Forget what did the empty suit promised in his speech tonight!
Here it is the reality….Government cannot create jobs or wealth….
Government trough regulation and taxation is removing the free market incentives for the entrepreneurs. People prefer to lay on their backs rather to put long hours of their precious time in creating and running a business and later to get robbed by the local and federal bureaucrats.
(emphasis mine)
Fewer people choose to be self-employed
The ranks of self-employed Americans are shrinking.
In August, 14.5 million people were self-employed, down 2.1 million from the most recent peak in December 2006, according to Bureau of Labor Statistics data.
The number of “incorporated” self-employed workers — those who incorporate to gain legal protection and other benefits — began its decline in 2008. Last month, 5.1 million people were in this category, down 726,000 from August 2008.
The decline is a “troubling” trend, says Scott Shane, professor of entrepreneurial studies at Case Western Reserve University. This category, which usually represents businesses that hire more employees than the “unincorporated” self-employed, was showing healthy growth before the recession, he says.
Unincorporated self-employed — at 9.4 million last month — has changed little since last spring. It’s hovering at its lowest level in 25 years, says BLS economist Steven Hipple.
Contributing to the drop-off:
•Financial issues. With tightened bank lending, reduced savings and sluggish consumer spending, many can’t afford to start a business or keep an existing one going. Adding to the trouble: Diminished home values make it difficult to get the home equity loans that the self-employed often use for capital.
•Vocational moves. Self-employed workers who have lost income-generating opportunities — such as real estate agents and construction workers who were victims of the housing market’s slide — could be moving to more secure lines of work or opting out of the workforce altogether, says Ellen Rissman, a Federal Reserve Bank of Chicagoeconomist.
“(Some people think) ‘I’m sitting at a desk and the phone isn’t ringing. Why am I doing this? When things get better, maybe I’ll try this again,’” she says.
•Psychological worries. “Constant news about the difficult economy makes people hesitant to venture out on their own,” says Kristie Arslan, CEO of the National Association for the Self-Employed. Many have concerns about how health care reform, tax policy and other regulatory issues could affect a new business, she says.
Folks receiving unemployment benefits also fret about trading in a steady check for the often-risky world of self-employment. Even if someone has a viable business idea, they still have to do a “cost-benefit analysis” to see if losing those benefits is worth the risk, Arslan says.
End yet a big bullet point of Obama’s speech today was extending the unemployment benefits….
Those already running a business are also worried: Slightly more than half of self-employed individuals with no employees have an overall lack of confidence in the future of their business, vs. 36% of all small-business owners, according to a National Small Business Association’s 2011 midyear report.
Here is a fresh study about the extended unemployed benefits and how they are making the people NOT TO WANT TO SEARCH FOR WORK…
Extended Unemployment Benefits Cloud Interpretation of Labor-Market Data
Extended unemployment insurance (UI) benefits provide a safety net to job-losers, raise income and stimulate aggregate demand and employment, and alter the incentives to search for work and to be counted in the labor force as unemployed.
- These first two effects are widely appreciated and not the main subject of this report.
- The third type of effects — what we label as the “behavioral” channels — have consequences for the interpretation of data on unemployment and the level of resource utilization that are perhaps less well understood.
- Stimulus effects are currently adding a couple-hundred thousand to employment and lowering the unemployment rate by one- to two-tenths, but behavioral channels are raising the unemployment rate by considerably more. The net effect is to raise the reported unemployment rate by about 1⁄2 percentage point and the NAIRU by about 2⁄3 of a percentage point.
The presence of extended UI benefits alters the incentives to search for work and to be counted in the labor force as unemployed.
- UI benefits lower the net benefit to accepting employment and raise the incentive to continue to search for work and to decline employment offers that are less than ideal. This leads to longer durations of unemployment, but may allow for more productive “matches” between employers and employees.
- Recipients of UI benefits may be counted in the labor force as unemployed and looking for work even if they do not currently intend to accept a job offer.
