The "State of the Economy"

I’ve just attended a venue in which I was able to discuss Business and the Economy with dozens of Small Business owners. If you believe that Small Business drives the economy and is the best representation of the “State of the Economy” then the following could have some credible significance. I am a pretty good judge of who is bullshitting and who is not. (you can’t bullshit a bullshitter) Some Business owners will always LIE and tell you that things are good, even if they are 1 week from going out of business. I’ve only listed a few here that I am very confident spoke openly and honestly.

Also, I intentionally kept “politics” out of the discussion mix. That didn’t prevent some from voicing their own political-economic viewpoints. I can tell you that no one spoke highly of Bush*. It was generally neutral or negative. There was the occasional person who still blames Clinton for our economic woes. And a few still felt that 9/11 and the “War” was hurting the economy. I kept the Clinton bashers and “war-excuse” Businesses out of my sampling.

Business A. Status: Very good. Followup: They added a new Product Line and doubled their production. Hired no additional Employees. Factory, Sales, and Management staff required to “find a way” to deal with added product line.

Business B: Status: Good. Followup: Dropped production of “problem” product. Reduced factory staff.

Business C: Status: Poor. Followup: Company acquired by Foreign Division of General Electric. Reduced American employees by 80%.

Business D: Status: Very good. Followup: Production is all done overseas. Local US distribution was actually considering filing BK 12 months ago and/or shutting down. They reduced margin by 20% and sales “exploded”.

Business E: Status: Good. Followup: Reduced employees by 50%. “The only way we can survive right now is by cutting our payroll.”

Business F: Status: Poor.. Followup: “Box Stores are killing our Business.”

Business G: Status: Very Good: Followup: They just got their Product in Lowes and Home Depot.

Business H: Status: Good. Followup: They replaced their high paid Sales Staff with “clerks”. Same number of employees, they just hired people they could pay less to. Reduced payroll.

Business I: Status: Poor. Followup: Moving Production to Mexico. Had looked at Mexico and China. Chose Mexico because of lower shipping costs and Government rebates. Currently negotiating with U.S. State Department for a 10%-15% production rebate.

Some general observations:

Most felt that the Economy/Business is getting better but it could take 3-5 years for things to really turn around for the positive. There was no specific reasoning given for this from anyone. My impression was that it was more “wishful thinking” and “blind optimism” No one cited Tax Cuts as a contributing factor for their Business Status. The main problem every Business faced was finding ways to increase revenue, and as you can see from the few businesses I’ve listed here everyone has sought to achieve this goal through different means. I can also tell you that almost every Business is surviving right now through end user debt. “Cash” is not a factor anymore.

I should also add the disclaimer that most of the Companies are either based in or rely mostly on business .... in the Western States. I realize that some parts of the country are doing better, and some parts are doing worst.

You will notice that in my sampling here that no one is hiring. The most interesting quote I heard from someone was “Americans are working themselves right out of the job market.”

My own take is that the economy could improve, but on our current path it will do so only by reducing more and more jobs and putting an added burden on our States and our Federal Welfare system. All we are doing is fixing one problem and creating another …..larger problem. My favorite quote from the HBO series The Wire, by a Union Leader, was…”we use to make shit in this Country.” Unless we find ways to create more jobs in THIS country I don’t have a good feeling about the coming years.

Note: I'd really like to hear from other DUers on this subject. Other small business owners...those that work for small business. I posted this in the EI section so this thread won't fly off into the catacombs. I HAVE to get back to work now, but will check in later...

Thanks in advance for any comments you might have.

I work for a huge corporation (Verizon, local telco division), and don't get a sense of small business any more.

Verizon is losing lines to competitors, and is desperate to find a way to stop the losses. A big early-retirement package has just been offered, and lots of people are taking it. Fewer employees here, too.

My name is Richard Kilgore and have a small business in Coldwater, Michigan. We are a Medical Transcription Service and have been in business for 10 years. My business sales is up but its because one of my customers are cutting back its office staff which sends us more work. I have 15 contracted people working for me amd I have just hired 3 more. But local business in this area are hurting. One has been in business for 30 years and said to me that if things didnt turn around soon he would be forced to shut down. There have been 4 factories who have shut down in the area and yes some have shippped there jobs overseas. I to could ship my work overseas but I will Not.
Sure it would bring more money to my bottom line but the people who work for depend on my company. Call me stupid like some would say but I beleive in America. These people who send there jobs overseas are greedy and I cannot be that way. I also beleive we need a regime change here at home.

