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Comments about ‘Robert J. Samuelson: Here's the real reason why job creation is so hard’

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Published: Tuesday, Feb. 19 2013 12:00 a.m. MST

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1conservative
WEST VALLEY CITY, UT

Every time I read an article like this I wonder why we need 25 million MORE poor, unemployed foreign workers via yet another amnesty law?

Do (both political parties)want jobs for Americans, or jobs for foreign nationals?

Who comes first?

Twin Lights
Louisville, KY

Interesting point. But I think it misses the longer term shifts that have been taking place. Work is less rewarded (rewarded to be certain, but less so), there is less opportunity to rise to sand stay in the middle class, there is a seeming disconnect between the work one does and the risks and pay received.

We have become an economy that is entrepreneur focused. Nothing wrong with entrepreneurs. They are key to a lot in the economy. But they alone are not the working economy. The vast chunk of the working economy is workers. And we seem to be in an ideological war against workers. Every business needs them but we talk about them as if they were hangers on. Beggars to be given a crust if that is our desire. Note that very successful companies don't do this, but that is the talk you often hear.

We need to get back to a point we used to understand. We are indeed all in this together. The workers are not our enemy. The govt. is not our enemy. The person who votes differently is not our enemy.

We have enough to do without creating enemies for ourselves.

pragmatistferlife
salt lake city, utah

Interesting admission from a very right centered economist..this is a demand driven recession, and rcovery. Where have we heard that before..oh yea, from everyone other than conservative idealogues. That's why the stimulus, worked to save a plumeting economy. It's the same reason austerity, draconian deficit reduction, and the major overhaul of social services is exactly the wrong approach.

JoeCapitalist2
Orem, UT

While I agree with many of the points made, I would add another big one. The government's recent shift to the left and its hostility toward businesses. To many on the left (including most of the posters on this forum) businesses are viewed the source of most of our problems. Big businesses, small businesses and their owners (i.e. the wealthy) are the enemy that needs to be punished. Even though they pay most of the bills, they are constantly demonized as not paying their "fair share" by the far left (from the President on down).

To give you an example: If radical environmentalists got their way, owning cars would be greatly discouraged. They want to convince government to jack up the taxes on gas, make parking expensive, raise insurance and registration costs and requirements, and demonize their owners. Then everyone wonders why fewer cars are on the road. The same principle applies to businesses and jobs.

Tyler D
Meridian, ID

I always get a good chuckle out of articles that pretend to shed light on some new theory for why things are the way they are. Not only does this article (like most others) come up short, but he notes the one main reason early on – deleveraging. And the rest of his article simply states the psychology behind it.

As households get back to more rational debt levels, spending (and demand) will pick back up – no need for an Oracle to explain the plainly obvious.

More interesting is what’s occurring on the supply (business) side (confession - this theory is not original to me). American businesses, still under the spell of High Finance as a way to create wealth (did they learn nothing from 2008?), hoard cash and are not investing in income producing assets. This is the real source of risk-aversion and it’s what happens when businesses are run by myopic bean counters focused on short term returns vs. long term growth and innovation (the real drivers of demand and standard of living increases).

Kent C. DeForrest
Provo, UT

Another interesting viewpoint from Samuelson. But he does miss one of the major causes of our low employment figures. For 30 years now, we have tried supply-side and trickle-down economics (they are similar but not the same). Rewarding and encouraging investment at the expense of supporting demand has left us with an economy that has plenty of available cash to invest but not enough to purchase all the stuff corporations want to create.

By the same token, funneling as much money as possible to the already wealthy while assuming that a little bit of that will trickle down to those lower on the food chain is a proven dead-end street.

Of course, almost all economists, whether Keynesians or supply-siders or whatever else, see endless economic growth as the cure to all our problems. But endless growth is a suicidal and irrational philosophy in a finite world with finite resources. According to a close relative who is a chemical engineer for Exxon, all the easy oil has already been found and tapped. What's left is hard to reach, potentially damaging to the environment, or expensive to refine (or all three).

