Archive for January, 2010

I’ve heard this before; I guess its just coming up more now as the jobs situation gets worse.

The private sector had 107 million jobs in 1999, and that’s about the number it has currently….a decade later.  There was an artificial bump before Y2K as companies hired a bunch of folks and bought a bunch of new computer equipment in anticipation that there would be some technical apocalypse, but still…10 years on and there is no net job creation.

That’s tough for the common man to swallow; after all GDP has increase from 9 trillion in 1999 to about 14 trillion today.  Are you telling me there those extra 5 trillion dollars created no net jobs?

Also, population has continued to increase from 279 million in 1999, to 304 million today.  So there are more people chasing the same number of jobs, while national income (GDP) went from 9 to 14 trillion dollars.

Where did the 5 trillion dollars go?

Here are two facts you can take with you (unfortunately not to the bank):

1) Trickled-down economics is shite:  It doesn’t trickle down.  A rising tide doesn’t lift all boats; it drowns those without boats.  Income inequality is the worst its been since WWII; Reagan, Bush I, and Bush II are responsible for most of that.  If you think income inequality doesn’t matter, then ok.  But it causes crime and ill-health.  That will eventually effect you; I don’t care how hard you try to sequester yourself away from the poor (which are increasingly the middle class).

2) What’s good for Wall Street is not good for Main Street. And its corollary:  What’s good for US companies is not good for the US. In the past, this was true.  Where did the 5 trillion dollars go? It went to China and India via US companies.  In fact, I wouldn’t even call them US companies anymore.  They are global; they are not beholden to any government.  If a government upsets them they could always pack up and ship operations (i.e. jobs) elsewhere and still sell their goods/services in the country.

Maybe that isn’t where all (or even the majority) of the 5 trillion dollars went; however, a large number of the missing jobs are not missing…..they are simply relocated.  My company, for instance, has not closed up shop in the US.  We still have operations here; its just that we are adding jobs 4 to 1 overseas.  They used to all be here.  So growth is still good…just not growth in the US; however, since it is a US company their corporate income/consumption still counts towards GDP.

I’m not happy about this; however, I sometimes feel like it is a snowball gathering steam down the mountain.  I guess the only practical advice I have to give about the future of the US economy (and thus YOUR livelihood) is:  Be conservative.  We will be the first generation to have a lower standard of living than our parents; accept it.  Our children will increasingly compete for jobs against people continents away who need to make less than we do to survive.  Its hard to win in that equation.

I have one suggestion that is practical and will help immediately:  Stop the wars.

I lived in the Middle East; they hate foreign occupation.  They hate it.  I mean HATE.  Its their hang-up.  The more we intervene, the most terrorists we create.  For those who say, “We aren’t occupying; we’re liberating/helping”….I will say it is simply a matter of perspective, and theirs is the only one that matters.

Stop the wars, and spend the money at home.  We are losing to a phantom enemy that we create more of the harder we try to root them out.

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