Thanks

Not to be corny but you, Richard, provide a true-life example of what a real patriot is. It's not about politics or rhetoric but about supporting our country through the simple act of keeping fellow Americans working and not sacrificing them to your bottom line.

You ARE a true patriot, for keeping the jobs in America.

The administration is caught in a jam. They need the job loss to turn around and fast.

So, they are allowing the dollar to weaken, which will prop up companies that export and may create a job or two.

That being said, allowing the dollar to weaken will raise interest rates which will ultimately hurt small business.

Large companies that control big marketshare like to starve out competitors with high cost of capital. That is a plus for the largest of companies that like to squash small fry competition.

So, watch for the hiring to begin soon at domestic companies that export equipment, like IBM, GM, GE, Dupont, but know the true cost of a weak dollar policy is inflation on imported goods and higher interest rates.

... was there a trend amongst the comments that business is good, we laid people off and cut prices?

I assume these were not rank-and-file employees speaking.

My intention was to list a few that gave a broad overview of the comments being made. And no....these were not employees speaking. Company officers, owners......

I tried to point out the distinction between Businesses and the Economy without going into a 10,000 word post. It was just a summary.

The significant point here is "how" companies are maintaining a "good" business performance level during a "bad" economy. They are doing so through actions that will/can contribute to a further decay of our Economy.

A Company, like my own, can make the claim of being in "good" shape for no other reason than they are still in business. Unlike publicly held Corporations that are required to file financial information, most Small Businesses are privately held and the principles won't discuss their private financial details. I can only make assumptions that would lead me to believe that virtually no one is making an actual profit. As I mentioned, the main issue is generating revenues.

Our Company has paid zero Corporate Income Tax over the last two years. We've reduced corporate salaries to the bare minimum and have eliminated bonuses (officers and employees). Our goal has been to keep our employees and subs. They are the reason our company has enjoyed success in the past and hopefully (if we can ride this bushit out) we will enjoy some success again in the future. The hardest part has been keeping our subs. We've actually gone out and looked for other contract work for them just so they will continue to work for us.

We'd gladly pay Corporate Taxes right now!! It would mean we are making a profit.....paying bonuses....putting more money in pension/retirement (..another negative down side to us not making a profit).

Hopefully I'll have more time to respond to everyone else on this thread this weekend. My time is short right now...... But a huge thanks to everyone that has replied. Three very important issues I didn't discuss in my original post were Collections, Health Insurance, and Consumers.

......later.......

Here is the flip side.

I am professionally trained and have been unemployed for 38 months. In the last 18 months or so, I have not heard from either a recruiter or company. So after thousands of inquiries, I must conclude that the economy is just not happening for jobs.

Additionally, all of the professionals I know are having similar luck. My sample size is 20. This tells me that my experience is not unique. With the report posted today, we have further confirmation that small business is holding its own at the expense of fewer employees.

In a nutshell, myself and others have given up hope that we will see a jobs turnabout anytime soon.

The following link illustrates the extremes to which some are going to find work.

www.villagephotos.com/viewpubimage.asp?id_=5303716

I'm a partner in a small, computer system integration company. We do mainly consulting nowadays as the hardware business is gone. Hardware is now a very low margin, cut-throat business and is simply not worth going after. Companies are not buying unless absolutely necessary. Now and then a deal falls into our laps and we take it but just about all computer hardware is a commodity so there's little value to add to a sale.

When we started 10 years ago, much of the computer equipment we purchased was made in the US. Now none of it is except for perhaps final assembly.

Now we survive on a consulting business. We focus on long-term assignments as the short-term stuff will make you crazy. It has been very slow the past two years. Now and then it appears to pick up but doesn't last. There has been no significant change for the better recently.

We get loads of resumes for most positions. The H1B-visa holders are competing with folks laid-off and with much experience. Companies are dictating all terms. I see SO MANY resumes of very talented, experienced IT people who are likely done in the field because they are too old (you're old if you're over 40).

Most of our client companies already send significant work offshore. Some are moving operations out of country. This has steadily increased over the past few years and I think is gaining momentum.

In our Business. Competitors that lived and died with contract work are going out of business left and right....But dealing with consumers isn't so rosey these days either.

