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Ask and Listen
The head of the Minneapolis Fed, Narayana Kocherlakota gave a presentation
in Marseilles, France on Friday. This was another attempt at convincing
the public that the Fed can fix anything provided they are left to their
own devices and have unlimited capacity to print money. The
presentation was a “No Sale” for me.
The deep thinkers in Minneapolis have come up with a new formula. Bubbly Equilibria? What does that mean?
I suppose that someone has to create such drivel. The formulas were
based on an Apples and Bananas economic model. Unfortunately the real
world is a bit more complex.
The bottom line from Mr. K is that bubbles of any kind don’t create a threat to employment provided that the Fed provides the “appropriate”
level of monetary stimulus. He does point out the limits of monetary
policy due to the limitations of zero interest rates. So really this is
just a defense of QE. His words:
“The bubble collapse has no impact on unemployment or output, given sufficiently accommodative monetary policy,”
This suggests that the Fed can "fix" all bubbles. What Mr. K does not
seem to get is that the Fed is the one that causes bubbles. They do it
with accommodative monetary policy. We are seeing this in ink every day.
Look at the S&P, look at the CRB and look at the two-year note. They are all at bubble levels today. It’s cheap money and loose monetary policy that did it. The current bubbles formed by the Fed will pop. And when (not if) they do, guys like Kocherlakota will respond with: “We need more stimulus!!”
We do need some folks at the Fed who are purely academic economists. But they should not be pulling the strings on policy. We need pragmatists. Ones that can look beyond the next six months and say, “We should follow policies that promote long –term stability”.
The current policies that create bubbles, and then fight them when they
burst with more monetary stimulus, are old school. We need some new
leadership. That leadership should not come from academia.
Want some evidence of that? (Reuters)
In one of the paper's more surprising claims, Kocherlakota suggested that extending unemployment benefits
-- sometimes seen as adding to the jobless rate because it can
discourage those receiving benefits from actively seeking jobs -- actually reduces it.
Mr. K. has to get out of ivory tower and talk to the people.
He may be able to argue that extending unemployment benefits is
countercyclical. But if he bothered to ask around and see what is
happening he would understand that extending unemployment just creates
more unemployed. I’d be happy to introduce him to a few folks that maxed
out unemployment because it was much easier than working. But those people found work as soon as the checks stopped.
I suspect he would hear as much back in Minneapolis (if he bothered to ask). He would also hear that the folks in his district are just sick and tired of bubbles and the Fed that keeps causing them.
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"...far below union scale." 'Bout damn time.
Obviously someone who never had to reach out and grab the chokers on a crane load of drywall and get stuck to the chokers because the hands froze to them. Life is then saved by co-worker. The hands? "Don't let anyone in the white hats see you are hurt man".
+1
And drywall weighs an effin ton! Not that I ever worked with it but my brother does and he once enlisted me in a personal home reno - never again!
Yeah, a REAL job would be tough, wouldn't it? Drywall is not heavy if handled properly -- which comes from experience. Sweat much?
hey rocky, is that your first junk? seriously, I've never seen you junked before.
I get junked plenty. And to answer the above question about whether I sweat:
I was in the real estate and remodeling business most of the 1980s and through the 1990s. I sold my little company in 2003 to the only partner I've ever had. I've carried and hung more Sheetrock than I care to remember, roofed at least 100,000 squares, and spread more paint than would cover a few battleships. Yeah, I've sweated and it's not for pussies. Laying up under a house in the dead of a 5 degree winter fixing broken water pipes, in the cold mud, drinking the only thing we could get at 2 AM (a bottle of cognac) can be a real blast. The "sweating" was copper pipes. It has its upside.
Hey Rocky -
I'm a girl! Love you and and my brother tons but only so much I can do - which I do admit to. Carried drywall a few times - not.
(Though bet I could do better than many posters here but not the points I'm interested in discussing. )
So cut me some slack?
Do you?
What's a good job Leo? Making 60k a year for 9 months work and full pension and medical after 25 years??
No. That is gone.
The 40 hour week? That's gone too. Job for life? Not in America. Want to sell real estate for a living? Go someplace else.
You seem to have some notion that Americans have a right to a high paying job with benefits. And if the don't have that they should get paid for not working.
You are wrong Leo. America is not what it once was. We have to compete on a global scale now. We brought that on ourselves. Now way have to pay a price. There is no free lunch.
