Need help understanding this economy mess

[Dan]

OK... here's my simple dilemma... I'm hearing on the tube that Obama's massive stimulus spending and trillion $ bail out didn't work because we still have 9.4% unemployment. Also that it's not up to the government to create jobs; it's up to private business. right?

 

Here's what I don't get... the stock market is at 12,000pts, the banks are stable, the car companies are doing as good as ever. OK. so why aren't these people hiring yet? And why does everyone say the President and the Congress have to do something to get America working? It seems all the stimulus money did it's job as it was spent to save wall street and corporations too big to fail; it did that. Now those corporations aren't holding up their end and hiring again.

 

What am I missing? Why don't we conclude the stimulus trillions did their job and bailed out all these mega corporations? Why do we want less government that doesn't try to create jobs, but then criticize politicians when the unemployment rate is high? Educate me...

[Buftex]

OK... here's my simple dilemma... I'm hearing on the tube that Obama's massive stimulus spending and trillion $ bail out didn't work because we still have 9.4% unemployment. Also that it's not up to the government to create jobs; it's up to private business. right?

 

Here's what I don't get... the stock market is at 12,000pts, the banks are stable, the car companies are doing as good as ever. OK. so why aren't these people hiring yet? And why does everyone say the President and the Congress have to do something to get America working? It seems all the stimulus money did it's job as it was spent to save wall street and corporations too big to fail; it did that. Now those corporations aren't holding up their end and hiring again.

 

What am I missing? Why don't we conclude the stimulus trillions did their job and bailed out all these mega corporations? Why do we want less government that doesn't try to create jobs, but then criticize politicians when the unemployment rate is high? Educate me...

 

Because admitting that it did what it was supposed to do, would take away a major argument from the tea-partiers, and Republicans alike.

[boyst]

Because admitting that it did what it was supposed to do, would take away a major argument from the tea-partiers, and Republicans alike.

That's the truth.

 

Then again, what jobs aren't they hiring? A lot of companies were already bloated with employees making huge salaries and now we don't need more people assembling cars, we have plenty union employees already making far too much. Then, there are probably 3 bankers for every 5 people in the country. And, at the end of the day, none of our politicians know how to create jobs and now it appears none of the big invincible companies do either. It's all a work.

[GG]

You can do an extensive search on these pages about a fullsome discussion on TARP & ARRA and the associated criticisms.

 

To save you the headache, the two shouldn't be mixed together, but they are because it's too convenient to politicize. TARP, and related actions to fund the financial system were specifically targeted for short term stabilization. It was an almost certain outcome that if the financial system wasn't stabilized, the economic picture would have been much worse. The short term liquidity crisis of the financial system was proven by the fact that most of the banks & financial players who received funding have repaid it with a profit to the government.

 

ARRA was a different animal altogether, as its goal was a Keyensian gamble that monetary stimulus from the government will yield a private sector multiplier to spur the economy. But a funny thing happened to the forum. Much of the ARRA spending was not stimulative in nature, but simply propped up demand and transferred money from one part of the economy to another. Then as companies, banks and consumers were cleaning out their finances, there was little apetite to spend more. That leads to a cycle of no new investment until confidnece returns.

 

To make matters worse, this administration took a hostile position against business & the private sector in general. Then came the healthcare act, which increased uncertainty for businesses going forward. As one CFO told me in 2009, "You have to be insane to be adding more staff in this environment."

 

So the reult was squeezing more productivity out of your work force, generating more profits but with less revenue growth, and sitting on piles of cash waiting for a better day to reinvest it.

 

I think that Obama finally got the hint, at least from his comments since November. We're waiting to see if he actually puts actions behind his words.

[Gary M]

OK... here's my simple dilemma... I'm hearing on the tube that Obama's massive stimulus spending and trillion $ bail out didn't work because we still have 9.4% unemployment. Also that it's not up to the government to create jobs; it's up to private business. right?

 

Here's what I don't get... the stock market is at 12,000pts, the banks are stable, the car companies are doing as good as ever. OK. so why aren't these people hiring yet? And why does everyone say the President and the Congress have to do something to get America working? It seems all the stimulus money did it's job as it was spent to save wall street and corporations too big to fail; it did that. Now those corporations aren't holding up their end and hiring again.

 

What am I missing? Why don't we conclude the stimulus trillions did their job and bailed out all these mega corporations? Why do we want less government that doesn't try to create jobs, but then criticize politicians when the unemployment rate is high? Educate me...

Companies are not hiring because A: nobody is buying anything, 2: they are still trying to figure out the cost of the heathcare mandates

[IDBillzFan]

OK... here's my simple dilemma... I'm hearing on the tube that Obama's massive stimulus spending and trillion $ bail out didn't work because we still have 9.4% unemployment.

I can't speak for TARP, but the Recovery Act was a failure on two fronts.