This comment you made; Now and then it appears to pick up but doesn't last....pretty much sums it up. There is no consistency. Every time we think things are improving, things go to shit again.

Hope you can ride it out. I know your industry is getting nailed right now. This comment scares me a bit....I see SO MANY resumes of very talented, experienced IT people who are likely done in the field because they are too old (you're old if you're over 40).

Can these people shift to another related field? I don't know what that would be. My only connection to your field is with friends I know that have either taken jobs with huge pay cuts, or they are still looking for work.

"Can these people shift to another related field?" is a great question. Bush says we just need to retrain. Retrain for what? Start where? Wal-Mart is always hiring...

Many IT people, especially those who've been it for awhile, got into it because they couldn't find work in their field. IT attracted many renaissance-types; very smart, multi-facted and talented. I've been blown away by the resumes I've seen. People I couldn't hold a candle to. Many with advanced degrees in the sciences who had no hope of working in their chosen expertise. (So much for the emphasis on getting a good science education.)

Hugh pay cuts are a given. Compensation did get out-of-control during the late '90s but the rollbacks now are ruthless. The corporations are in complete control because you can (and will) be replaced by a cheaper body. Competition for a position is unbelievable, if you don't fulfill every requirement and then some, you don't have a chance.

Two years ago I was working on a IT degree at a top ten school...And now I consider myself very very lucky to be employed in something that involves IT (most of my friends are working as food servers). However, I am making roughly HALF of what I would have made had I graduated even 2-3 years ago. I was told that I would not receive any raises for at least a year and many employees have worked well over 24 months without a raise.

Sorta off topic, but something I've noticed about the IT field is that many of the non-bleeding-edge-of-technology trends-skills are easily outsourced to other countries as their companies reverse engineer the processes and teach them to a foreign worker willing to do the job for a tenth of the cost.

India is by far the best for this....they have a well educated, english speaking workforce willing to work for pennies on the dollar.

Nice post on the microeconomics, but I too do not have a good feeling about job growth in this decade. To me, it's really a matter of our overvalued currency and subsidization of the Asian central banks that is proping up our economy. We have too much debt, and the imbalances will soon unwind in a bad way. With that warning, here is my bearish outlook...

I do not have the time to articluate all that I have read about these complex issues from a macroeconomic perspective. But in brief, due to loss of "critical mass" in the US manufacuring/export sector, our economy can not absorb the number of people entering the job market. Period. Too much debt, too little US corporate profits, and too little demand for US products on the global stage. The refi/credit bubble is the only thing that is creating demand - artifical "bubble" demand. However, the personal bankruptcy numbers are getting worse and worse. People and businesses are nearing the end of what they can borrow. The popping of this bubble will not be pretty...at all...

The US dollar is part of the problem, and I anticipate a severe decline/panic on the dollar within the next 1-2 years. For those who think a weaker dollar will result in an increase in domestic production and a reduction in exports - I'm afraid they are living in the old paradigm that was more reflective of the post-WWII US "real" economy. We don't have enough of a "real economy" anymore, too many service sectors jobs, too much 'activity' but without real production. Too many educated and bright people doing "busy work" and not enough interest in actually products for global buyers. That Union Leader is right…”we use to make shit in this Country.”

Last week's 'The Economist' magazine had a detailed analysis that basically showed that a drop in the dollar's value does not necessarily correlate with an increase for US made goods/decrease in imports. Why? Because we simply don't make the products anymore that were previously demanded by foreigners. The previously prestigious label "Made in US" does not only apply much anymore unless you're taling about Boeing jets, computer technology/bio- technology, medical equipement products, and our lucrative military weaponry (the later accouted for most of our GDP 'growth' in the last Qtr). The Chinese currency is the other big problem that is hollowing out the "real" US economy. Billions of Chinese willing and able to work all day for about $6. Anyhow, even if a foreigner wanted to buy a US product such as a TV or perhaps a toaster, they can't - b/c we no longer make these things, and if we do, they can't afford it. Ford and GM are not making profits on vehicle sales, but in "finance capitalism." This is not good.

