Wall Street Weekly | 10/02/2009 3:15 am

Obama: We Need Jobs, Not More Speeches, by Liz Peek

Bears, Bulls, Chickens and Pigs: wOw’s Wall Street Weekly with Liz Peek (Week of 9/28)

Editor’s Note: Liz Peek is a financial columnist and the author of wOw’s SHEconomics.

Should President Obama have gone to Copenhagen to win the 2016 Olympics? Probably not, since the elimination of Chicago is something of an embarrassment. Still, since this campaign might have brought jobs to the U.S., it was worth the effort.

While Congress is debating the fine points of public options, smog production, Charlie Rangel’s ethics violations and whether credit card companies should give you one month or two to deal with a rate increase, more than 20 million Americans are without jobs. Today there are some 15 million people looking for work, 2.2 million who are unemployed but have given up the hunt, and another 9.2 million who have part-time jobs but would like a steadier situation. In addition, brokerage firm Charles Schwab recently reported that there are as many as 9.5 million retirees who are considering returning to the workforce.

Where are all those jobs going to come from? That’s what investors are beginning to ask, as job losses continue at a discouraging pace. Today the Bureau of Labor Statistics reported that job losses in September totaled 263,000, up from 201,000 in August. Earlier in the week the government surprised economists by reporting that unemployment claims had increased by 17,000. Optimists pointed to the four-week moving average of claims which, with a slight decline to 548,000, reached the lowest level of the past 36 months. Instead of pointlessly analyzing these modest ups and downs, maybe we should step back and consider: more thsan a quarter million more Americans – mothers, fathers, sons and sisters — lost their jobs in the past month. The devastation is terrible.

The Obama administration has given the economy several shots of adrenaline through the Cash for Clunkers deal, the stimulus program and the $8,000 credit for new homebuyers. It is not enough. The minute we ran through the Clunkers bankroll, U.S. auto purchases plunged 23%, with GM and Chrysler both reporting a sales drop for September of over 40%. Similarly, the expected demise of the first-time homebuyer credit in December has the housing industry worried that sales will drop there too.

Meanwhile, sentiment readings from corporations have become less rosy. ISI Group reports that their pulse-taking among companies showed weakness for the second week in a row, with shipping, homebuilders and truckers’ responses "well below their peak." This echoes a disappointing durable good order figure last week.

It is clear we need a more sustaining therapy. It cannot come from government spending because federal budget deficits already threaten to compromise the dollar and produce future inflation. Instead, it must come from the private sector. All over the world governments are cutting taxes to spur industry, while U.S. legislators are panting to increase taxes – taxes on energy, taxes on foreign profits, taxes on small businesses, taxes on health insurance plans. Consider: France, a country that admires socialism almost as much as a superbly ripened Camembert, has just announced plans to eliminate a burdensome tax levied on business fixed investment. Francois Fillon, the finance minister, calls the change a "competitiveness shock." In addition, the administration is reducing taxes on small businesses if they hire workers.

409 Reader Comments (so far…) Sign In or Register to comment

Cash for Clunkers only benefitted the employed, as well as an 8000.00 home credit. The stimulus money helped the unemployed get through another month maybe. I wonder at what point is the government willing to invest in the dreams and visions of the people, rather than just creating comfort stimulus to the employed? The dynamics of Wall Street and the financial system is looking to what the future holds, there needs to be more creative thinking than just lining an air bubble.

By Linda Myers on 10/02/2009 11:37 am

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The Cash for Clunkers really didn’t benifit the employed much either. I totally agree with what you are saying LM. I’m so glad Chicago didn’t get the Olympics what a nightmare for Illinois. When 60%+ of the whole population of IL lives in Chicago it would have been the much smaller towns paying the same tax hike that they cannot afford because there are no jobs in the small towns. My feelings have nothing to do with Obama as much as it was self preservation of my family and the jobs here. I agree less talk and more doing to create a stimulus that is long term not this short term stuff. How long until we are bailing out the car companies again?

By Kim Horton on 10/06/2009 7:52 am

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As long as American companies keep out sourcing minimum wage jobs overseas, the average person in this country does not stand a chance of progressing job wise in this country. Call Comcast customer care, call Verizon customer care, call Chase credit card customer care, and listen to the voices answering your question. Almost all the people on the phones are sitting in the Phillipines or India. Kids coming out of high school and working moms tradionally took jobs like these, because they could split their hours, decide what days they could work, and could support themselves while going to school. Women did not have to worry about corporate wardrobes, could usually find a job close to home and could supplement the family income. I worked these jobs for over 30 years and raised 3 girls, 2 of whom went on to college. These jobs are just the tip of the iceberg, and American companies should be encouraged to keep these jobs here. I have nothing against the countries I named and I wish those citizens well, but, we are at a point when we need American companies to hire Americans. Not every one is a college graduate or wants to be a corporate C.E.O. Some of us just want to feed and clothe our families. The companies I named are hugh American businesses who make a profit constantly while farming out jobs that Americans could definitely do. How many other big companies are doing the same?

