Tag Archives: Politics

To State the Obvious

Posted on by Bill Ryan

It is time to start stating the obvious. This is not your garden variety recession. We are not likely to bounce back to either the levels or type of employment that we had prior to 2008.  

Yes, I know technically we are no longer in a recession, because we have not had two consecutive negative growth quarters since 2009. To be precise we are in a period of sluggish GDP growth. But to most Americans it feels as if the recession that started in December 2007 is still with us. This has gone on longer than it took the U.S. to defeat Germany and Japan in World War II! 

Since we are stating the obvious, let us dispel a myth. No, the recession and its length are not Barack Obama’s fault. Carrying on with that thinking takes us off reflecting on what is really going on and how we need to adjust. Does anyone out there really think that if John McCain and Sarah Palin or even Mitt Romney had won the 2008 Presidential election that the economy would be all that much different today?  

What we are experiencing is much bigger than Republicans vs. Democrats and their ideologies. The world is undergoing a fundamental transition, a realignment of wealth and power, and we Americans better be ready to compete in the emerging global economy unless we want to be yesterday’s story. 

My principal economic concern has to do with joblessness. A society that does not have most of its citizenry gainfully employed is a society experiencing too much hardship. My principal concern is not that we are relinquishing our former status of disproportionately over-consuming the world’s resources. That was bound to change sooner or later. Much of the rest of the world is catching or has caught up to us in terms of living standards. America now must share more resources, like oil, and that is part of the pain we are feeling. 

But back to employment. Some fundamental job-related trends were underway before the recession and have been accelerated by it. For example, increasing self-employment, more engagement in project or portfolio work, and a pick-up in the passive candidate or hidden job market (think networking). Realizing these trends and getting-with-the-program, as it were, will help job searchers prepare. 

Note that a growing trend is not to sit for hours scrolling through postings on job board sites and electronically broadcasting your resume willy-nilly. To be clear, I am not saying do not try to get your defined message and brand out there, but do not think that sitting at a computer alone is a well-rounded job search. It is not. 

Securing fulfilling employment is no more complex than weight loss. Want to lose weight? Eat fewer calories and exercise more. Want to advance a career? Develop self-marketable expertise. As simple as this sounds, we all know it can be profoundly difficult to implement. Just as we know to not fall for diet fads, we should also know to avoid simplistic messages, especially from politicians, who proclaim we can return to old patterns of employment. 

A globally competitive workforce requires intelligence, foresight, creativity, and resilience. You are at root your own boss. Examine the landscape before you and take appropriate action. Rely as little as you can on the benevolence of corporate deal makers to pave the way out of the employment malaise. If your skills intersect with commercial needs, great. But if you find there are no doors to open, then you may have to build a door. 

Americans have traditionally thrived, because of independent and innovative thinking. These times call for as much of that as any other time in our history. Do not wait for monthly Labor Department statistics to energize you. To state the obvious, get out there and make it happen. 

What Is Behind “Occupy Wall Street”?

Posted on by Bill Ryan

“At many stages in the advance of humanity, this conflict between the men who possess more than they have earned and the men who have earned more than they possess is the central condition of progress.” — Theodore Roosevelt, 1910. 

As any student of history knows, there is a relatively limited set of macro issues that ebb and flow in various manifestations over the long-term. This quote from President Roosevelt, a Republican, from 100 years ago seems tailor made for describing the discontent expressed by the current Occupy Wall Street movement underway today. Despite the movement’s excessively grassroots and decentralized focus it is an example of a long-held view that reemerges occasionally in American history — that concentration of wealth among a few and the consequent constricted distribution of resources can get the masses riled. 

The economic dislocation being experienced by so many over the past three years is starting to be seen from a perspective not generally voiced during this Great Recession until quite recently. That being the economic downturn is largely the result of intentional manipulation by the richest segment of society (the 1%) to protect their financial interests at the expense of everyone else (the 99%). 

 This is a dramatic change of view, which may have more political implications in 2012 than economic ones. It represents a possible shift in popular thinking that until now seems to have been dominated by hard right conservative ideology stating government is more to blame for the bad times. 

Even astute political observers did not see this one coming. Although the future of the movement is uncertain, now that the Occupy protests are here it is not all that surprising they are occurring. The two Americas made up of the haves and the have-nots seem to be becoming more starkly divided. Many of the nouveau-poor are not just experiencing temporary employment and financial setbacks, they are seeing their worlds turned upside down. The rules have changed, dreams have been shattered, and the new normal is much more insecure and harsher than in the past. 

