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

Katharine, ……….And what about the "sacrifice trip" MO came up with in that "Bubble Gum" speech on her way to Copenhagen! Grotesque!

By sibelle daubigne on 10/04/2009 9:00 am

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sibelle…My husband is a HUGE college football fan. Every Saturday he says, "I’m tired of sitting on the bench, it’s time for me to suit up and get in there and show what I can do." Maybe that could apply to all of us who are fed up with the lack of attention being paid to the economy and job losses.

Maybe it’s time for all of us to "get off the bench, suit up and show what we can do."

By Glenda Glynn on 10/04/2009 8:06 pm

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F. P. is right on so many points, and again, I’d like to point out, this is a blog of personal opinions only. Everybody has a right to state their own opinion on these topics. Isn’t it interesting how many seem to think President Obama should have been able to correct all the wrongs in less than a year in office? Nothing changes quickly in Washington. All of the President’s good intentions and plans to make things better for America has a massive number of those working to see that his efforts turn into failures, for their own personal gains. As many of those of us, who read this blog, why aren’t we "brainstorming" with ideas that might help instead of criticisms of someone who is trying to help us out of these messes that have been developing since the last President and his puppeteers took office?

It is also my belief that we need to keep American jobs in America instead of farming them out to other countries. That’s GREED in it’s most simple form on the part of companies and corporations who disregard the well being of American people over their own profits.

Did you see the videos that were displayed with the contesting countries for the Olympics? The Chicago video was mediocre at best and wouldn’t have convinced anyone that Chicago had any merit over the other countries. America has hosted the Olympics on many occasions and Rio has never hosted, so there’s no shame in losing to Rio. Certainly no blame or shame to President Obama in the loss. He was hoping it could provide needed jobs and it certainly wasn’t wasted time for the short period he spent there. He tried to present a good showing to the world and what’s wrong with that?

If Congress would stop the backbiting, maybe they could do something useful and constructive. Their grandstanding and preening for the media and camera is worthless.

I blame Congress for the lack of progress. Election time is coming.

By JJ GB on 10/04/2009 10:52 am

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"I blame Congress for the lack of progress. Election time is coming. "

Recently, Leonard Zwelling. MD, spent much time on Capitol Hill as a content expert ( clinical care, cancer research,and research administration). He made several interesting observations about our Congress and has some suggestions as a concerned citizen.

* When Congress is in session, they start to "smell jet fuel" by early Thursday afternoon. They take off. Most return late Monday or Tuesday of the following week. They need to spend more time with one another in DC, eyeball to eyeball, and away from the media.

* Limit lobbying time to only four hours a day during the week. Limit their access ,and you limit their influence.

* All bill language should be drafted by Congress only. Lobbyists should not be permitted to submit language.

* All bills should be read before voting on them. If bills are a 1000 pages long, they contain hidden pork or obscure legislation that will not benefit the taxpayer. Shorten the bills. Make time to read them carefully. They were elected for that purpose.

* All bills should be written in summary in colloquial English, vouched for by at least one Democrat and one Republican, and posted on a public web site.

*Democrats and Republicans should be allowed to invite equal numbers of witnesses to hearings.

* More round-tables, fewer hearings.

* Members should keep story telling to a minimum. Expert witnesses often fly to Washington at their own expense. Allow them to testify quickly and serve their country in a timely manner.

Dr. Zwelling believes that streamlining Congressional activities would better serve the country and foster bipartisanship. Maybe we would get something done.

( Houston Chronicle, Oct. 4)

By Maggie W on 10/04/2009 2:53 pm

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Maggie W.,

All of your comments (Dr. Zwelling) regarding Congress are valid and mirror my thoughts, too.

By JJ GB on 10/04/2009 4:20 pm

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Maggie: Maybe we would get something done.

I believe Dr. Zwelling in on the right track.

By Marjorie C. on 10/04/2009 7:21 pm

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PAULSEN AND BERNANKE MISLED PUBLIC ON BANK RESCUES!!!!!!!

WASHINGTON — The credibility of the government’s $700 billion financial rescue program was damaged by claims a year ago that all of the initial banks receiving support were healthy, a new report contends.

Special Inspector General Neil Barofsky generally found that the government had acted properly in October 2008 as it scrambled to implement the Troubled Asset Relief Program to avert the collapse of the U.S. financial system.

But the report said that then-Treasury Secretary Henry Paulson and other officials were wrong to contend at an Oct. 14 press conference that all nine institutions receiving the first round of support — $125 billion — were sound.

"These are healthy institutions, and they have taken this step for the good of the economy," Paulson had declared at the time.

Barofsky said that the fact that Citigroup Inc. and Bank of America Corp. soon required billions in additional assistance highlighted the inaccuracy of that claim and raised questions about the whole effort. In addition, Merrill Lynch, which was also in the original nine, was in the process of being acquired by Bank of America because of its weakening financial position.