What in Tucket?
Provo, UT

I guess excessive red tape, too many government workers, high and complicated taxes, among other things are not a factor.

patriot
Cedar Hills, UT

lower taxes and get rid of Obamacare and watch what happens to the job market. Liberals are not to be confused with economists.

JoeCapitalist2
Orem, UT

Kent C. DeForrest: "By the same token, funneling as much money as possible to the already wealthy while assuming that a little bit of that will trickle down to those lower on the food chain is a proven dead-end street."

I have noticed the same thing happening in the field of personal fitness. All the muscles, strong hearts, energy, and slim figures are being "funneled" to the already healthy (you know, all those people who regularly control their appetites and get up and jog or bicyle every day) while very little of it is trickling down to all the couch potatoes.

Something must be done to force all those greedy, healthy people to give up some of their health and redistribute it to all the fat, lazy people out there who obviously deserve a bigger piece of it.

Tyler D
Meridian, ID

This notion of our “recent shift to the left” and all the anti-business implications it suggests is, to put it bluntly, a myth. First, the tax burden on the wealthy (including business) is the lowest it has been in decades (lower than the booming 90’s and far lower than under Republican presidents like Nixon and Eisenhower); while simultaneously businesses are enjoying their highest profit margins in history.

The interesting question this raises is “why do people believe otherwise?”

Businesses are always going to complain about taxes and regulations because they only look at the cost side of the equation and not the benefit side. So unless the rates on both are zero, they will gripe.

Then if they can start some media outlets where these gripes are broadcasts to millions and served up with lots of patriotism, nostalgia, and Pavlovian button pushing (esp. fear & anger), they can fulfill Goebbels prophecy that the truth is anything repeated enough times.

There are good reasons to be a conservative (e.g., limited government, fiscal responsibility), but being one based on distortions and lies is not one of them.

Kent C. DeForrest
Provo, UT

Joe:

Sorry, but your analogy doesn't work. Getting up off the couch and exercising is something you alone can control. Getting a job, when no one will hire you, is quite a different matter. And the problem isn't that people are lazy.

Also, in our economy, we actually do redistribute health, but it always goes from the bottom to the top. Those who actually create the wealth do not get a proportionate share of it. Those who actually produce very little reap most of the rewards. Don't try to tell me that a CEO is really producing 500 times as much wealth as the assembly workers or programmers or salespeople.

Twin Lights
Louisville, KY

Tyler D,

Two great posts.

Thank you.

4word thinker
Murray, UT

If businesses are really making the largest profit margins in history, why aren't those businesses borrowing to expand while the getting is good, and interest rates are low?

The reasons are many.

The profits aren't as great as you think.
The country's economy is being run in a way that will lead to yet another crash. Overextended companies perish when things crash. (Which is part of what Samuelson said)
The country's economy is being pumped up on steroids, called deficit spending, which cannot be sustained, and which will eventually compromise the economic health of the country.
More regulations are coming in this anti-business climate, which makes taking on more employees very risky. (basically business has a bounty on its head)
People in the US would rather buy cheap things at Walmart, which are made in China, than pay a little more to have them made here.
The entitlement class is growing in size and audacity. They will eventually vote all the hard earned value of the business to themselves, and then squander it.

It's not about business being greedy, it is about smart survival.

marxist
Salt Lake City, UT

Total hogwash. The stock market has recoverd without recovery of the labor market because American capital has disengaged from the domestic economy. They have moved production to China and are more intersted in global markets.

patriot
Cedar Hills, UT

re:Tyler D

Business's don't hire when taxes are raises Tyler. Do you want more job opportunities or less? The more taxes are raised the less companies will hire. If I am standing in an unemployment line I sure don't want to see more business taxes. I want a interview!

Tyler D
Meridian, ID

@Patriot – “Business's don't hire when taxes are raises Tyler.”

I agree… and despite what I said below, eliminating taxes on business (any productive enterprise) altogether would be a tremendous boon.

Of course the devil is in the details, but even if we assume no change in overall tax revenue to the government, it would likely be better for our society as a whole if our tax base came from income (including share holder distributions and dividends) and consumption.

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