You and a bunch of others keep telling people that all we have to do is run the printing press for a few more months and everything will back to "normal". Sorry to tell you, that is the last thing that is going to happen.
Are their jobs? Yes. Maybe you have to move, learn a skill or just take a lower paycheck than you think you deserve. But there are jobs Leo. if you were coming from Eastern Europe and you looked what you could do you would call it the land of opportunity.I'll get you a job driving a cab for $200 buck free and clear a day. If you are an electrician, plumber, carpenter, roofer, mason, Dr, nurse, or any medical tech you can get a job tomorrow.
But that cushy job working for the state? Well that job is no longer there. Move on.
FYI, Information Technology notes a very simple concept taking place in India: The rising tide of human expectations. At first salaries were 1/10 that of us Salaries. Thanks to 20%-35% increases yearly, the ratio is now down to 1/3 which is just about break-even. One example cited was a senior programmer in India now makes $55,000 a year with benefits. In addition, US companies that have a presence in India so they wouldn't have to pay for the overhead or the profit of an Indian based outsourcing company like INFOSYS , have seen their rent shoot up to Silicon valley levels and beyond with no slow down in sight.
Obviously this is applicable to all outsourced jobs there. Certainly low skill, low paying jobs may go around the circle to the Philippines and other places. But it will be difficult to cost justify over a period of years training people to do the same work in the US or India at a 1:10 Wage ration as one salary here equals 10 salaries there.
Since the 80/20 rule is applicable everywhere, more and more US companies are finding out the hard way that labor arbitrage to force down wages here or eliminate jobs ain't what it used to be. By 2013, the author stated it will no longer make economic sense. One could also say that India is in the final phases of a Labor Bubble.
Anecdotal evidence; tech workers in the DETROIT area are landing multiple job offers. Recruiters haven't seen this since the worthless.com era.
That rising tide of human expectations is also forcing China to raise wages, albeit more slowly than India as they sell sweat mainly for low skilled factory positions. Companies like Apple who have manufacturing experience tend to source and buy their own parts and have them delivered to China so the contractor can't mark-up the parts. That means labor increases have to be passed along.
Parts man Parts: Japan's Nuclear Reactor problems along with the original damage from the Tsunami /earthquake smashed up many of the global parts companies that effect factories everywhere like the supply chain of parts that China, The US and Europe depend on is starting to cause plant closings. Boeing announced problems also with a warning.
Notice the iPad seem to always be 4 weeks away from delivery? When , not if, this problem worsens , I suspect this whole globalization thing with no back-up plans will have to be rethought. This may be good but first there will be pain as Americans are more reactive than proactive: This very well could be a monstrous Black Swan in the making. If US-based Japanese auto makers and US car Companies are forced to shut down along with tech companies, that could easily be the final double tap to this economy that no QE2300 will revive.
Oh yeah, GM depends on a Transmission made in Japan for one or two of its key "come-back" cars among other parts. They closed their transmission plant down where I am in a fairly brutal fashion. Some Bad Karma is a coming...stay tuned
Hey Bruce, do you mean those cushy jobs where you write bullshit, or fellate your boss so you can be a parasite to the vast financial fraud system that steals money from people who actually produce something, or render opinions that support said monolith? Those jobs aren't going away, no. Just the ones that took the blood of wage-slave laborers to die in the factories or the streets to provide the average guy, you know, the one who doesn't have the connections or brains to go to an ivy league school to get indoctrinated into the ruling class, with some kind of decent life. Yeah, that decent, pleasant kind of lifestyle has gone away. Get over it. Just because our pals in the fraudulent bankster system took all the money and are gonna keep taking it, money that you shouldn't have had to begin with, doesn't mean it isn't your fault for trying to live some kind of minimal-existence life. It's time to get a bit more minimalist, so stop your bitching and moaning. This is darwin, baby, it's survival of the corruptest. Move on and let me keep writing, cause i'm so good at it...
Yeah, but.....
...my daughter is in the group above, has work, and still can't get by in today's world. State mandated insurances skyrocketing, local taxes, various cost of living expenses goes through her wages...and more...
So, from that aspect, why the eff NOT just let the state take care of a person? I know or have heard of plenty accounts of people that are "better off" living off the State than on taking menial jobs.
Corporate profit before all else, aka Wall Street Mentality has led us to this. We are coming to a point where something has to change...viva la revolution?