 

First, much of the spending was kickback funding that did nothing the plan promised to do...spur growth and develop future job development (studying grape genetics, and a host of other embarrassing projects, prove that point).

 

Second, and the simplest proof that calling it a failure is not just a Tea Party talking point, is that it didn't do what it was specifically promised to do: keep unemployment from exceeding 8%. That's not something people made up. It was the administration's primary selling point. It failed to meet that benchmark, so it is a failure, and no one -- absolutely NO ONE -- can reasonably deny this simple truth.

 

One last note; only a person with no practical, private business experience would think he could force money on a company called "too big to fail," get the money back, and then expect the company to start hiring again just because it says so. The biggest lie you'll ever hear from a progressive these days is that companies SHOULD and MUST start bringing their profits into the market just because people need to be hired, and they wouldn't be around if not for the unemployed taxpayer who bailed them out.

[Gary M]

I can't speak for TARP, but the Recovery Act was a failure on two fronts.

 

. It failed to meet that benchmark, so it is a failure, and no one -- absolutely NO ONE -- can reasonably deny this simple truth.

 

oh really????

 

 

http://www.youtube.com/watch?v=I3TlNsPFkyE

[Dan]

You can do an extensive search on these pages about a fullsome discussion on TARP & ARRA and the associated criticisms.

 

To save you the headache, the two shouldn't be mixed together, but they are because it's too convenient to politicize. TARP, and related actions to fund the financial system were specifically targeted for short term stabilization. It was an almost certain outcome that if the financial system wasn't stabilized, the economic picture would have been much worse. The short term liquidity crisis of the financial system was proven by the fact that most of the banks & financial players who received funding have repaid it with a profit to the government.

 

ARRA was a different animal altogether, as its goal was a Keyensian gamble that monetary stimulus from the government will yield a private sector multiplier to spur the economy. But a funny thing happened to the forum. Much of the ARRA spending was not stimulative in nature, but simply propped up demand and transferred money from one part of the economy to another. Then as companies, banks and consumers were cleaning out their finances, there was little apetite to spend more. That leads to a cycle of no new investment until confidnece returns.

 

To make matters worse, this administration took a hostile position against business & the private sector in general. Then came the healthcare act, which increased uncertainty for businesses going forward. As one CFO told me in 2009, "You have to be insane to be adding more staff in this environment."

 

So the reult was squeezing more productivity out of your work force, generating more profits but with less revenue growth, and sitting on piles of cash waiting for a better day to reinvest it.

 

I think that Obama finally got the hint, at least from his comments since November. We're waiting to see if he actually puts actions behind his words.

Thanks. yeah, I wasn't so much interested in all the good and bad prognostications of the past. So, I didn't really search.

 

But, that's kinda how I see it. Companies used the federal monies, whether it be stimulus or whatever to clean out their books, get new business, generate more profit and then sat on it. But, then I don't get why we're upset at the politicians because these people are sitting on their profits that are largely due to my tax dollars helping them.

 

 

Companies are not hiring because A: nobody is buying anything, 2: they are still trying to figure out the cost of the heathcare mandates

I'm not sure I buy the whole health care act has created all this uncertainty; therefore, I can't hire anyone. I think it's a cop out. Like most people, I haven't read the entire bill and like most people I'm not a lawyer; hence, I don't quite understand the intricacies of all I have read. However, my understanding (as a person running a business) is that for the time being it has almost no affect on my business. In a couple of years, I'll be forced to give our employees health care or pay into the larger system. But, 2 things: we already give all our employee healthcare, and most importantly, that mandate doesn't kick in until 2014. So, even if I don't give my employees health benefits why wouldn't I grow my business and hire people if needed until then? I can always fire them later if they demand health care.

 

So I keep coming back to people saying that the billions and trillions were wasted; but it seems the economy by and large was saved just prior to a full collapse, the largest corporations are doing as well as they ever have because of it; yet people aren't being hired - largely because businesses are becoming more efficient and just banking the profit. I can't really blame any of the politicians for that. I can't help but think that most people expect the world to go back to 2007 when homes were grossly over valued, and as jboys said, companies were overstaffed with too many employees that they've since discovered they didn't really need.

 

It's a mess no doubt. I'm just trying to understand it all better.

 

I can't speak for TARP, but the Recovery Act was a failure on two fronts.

 

First, much of the spending was kickback funding that did nothing the plan promised to do...spur growth and develop future job development (studying grape genetics, and a host of other embarrassing projects, prove that point).

 

Second, and the simplest proof that calling it a failure is not just a Tea Party talking point, is that it didn't do what it was specifically promised to do: keep unemployment from exceeding 8%. That's not something people made up. It was the administration's primary selling point. It failed to meet that benchmark, so it is a failure, and no one -- absolutely NO ONE -- can reasonably deny this simple truth.