In essence, the article projected that a 30% drop in the US dollar realtive to a basket of currencies would only decrease the US trade account defict from -500 billion to about -$300 billion. That is a fundamental problem. Our currency is only being propped up b/c it is still the world reserve currency - mainly b/c it is the international oil transaction currency. The euro is challenging dollar supremacy, and my opinion is that by the end of this decade dollar hegemony will dissipate with the euro accending to the preferred "world currency." I predict a disorderly correction, with US wages falling dramatically, 1930's style bankruptcies occuring, etc. After that, the US will start making export products again, but our standard of living will be much lower, our energy costs will be higher, and we will no longer be a Superpower - atleast not economically. Sorry, but I have become very bearish re the US economy.

Anyhow, today's NYT article discusses that jobs are contracting in the US economy, and I believe this is a permanent development - unfortuately.

***************

'Slowing Stream of New Jobs Helps to Explain Slump' (Oct 1, 2002)
http://www.nytimes.com/2003/10/01/business/01JOBS.html?hp

The new numbers portray an economy stuck in neutral, with workers no longer losing their jobs at the rapid pace of 2001 but with relatively few new job opportunities popping up. In the last three months of 2002, 7.8 million jobs were eliminated, while 7.7 million were created, according to company records studied by the bureau.

"You get a picture of a job market where employers, nervous about undertaking new labor costs in the face of weak demand, are very reticent about hiring," said Jared Bernstein, a senior economist at the Economic Policy Institute, a liberal research group in Washington.

The absence of new jobs means that conditions have not improved for people entering the work force, like graduating college students. But the drop in layoffs since 2001 has clearly helped many workers, sparing them the financial and emotional pain of job loss.

****************
'Employment disaster'(Oct 1, 2003)
http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=26827

"In June it was declared that the recession had ended in November 2001. Yet in the 20 months since, payroll employment has declined by a total of about 1 million jobs, or about 8%. In not one of the seven or eight postwar recoveries has there been any employment decline. Immediate strong job growth has been the regular characteristic of all business cycle recoveries. On average, payroll jobs increased 3.8% in the 20 months following the end of recession.

What's more, no letup in job losses is in sight. During the second quarter, widely hailed for its better-than-expected GDP growth, the household measure of employment slumped by 260,000. However, this figure concealed an even greater number of workers - 556,000 - who statistically quit the workforce because they have given up looking for nonexisting jobs.

This rapidly growing group of people no longer count as unemployed. What American job statistics really measure are not changes in unemployment, but changes in job seekers. Including the frustrated job seekers, the U.S. unemployment rate is hardly lower than in Europe. Certainly, it is rising much faster."

..."Think of the sharp rise in long-term interest rates that is most assuredly stopping the mortgage-refinancing bubble dead in its tracks. That, in our view, will not only abort any recovery but will also mean the economy's relapse into new recession."

I was listening to a bunch of acedemic economists having a discussion the other day on the US economy. Their general consensus was that the Yuan flap is primarily a political distraction from domestic failures. Domestic demand is down primarily as a result of a badly skewed income distribution. They also agreed that the job losses to date are permanent. New employment will be in new fields.



Contrary to what the Republican bullshit masters want everyone to believe, distribution of income is not a moral issue. Directing too much income to one end of the income spectrum has very real and very bad economic consequences. See most of Africa as an example of what happens when the rich capture too much income.

Distribution of income is essentially a political problem. The American economy will not substantially improve until some way is found to prevent the rich from continuing to capture so much of the national income that consumers literally cannot afford to keep the economy running.

do you have a link or some other source?

Some great posts here. I'm in the Chicago area and can only speak of the Chicago market. I'm a freelancer, and the one thing that surprises me is that, despite the dearth of fulltime writing jobs and cuts that have gone on, freelance opportunities have not risen accordingly. Usually when pubs hold off on hiring they contract work out to people like me. Not this time. Instead, they're getting by with filler, making their staffers work twice as hard and forcing their editors to moonlight as reporters. I'm holding my own, thankfully, so money is not a problem. But my annual earnings are down 50 percent from when Clinton was in office.

been in the local area (thurston county, wa state - The OTHER washington, damnit@!) since 69. Seriously an old fart but did international consulting on high end sql(ish) and telco software for years, decade almost. Then crash. Pop goes the I-net boom and the telco's soon followed. NO jobs nor even apps really being accepted in software land any more. One small firm had one opening and got 300 resumes within 4 hours of it hitting hotjobs. Then they just went for those who are most experienced, under 30 and willing to work cheapest. At 50 and bald as an egg, can't hide the age, nor the work with patents and career accomplishments. But, that don't mean squat these days. I have actually received advice to consider moving to india as I read a little hindi. No thanks guys. Here I live, here I fight, here I die, if that's what it takes.