Bruce... keep drinking the koolaid.
Many American companies pay workers $10-$12 dollars and hour. These jobs don't have healthcare plans and don't allow for a steady 40 hours a week. They don't include any retirement contributions.
Consider a husband or mother having to take such a job and trying to make ends meet.
These companies show increased revenues and management, owners and stockholders receive great compensation while the very people that do the work receive less.
You are playing the public vs private card when the obvious play is the concentration of wealth into too few hands.
This always results in revolution. I hope you live behind a secure gated community so you can watch what happens when people cannot eat.
They will eventually come see you and dine from what you have stored in your refrigerator.
I could enlighten you but your elite banter prohibits a substantive discussion.
Yep and even though I like what you post on ZH, this piece gets a big JUNK.
I think that you underestimate the potential of a competently run economy. If trade is making you poor UR doing it wrong. What percentage of US gdp do you think is preventably wasted? It is in the national interest to keep unemployed people from being homeless and starving but not to discourage them from working. The disabled as well I might add.
There are no jobs. We used to have jobs. In the late 70's & early 80's I always got any job I applied for. My sister worked for $15/hour for the airlines in the 1980's with overtime.
Bruce, there are NO JOBS ......... unless you want to fight with 500 others for a shit $8/hour job which doesn't even pay for the gasoline & car payment just to get to the shit job.
Here in DAYTON, OHIO, THERE ARE NO JOBS . 20% of all houses are VACANT.
The jobs market was deliberately collapsed through policy out of Wall St. & Washington, remember ?
Anyone who really thinks that there are good - paying jobs in this country that can support a family, house payment, car payment, car insurance payment, utility bills, gasoline, food & kids schools needs to "GET REAL" .
THERE ARE NO JOBS, PEOPLE .......... we've had a collapse in the job market, housing market to collapse next.
Bruce-
I live in Cali. Finding work as a electrician, plumber, carpenter or roofer is a no go unless you are spanish speaking and unable to stand up for your rights when the contractor that hires you does not pay you.
I met another "real worker" from the midwest who was really successful running his own contractor service until the syndicate took over. He now plays banjo on the sidewalks cause the syndicate of illegals run the show. There are many 'illegal' contractors who pay less than $2,000 for a workmans comp package and insurance and without residency screw their own and the 'legals' - just like your friends at the bank/market/fantasy world you feed off of.
Look at your hands - soft no? You wear a tie for a living. Have you made any money in these 'opportunities' the last few years?
You are spewing PURE RECTUM. That's why some think you are an asshole - understand now?
Yes one can make money - I do it schleping art illegally on the street (I look good and am the best fucking artist anyone has seen). When fuckheads (ties) like you pass I ask them what is the price of Silver. Looking forward to the first person who answers correctly and find how how they are scamming their way to knowing the problem - and how they take advantage.
All you soft bellied, girly handed, Ferengi will soon see what you are worth. What can YOU do with your hands and back? It is going to be so fun laughing - IN YOUR FACE - at you types when the time comes for you to carry your own weight.
"America is not what it once was."
You state that with such glee. Why in blazes would you advocate a system where the rich get richer and the middle class is destroyed. Are you a member of the ruling elite? You wouldn't be here if you were so accepting the situation as it is -- "toughing it out' -- is simply stupid and not in your own interest.
If the mofo corporations were required to produce in the same countries they sold their products and if the marginal tax rates of the 1950s were restored, the America where the middle and lower classes could expect their children to have a better standard of living than they do would return.
Where shall I begin? How about at the beginning.
"What's a good job Leo? Making 60k a year for 9 months work and full pension and medical after 25 years??"
No a good job is one that you can respect yourself for doing. You trot out what appears to be the right-wing horror ideal of a teaching job and try to use it as a broad brush to paint everything. That is illogical.
"The 40 hour week? That's gone too. Job for life? Not in America. Want to sell real estate for a living? Go someplace else."
How does the 40 hour work week relate to a job for life? Asking for one is not asking for the other. People work more than 40 hours, and they don't ask for security. They just ask that some bankster doesn't steal all the money that their job depends on. And I do agree that real estate agents are overpaid, at the top end, but if you want to talk about jobs that are overpaid and don't produce anything, how about the financial services industry?
"You seem to have some notion that Americans have a right to a high paying job with benefits. And if the don't have that they should get paid for not working."
