It is the private sector that creates jobs... - Politics and War Forum

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It is the private sector that creates jobs...
Saturday, July 31, 2010 12:34 PM on j-body.org
So where are they?
Corporations working in unions and cooperation conveniently play politics with job creation, again?

Quote:

It's the slowest rate of recovery seen in nearly a year -- the gross domestic product rose just 2.4 percent in the last quarter and that's down from 5 percent growth less than a year ago. But even as the economic recovery slows down dramatically -- with consumers spending far less and unemployment currently at 9.5 percent -- one group is spending and that's business.

Companies are investing more money in equipment and software than they have in more than a decade. Spending by builders on commercial projects has spiked.

So why isn't that money turning into jobs?

"There's a real mystery going on here because corporate profits have been pretty strong," said Jon Hilsenrath, the chief economics correspondent for the Wall Street Journal. "The problem is they're investing in equipment, not people."

But that doesn't necessarily mean that people are being completely replaced by machines -- just yet.

"There has been a productivity boom, which has surprised a lot of people, because you usually see a productivity slowdown. ... We are seeing machines doing more but we're seeing businesses asking people to get more out of the machines surrounding them," he said.

Part of the reason: During the recession, businesses and corporate America learned how to do more with less and asked employed U.S. workers to produce more.

"They had no choice," said Mark Zandi, chief economist for Moody's Analytics. "When things were bad, they made those cuts and are now able to produce a lot more with fewer people."

Because of that, some of these leaner and meaner companies are producing huge profits.

Three-quarters of the companies in the Standard & Poor's Register of Corporations that have reported earnings have beat the earnings estimates.

"Businesses are in fact sitting on a large pile of cash, a record amount of cash," Zandi said. "They've been profitable and they're hoarding that cash."

For example, heavy equipment manufacturer Caterpillar's profits are up 91 percent over last year, earning $707 million last quarter. DuPont's profits are up 277 percent over last year, earning more than $1 billion in three months. And Microsoft's profits are up 49 percent over last year, earning nearly $6 billion between April and June.

All three companies were called but only Caterpillar offered hard numbers.

"We've hired about 3,650 employees to date in the last half of this year," a representative said. She said that number could reach 9,000.

She said of the 9,000, about a third would be in the U.S. The rest would be overseas because "that's where the customer is," she said.

In total, the three companies have more than $40 billion just sitting on the sidelines.

"The positive scenario is that eventually executives are going to get enough confidence in this recovery that they're going to start hiring people too. But right now, they're holding back. They're keeping their tinder dry," Hilsenrath said.

He said businesses have to become confident that consumers will spend money. "We haven't seen a very big rebound in consumer spending," Hilsenrath said.

"No business person wants to go out and hire a new person unless they are absolutely sure if they make that hire, they will be able to sell what that person is going to produce," Zandi said.

Yet there is still at least one wild card to watch out for, said Hilsenrath: the rest of the world.

"Exports have started to come back. Global demand is pretty strong. The emerging markets are rebounding a lot more vigorously than the U.S. is. One positive scenario is that we get an export-led recovery and that leads to hiring."

Zandi points to the auto industry. "Automakers have gone from laying off hundreds of thousands of people to hiring tens of thousands of people and I would anticipate that we would see more job growth in that sector because of increasing global trade."

"There's only so much you can push your work force. ... If you want to continue to maintain that demand and you want to maintain that customer service then you're going to have to go out and hire more people," Zandi said.

From here.
http://abcnews.go.com/WN/big-spenders-company-profits-translating-workers/story?id=11290736&page=2
And for the vultures that don't read.
http://abcnews.go.com/WNT/video/companies-reluctant-hire-slow-ecnomic-recovery-muir-jobs-unemployment-11292497




THE POLITICALLY INCORRECT ONE.


Re: It is the private sector that creates jobs...
Saturday, July 31, 2010 1:40 PM on j-body.org
Well, it certainly cant be the government creating jobs. The only jobs "saved or created", have been either public sector jobs (teachers, road construction, census workers, or....umm I guess thats it)

These jobs that obummer likes to say he created or saved, are not paid for on a budget. They are fake jobs being paid for by adding to the national debt. What happens when the government stops funding the jobs? The govt employees don't actually produce anything to sell, so its not like they can become self-supporting.

.



“Poor Al Gore. Global warming completely debunked via the very Internet you invented. Oh, oh, the irony!” -Jon Stewart
Re: It is the private sector that creates jobs...
Saturday, July 31, 2010 4:13 PM on j-body.org
It makes a difference if your job were the ones that was "saved," where ever it was. Publicly less tax revenue was being picked as the foreclosure were on the rise and public jobs were being cut back. Privately, infrastructure are being redone and to whom those contracts went to?


THE POLITICALLY INCORRECT ONE.

Re: It is the private sector that creates jobs...
Sunday, August 01, 2010 7:55 AM on j-body.org
they are sitting back holding onto there money because they don't like what they see and arn't sure whats going to happen. obamas big spending spree is winding down wich i think for some people think it wasnt worth anything and was just a short artifical bump to make it seem like things were okay when they really weren't so they are all prepred for the slowdown to come again and are very slow to increase there staff just to have to let them go again in the coming months. picture winter time. you get that one warm day as spring is starting to approach. you dont pack up all your winter clothes because you know its not over and there will still be some more cold days ahead and maybe another last snowfall. so you sit and wait. look at our company. we let 10% of our staff go at the start, and were just now starting to slowly hire back, back in the day we were hiring a new person like every 3 months or so. now were hiring back a person every 6-9 months. so we dont get to big to fast in case things slow down again.


