http://www.taxfoundation.org/news/show/24980.html
The watermelons & unions continue the reddening of America, following the failed models of the Soviets & China (ironically just as China has smartly moved closer to a free market). By keeping corporate tax rates at the 2nd highest in the world (39% fed+state) while Canada, Czech Rep., Korea, & Sweden lower their corp. tax rates, the fed. gov't opts to kick the economy while it's down. This will certainly drive more businesses into bankruptcy, but that's just so the Dems can take them over anyway (just as planned).
Sunday, August 16, 2009
Tuesday, August 11, 2009
Structural Downturns
AP Wire excerpted: http://hosted.ap.org/dynamic/stories/U/US_MELTDOWN_101_JOBLESS_RECOVERY?SITE=WIMAR&SECTION=HOME&TEMPLATE=DEFAULT
My notes will be prefaced by "My notes"
Q: How long does job growth typically lag behind the end of a recession?
A: The lag time has been growing. After almost every recession since 1960, unemployment started to drop only one or two months after the recovery started. But that changed after the recession ending in 1991, after which there was a 15-month lag. After the recession of 2001, the lag was 19 months. This time around, most economists aren't expecting the lag time to be that long, but it will be years before the unemployment rate hits pre-recession levels.
Q: Why is the lag time for job creation getting longer?
A: One big reason is the changing nature of U.S. recessions.
Downturns used to be cyclical, meaning demand dropped for whatever reason, and companies responded by cutting production and laying off workers. When demand picked up, companies simply rehired employees and got back to business.
That's not the case anymore. A 2003 study by the Federal Reserve Bank of New York found that downturns are increasingly "structural," meaning the economy itself changes and jobs disappear for good.
Many U.S. manufacturing jobs lost in 1991, for example, never came back, but instead were shipped overseas. Internet firms disappeared altogether during the recession of 2001. After this recession, millions of jobs will likely disappear in the construction, finance and automaking sectors.
This increases the period needed for new jobs to be created, and for workers to get trained to fill them.
My notes: I don't know what these new jobs are or whether our economy is really equipped to regain the competitiveness we had in the 20th century. When jobs are being outsourced & never brought back on US soil, it shows that we are establishing a regulatory & tax structure that punishes businesses for holding jobs locally. There are costs associated w/ outsourcing, but clearly these are now too often lower than those associated w/ meeting minimum wages, satisfying union requirements, meeting various OSHA & other government regulations associated w/ domestic hiring, etc. I'm not suggesting we undo all these regulations, but it's hypocritical for the gov't to build such a regulatory structure hostile to local hiring & then accuse businesses of being evil for trying to cut costs by hiring overseas. Why can't we reexamine some of the environmental restrictions associated w/ environmental impact statements & LEED certification or temporarily stop raising the minimum wage? Why can't we loosen labor unions' stranglehold on various industries? This is critical: if we don't act soon, China & India will relegate us to 3rd world status & all these well-meaning regulations that are supposed to protect workers will be meaningless when our unemployment skyrockets after we destroy all our industries through overregulation. (We have already destroyed our manufacturing base; must we do the same to the service sector next?)
My notes will be prefaced by "My notes"
Q: How long does job growth typically lag behind the end of a recession?
A: The lag time has been growing. After almost every recession since 1960, unemployment started to drop only one or two months after the recovery started. But that changed after the recession ending in 1991, after which there was a 15-month lag. After the recession of 2001, the lag was 19 months. This time around, most economists aren't expecting the lag time to be that long, but it will be years before the unemployment rate hits pre-recession levels.
Q: Why is the lag time for job creation getting longer?
A: One big reason is the changing nature of U.S. recessions.
Downturns used to be cyclical, meaning demand dropped for whatever reason, and companies responded by cutting production and laying off workers. When demand picked up, companies simply rehired employees and got back to business.
That's not the case anymore. A 2003 study by the Federal Reserve Bank of New York found that downturns are increasingly "structural," meaning the economy itself changes and jobs disappear for good.
Many U.S. manufacturing jobs lost in 1991, for example, never came back, but instead were shipped overseas. Internet firms disappeared altogether during the recession of 2001. After this recession, millions of jobs will likely disappear in the construction, finance and automaking sectors.
This increases the period needed for new jobs to be created, and for workers to get trained to fill them.
My notes: I don't know what these new jobs are or whether our economy is really equipped to regain the competitiveness we had in the 20th century. When jobs are being outsourced & never brought back on US soil, it shows that we are establishing a regulatory & tax structure that punishes businesses for holding jobs locally. There are costs associated w/ outsourcing, but clearly these are now too often lower than those associated w/ meeting minimum wages, satisfying union requirements, meeting various OSHA & other government regulations associated w/ domestic hiring, etc. I'm not suggesting we undo all these regulations, but it's hypocritical for the gov't to build such a regulatory structure hostile to local hiring & then accuse businesses of being evil for trying to cut costs by hiring overseas. Why can't we reexamine some of the environmental restrictions associated w/ environmental impact statements & LEED certification or temporarily stop raising the minimum wage? Why can't we loosen labor unions' stranglehold on various industries? This is critical: if we don't act soon, China & India will relegate us to 3rd world status & all these well-meaning regulations that are supposed to protect workers will be meaningless when our unemployment skyrockets after we destroy all our industries through overregulation. (We have already destroyed our manufacturing base; must we do the same to the service sector next?)
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