Leo suggested nothing of the sort. You made that up and attributed it to him, and you got viciously angry in order to try and cover that fact up.
"You are wrong Leo. America is not what it once was. We have to compete on a global scale now. We brought that on ourselves. Now way have to pay a price. There is no free lunch."
Who is this "we" you refer to? How did the people whose jobs were taken away bring any of this on themselves? This "competition on a global scale" comes from politicians ripping down trade barriers using GATT and the WTO, so that the rich could move all of their capital and manufacturing to China, pump up their profits, and continue to sell back to the people of the US.
"You and a bunch of others keep telling people that all we have to do is run the printing press for a few more months and everything will back to "normal". Sorry to tell you, that is the last thing that is going to happen."
Again, Leo said nothing of the sort. I think that what Leo truly wants to happen is that the printing presses will stop, because inflation hurts working people more than it hurts rich folks like yourself. I think that what Leo wants is for the gap between rich and poor to decrease, and for there to be good, honest work for Americans to do, that pays a living wage, so that they can feed, house, and clothe their families, and have something left over to save for the future.
"Are their jobs? Yes. Maybe you have to move, learn a skill or just take a lower paycheck than you think you deserve. But there are jobs Leo. if you were coming from Eastern Europe and you looked what you could do you would call it the land of opportunity.I'll get you a job driving a cab for $200 buck free and clear a day. If you are an electrician, plumber, carpenter, roofer, mason, Dr, nurse, or any medical tech you can get a job tomorrow."
How do you propose people move without money? How shall they learn a skill without either money to go to school, or a job to apprentice at? What skilled jobs are there anyway? You magically float this idea of driving a taxi for $200 a day -- well maybe you can make that in NYC, and I say maybe because I do not know anything about that. But that is not a skilled job, and besides there aren't enough NYC taxi jobs for everyone. Your claim that a skilled tradesperson can get a job tomorrow has been thoroughly debunked before me.
"But that cushy job working for the state? Well that job is no longer there. Move on."
And to finish up you trot out this old chestnut again. This was extensively covered around the Wisconsin protests. Federal workers may have a higher average salary, but state and city workers do not. And plus, if federal workers now make much more than the average in the private sector, it's only because private sector wages have been falling in real terms since the 1980s. The answer is to pay those in the private sector more, not cut what public employees make. And you won't need to run the printing presses for that, you'll just need to ask where the money that was already printed has gone. I suspect you might find a lot of it in your own bank account.
How? By supporting the consumption temple named the US.
The mechanics are simple:
-in order to consume more and more, the US works at suppressing domestic consumption in foreign nations so that they export to the US their resources, production of goods to be consumed in the US.
- a normal consequence is that, as the domestic consumption is suppressed, labour in those countries grows cheaper. As they consume less, it shows on the wage bills. But not only. As time passes by, the suppression of consumption appears in the shaping of their general environment: as they can not consumed, they can not invest in bettering their environment. Which is a large share of a wage bill, in what environment one lives.
The US has created this trend leading for a demand of a non US residential workforce. It is stupid to think that everyone can live in a Ritz palace. The whole landscape of the US has been shaped by this force.
The US citizens have pushed with pride for this situation and are now vindicative about foreigners because those ones can not consume when the US citizens have forced them to suppress their domestic consumption so that it can be consumed in the US.
It is a piece of the insanity forced by the US world order.
Best post I've read this year. Bravo!
If we are going to preach competition then let's start by busting up the ugly banking cartel. Competition is the one thing these criminals do not want.
I'm thinking out loud here, but I wonder if competition in the finance sector is what we really need. It would seem reasonable to assert that the finance sector has contributed to the outsourcing of American jobs and the ensuing drop in standard of living. Maybe the working class should fight back by eliminating jobs in the finance sector; then let's see who throws an entitlement induced temper tantrum.
What function does the financial sector really serve for the majority of Americans? They can't funnel investment money into industry for job creation, it's not profitable to do so here. They can't be trusted to secure retirement funds (well, unless you have the foresight to pull your funds before each bubble busts, but then if you had that foresight what is the use in paying them).
I agree that people should stop thinking they can get something for nothing, but the biggest promiser of this seems to be the financial sector. Oh, wait, my college econ classes are coming back to me now, it's not something for nothing, it's something for risk. Then again, the federal government eliminated risks for most financial businesses, so I guess it is something for nothing.
