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Thread: Where the New US Jobs Were Found since 2008

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    Default Where the New US Jobs Were Found since 2008

    as always, a picture is worth 1000 words ...





    As becomes very obvious with this color coded chart format, the 'lions share' of new jobs since 2008 fell in the categories of government, education and health care. From a financial standpoint, these three segments have a common thread in that they are all primarily funded by gov't spending. However, this apparent trend may now be reversing given that state and local gov'ts have encountered deep budget distress, and are now forced to cut spending levels ... translating into pink slips.

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    Default Re: Where the New US Jobs Were Found since 2008

    Quote Originally Posted by Melonie View Post
    as always, a picture is worth 1000 words ...
    Not sure how accurate your chart is as it doesn't cover the self-employed or new job entries.

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    Default Re: Where the New US Jobs Were Found since 2008

    At least the results of state and local revenue shortfalls versus current gov't spending levels isn't in question ... the only question is when !

    from

    (snip)With Detroit Mayor Dave Bing preparing to explain the city's fiscal crisis tonight in a rare televised address, Council President Pro Tem Gary Brown says the situation is even worse than anyone has let on.

    Bing is expected to discuss a confidential Ernst & Young report obtained by the Detroit Free Press that suggests Detroit could run out of cash by April without steep cuts to staff and public services.

    That's a grim prognosis, but according to Brown, the city actually could be unable to make payroll "as early as December."

    "I know the report says April, but there are certain risk assumptions that when you take those into consideration, worst case scenario you could run out (of cash) in December," Brown said this morning on WJR-AM 760.

    In his speech tonight, Bing is expected to propose privatizing the city's public bus system and lighting departments, both of which have have been failing residents but reportedly cost them $100 million a year in subsidies.

    Brown supports that long-term plan, but he is hoping the mayor will couple it with a short-term strategy to lay off up to 2,300 city workers if unions fail to agree to long-discussed concessions.

    If Bing doesn't, City Council will.

    "If the mayor tonight comes out with a plan that does not address the short-term and long-term issues, the Council is going to come out with a plan. We're going to put it in a resolution, send it to the governor and say 'We're willing to make these cuts.'"(snip)


    As to official employment stats for the self-employed, as well as for 'small businesses', it's fairly well documented that the BLS's 'Birth-Death' model contains more fiction than fact lately. See Granted that whatever data the BLS does have was not used in the preparation of this chart. However, given relative numbers, it's doubtful that addition of this data would have changed the basic trends which the chart clearly illustrates.

    ~
    Last edited by Melonie; 11-17-2011 at 03:47 PM.

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    Default Re: Where the New US Jobs Were Found since 2008

    Quote Originally Posted by Melonie View Post
    However, given relative numbers, it's doubtful that addition of this data would have changed the basic trends which the chart clearly illustrates.
    I'm not so sure of that, there has been a huge surge in self-employment given the stagnant hiring rates.

    The rate of Americans forming new businesses hit a 14-year high last year – some 558,000 every month – the Kauffman Foundation reported (.pdf) in May.
    • Elance, an online marketplace for freelance work, saw second-quarter earnings of its freelance professionals jump to $23 million, 45 percent over the same quarter a year ago.
    "People are getting creative about how to find work," says Ellen Pack, vice president of marketing for Elance. "They're finding that an online channel can be a way to find interesting work."
    http://www.csmonitor.com/Business/ne...freelance-jobs

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    Default Re: Where the New US Jobs Were Found since 2008

    Quote Originally Posted by jimboe7373 View Post
    The rate of Americans forming new businesses hit a 14-year high last year – some 558,000 every month – the Kauffman Foundation reported (.pdf)
    We are mired in a jobless recovery. That was brought on by Tim Geithner and Larry Summers response to the recession. They do not believe that government can stimulate demand, so they fought at every turn to avoid any type of stimulus that might stimulate hiring. They were not entirely successful, but they won the major fights. Further, Geitner, Obama and Summers were dedicated to bailing out Obama's big supporters on Wall Street to make sure the campaign dollars still flowed to the Obama campaign. Politics mixed with economics to be sure. But, necessary to understand why we are where we are.