By Helen Moran on 10/02/2009 11:47 am

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Hi Helen,

I agree with you there. Almost all customer service phone jobs are now in India. Two customer service companies in my area have closed down because of it. Thing is… those big companies do not have to pay workers comp insurance, minimum wage or offer health insurance when the jobs are outsourced to India.

By Heidi W on 10/03/2009 10:36 am

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Helen, I absolutely agree with you. How many other big companies are doing the same-start listing those in technology, those who make and sell computers, printers and software. Almost all the people in customer and tech support for your computer, modem, and printer, etc in these companies are in foreign countries. I will make an exception for Apple as in most cases you do speak to someone here in America. It has gotten so bad here where I live that agencies that once provided temps for small businesses have scaled back tremendously due to minimum requests from small American businesses. The proof is in the pudding. Our administration should expand upon their policy which awards American companies who hire American workers instead of farming out jobs abroad, and finally, lower taxes on small businesses to provide incentives for them to begin hiring American workers.

By San T on 10/04/2009 8:18 am

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Hi San T, it may not be much, but I have started calling every company that outsources these support jobs, and calling them on it.They should lose any tax breaks they may receive, until they start employing Americans.

By Helen Moran on 10/04/2009 3:05 pm

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I, like you worked PT at companies like these as a second job in order to adequately support myself and daughter. I agree they should lose tax breaks if they outsource jobs to other countries. Isn’t this something Obama has in the fire to do or am I wrong.

By San T on 10/04/2009 4:37 pm

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San T. I sure hope you are right. THose kinds of jobs fit lots of people for lots of reasons. Not everyone is a college graduate, and the way things are going, i don’t know how more college graduates will be available. Of my 3 daughters I raised working those jobs, 2 went on to college and careers and the third went into retail management. One has been laid off because of the economy, but, she is taking classes in computers. She is and will be doing just fine. The work force is made of of more people like us than college graduates, and we need those jobs brought home. As i said earlier, call those companies as you come across them and let them know how you feel, and that you know what they are doing. Then call your local state representative and tell him or her also. Shine a light.

By Helen Moran on 10/04/2009 5:19 pm

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I’m glad to see that I am not the only one that this bothers. I called to speak to an Old Navy representative the other day and was placed to a call center in India. It really bothered me that the company would rather use a service that is not in America. I made a decision that day if they are not willing to help U.S. Citizens by providing jobs here, I don’t need to shop in their stores. Therefore, I am paying off my account and will no longer be purchasing ANYTHING from them.

By Leslie Cimino on 10/06/2009 9:42 am

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Hi Leslie, glad to see your reaction. I knew I wasn’t the only person this bothered. I am starting at the local level, with my state representative, and seeing what can be done besides letting the companies know how much I dislike this practice. I have also contacted a candidate for the U.S. Senate. I really think if asked our families and friends to complain both to the businesses and local representatives, we might make a difference. The companies make at least millions from us, they should spread it around by hiring local talent for these customer service spots. Thanks again, Helen

By Helen Moran on 10/06/2009 10:44 am

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Liz Peek,

I’m honestly not surprised that Chicago lost the Olympic bid in the first round. When you have a new President who, from day one, went out to the world "apologizing" for our great country, well, one has to think that he has diminished our importance to the world. And, to be fair, my pick was Rio from the start because Brazil has never held that title of hosting the Olympics. As I type, we are moments away from hearing who actually won. **News Flash: RIO!! Good for them!

Regarding our small businesses left to fend for themselves without even a nod from President Obama and his administration, you and I both know that Obama made a very costly mistake perhaps due from inexperience in running a business himself. We need only look at the new unemployment numbers which are horribly grim. What in the world was this administration thinking when they sold Americans this $787 billion pork laden stimulus package? Why didn’t they address the largest employer of jobs in our country? I can’t seem to come to terms with that because the ever looming question in my mind is "Why does this President want our country to fail?" Quite frankly, I didn’t graduate from Harvard Law School and Columbia University, but I knew what it would take to turn this country around back in January 2009! Ronald Reagan knew what to do!! The ONLY way to stimulate a deep recession is to immediately cut taxes to our small businesses, provide very low interest loans to them and put cash in the hands of the American people to stimulate the retail sector and the housing and commercial industries. What could’ve been any more important to a new President than to make a bold move towards actually stimulating our economy? Well, as it seems now, what was more important to this new President was to take a deficit from a previous president and swell it to $15 trillion in just 8 months….with absolutely nothing to show for it. At this stage of our grim economic report card, the very least this administration needs to do is take the remaining 2/3 of that stimulus and immediately address our small businesses. That is the ONLY way we are going to get the jobs back. Time for Obama to stop EXPERIMENTING AND START ACTING CONCERNED ABOUT THE LOSS OF JOBS IN AMERICA.

