Saturday, September 24, 2011

3 Million Jobs unfilled in September 2011???

Shipyard workers on National Security Cutter

National Security Cutters

That headline screams out at a time that the United States languishes in what has been now dubbed the Great Recession. This past week saw the President propose spending almost half a trillion dollars on a jobs bill at at time when there are already 3 million jobs waiting to be filled. The problem in filling those jobs is examined in a two part post by Steve DeAngelis on his Enterprise Resilience Management Blob. Steve links several articles and adds his own thoughts to what needs to be done to get America back to work.
In June, two members of the President's Jobs and Competitiveness Council, Jeffrey Immelt, the Council's Chairman as well as the chairman and CEO of General Electric, and Kenneth Chenault, the CEO of American Express Co., wrote an op-ed piece explaining what the Council is doing to try and generate jobs. ["How We're Meeting the Job Creation Challenge," Wall Street Journal, 13 June 2011] They stated the obvious when they wrote that "the inescapable truth is that we have a persistent jobs challenge that demands an aggressive response." The Council, which includes 26 private-sector leaders, was established to develop "ideas that will accelerate job growth and improve America's competitiveness." The June op-ed piece was the Council's "initial 'progress report' to the president." It included "a series of steps" that Council members believe "can help spur hiring in the short term in areas like construction, manufacturing, health care and tourism." Immelt and Chenault admitted that the challenges are daunting and the solutions difficult.
Read more:
Creating Jobs in America Part 1

DeAngelis continues in a second post to expand on this thread and adds recommendations from
Robert J. Samuelson and Arthur Laffer on what it takes to get real job growth.
In yesterday's post, I discussed some of the initial recommendations offered by the President's Jobs and Competitiveness Council as well as some of the programs that the President put forward in his jobs bill. Having listened and read what is being offered on the jobs front, opinion columnist Robert J. Samuelson believes that politicians and their constituencies "need a refresher course in Job Creation 101."
Read more:
Creating Jobs in America Part 2

Continuing on the subject of jobs, comes this post courtesy of Galrahn of Information Dissemination who questions what kind of trade off we will see in replacing construction jobs with higher paying defence jobs.
An especially troubling aspect of the present situation is that the cuts mandated by the Budget Control Act to reduce deficits could grow bigger if the president’s jobs bill passes, because the special committee would need to find additional savings to cover the price-tag for its package of tax changes and targeted spending. So in the current environment where legislators are trying to cut deficits and stimulate the economy at the same time, the government could end up destroying many thousands of good jobs to create lots of not-so-good jobs in areas like construction. What kind of a tradeoff is that?
Here is the bottom line of what deep defense cuts will entail.
So let’s do the math. The number of jobs created by defense spending varies depending on the nature of the activity and how much each job pays, but it’s a safe bet that at least one direct job is created for every $200,000 in spending. Thus, the $100 billion in annual military spending cuts that might be spawned by deficit-control legislation potentially accounts for 500,000 direct jobs. But that’s just the beginning, because numerous additional jobs are created in retail, construction, education and other pursuits as defense workers spend their income. Analysts argue endlessly about what this economic multiplier effect might be, however a very conservative guess would be that each direct job leads to the creation of at least one indirect job (the real number is probably over twice that). So even a restrained analysis suggests that $100 billion in defense cuts will wipe out a million jobs.

Not pretty, even during the Great Depression, President Franklin D Roosevelt understood the logic of keeping the shipyards working by continuing to let contracts to build a small number of ships and then let a new contract for an improved version.

Read more:
FDR Shipbuilding programs 1933-45

Galrahn adds this logical argument.
Shipbuilding is always a good government investment when it comes to jobs, which is why I strongly believe the Obama administration really screwed up their stimulus spending choices. They should have invested in shipbuilding, starting with heavy investments early on with the US Coast Guard (Icebreakers and Cutters) and building up towards bigger investments in the Navy - specifically T-AKEs and Virginia class submarines, although LPD-17s would be useful and the MSC ships that made up the Sea Base would have been optimal from an economic stimulus point of view. What a fantastic failure of a missed opportunity considering that government spending would have contributed more to GDP and had far greater direct/indirect/induced spending impacts towards positive economic activity than the low-wage earning projects favored instead.

Read more:
Jobs, Jobs, Jobs, Jobs, Jobs, Jobs, Jobs!

Now I think that we can all agree that for Americans to regain our heritage of being innovators and industrious we need to step it up as a society. One related post, by Thomas Barnett addressed the United States shrinking share of global economic power that will according the the illustration, see the US in second place in 19 short years. Barnett suggests that we need to look to our own neighborhood to expand our relationships with our southern neighbors. His post spawned some interesting comments, including one that pointed out that until we curtail the drug demand in this country, we can expect little in the way of ending the downward spiral of societies below our own borders.

Read more: as well as the comments.
China slows but still grows thanks to regional gravity

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