"If you are an electrician, plumber, carpenter, roofer, mason,..you can get a job tomorrow."
"And if the don't have that they should get paid for not working"
What the heck is the matter with you? You are not on Mars, or maybe you are.
I had respect for much of what you write from time to time, but this kind of FOX NEWS propaganda belongs on Fox.
For God's sakes Bruce you have no idea what America is going thru...I mean you do live in up scale NewYork where "real estate price are firm" as you recently put it. Good for you. Or is this just another attempt to win anyone who is deaf, blind, and registered independent?
Don't think I'll read anymore of your guff, there are enough mean spirited politicians on the MSM now without looking for it here on ZH.
Maybe you'll be lucky enough to find yourself one of those cushy jobs driving a cab in the NY city sooner than your cocky rich silver-spoon-in-mouth attitude can imagine.
You make me want to puke.
+1!!!
blindfaith
I have to agree with you. Bruce usually dishes up interesting and helpful issues.
BUT, Bruce lives in the Northeast which was the recipient of $7 trillion in government welfare. Of course the world looks a little rosier in the geography of the Criminal Cartel banker turf.
If Bruce needs some carpenters I could dial up a couple of hundred in a day that he could put to work, once he coughs up the transport fees.
Not a dig at Bruce personally (really), but I agree. Bruce can't see the forest through the trees because he's living among the chosen (and I do not mean that in any anti-semitic way).
By 'chosen,' I mean that he's living in an area that has a disproportionately high % of its population working in the financial services industry, which really has been bailed out more than any other industry by taxpayers (involuntarily), and where expectations of continuing government largesse and support run very high.
In truth, this nation would be far better off from a global competitiveness standpoint if it shrunk the size and influence of the financial services segment (or let the free market do it by getting rid of government subsidization) of the economy.
All Fed branches are subordinate to the NY Fed, where the decisions are made.
All subordinate Feds gather stats and make occasional comments on the economy or Fed policy...basically they are ignored by the NY Fed unless they say something the NY Fed wants to hear.
Let's get real about how the Fed operates.
Very nice. The future.
Frankly Bruce, of the two of you, you sound more ideological. Not that I don't agree with much of what you said, but your testy response sounds like it's coming more from your politics than left brain.
If Bruce's position sounds ideological to you then it can only be a result of your recency bias and normalcy bias - the Warren Buffet nonsense about America The Great always surging to new heights of economic growth and prosperity. But now, for the first time in my 64 year life span the numbers don't add up. The political program of our elites to take the middle class down to Chinese wage and living standards is so clear and so obvious, I cannot see how any sensate observer could miss it. Our problems are not the result of mysterious and temporary forces. They are the product of conscious, long term design by the tiny numbers who benefit.
I agree. But the long-term unemployed be they cheats or honest aren't part of that tiny number, they are part of the middle class realizing they're headed for Chinese living standards.
I was reacting to Bruce's anger at the unemployed.
I see your point. The slacker is such a powerful image in the popular culture that it is no surprise that many of the younger unemployed decide to slack. It will take time before they realize that "slacker cool" is a product of Hollywood (or more accurately, Beverly Hills) and was part of the propaganda push to get the sons of the middle class to give in to their own subordination.
But Bruce is right that they should figure out the game, stop being slackers, get jobs, get political and take to the streets in protest. I can understand his frustration at young men moving in with parents and failing to take charge of their fate and their country.
+1
When it comes to unemployment of the highly educated and/or formerly highly paid folks, I am experiencing chronic cognitive dissonance between economic theory, "sound" statistics, and what they (the unemployed) actually say. I am from Michigan (don't live there anymore thank God). Many, many people I know are unemployed. Two of my three college educated brothers are unemployed. Most of my cousins are unemployed. Many of their friends are unemployed. My ex-husband is unemployed. All have been unemployed for quite awhile. WITHOUT EXCEPTION the attitude is "I might as well just enjoy life until unemployment benefits run out." Some are doing good things with their time like going on extended missions that they couldn't do while employed. Some are half heartedly taking classes at the local JC. But the overwhelming majority have become pathetic 24-7 posters on Facebook. I'm stunned by the lassitude I see in formerly ambitious, intelligent, go-getters. WTF is all I can think when I hear of their doings or talk to them personally. And I have to say it pisses me the hell off. It's not like they're earning big bucks on unemployment. A good retail management job would pay more than their unemployment checks. They've lost their homes, moved in with family or friends, sit in tiny apartments with a few remaining belongings from the good 'ol days, but they don't even try to look for a job. The other day I was in Barnes and Noble asking about their hiring. The girl at the counter said they had just hired for some part time positions, but they couldn't find anyone for a manager's job. She asked me if I knew anyone! The current unemployment rate overall in my area is 17%! And Barnes and Noble can't fill a management position????