Now note that this area since the 60s has gone from resource base (salmon, logs, and such) with beer as a base (oly brewery closed this july - pop go 600 primary jobs) and govt as a pump. Now even govt is going sour. They are contemplating a non-future future and the politico's are doing stupid, desperate things like trying to build a multimillion dollar 'conference center' in OLY?!? And in a day and age when any 21 minute net research survey will tell you that the conference biz, already cutthroat, is dying with the rest of the biz travel and the economy.

So, that's a real smart idea, saddle the local population with a debt that they don't want, and are not allowed to vote on... screwy days, no doubt.

And no hiring, also out here in the west, the velocity of currency through the local economy is decellerating. More and more of my friends who have dropped out of the job seeking after the UI ran out are telling me that cash per se is not moving as rapidly in the grey markets as it used to. Lots of trading, and bartering picking up, but not much in FRN's. However, when the bikers are doing biz, they always have silver bars for trading which can be 'redeemed' at local coin shops.

Can anyone say, argentina? Only thing we are missing is the banksters hanging in the streets, and spitting on politicians....

Now, on a positive note, at least those of us who realize (after months of unemployment beating our brains) that we are snucked, flucked, and stuck, can change our lives. The fastest growing category of business out west is the no-employee, illegal business where no licenses are sought, and certainly no employees as those bring along the dreaded gov paper work that costs a fortune. But, not to worry, seems that these no-employee businesses band together for projects pirate ship style and split the proceeds when circumstances demand. Know of one guy hunting logs drifting for both hazard removal bounty, as well as using old growth cedar as shakes. A bunch of us will get together and split for a few days after he snags one of these old logs, and then a quick few hundred are made as the bundles of shakes are sold to local contractors. Others are doing smoked salmon. Then the geologically minded go out and about hunting gem stones, or what not. Know of a guy running rock for artists north to BC. All kinds of strange activity going on. Just got to make-a-way as there are no longer any real alternatives in corp-land headed our way, and for the most part, the old farts just ain't old enough to pack it in yet.

Different kind of world, in EU zone they call it 'being on the fiddle'
Ok. So now at my advanced age, I am learning to fiddle. One tune I know everyone wants to hear is 'pop goes the weasel'.

your comments about argentina, and all those odd no-employee jobs, are fascinating. hunting gemstones? holy shit, this country is going back to the 30s.


however, there is one new growth industry: making artifical arms and legs for GIs returning from Iraq and Afghanistan.

:(

What needs to be increased is public spending in the public services sector. While all these people become jobless, the government ought to start employing people, perhaps at slightly lower rates, but employ them nonetheless. The unions need to let up a little bit right now in order for the economy to recover.

The unions ought to let up a little bit to give room for the government to hire more employees. This way, when the economy does recover, there will also be greater numbers within the union to have more of a clout in shaping domestic policies.

Some union employees are paid very, very well and, perhaps, they ought to think about their fellow Americans who do not have a job because they keep asking for wage increases at a time when everyone is hurting.

I am an atheist but I wish to use a Christian parable to illustrate my point. Somewhere in one of the New Testament gospels, there was a story about Christ speaking for three days and there was a crowd of people (a 1,000 people?) listening to him. After some time, the crowd grew hungry and thirsty. Christ passed around one loaf of bread, one fish, and one bottle of wine. The crowd was adequately fed, everyone's hunger was satisfied. How?

A professor once explained that what happened in this "miracle" was that everyone took a small piece and took only the absolute minimal amount needed, because they thought of their neighbor, who was also hungry.

I do not believe this parable holds any spiritual significance but, rather, an economic meaning. If the economy were to start helping itself like that and starting to build the public services industry, while taking slightly lower wages to accommodate more people into the workforce (so at least no one will absolutely starve).

In short, to spread the work out a little bit. Re-train more people. The economy is shifting and the US needs to align itself with the global economy by being more of a planned economy.

Why the hell not? Call it what you will: marxism, communism, whatever... BUT, all the other countries have the advantage of government intervention to maintain economic stability while this lazy-faire system of operating so dependently on pure free market forces falters under a more calculated economy.