    If we are to recover, it will be through new business formation of the very smallest sort. Remember, Geitner and Summers do not think that there is any method to stimulate demand. (They are wrong, but they are the people advising the President.) Thus, the bailouts and stimulii have not carried a requirement that banks or brokerages lend the bailout and stimulus money. Thus, they have not. For the most part, the too big to fail banks and brokerages have taken their stimulus money and bought Treasury Bills, Bonds and Notes. This has amounted to an additional $39 billion a year in subsidy to those too big to fail banks and brokerages.

    Thus, we are left with small, very small startups as the only way to grow the economy. Banks won't lend. Brokerages won't float IPOs unless they are very sure to make money. Our VC firms (my segment) have lots of money to invest, but we have nothing like the trillion or so of free money that the too big to fail banks and brokerages got. Because there is so little lending support, we have to invest more and longer on the equity side to get a business going. Because the brokerages (brokerages and banks at least of the too big to fail variety tend to be the same thing. Think Bank of America and Merrill-Lynch or JP Morgan Chase) are not interested in lending our commitment is both longer and involves more money. That slows the normal business cycle. Under a more "enlightened" economic team, the government would have given the banks and brokerages money with the stipulation that they lend it out. That would have hastened the recovery as banks made money available to small businesses and startups. But, we are where we are because of Obama's decision to listen to Geithner and Summers and his own need to keep Wall Street giving him money.

    HTH
    Z

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    Default Re: Where the New US Jobs Were Found since 2008

    Under a more "enlightened" economic team, the government would have given the banks and brokerages money with the stipulation that they lend it out.
    Wasn't this already tried in the 90's in terms of lending for single family housing ? Community Reinvestment Act, Janet Reno etc. ? Gov't 'stipulations' that banks make loans, and assume associated loan risks, that the banks themselves would not choose to enter into in the absence of said gov't mandate, have a history of ending badly for the US taxpayer and the economy in general.

    I would also point out that, based on developments over the past few years, it appears that the gov't no longer needs / wants banks to act as intermediaries where loans to certain companies are concerned ... i.e. Solyndra, GM, and a very long list of other companies that taxpayers don't hear about until the company files for bankruptcy !

    Circling back on topic, indeed it is true that such gov't loans do create jobs. However, in virtually every case, US jobs that are dependent on increasing levels of debt, as opposed to jobs that actually 'create' more value than they 'cost', tend to disappear soon after the debt stops growing and debt funded spending stops flowing. This arguably happened in housing in 2007, happened with private sector businesses in 2008, and is NOW finally happening with state and local gov'ts in 2011.

    ~
    Last edited by Melonie; 11-19-2011 at 05:35 PM.

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    Default Re: Where the New US Jobs Were Found since 2008

    Quote Originally Posted by Melonie View Post
    Wasn't this already tried in the 90's in terms of lending for single family housing ? Community Reinvestment Act, Janet Reno etc. ? Gov't 'stipulations' that banks make loans, and assume associated loan risks, that the banks themselves would not choose to enter into in the absence of said gov't mandate, have a history of ending badly for the US taxpayer and the economy in general.
    ~
    You're making stuff up again and you're bringing up politics. Not allowing banks to discriminate against inner city minority residences had nothing to do with the financial crisis.

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    Default Re: Where the New US Jobs Were Found since 2008

    Quote Originally Posted by eagle2 View Post
    You're making stuff up again and you're bringing up politics. Not allowing banks to discriminate against inner city minority residences had nothing to do with the financial crisis.
    See it is relevant. Since those .gov stipulations are what caused the fiasco with Fannie Mae and Freddie Mac making loans to people that in no way could afford them.

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    Default Re: Where the New US Jobs Were Found since 2008

    Quote Originally Posted by Melonie View Post
    Wasn't this already tried in the 90's in terms of lending for single family housing ? Community Reinvestment Act, Janet Reno etc. ? Gov't 'stipulations' that banks make loans, and assume associated loan risks, that the banks themselves would not choose to enter into in the absence of said gov't mandate, have a history of ending badly for the US taxpayer and the economy in general.
    There you go, making things up again. For the record, the Bush/Obama bailout was the first and so far only time that banks have not been required to loan bailout money. The CRA was such a tiny part of the current problem as to be insignificant. Yet the loopy right wing has seized on it for no fact based reason as the heart of all our troubles. Nothing could be farther from the truth.