The Keynesians, socialists, liberals, bleeding hearts out there are dead wrong. Handouts don't help. Handouts weaken. Period. I don't think people should be left to starve, but unemployment benefits should come with strings attached such as proof of almost daily job searches, pursuit of retraining, etc. And the duration should be shortened dramatically, not extended. The longer the unemployed sit on their couches, the weaker they become. And that is a fact.
BKS are BK as of about two weeks ago. Who in their right minds would go to work for them?
In 2006 my company employed over 500 people in manufacturing, mining, steel retail and steel fabrication industries. Our cement powder suppliers, Cemex, Mitsubishi, TXI had powder at around $120 per ton and were going gang-busters to keep up with demand, domestic and international. My staff as Corporate Controller was 23. Revenue was around $60 million and profit was just under 8%. We had purchased 25 new mixers bringing our fleet to over 100 hundred and haul trucks doubled to 20. Bonuses were paid to all employees.
In 2007 I smelled a dead rat in the economy, but couldn't locate a corpse--so I didn't pinpoint what had me on edge (and I had never heard of Zero Hedge). I took steps to eliminate over-time, severely tightened up inventories and we locked in our line of credit with the Chinese Bank that took over our local bank. Near the end of the fiscal year we started laying off operations people because our market started to shrink. New construction plans were delayed, postponed, stalled, or held up in Contractor financing/approval. We also did our own worker compensation audit, subsequent to the actual audit, and successfully proved that we were owed significant refunds due to a stellar safety record. Revenues were just under $80 million with profit just a hair under 10%. No raises were granted during the year, in spite of the profit, nor bonuses because by the end of the fiscal year the economy reeked with unrecognised omens...gut feeling came into play.
2008 was tough due to the cost of diesel fuel used to transport rock and sand to customers and ready mix batch plants. This coupled with a further decline in our market due to an effective price war between competitors saw ready mix revenue of $120 per yard drop to $80 per yard. We idled 20 trucks and reduced our labor by over 100 people. My personal staff, due to attrition and more efficient processing, dropped to 15. Revenues just under $70 million, profitability at 4%. (Fixed costs were eating us alive)
In January 2009, clerical/administrative personnel were put on a 35 hour workweek following the credit freeze of October 2008 and the complete drop off of pretty much all consumer and developer construction. I watched in awe as the "Stimuless" edict was created and enacted. Then actively monitored the local California projects that it supposedly funded...those soon morphed into entirely different types of spending and I was unsurprised to see very little of any actual contruction being done. We idled another 25 mixers and 5 haul trucks. TXI shut down, and a bit later, so did Mitsubishi, Cemex reduced operations to nearly nil in local plants. Cement powder dropped from $120 per ton to $80 per ton. Our ready mix price dropped from $110 to $80. Steel sales were down 40%, steel fabrication was down 60%. We laid off another 100 people. No bonuses were paid, nor were raises granted. 35 hour work weeks expanded to all clerical staff. My personal staff was reduced to 10. Drivers are hard to get, primarily because they may only work 20 hours per week. We have encounters with prospective new hires that tell us that "the fact of the matter is: you want me to get up at 4 am, drive over here to maybe work 20 hours per week, pay for health insurance, taxes, etc. and then drive home and hope to get a call for additional hours....I make more for less effort on unemployment." I have to agree with them.
Here, at the end of 2010 fiscal year, I have a staff of 6 working 35 hour work weeks who haven't seen a raise since 2006 nor any sort of bonus since 2007 (including myself) who are doing the work that used to take 23 working full time. We have over 100 trucks sittiing idle. Our cement powder cost is now around $60 per ton, our ready mix sale price is around $48 per ton. Steel sales in both Arizona and California are 60% of 2006 though we've managed to increase gross margin by 1%. Our revenue is just over $28 million and our loss is 13%. Total personnel is less than 300. The only thing keeping us moving has been the refunds from worker compensation, income taxes and negotiated personal property tax values.