Don't hate these overseas countries because they are able to do this. Use government intervention as a means to make the country an agile global power.

The people need to find a way to keep the corruption out of there.

What needs to be increased is public spending in the public services sector.

In the Colorado History Museum is a wonderful diorama/scaled model of the the City of Denver. It was commissioned by the City who paid "out of work Engineers" during the Depression to do it.

Democracy is all about "from the bottom up"...not "the top down". Democracy IS about ALL people. Putting money in the Public Sector for Public Services is good for the entire Country. That money stays in the Community which, in turn, improves the economic and social health of that Community. The Federal income tax generated by a one healthy community can then be used to help another community. It's a very simple concept that the Republicans just can't grasp.

The problems that Communities face now......The money isn't staying in the Community and the Federal tax dollars aren't being cycled back in a way that helps the Community.

Communities have been "Wal-Martized". Where do the profits of Wal-Mart and other chain/box stores go? They leave the Community and go into the hands of Stock Holders living outside that community. Wal-Mart doesn't "reinvest" into the Community other than building another store 4 blocks from another.....

They DO generate taxes; income, property, and sales....but not the level of taxes that the aggregate of Small Community based Businesses would. And the profits of Small Community Businesses usually stay in the Community.

Where do you shop? I'll drive by a dozen box/chain stores to do business with another local Small Business. I even buy my Pizza from a Russian Immigrant that owns his own place and makes a much better pie than the chain stores. Sure, these places usually charge more but I know that almost all of the dollar I spend at these places is staying in the Community.

The Printer we use for the Business is hanging on by a thread. He once had 6 shops and employed over 100 people. He's now down to one shop and 3 employees. Can you say....KINKOS.

The cycle of "Community" that started during the Great Depression has been broken. People (consumers) have de-evolved. Everyone hides in their cave......drives to work in their SUV (cave on wheels)......then returns to the comfort of their cave. How many people here on DU can name ALL of the neighbors living on their block or apartment floor? Their Bank Cashier, their Postal Carrier, the Server at their favorite eatery........

I don't know how we can ever get back to having real Communities. Maybe we can't.

....I'm rambling...TOO-MUCH-COFFEE.......

The loss of community is to large extent the social fallout of the automobile. It allowed us to reach our little cave, and induced sprawl which really nailed the community.

Now the cave is so nice that people don't want to leave. I'll take a bike ride around my area (typical mid-upper suburbia) on a beautiful afternoon and see very few, if any, people outside!

The worst part of it is that this extends to the kids. Their lives are so scheduled and controlled that they don't know what it is to just go outside, find a group of friends, and hang out.

I don't think this gets fixed. If gas was $5/gallon it might change our living habits which might force a bit of community on us.

With on another?

They just might start comparing notes.

By comparing notes they just might want to act on their frustrations.

By acting on their frustrations they just might want to participate in politics.

By participating in politics they just might hinder the ability of large corporations to make unlimited profits.

By limiting the control of large corporations their quality of life might improve significantly.

Will this ever happen?

Not today.

Why?

Who has an interest in keeping the status quo?

Everyone except little people like you and me.

China's economy is growing at 8.2%. We just posted 3.3%, but a large part of that spike was in retail, which makes sense because of the tax cuts and rebates. But tax cuts are not a structural solution and we have structural problems. The gains in productivity are not because of efficiencies but because of sourcing overseas, off the books. Reduce staff by 1000 employees, that's 1000 not counted in the productivity equation.

When white collar jobs follow blue collar jobs, where is there left to go? The current trade agreements are being ignored by China and the US is doing nothing to enforce them. Who benefits? The few, at the expense of the many. It's time to carry a big stick, stand up. Fight back.

http://www.crystleforsenate.com/visa

Hi All,

My letter to the editor at the Financial Times on unemployment was
recently published.

No matter the issue, we all need to keep the pressure on if we ever hope
to see substantive change.

The letter follows.
--------------------

Dear Financial Times,

I read with interest Amity Shales review of Al Franken's new book,
Lies and the Lying Liars Who Tell Them in the October 6, 2003 US edition.

Her criticism centers on US tax policy vs the bulk of Mr. Franken's
book. However, she makes a glaring assumption and possible error
about US unemployment that cannot go unchecked.