- The combined effect of these two behavioral channels is to raise the reported labor force and the reported unemployment rate, with little effect on employment, in contrast with stimulus effects, which raise employment and lower unemployment.
The increase in unemployment from behavioral channels raises the NAIRU by an equivalent amount and has no direct impact on the unemployment gap — the difference between the unemployment rate and the NAIRU.
- Failure to recognize the effect on the NAIRU would lead one to over-estimate the unemployment gap and to expect less inflation (via a Phillips Curve model).
- Correctly gauging the degree of labor-market slack is critical for monetary policy.
We estimate that the behavioral channels are currently boosting the reported labor force by roughly 1 million, and the reported unemployment rate (and the NAIRU) by about 2⁄3 of a percentage point.
- At the peak in 2010, when there were some 6 million recipients, the impacts on the labor force and the unemployment rate (also NAIRU) of the behavioral channels were approximately 11⁄2 million and 1 percentage point, respectively.
- The expiration of extended UI benefits in 2012 will lower the NAIRU and contribute negatively to employment, unemployment, and the labor force.
- Conversely, we would revise up our forecasts for employment, the unemployment rate, and the labor force, if extended UI benefits are renewed.
And here is an opinion piece by someone that does not understand economics at all…Read the whole thing. It is just amazing to me how someone can think that we have to follow the Karl Marx slogan – “From each according to his abilities to each according to his needs”
The phrase summarizes the principles that, in a communist society, every person should contribute to society to the best of his or her ability and consume from society in proportion to his or her needs. In the Marxist view, such an arrangement will be made possible by the abundance of goods and services that a developed communist society will produce; the idea is that there will be enough to satisfy everyone’s needs
SOCIETY AND THE ECONOMY DOES NOT WORK THAT WAY!!!
Are jobs obsolete?
The U.S. Postal Service appears to be the latest casualty in digital technology’s slow but steady replacement of working humans. Unless an external source of funding comes in, the post office will have to scale back its operations drastically, or simply shut down altogether. That’s 600,000 people who would be out of work, and another 480,000 pensioners facing an adjustment in terms.
We can blame a right wing attempting to undermine labor, or a left wing trying to preserve unions in the face of government and corporate cutbacks. But the real culprit — at least in this case — is e-mail. People are sending 22% fewer pieces of mail than they did four years ago, opting for electronic bill payment and other net-enabled means of communication over envelopes and stamps.
New technologies are wreaking havoc on employment figures — from EZpasses ousting toll collectors to Google-controlled self-driving automobiles rendering taxicab drivers obsolete. Every new computer program is basically doing some task that a person used to do. But the computer usually does it faster, more accurately, for less money, and without any health insurance costs.
We like to believe that the appropriate response is to train humans for higher level work. Instead of collecting tolls, the trained worker will fix and program toll-collecting robots. But it never really works out that way, since not as many people are needed to make the robots as the robots replace.
And so the president goes on television telling us that the big issue of our time is jobs, jobs, jobs — as if the reason to build high-speed rails and fix bridges is to put people back to work. But it seems to me there’s something backwards in that logic. I find myself wondering if we may be accepting a premise that deserves to be questioned.
I am afraid to even ask this, but since when is unemployment really a problem? I understand we all want paychecks — or at least money. We want food, shelter, clothing, and all the things that money buys us. But do we all really want jobs?
We’re living in an economy where productivity is no longer the goal, employment is. That’s because, on a very fundamental level, we have pretty much everything we need. America is productive enough that it could probably shelter, feed, educate, and even provide health care for its entire population with just a fraction of us actually working.
LOL!!!! Why would any one want to work?
According to the U.N. Food and Agriculture Organization, there is enough food produced to provide everyone in the world with 2,720 kilocalories per person per day. And that’s even after America disposes of thousands of tons of crop and dairy just to keep market prices high. Meanwhile, American banks overloaded with foreclosed properties are demolishing vacant dwellings to get the empty houses off their books.
Our problem is not that we don’t have enough stuff — it’s that we don’t have enough ways for people to work and prove that they deserve this stuff.