"Statements that are less than careful or forthright — like those made in this case — may ultimately undermine the public’s understanding and support," the report said. "This loss of public support could damage the government’s credibility and have long-term unintended consequences that actually hamper the government’s ability to respond to crises."

In announcing the $125 billion in support to the nine institutions, Paulson had said that by building up the capital reserves of these healthy institutions, it would allow them to resume normal lending to businesses and consumers and help stabilize the financial system.

The nine institutions, including JPMorgan Chase & Co. and Wells Fargo & Co., held about 75 percent of the assets of the U.S. banking system at the time.

A joint statement from Treasury, the Federal Reserve and the Federal Deposit Insurance Corp. also referred to the nine institutions as healthy.

In commenting on Barofsky’s report, the Federal Reserve generally supported the findings, saying "transparency and effective communications are important to restoring and maintaining public confidence, especially during a financial crisis."

But Assistant Treasury Secretary Herbert Allison Jr., who now heads the bailout program for the government, said that any critique of the announcements made a year ago should take into consideration the unprecedented circumstances facing financial regulators at the time.

"We believe the most important lesson from this history is that quick, forceful action prevented a catastrophic meltdown of the system," Allison wrote in his response to Barofsky’s findings."

http://www.foxnews.com/politics/2009/10/05/government-report-questions-bank-rescue-claims/

By deber B on 10/05/2009 3:41 pm

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JJ-GB ~~Why does everyone keep harping on jobs being farmed out to other countries?? If American employers didn’t have to deal with the demands of unions, and worthless federal paperwork that costs millions, maybe they’d be more interested in doing business here. And with all the help unions are getting from Washington now, all they’ll do is drive MORE jobs out of the country. Idiots!

Tell the truth….if you owned a business and the cost of doing business took most of your profit, wouldn’t you be looking for another route?

By Callie O on 10/05/2009 11:11 pm

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Callie,

People harp on it because it’s true. Everyone can cite examples in their own lives and others they know, of calling a customers service line regarding products and services they subscribe to, where the answering party is in India, Pakistan, Mexico, etc. ande often can barely speak the English language or help with your problem. Many, myself included, finally give up in frustration and anger. I know those countries are in worse financial shape than we are, but don’t tell me those American Companies who use these practices of shipping jobs overseas, or out of America are not motivated by Greed. They were making profits before and now they are making Bigger profits at the expense of the American worker and also the foreign workers they currently employ.

The Unions aren’t that helpful anymore. Where they once were about fairness and protecting the members against powerful corporations, they now collect their membership dues and do little else.

If I owned a business, I don’t know what I would do, but I’d like to think I wouldn’t put profit over the welfare of my employees. It’s the employees that are a company’s major asset. Do right by them and you will not only succeed and profit, but you will progress. There are examples that is a true statement, too.

By JJ GB on 10/06/2009 10:39 am

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JJ GB - I agree that the employer-employee relationship should be respectful on both sides, and mutually beneficial. But when the employees decide they should be running the business, (with the help of whatever union), that’s when problems arise.

We have been on both sides…worked for others, and owned a business. Neither of us ever had a problem either way, because we always realized our employer had a right to run things as he wished, and we were there to help and support. And our employees always felt, I think, that we were very much like a family, all working toward the same goals.

But I would have resented it had they tried to bring in a union to dictate who, when, what and how much.

As for not putting profit over employees, that’s rather naive, because if there is no profit, there won’t be employees for long. There is such a thing as greed on the employee side, too.

As for employees outside the country, of course they’re there. And no one hates getting service or tech help you can’t even understand worse than I.

Ideally, companies/employers would set a fair profit margin, then put anything extra back into the company in the form of employee benefits, equipment, perks, etc. But we all know life isn’t always fair, or what we’d like it to be. And there will always be some who won’t do what we consider the right thing.

Even so, we can encourage fairness, we can even demand it, but we can’t use force to take from anyone what is legally theirs. That is contrary to our Constitution, and our way of life.

By Callie O on 10/06/2009 4:18 pm

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Callie,

You’ve apparently had a good outcome on both sides of the employee-employer side of a business. You are one of the lucky ones. There are many who have not been so lucky.

By JJ GB on 10/06/2009 8:18 pm

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Jobs will go over seas as long as unions (and I belong to one) price us out of business with their business killing arm-twisting cost increasers. Corporations—love them or hate them— create wealth in this country and give us jobs. They aren’ t the enemy. A government that overregulates and taxes is. Government is often the real job-killer. As someone who was a health care consultant in Russia—I know this first hand!

As for the Olympic fiasco—I was dismayed that the President’s very first comment at the OIC was about himself. (sigh, isn’t everything?) He also made the mistake of blessing Coppenhagan with a rather pedestrian presentation while other heads of state spent more time giving the OIC voters "respect." The Danish press is having a field day about our president’s narcissism.

Finally—speeches are not economic, defensive or social policy making. He needs to quit campaigning and start wearing big-boy president pants! Start leading this nation somewhere other than socialism.

By christine kessler on 10/04/2009 5:29 pm