   I particularly enjoyed the post of July, 2010 which was as devoid of substance as one might expect from this Administration.

Perhaps, my readers will ask themselves the same question I did:

“Is it real or is it Memorex?”

BmprStck25591

June 2012: “Therefore, it is important not to read too much into any one monthly report and it is informative to consider each report in the context of other data that are becoming available.” (LINK: http://www.whitehouse.gov/blog/2012/07/06/employment-situation-june)

May 2012: “Therefore, it is important not to read too much into any one monthly report and it is helpful to consider each report in the context of other data that are becoming available.” (LINK: http://www.whitehouse.gov/blog/2012/06/01/employment-situation-may)

April 2012: “Therefore, it is important not to read too much into any one monthly report and it is helpful to consider each report in the context of other data that are becoming available.” (LINK: http://www.whitehouse.gov/blog/2012/05/04/employment-situation-april)

March 2012: “Therefore, it is important not to read too much into any one monthly report, and it is helpful to consider each report in the context of other data that are becoming available.” (LINK: http://www.whitehouse.gov/blog/2012/04/06/employment-situation-march)

February 2012: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report; nevertheless, the trend in job market indicators over recent months is an encouraging sign.” (LINK: http://www.whitehouse.gov/blog/2012/03/09/employment-situation-february)

January 2012: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report; nevertheless, the trend in job market indicators over recent months is an encouraging sign.” (LINK: http://www.whitehouse.gov/blog/2012/02/03/employment-situation-january)

December 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2012/01/06/employment-situation-december)

November 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/12/02/employment-situation-november)

October 2011: “The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision. There is no better example than August’s jobs figure, which was initially reported at zero and in the latest revision increased to 104,000. This illustrates why the Administration always stresses it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/11/04/employment-situation-october)

September 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/10/07/employment-situation-september)

August 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/09/02/employment-situation-august)

July 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/08/05/employment-situation-july)

June 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/07/08/employment-situation-june)

May 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/06/03/employment-situation-may)

April 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/05/06/employment-situation-april)

March 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/04/01/employment-situation-march)

February 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/03/04/employment-situation-february)

January 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/02/04/employment-situation-january)

December 2010: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/01/07/employment-situation-december)

November 2010: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2010/12/03/employment-situation-november)

October 2010: “Given the volatility in monthly employment and unemployment data, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2010/11/05/employment-situation-october)

September 2010: “Given the volatility in the monthly employment and unemployment data, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2010/10/08/employment-situation-september)

July 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative. It is essential that we continue our efforts to move in the right direction and replace job losses with robust job gains.” (LINK: http://www.whitehouse.gov/blog/2010/08/06/employment-situation-july)

August 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/09/03/employment-situation-august)

June 2010: “As always, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/07/02/employment-situation-june)

May 2010: “As always, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/06/04/employment-situation-may)

April 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/05/07/employment-situation-april)

March 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/04/02/employment-situation-march)

January 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/02/05/employment-situation-january)

November 2009: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2009/12/04/employment-situation-november)

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