Gee, why would some one deserve a Ferrari since we all can have and be satisfied with Hyundai’s?
Jobs, as such, are a relatively new concept. People may have always worked, but until the advent of the corporation in the early Renaissance, most people just worked for themselves. They made shoes, plucked chickens, or created value in some way for other people, who then traded or paid for those goods and services. By the late Middle Ages, most of Europe was thriving under this arrangement.
During the Renaissance’s we had a great artists and inventors who were trying to better the society, but were they all motivated by just to do it for the others? Nope. They were mostly motivated by self interest (different by selfishness). The explorers during that same period (Age of Discovery) were motivated by discovering new trade ways, new spices, new foods, new gold sources….Most people did not work for themselves. They worked to make a product that others can buy. If you were a shoemaker you would not make just shoes for your family. You would make shoes for the whole village and sell them. You did not rise just 2 chickens, but as many as you could. You sell the eggs and the chicken that cannot eat yourself. Those were not people working for themselves, but entrepreneurs…They were following the principle – I provide what is valuable to you and you in return give me what is valuable for me (money or barter product).
The only ones losing wealth were the aristocracy, who depended on their titles to extract money from those who worked. And so they invented the chartered monopoly. By law, small businesses in most major industries were shut down and people had to work for officially sanctioned corporations instead. From then on, for most of us, working came to mean getting a “job.”
The Industrial Age was largely about making those jobs as menial and unskilled as possible. Technologies such as the assembly line were less important for making production faster than for making it cheaper, and laborers more replaceable. Now that we’re in the digital age, we’re using technology the same way: to increase efficiency, lay off more people, and increase corporate profits.
While this is certainly bad for workers and unions, I have to wonder just how truly bad is it for people. Isn’t this what all this technology was for in the first place? The question we have to begin to ask ourselves is not how do we employ all the people who are rendered obsolete by technology, but how can we organize a society around something other than employment? Might the spirit of enterprise we currently associate with “career” be shifted to something entirely more collaborative, purposeful, and even meaningful?
Instead, we are attempting to use the logic of a scarce marketplace to negotiate things that are actually in abundance. What we lack is not employment, but a way of fairly distributing the bounty we have generated through our technologies, and a way of creating meaning in a world that has already produced far too much stuff.
The communist answer to this question was just to distribute everything evenly. But that sapped motivation and never quite worked as advertised. The opposite, libertarian answer (and the way we seem to be going right now) would be to let those who can’t capitalize on the bounty simply suffer. Cut social services along with their jobs, and hope they fade into the distance.
Yep, the communism never worked well, but why the author keeps pushing it?…
But there might still be another possibility — something we couldn’t really imagine for ourselves until the digital era. As a pioneer of virtual reality, Jaron Lanier, recently pointed out, we no longer need to make stuff in order to make money. We can instead exchange information-based products.
We start by accepting that food and shelter are basic human rights. The work we do — the value we create — is for the rest of what we want: the stuff that makes life fun, meaningful, and purposeful.
Free houses and food for everyone? Then why not free healthcare, free education, free daycare, free cars, free…Oh, most of those we have free in America now…
Where we are going to draw the line?
Who is paying for the free stuff?
If all is free why would anyone will want to work?
This sort of work isn’t so much employment as it is creative activity. Unlike Industrial Age employment, digital production can be done from the home, independently, and even in a peer-to-peer fashion without going through big corporations. We can make games for each other, write books, solve problems, educate and inspire one another — all through bits instead of stuff. And we can pay one another using the same money we use to buy real stuff.
LOL, LOL, LOL.
I just farted, is that considered creative activity?
Who is going to pay me?
You bastards…
Don’t give me these virtual money!
The bakery around the corner does not accept them.
And I am hungry…………………………
For the time being, as we contend with what appears to be a global economic slowdown by destroying food and demolishing homes, we might want to stop thinking about jobs as the main aspect of our lives that we want to save. They may be a means, but they are not the ends.
The opinions expressed in this commentary are solely those of Douglas Rushkoff.
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