    I would also point out that, based on developments over the past few years, it appears that the gov't no longer needs / wants banks to act as intermediaries where loans to certain companies are concerned ... i.e. Solyndra, GM, and a very long list of other companies that taxpayers don't hear about until the company files for bankruptcy !
    I would submit you are drawing the wrong conclusion from the information. As I see it, the government is no longer needs/wants the banks, Obama is simply misusing the system to reward his backers. Just good old fashioned corruption mixed with Obama's ineptitude.

    Circling back on topic, indeed it is true that such gov't loans do create jobs. However, in virtually every case, US jobs that are dependent on increasing levels of debt, as opposed to jobs that actually 'create' more value than they 'cost', tend to disappear soon after the debt stops growing and debt funded spending stops flowing. This arguably happened in housing in 2007, happened with private sector businesses in 2008, and is NOW finally happening with state and local gov'ts in 2011.
    You miss the point. I am not writing about government loans, but all lending. The banking system remains closed. Little lending is taking place. That forces equity to carry much more of the burden of economic development. In essence we have lost half (the debt half) of our capability to grow the economy. What we have left is the equity half. Thus, the economy grows slowly and without much job growth.

    Z

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    Default Re: Where the New US Jobs Were Found since 2008

    The CRA was such a tiny part of the current problem as to be insignificant
    There are many experts who would agree with you, but many other experts who would disagree. Either way, my basic point was not about CRA ( where banks accepted objectionable levels of loan risk in exchange for other 'benefits' like permission to expand or freedom from DOJ harrassment / negative publicity ), but about the post CRA 'moral hazard' created when US taxpayers ( involuntarily ) take on the actual loss risk ( a la the outright takeover of Fannie / Freddie ), thus providing banks, investors, et al with a clear shot at profits from making risky loans that do perform plus a 'greater fool' to be stuck absorbing losses resulting from risky loans that do NOT perform. Granted that, at this point, enough awareness has been built that it's highly unlikely that US taxpayers will accept the role of a 'still greater fool' by backstopping yet more risky loans. And THIS is arguably a major reason that banks aren't lending today i.e. it's now much more difficult for banks, investors et al to 'transfer' loan risk.


    I am not writing about government loans, but all lending. The banking system remains closed. Little lending is taking place.
    Arguably, a gov't guaranteed loan IS a gov't loan even if the 'agent' for the loan is a private bank and the loan debtor is a private individual or business ! And you miss my point ... which concerns the fungibility of gov't ( taxpayer ) money i.e. money originating from gov't loans being indistinguishable from gov't ( taxpayer ) money originating from gov't grant checks or gov't salary checks. This in turn has allowed a large number of gov't approved businesses ( many involved with green energy but that's beside the point ) to pass through the gov't money to their supposedly private sector employees' paychecks while the business fails to generate a profit. As long as gov't loan money remains, or new gov't loan money keeps coming, this business can continue to burn through cash and continue to fund employees' paychecks with indirectly spent US taxpayer dollars. But as soon as the gov't loan money runs out, or new gov't loan money stops coming, the business is faced with the economic reality that its business model was, and now literally is, bankrupt.

    Obviously direct gov't employees, and indirect gov't paid workers like teachers and health care professionals, are party to a similar situation regarding the pass-through of gov't dollars ... with some portion funded from current year tax revenues but a major portion funded by increased gov't bond debt assumption. As US gov't bond debt grew at record levels over the past couple of years, this clearly explains how the increase in employment levels in the gov't, education, and health care sectors was able to occur. However, now that state and local gov't deficit levels are restricting their ability to issue yet more bond debt, ( and failed to receive more federal stimulus money ... which effectively substituted new US federal bond debt for new state and local bond debt in 2009 and 2010 ) those state and locally funded gov't employees, teachers, and health care workers are losing their jobs by the tens of thousands. However, since this only really started happening in earnest with the advent of a new 2011 fiscal year ( typically July ), these job losses aren't reflected in the chart I originally posted.

    ~
    Last edited by Melonie; 11-20-2011 at 03:22 PM.

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