I have often referred to this administration as "The Bandaid Administration." They are long on throwing a quick fix on an economic issue and very short on having solved anything. If this administration had put cash in the hands of all Americans from day one instead of erecting the failed stimulus, we wouldn’t have these issues today. The banks would’ve been stronger, new cars would’ve been purchased, Americans would’ve caught up on their mortgage payments and rent payments, appliances would’ve been purchased, and the list goes on! Even the $8,000 to new home owners could’ve been avoided if he had put the cash in the hands of the American people so that they would have control OVER their personal financial priorties. People would still be in their homes today and have their jobs. That’s the bottom line. All Americans need to ask themselves this question today: "What has President Obama done to make my life better since he took office?" And if you come up with an answer then the next question you need to ask yourself today is: "At what cost?"

Republicans in 2010 and 2012!! God Bless America and God Bless Liz Peek!

By deber B on 10/02/2009 11:58 am

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deber, can I see your birth certificate? Ronald Reagan? Think Iran Contra. The Olympics? Would have been nice, but, it was always going to be Rio. What’s that got to do with President Obama? He went, hoping to change mindsm but that didn’t happen. Apologizing for America? Damn right. Bush and Cheyney spent 8 years spreading hate for the U.S.A. all over the world. The word Bullies comes to mind that is too mild for those two. Check your Bible, ask Dr.Phil, before you can change you must recognize what you did and apologize. There is a lot of psycho babble out there, but happens to be true. The last super power? Yes. But for how long? When you start thinking you are better than everyone else, its the first step down the slippery slope. America, for a long time now, thinks its all that. We are all guilty. same as our leaders. Obama has had power, what, 8 months? Republicans in 2010 and 2910? Who? Sara Palin? I am sure their are some smart republicans out there, but they better hurry up and show their faces, before we have a Limbaugh Palin ticket or Beck and Palin. We could call it the paranoia party. When politicians publicly state they want to bring down the president, even at the cost of the people they supposedly represent, that is the next step in the downward spiral. Two parties was suppose to mean 2 different ways of dealing with the problems of state. The people then decide. What we have now isn’t even a pale shadow of that thought. One thing with the Republicans, you do get the best party money can buy, with money as it is now, can’t wait to see who you field in 2010 and 2012. God Bless America and God Bless our President.

By Helen Moran on 10/03/2009 2:08 pm

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Well, Helen Moran, if you had taken the time to read Liz Peek’s article she mentions the Olympics. You are welcome to your own opinion on the other issues that were raised in her article. I have offered my opinions.

By deber B on 10/04/2009 5:22 am

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Liz, Chicago lost the Olympic bid not because Obama "went out to the world "apologizing" for our great country". Our great country diminishes its importance to the world each time our representatives along with other "Americans"become personally insulting, arrogant and vulgar towards America’s leader. The unforeseeable cheering from the right because the Olympics did not come to America demonstrated this behavior and attitude. The world’s been watching and listening to the"Tea party, the conservatives, the negative and violent town hall meetings, statements like, "give me back my country" meaning the exclusion of “who”, plus the frightening negative imageries displayed towards the president and his family here in America.

Next, polls show that the world still disdains America for the handling of previous polices of Washingtonin major hot spots around the world. The world’s senses antagonism, unfriendliness and hostility here. Thus, why would the Olympics,which represent unity of continents and bravery of athletes, be placed here? President Obama did not diminish America, its been doing OK on its own. Now, problems with housing foreclosures, failed banks and auto industry didn’t start overnight. These along with market turmoil started way before Bush’s watch. True, Obama hasn’t brought forth quickly policy prescriptions of handling Wall Street and the market, providing short-term stimulus, health care reform, jobs. But this is going to take more than 9 months in office for any administration. There is no magic that is going to pop the economy quickly back from the collapse of a previous long term economy of spending, a run away wall street, and debt. Meanwhile, adding to this problem are the constant adverse political struggles posed by the Republicans and some democrats in different segments of Congress towards this administration. This only helps cripple and stifle any progress, reform and solutions for all Americans.

By San T on 10/04/2009 11:22 am

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I really feel sorry for people who think like deber B. If a person thinks that Obama was aplogizing for our country, and "one has to think that he has diminished our importance to the world", then that is a person who has never read any newspapers except U.S. papers and who has lived in a fantasy world in which all other countries trusted the United States before Obama was elected. If that person takes even a small bit of time to inform themselves, they would realize that most people in most countries around the world openly despised the U.S. government and Americans. But during and shortly after his election, you could go into cafes around the Middle East and hear the kids chanting Obama’s name and shouting, ‘I love Obama’. (About 70% or more of the population of Arab countries is under 30; in the U.S., only 40%) Prior to that, most people hated "American foreign policy" and by default, Americans. Now, they are ready to like Americans again because of Obama. It’s as simple as this: They like Obama >> They like Americans >>They are less likely to want to suicide bomb us. For now, it’s up to Obama, but foreign policy has to change, or we may have problems when he leaves office.

By Debra Cloud on 10/04/2009 12:22 pm