To quote Ms. Shales "But the fact remains that US workers are far more
likely to find new jobs within a reasonable period ..."
One wonders how she defines reasonable?

I am an unemployed professional and correspond with a peer group of
roughly 20 similarly unemployed professionals. We are all refugees from
the telecommunications industry. We represent periods of unemployment
ranging from 10 months to 38 months, with myself the statistical outlier.

To a person, we are all college educated and several hold graduate
degrees. I hold a Bachelor of Science in Electrical Engineering and a
Master of Business Administration.

Our careers all reached a middle management or upper management stage
before the axe fell. Regrettably, not one of us has had any success
seeking employment. Personally, I have not heard from either a
recruiter or company in over 18 months.

Say what you will, the assertion that suitable employment is easy to
obtain does not wash with the reality that I and others are experiencing daily.

Ms. Shales should spend time checking her assumptions before blindly
describing a situation that is not reflected in reality.

The easiest way for your children to learn about money is for you not to have any.
Katharine Whitehorn
-

But my parents were dirt poor. I grew up on farms. One with no running water. Using an Out House in the dead of Winter gives you a unique perspective of "wealth". We lived on Oatmeal. We would pretend that it was different "foods" every night we sat down for dinner.

Going from "not having" to "having" has been a hard adjustment for me. Too many people judge others based on their perceived "wealth", and I have never looked at people that way.

I"m in the midwest working for a tiny manufacturer of production machinery. We are limping along. Our suppliers are limping along too. In general things don't seem to be getting worse sales wise.

One given is the difficulty all are having collecting on accounts receivable. Reverting to my macro economic speak, liquidity in the manufacturing/capital goods arena is poor. This stands to reason, as the 50 year slide in manufacturing continues.

But this is about manufacturing, now 15% of the economy at most. Just a sideshow which Greenspan himself dismissed in his July testimony when he said the US didn't need manufacturing.

Interesting analysis.....
Economics has always been coined "The Dismal Science" In this day and age, that holds true

:hi:

I hear that there are now raised projections for tax revenue following the tax cuts....how can this be? My economics professor in college tried to convince me that this happens when there are tax cuts but I never bought that B.S. But now the projections are that tax revenue is up $85 billion!!! Also, the economy grew by 3%-6% last quarter. This scares the hell out of me....if this is true and the trend continues then Bush will be able to cover the costs of his "nation building" project. That would make him a tough candidate to defeat in the elections next year....and I want that neo-con puppet out of there ASAP!!!

There is no way Bush can close the deficit especially when his tax cuts kick in in 05/06. If unemployment does not drop, the economy will not seem good for most average folks. Do you know about 1 in 4 Americans have a relative or close friend laid off??? Try not to "scare" us by saying Bush will be a tough to beat. He will be tough because of dirty tricks not because of his economic program. Remember we've been in a "recovery" for all of his administration!

What exactly do you mean by calling me a troll? First of all, I'm not scared about Baby Boy Bush being tough to beat, especially if unemployment levels stay in place. Also, I specifically don't like your tone since my wife lost her job during this "recovery" period. I'm just pointing out that the economy is getting back to a level (minus unemployment) that would warrant an "even ground" debate in the race next year. The economy's been pretty unspinnable for the Bush administration for a while and has been a weak spot for us to attack, but I don't want us to focus too much on it if it becomes overly debateable as to whether or not we're in "recovery". I still think that Ashcroft and Bush's SS squad constitutes the greatest weakness in Bush's campaign. The actions that have been proposed and things like the suspension of habeas corpus for "enemy combatants" is frightening to me. The way the masses are beginning to ride the waves of "patriotism" into shouting down opposing views is also frightening. I think that a campaign that is anti-war and speaks out against the shredding of our constitution are the greatest subjects for victory of our side in the upcomming election.

the temporary spike during third quarter was due to people spending their child tax credit, not much more.
Take billions of dollars give it to the people, they spend it, the economy shows some sings of improving.

The continued problem is simply job loss, and lack of demand. I find it amazing that companies keep thinking Americans will buy and buy when we don't have jobs.

How long will it take, if you keep giving the jobs to people outside of the country, how can people inside the country afford to buy the product?

"How long will it take, if you keep giving the jobs to people outside of the country, how can people inside the country afford to buy the product?"

---This should be more obvious than any other aspect of our entire economic system.

HOW ARE YOURS?