If the discontent was somehow being shared across all classes and economic strata, then the anger might have been more muted. But it is not. Those who have slipped down the ladder are instead seeing the “swollen fortunes of the few” (another TR phrase) being enjoyed by people, many of whom seem to be culpable for creating this mess in the first place. 

Although the Occupy protesters can sometimes be seen as having a muddled message and questionable tactics, for example letting their energy be diluted by directly battling police (part of the 99%) more than the 1% they claim to oppose, there are elements of the current political narrative that do seem to be instigating their clamor. Here are three main motivators of Occupy Wall Street that I am hearing from their sympathizers: 

  • The Bush tax cuts for the rich must be maintained, because they make it possible for the rich to create jobs. Really? These tax cuts have been around ten years. It is hard to say they have been stimulating much job growth as of late. 
  • The more vigorous and vocal Tea Party movement promotes shrinking government thereby encouraging the growth of the private sector. But for all the wealth generation potential of the private sector they were also the ones involved in selling over-speculative housing-related investments and encouraging bad mortgages. In other words, greed and self-interest can rule in the private sector over the concerns of the commonwealth. 
  • No one from Wall Street has yet been sent to jail even though the collateral damage to the economy has been far worse than any robbery. This charge has some genuine weight. 

Shared sacrifice and wealth distribution appear to be what is called for by Occupy Wall Street. Whether a legitimate demand or not, this belief has become a new variable injected into the national conversation about how the Great Recession began and what kind of America will emerge from its wreckage. 

Student Loans: Expense or Investment

Posted on by Bill Ryan

The burden of student loan debt on individuals, particularly young unemployed ones, is certainly starting to get a lot more attention in the media. College costs have experienced higher rates of inflation than for most consumer areas. The American Institute of CPAs for example reports that for the 2010-2011 academic year alone, 4-year state colleges for in-state students rose 7.9%, while for out-of-state students the rise was 6%. The inflation rate for 4-year private colleges was 4.5%. This compares to a general consumer rate of 3.9% for the past twelve months, according to the Bureau of Labor Statistic’s Consumer Price Index, a measure of U. S. inflation. 

Among the economic complaints raised by recent protests of the Occupy Wall Street movement is that student loan payments are creating too high of a debt position for young people trying to enter the workforce. In fact, it could be said that this issue is one of the significant catalysts of the movement. Starting out adult life faced with ten or twenty years to pay off tens of thousands of dollars of debt in this economy with no job is enough to make anyone scream. 

In my own personal life, I sense the anxiety. My daughter recently graduated with a 4-year degree and between my Parent PLUS loans and her Stafford loans we are looking at substantial debt. For my portion alone the Federal government is giving me up to thirty years to pay this off and from where I sit right now, I’ll need that much time. If it takes me thirty years to pay off this loan, I’ll be 88 years old! I have real doubts that I will live that long. 

My situation is indicative of a situation facing the generations right now. I am a Baby Boomer who has always believed that education is an investment. I have bought into the notion that there is a direct correlation between the level and quality of one’s education and the number of career options and earning potential one has throughout life. 

Even recent statistics have supported this view, such as the fact that of the 9.1% unemployed in September 2011, 78% have only a high school diploma. My daughter on the other hand is looking at her amount of student loan debt more as an expense right now and is truly questioning whether the B. A. was worth it. Time will tell. I still think the college education gives her a higher launching pad for her career and hope the debt will not diminish that advantage. 

I was chatting with a businessman from Belgium a few years ago over lunch. We were in Boston being trained to administer and interpret the Myers Briggs Type Indicator. I asked him about the income tax level he lives with in his country, and he did say it was quite high, if I remember correctly close to 50%. 

But he did not seem that upset after seeing my jaw drop. When I asked him why he was not outraged he cited two reasons. One, he does not pay any medical expenses and felt that he and his family received good medical care. The other reason was that one of his children, who was at the time enrolled in a university, could attend at no additional expense. He seemed content with the concept of receiving quality service for the high taxes he was paying. 

I do not know which system is best, the European or the American. But I do know this. The system that promotes the greatest amount of education for the most people will be in a better position to compete in the 21st century global economy. If higher education is not pursued by more and more Americans because it is seen as too much of a crushing expense, then it will diminish our talent pool and our competitiveness. This is a situation to be avoided. 