 

One last note; only a person with no practical, private business experience would think he could force money on a company called "too big to fail," get the money back, and then expect the company to start hiring again just because it says so. The biggest lie you'll ever hear from a progressive these days is that companies SHOULD and MUST start bringing their profits into the market just because people need to be hired, and they wouldn't be around if not for the unemployed taxpayer who bailed them out.

Agreed about the promise to not exceed 8% unemployment. However, I would suggest that no reasonable person would expect any one, especially a politician, to be able to completely and accurately foresee the future. So, I can give a little ground there. But, I do see your point.

 

As to your last paragraph... exactly my point just stated in a different tone. Please don't interpret my comments to mean I expect companies to bring their profits into the market just because people need to be hired. I'm suggesting that you can't blame any politician because companies aren't.

[Gary M]

 

However, my understanding (as a person running a business) is that for the time being it has almost no affect on my business. In a couple of years, I'll be forced to give our employees health care or pay into the larger system.

 

 

If it isn't going into effect why are these guys getting waivers?

 

http://www.foxnews.com/politics/2010/12/08/big-companies-unions-win-health-care-waivers/

[Dan]

If it isn't going into effect why are these guys getting waivers?

 

http://www.foxnews.c...h-care-waivers/

I'd assume they're more forward thinking that I am. But, really don't know what motivates them. I'm fairly certain 1/1/14 is when it would become mandatory for everyone to have health insurance; hence, when employers have to provide it... or not.

[Gary M]

I'd assume they're more forward thinking that I am. But, really don't know what motivates them. I'm fairly certain 1/1/14 is when it would become mandatory for everyone to have health insurance; hence, when employers have to provide it... or not.

 

90 days after enactment

 

 

-- Provides immediate access to high-risk pools for people who have no insurance because of preexisting conditions.

 

Six months after enactment

 

 

-- Bars insurers from denying people coverage when they get sick.

 

-- Bars insurers from denying coverage to children who have preexisting conditions.

 

-- Bars insurers from imposing lifetime caps on coverage.

 

-- Requires insurers to allow young people to stay on their parents' policies until age 26.

 

2011

 

 

-- Requires individual and small group market insurance plans to spend 80 percent of premium dollars on medical services. Large group plans would have to spend at least 85 percent.

 

 

 

All this has increased premiums, that those 222 companies can't afford.

 

So my arguement is that companies that did not get waivers are not going to add people that they will have to pay higher premiums for.

 

Understand yet?

[Dan]

90 days after enactment

-- Provides immediate access to high-risk pools for people who have no insurance because of preexisting conditions.

 

Six months after enactment

-- Bars insurers from denying people coverage when they get sick.

-- Bars insurers from denying coverage to children who have preexisting conditions.

-- Bars insurers from imposing lifetime caps on coverage.

-- Requires insurers to allow young people to stay on their parents' policies until age 26.

 

2011

-- Requires individual and small group market insurance plans to spend 80 percent of premium dollars on medical services. Large group plans would have to spend at least 85 percent.

 

All this has increased premiums, that those 222 companies can't afford.

So my arguement is that companies that did not get waivers are not going to add people that they will have to pay higher premiums for.

 

Understand yet?

Nope. There's nothing any politician can do to "reform" health care/insurance that's not going to in some way increase premiums. Because, that's what businesses do - they raise their prices at every opportunity. So, if we completely repeal the Health Care Act and replace it with new laws as proposed; they'll have similar a similar affect.

 

The can of worms has been opened. The health care industry (primarily the costs) in this country are obscene. Either we get the costs down so that you can afford to get sick without insurance or you find a way for everyone to get insurance. Personally, I prefer the former. But, looks like we're going to focus on the later. So what can either party do to bring health insurance coverage to all individuals without the insurance companies trying to raise their premiums? I guess we could take the tact that not everyone needs health care, but then that's perhaps a different argument all together.

 

Either way, insurance premiums haven't skyrocketed (at least mine haven't) and at least some businesses are using it as an excuse for the time being.

[pBills]

Nope. There's nothing any politician can do to "reform" health care/insurance that's not going to in some way increase premiums. Because, that's what businesses do - they raise their prices at every opportunity. So, if we completely repeal the Health Care Act and replace it with new laws as proposed; they'll have similar a similar affect.

 

The can of worms has been opened. The health care industry (primarily the costs) in this country are obscene. Either we get the costs down so that you can afford to get sick without insurance or you find a way for everyone to get insurance. Personally, I prefer the former. But, looks like we're going to focus on the later. So what can either party do to bring health insurance coverage to all individuals without the insurance companies trying to raise their premiums? I guess we could take the tact that not everyone needs health care, but then that's perhaps a different argument all together.

 

Either way, insurance premiums haven't skyrocketed (at least mine haven't) and at least some businesses are using it as an excuse for the time being.