We are now being asked by those that turned down prior employment offers if we would consider hiring...we can't. We have a seasonal uptick right about now, but what I'm seeing is only government spending. And once that phony money stops, everything stops.
(For those of you scanning your portfolios for possible take-overs etc...this is a privately held company, not traded anywhere, it's owned by a family)
If/when I get laid off my first goal is to get a job as a burger-flipper or janitor and stretch whatever unemployment benefits I may actually receive over the longest possible time.
Those that are unemployed can come and apply here, however unless one of our part-timers quits or is fired, there are no openings. And, here, at least, EVERYONE recognizes that just having a job, no matter how low the pay or low the hours, is a hell of a lot better than NOT having a job...partucularly when we see the help wanteds that say "unemployed need not apply".
OldPhart,
Sounds like you have excess capacity and underutilized resources in the form of heavy trucks located in CA & AZ, and ability to add operating staff if business picks up. If you were buying from Cemex & TXI, I assume you are located somewhere in the construction food chain. How are your contacts on the E&D side of the project timeline?
I may have an idea, but would need to better understand the company’s operations. One of my client’s is looking to expand to the US- it is near the bottom of my bottomless inbox, as both the Niger Delta and southern Thailand offer far more interesting opportunities and hospitable business environments for job creation. As much as I might view job creation in CA as providing aid and comfort to the enemy, I have to give Moonbeam credit: California is building high-speed rail- from first world economy, nonstop through emerging markets, and terminating in the undeveloped economy nether regions.
Anyway, if you interested drop me an email at urbanredneck@hushmail.com and I can send you my proper contact info and an outline of what I'm thinking.
Cheers
Indeed. As Dickens once opined: "the best steel comes from the hottest furnaces". And he was no friend of the oligarchy. Most humans, like water, seek the path of least resistence. Make things too comfortable and they will become couch pototoes. Soft, and indulgent.
Water moves by pressure, electricity moves by resistance.
You are completely incorrect. They move by pressure differential or voltage differential. But you are a good whiner, probably still living in Detroit.
Ah, the underemployment temptation. You know, when the labour market turns with an excess of labour offer, it is tempting to fill vacant positions with overqualified people or to create positions solving minor demands within the firm, looking for that person whose qualifications allow to fill the holes of small tasks the current team cannot performed efficiently, a highly qualified jack of all trades. The best example I was reported about was a position requiring to speak and write fluently four languages totally disconnected one from another. The goal was to ease the work load of four translators. Not enough to create a job in each language, no emergency and the labour market allows this kind of demand.
The firm you talk about could use internal promotion if there was an real demand for this position. It would be very interesting to know the qualifications required for this position. It would not be surprising if this firm looks for a rare specimen.
hey dissident, It's hard to get off the couch once all hope is lost. That being said, hunger is an excellent motivator, but not always for legit work.
yes, 30 years ago your premise is correct, not today. I had 28 machinist working for me, secretary, manager, ect. IN 2008, we had a banner year. By April, 2009 the fax stopped, orders halted, and the layoffs began. Being in manufaturing was always a struggle, but through all of the previous downturns, we adapted and overcame. Not this time. The blockades to job creation ise Gubmint created. IN what business can you pay the WC, Salary, Health, UE, Taxes, and compete with "Global Ecomony"? Short of proximity jobs, (ie. education, law, post office, gubmint, taxi cab) can you compete with offshore sourcing? None, because they do not have the gubmint induced overhead that we do. With over half of all employment being some sort of Gubmint(Fed, State or local) job, and factoring in retirees, poverty, and disabled, how can the private sector compete? All of the countries that compete with the US are poverty habitats, is that the way you want us to live? Bowl of rice, couple a fish heads(now radioactive), working 6 days a week for pittance? Couple it with the education decline because it is also gubmint controlled, and you have a recipe for disaster. When the highest valued company in the US is Facebook, and only employes 2,500 people, disaster is amonst us. Rethink your premise.
See my comment below - totally different experiences! Not saying that your observations aren't valid but my inner scientist is asking why such divergent experiences (most people I know who lost jobs were in New York state - not that far from Michigan).
Forget those couple junks, Bruce. You told Leo exactly what had to be said!