Let Us Please Place Job Creation as Number One

Posted on by Bill Ryan

I noticed the day after President Obama’s big jobs speech before Congress on September 8 that Mark Zandi, the often cited Chief Economist from Moody’s Analytics, praised it. True, he is an old-style Keynesian, but he is among the most respected economists in the country, so he deserves a listen to. Among the benefits he sees from the American Jobs Act are:

  • Confidence would return to the public and therefore a stabilization of the economy would result.
  • Just under 2 million jobs would be created with the unemployment rate being cut by a percentage point.
  • GDP growth would be two percentage points higher next year.
  • The $450 billion price tag would be paid between $250 billion in tax cuts and $200 billion in spending increases.
  • If passed, another recession could be averted.

It has little chance of being passed by the Republican controlled House. Now that would be fine except that it is not clear what the Republicans are offering for immediate stimulation to employment. In fact, it seems that they do not like the word stimulation.

We are being asked to encourage reduction of government, which will in and of itself release an explosion of private sector expansion and economic growth. So the private sector that seemed to play a rather large role in creating the Great Recession is going to lift us out of it because government is diminished? Really?

If there was a credible plan to create jobs by Republicans aside from the usual cut taxes for the rich and reduce regulations I would be all ears. I want jobs to start growing as much as anyone and I really do not care which ideology produces them as long as they get created. But now that one of the two major political parties has been shanghaied by the Tea Party, who does not place job creation as their number one priority, we are not getting a full collaborative effort from all sides.

I will give the Tea Party credit for sounding the alarm on the growing Federal debt, which if left unchecked would constitute major economic problems, including unemployment in just a few years. However, what are they contributing to the debate of job growth now? Not much from what I can hear.

They seem more committed to eliminating the President’s job than in generating new ones for Americans. They are a one trick pony. Just reduce debt and morning in America will return. They seem to think that managing the Federal budget is no more sophisticated than balancing the family checkbook.

Perhaps most troubling is the Tea Party’s reluctance to negotiate and compromise with those who have a different viewpoint. They are so confident in the righteousness of their position that working across the aisle is seen as weakness and capitulation. There is value in decisions made as a result of consensus. And now is a time for our leaders to work together to expand employment. The Tea Party strikes me as an impediment rather than as a serious partner.

I guess we’ll never really know if Mark Zandi’s ecomomic predictions will come true. Probably the most President Obama will get out of that speech is a reelection campaign position. Meanwhile, the unemployment rate stays in the 9% neighborhood.

Perhaps government really cannot effect economic change and private capital (which the private sector is not releasing) is all that matters. But don’t we elect Federal leaders to solve national problems? And isn’t that best done when collaboration occurs? This climate of polarization during a time of national crisis is very disheartening. We should demand something greater from those we elected.

Entrepreneurs and Joblessness

Posted on by Bill Ryan

It does not look like joblessness is going to be easing anytime soon. Even though business orders are up, cash reserves are high, and overtime is wearing out employees. Unfortunately, economic conditions still do not seem to be stimulative enough to increase hiring. 

For the unemployed this is especially aggravating. Most are hopeful, perhaps desperate is the more accurate word, that “companies” will someday begin hiring again, that employers of businesses both large and small will again provide all the jobs we need like they did before. 

And what help can be expected from the government? Although the Democrats stimulus plan helped to avert another Great Depression and created or saved 2-4 million jobs it has not sufficiently convinced businesses or their lenders that there is enough stability and predictability to start hiring. The Republicans, on the other hand, are still convinced that no government plan is best and that if we can just keep taxes to the rich low and markets free of regulation all will recover nicely (President Bush’s tax cut to the rich is now nine years old and that worked out well, didn’t it?!).  

This joblessness problem is bigger than politicians can remedy with trite ideological positions and reheated campaign phrases. Here in New Hampshire, listening to the current crop of political ads can hardly give hope to the jobless. They sound like parodies of… well political campaign ads. 

We hear candidates telling us that their honesty and business acumen will “fix the economy”. Really? This is one heck of a big mess that will not be solved by way of polarization, finger-pointing, and outrageous claims of superhuman economic abilities. It begins with everyone seeing themselves as Americans first and Democrats, Republicans, Independents, Tea Partyers, or whatever, second. Nobody and no political persuasion have all the answers. When the nation’s most renowned economists cannot agree on what is the right course of action, then that tells me that this is really complicated and requires the collaboration of our greatest efforts, not simplistic political phrases. 

If I had a quick and easy answer or method to suggest that would lessen the pain of unemployment, believe me, I’d give it to you. But just like our candidates, be they lobbyists, lawyers, or magazine editors, I don’t have a magic bullet for fixing this unemployment mess and I have yet to run into anyone else who has one. 