 

 

As I have said before... Insurance Companies have it pretty good right now. They can play the victim of the healthcare reform bill and they can raise their rates. Stating it's all because of the bill knowing full well that they would have raised rates no matter what.

[Nanker]

Typical ARRA Job saving/building record.

EPA Top 100 ARRA job-saving/building projects.

1. $10mm 40 jobs

2. $18.5mm 40 jobs

3. $18 mm 270 jobs

4. $28mm 50 jobs

5. $14.6mm 50 jobs

Top 10 Most Exciting ARRA Funded State Energy Projects.

10. Arizona renewable energy for non-profit organizations $50m per site, $1.6mm total

9. Louisiana residential energy efficiency rebate program $2m per applicant, $15mm total

8. Massachusetts solar rebates help Audubon Society $8mm for 100 sites around the state

7. Minnesota homeowners ReENERGIZE $3mm $2.2m per household to 1.2m households

6. Mississippi $10mm for state jobs protection program - 35 companies to date saving $3.5mm in energy costs

5. Ohio Bakery and 17 others $11.8mm 25 new bakers apprentices added.

4. Idaho Retrofits all K-12 Schools >700 schools! $1.7mm - estimates creating/saving 150 - 250 jobs

“The $18,000 energy improvement project at Homedale will pay back in energy cost savings in just over a year,” Kjellander said, saving the district $11,000 per year that can be directed to programs and salaries instead of utility bills."

3. Kentucky "Green Bank" $14mm no jobs created/saved, but they loaned $1.3mm to the Kentucky Dep. of Edu. who will spend the money to save $140m annually from the greening program. So the KDE borrowed enough money to spend on 10 years worth of energy in order to save 10 years worth of energy costs. I see some wheel spinning here - do you?

2. Pennsylvania Helps Crayola Go Green. $9.5mm on Photovoltaic on commercial buildings. 149 peoples went to work. Not sayin' for how long, but they went to work.

1. American Samoa Expands its Solar Capacity! Hooray! Can we get a Haka here for the $5.2mm spend that's creating 12 jobs, please?

[Rob's House]

GG summed it up pretty well, but to add to that, the result of ARRA was entirely predictable. During the 30s the quasi-Keynesian philosophy of monetary expansionist policy to promote economic growth kept the economy depressed for over a decade. Once these policies were abandonned and WWII ended, the economy finally rebounded, and history was rewritten to credit the failed expansionist policies with the recovery. Anyone with at least a vague sense of economic history beyond what their Marxist history teacher spoon fed them in college knew exactly what ARRA would lead to and are not the least bit surprised by the stagnation it has perpetuated.

Edited January 26, 2011 by Rob's House

[/dev/null]

oh really????

 

 

youtube.com/watch?v=I3TlNsPFkyE

 

I love that argument

If we hadn't passed the stimulus unemployment might have reached 12%.

 

If we hadn't passed the stimulus, the Dark OverLord Xenu may have returned to anihilate all life on Earth.

Xenu has not returned. Ergo the Stimulus was a success

[IDBillzFan]

I love that argument

If we hadn't passed the stimulus unemployment might have reached 12%.

 

If we hadn't passed the stimulus, the Dark OverLord Xenu may have returned to anihilate all life on Earth.

Xenu has not returned. Ergo the Stimulus was a success

If Stevie only caught that pass vs. Pittsburgh, we'd have beaten a team going to the Super Bowl!

[Nanker]

If Stevie only caught that pass vs. Pittsburgh, we'd have beaten a team going to the Super Bowl!

 

However the sad reality is that we'd just be picking 6th.

[manateefan]

OK... here's my simple dilemma... I'm hearing on the tube that Obama's massive stimulus spending and trillion $ bail out didn't work because we still have 9.4% unemployment. Also that it's not up to the government to create jobs; it's up to private business. right?

 

Here's what I don't get... the stock market is at 12,000pts, the banks are stable, the car companies are doing as good as ever. OK. so why aren't these people hiring yet? And why does everyone say the President and the Congress have to do something to get America working? It seems all the stimulus money did it's job as it was spent to save wall street and corporations too big to fail; it did that. Now those corporations aren't holding up their end and hiring again.

 

What am I missing? Why don't we conclude the stimulus trillions did their job and bailed out all these mega corporations? Why do we want less government that doesn't try to create jobs, but then criticize politicians when the unemployment rate is high? Educate me...

 

Failed to hold the 12,000 today. And Florida's unemployment is over 11% (the 9.4 is average). The 9.4 is still too high. None of the stimulus or bail outs have gotten enough people back to work. And in some cases the unemployment rate has dropped because people have expired unemployment benefits and there is no way to track them ( I know because I have a step-daughter who has used up her benefits and still cannot find a job).

[Wacka]

California's official unemployment is about 12.5 % and unofficially is 18-20%.