"Forget those couple junks, Bruce. You told Leo exactly what had to be said!"
Damn straight!
Personally, I'm getting a little sick and tired of Leo announcing with every post he has MS (to soften a response to his economic views)...we fucking got it Leo...life ain't fair, self pity or using an illness as a crutch or as a rhetorical weapon is cheap shit...even cheaper than running down "those to the south" then turning to "those to the south" for your medical care "for convenience" and then bitching because there are no upscale restaurants to be had.
Leo the Keynesian would agree with this statement as well;
“For every dollar a person receives in food stamps $1.79 is put back into the economy. It is the biggest bang for the buck when you do food stamps and unemployment insurance. The biggest bang for the buck." -Nana Pelosi
Fucking bunch of psychos.
nmewn,
Give me a break! I publicly apologized for my silly comments on suburbia USA and the people down there were all super nice. And as far as MS, it ain't a crutch, it made me much stronger as a person. Life ain't fair and many people have it a lot worse than me. I just get irritated with some of you living in your big homes who think it's easy for the unemployed to to get a job. As far as being open about my MS, it's to help others who have it. I don't give a damn if it annoys you that I mention it in "every post" (bullshit!).
"Give me a break!"
You get nothing from me...I realize I will come out on the wrong end of arguing with a cripple but you're a big boy right?
"I publicly apologized for my silly comments on suburbia USA and the people down there were all super nice."
The truth is...most of the people in my neighborhood don't much give a fuck about how you think of us.
Further...your open endorsement of taxpayer subsidized >>>speculative<<< solar stocks does nothing to further your argument or street cred of "professionally managed" investing for pension funds.
You're a Keynesian socialist statist Leo...everyone knows it...you promote it with every post.
"You get nothing from me...I realize I will come out on the wrong end of arguing with a cripple but you're a big boy right?"
Your moronic comments show exactly how ignorant and demented you are. I'm not a "cripple" and don't see why you have to resort to making fun of disabled people to get your dumb points across.
"The truth is...most of the people in my neighborhood don't much give a fuck about how you think of us."
Which neighborhood is this? The gated community neighborhood where everything looks pretty until you scratch beneath the surface?
"Further...your open endorsement of taxpayer subsidized >>>speculative<<< solar stocks does nothing to further your argument or street cred of "professionally managed" investing for pension funds."
Have you seen the earnings reports from Trina Solar, Suntech, Sunpower, LDK, etc.? Have you seen their PEs and how manipulated these stocks are by the big hedgies looking to load up while retail gets scared away? No, you just like talking out of your ass..
"You're a Keynesian socialist statist Leo...everyone knows it...you promote it with every post."
Keynes was a genius, perhaps the greatest genius of the 20th century. Morons like you will never understand his genius. And I'm not a "socialist statist" but feel free to label me as a fan of JM Keynes. No problem with that.
hi leo. i'm responding to your #1104564, but from all the other stuff, too, you seem 2 me 2B a pretty interesting guy: straight shooter, good offensive/defensive balance, smart, and, most important to a pi-rat, a hustler, too. i'm not up to speed on the feudalisic feudz, here, after only 2 months with posting "privileges".
keynes was a genius. duh. so were the people who developed atomic energy, under 100% goobermint subsidy. ditto b.madoff, batmanke, peter sellers, and charlie chaplin, imo. SO FUKIN WHAT? have you not yet heard of his austrian dubunking? daologiacally, he has fallen, you shitforbrained moron. wake up & smell the coffee, ok? when snidely W @ #1104981 can wax yer ass like that, slewie sez, whoa bro! time to chill and maybe go play in the sandbox for a while, or something, with some good tunes and the mind-altering substance(s) of choice, of course.
when a short-run prodigy-genius economist answers the most fuking obvious question imaginable to his theses : uhh, what about the long run, here, john?, with: "In the long run, we are all dead," that's a fail, leo. a genius of a fail, but still a fail. you just do not answer an economic question by jumping the existential shark, son.
you write: Leave morality out of this. If you let morality and your emotions cloud your judgment, you'll never invest a dime anywhere, never take risk, and never lose or make money.
as unintended consequences are bleeding outa both of keynse's ears, now that the "long run" is, uhh, here, leo, damned near in its "fullness", too, i might add, it is with true dialogical love that i say methinkz you embody the faustian morality and values of your Hero so well. enjoy!