So, while we wait for our leaders to work together, jobless Americans need to be as proactive as they can. Assume for starters that we are not going back to Pleasantville. For the short-term, anyway, there is going to be a new normal. I think it will help to get yourself in the mindset of treating yourself as if you were self-employed… an entrepreneur. Avoid wallowing in despair and depression and instead face your situation as if you are trying to generate business for your own owner-operated company, the business of you. 

Be clear on what you can offer and then constantly look for opportunities to practice your skills. Volunteer, work temporarily, accept positions for now that pay less than before, keep studying, keep networking, do whatever it takes to stay in the game. Recessions historically generate entrepreneurial activity and given how deep this one is, the entrepreneurial reaction of citizens should be strong. 

Losing your identity is as bad, if not worse, than losing your money. Can you still say what you “are”, be it bookkeeper, truck driver, or seamstress? You are out of work, not out of life. Find a way to stay engaged in what you do and in who you are. Losing your job is not the same thing as losing your profession. 

The evidence that we are headed more and more into a freelance nation is continuously being reinforced. Waiting for the old normal of “getting a job” may never again be the same for millions of Americans. Begin making the mental shift now to being independent. It may be the only thing related to your work that you can control. 

Jobs and the Political Parties

Posted on by Bill Ryan

With the 2010 mid-term election campaign season heating up it is a good time to look at where the two different major political parties stand on job creation.

It is clear that the economy is the most important campaign issue and the most prominent economic theme on most people’s minds is job creation. To the extent that law makers can affect employment, the parties have staked out strategic positions, which they hope will help them win in November. As someone who shares in the hope that everyone who wants a job can have one, here is my take on who offers the best hope.

To start with, job creation is largely a private sector and business responsibility. Although government financed jobs are just as valuable and valid as private sector jobs, the public sector cannot and should never expect to sustain the economy largely through tax payer based employment. From that premise, it becomes necessary to rate the parties on what they think the role of government should be in creating or facilitating the conditions by which the private sector can grow and create jobs.

True to tradition, the Democrats are looking for more interventionist and activist ways of involving government to stimulate the private economy, while Republicans are trying to minimize government involvement believing that business and entrepreneurism alone can improve economic conditions. Let us see how these approaches have fared in recent political history.

Essentially, Reaganomics have had their way for the past twenty-five to thirty years, by which I mean the Republican penchant for reducing taxes on wealthier Americans and reducing governmental regulations on business have held sway. Even President Clinton talked about the era of big government being over. The best that can be said from a jobs perspective is that employment followed the economic bubbles and busts of the 1990s and 2000s resulting in the Recessionary mess we now have. If the economic tide had lifted all boats, then the pulling of the economic plug in 2008 drained all of us and quickly.

Let us look at the last couple of years in particular. The current Recession began in December 2007. By the fall of ’08 with panic starting to set in we had the Republican nominee for president telling us the fundamentals of the economy were fine while the Democratic nominee was warning us of economic doom and gloom.

President Bush’s Treasury Secretary saw it imperative to begin a program of government funded bailouts to keep the country from plunging into another Depression. The newly elected president realized that government financial intervention needed to continue for the banks and extended it to two of the major American auto companies. Without those bailouts, unemployment would have been much higher.

In 2009 President Obama, having inherited a $1.3 Trillion deficit, and the congressional Democrats involved the government further in passing economic stimulus legislation. This seems to have maintained more jobs than it created, but it can be said to have kept the unemployment rate from getting worse than it did.

As we all know, the economic recovery has been slow and the high unemployment rate remains largely stuck between 9.5 and 10%. In response, the political debate seems to be between the Republicans who say that everything the president and Democrats attempt should be thwarted and the Democrats saying that increases in targeted expenditures along with more regulation, particularly in the financial industry, is needed. So whose approach can result in more jobs?

This Recession began largely because of unsustainable spending and speculation on behalf of many in the private sector who were able to get away with it. Had there not been government intervention we would now be experiencing the second Great Depression in our nation’s history with much higher unemployment than now. To prevent a Depression government essentially transferred the unsustainable spending from the private sector to the tax payer in the form of an increased budget deficit. A robust business climate is needed to seriously reduce that debt.

Republicans are still wedded to the belief that low taxes to the rich and a low regulatory climate will create a long-term healthy economy. There really is nothing new in their game plan except to cooperate even less than before with the Democrats.

The track record of this approach from the last three decades is not encouraging, however. The Democrats still believe that government should be a check and balance to the power of the markets so that excesses such as those that have led to the current Recession and that have hurt so many Americans are mitigated.

The power calibration between free markets and government spending and intervention is tricky and far from a guarantee that it can right the economic ship, but I prefer action over inaction. I will take my chances with President Obama and the Democrats.