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Re: It is the private sector that creates jobs...
Sunday, August 01, 2010 10:40 AM on j-body.org
Quote:

"We've hired about 3,650 employees to date in the last half of this year," a representative said. She said that number could reach 9,000.

She said of the 9,000, about a third would be in the U.S. The rest would be overseas because "that's where the customer is," she said.

In total, the three companies have more than $40 billion just sitting on the sidelines.

"The positive scenario is that eventually executives are going to get enough confidence in this recovery that they're going to start hiring people too. But right now, they're holding back. They're keeping their tinder dry," Hilsenrath said.

He said businesses have to become confident that consumers will spend money. "We haven't seen a very big rebound in consumer spending," Hilsenrath said.

"No business person wants to go out and hire a new person unless they are absolutely sure if they make that hire, they will be able to sell what that person is going to produce," Zandi said.
Right here in your own article is information which both refutes the idea that these companies are not hiring, and the explanation why they aren't hiring faster. Jason hit the nail on the head. The people with the money are right now feeling no confidence that it is a good environment to spend it in. Taxes are going to go up next year if congress does nothing, and they're still talking about having to add more because of the budget disaster they created. Companies know that if they hire too much right now, they'll just be laying off in the next 6-12 months because the taxes are going to hit them hard.

Note that the taxes are going to hit everyone hard, but mostly the poor and middle class, via lack of jobs, and the fact that the credits they've been enjoying are all expiring. Just a reminder, the $400 per adult "Making Work Pay" credit expires this year, as well as the $1,000 per child tax credit. With 30 million small businesses being pass-through entities (this is when the owner[s] of the business claim the profits from the business as personal income), the tax rates going up on the higher brackets is going to hurt them.

Quite frankly, this is another failed attempt at saying tax-and-spent is the way to go. History proves otherwise, as I've shown in plenty of other threads. Spending, as Jason also pointed out, is not sustainable. When the private sector lacks confidence to invest, because of tax policies, the government spending will only temporarily slow the recession.

And last, that whole argument of "well it matters to you if your job was saved" is hollow, because that was only temporary, and the claims of millions of saved jobs is a number which can not be substantiated. However, it's used because it also can't be refuted, due to the fact that there is no way to prove the hypothetical argument of what would have happened if things were different.







Re: It is the private sector that creates jobs...
Sunday, August 01, 2010 12:42 PM on j-body.org
sndsgood wrote:

they are sitting back holding onto there money because they don't like what they see and arn't sure whats going to happen. obamas big spending spree is winding down wich i think for some people think it wasnt worth anything and was just a short artifical bump to make it seem like things were okay when they really weren't so they are all prepred for the slowdown to come again and are very slow to increase there staff just to have to let them go again in the coming months. picture winter time. you get that one warm day as spring is starting to approach. you dont pack up all your winter clothes because you know its not over and there will still be some more cold days ahead and maybe another last snowfall. so you sit and wait. look at our company. we let 10% of our staff go at the start, and were just now starting to slowly hire back, back in the day we were hiring a new person like every 3 months or so. now were hiring back a person every 6-9 months. so we dont get to big to fast in case things slow down again.


Sorry but all of that is just a poor excuse.
First and foremost the US government will set up to destroy a company and quite frankly it is the most ridiculous argument to date. That being said, some of these companies have been around through ages and they endured much worse taxing and regulations then anything Obama is bringing to the table and guess what... they manged to survive and in return the country was actually doing good in those eras.
Obamas spending spree was never meant to be a long term (5+ years) solution, it was a catalyst to kick start the economy and like these company's showed in terms of profits, it worked. From there on, the private sector should continue the momentum, not put a wall up, like they are doing now. Demand and sales are showing for certain areas and all they are doing is sitting with the profits. So now you have a small group of overworked employees trying to reach the demand all because X company is liking the taste of not paying an extra salary for the same achievement with one. This mentality is what is bringing the slow down. "Maximise profits..." ok, but at what cost? Then people wonder why isn't the economy moving... well, ask the companies sitting on their profits: Why? All they are doing is digging their own grave... company and economically wise.



THE POLITICALLY INCORRECT ONE.

Re: It is the private sector that creates jobs...
Sunday, August 01, 2010 1:13 PM on j-body.org
Goodwrench, you simply don't have a clue what you're talking about in this area. You don't know how a company operates, and how decisions are made on hiring and expansion. You regurgitate the rhetoric used by the leftist tax-and-spend proponents, and can't do anything but claim "it's just the greedy businesses" screwing everyone.

Those companies who have survived other recessions and high tax rates likely did so in many ways. Before you starts claiming that it's and example of why they're just being greedy now, because they survived before, how about you show us that they didn't do it by doing exactly what they're doing now. If you have data that shows companies that survived other times like this actually did so by hiring, I'd love to see it. If you can't you're simply speculating and spewing rhetoric.

As for the theory that the stimulus was suppsed to jump start the economy, it's never worked like that. Government spending only shows any kind of stimulative effect until it stops. This reminds me, I have to pull up the C4C discussion again. I have been proven correct in what I claimed about it last year. I'm sure you'll still refuse to accept it, and throw out some weak excuse as to why it had nothing to do with it, but I have faith that others will get it, and see how these kind of things are flawed at best.







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