wiegie Posted June 4, 2010 Share Posted June 4, 2010 the economy added about 430,000 jobs in May--now this would be a very good number except for the fact that of those jobs only 41,000 were from the private sector (most of the increase jobs was from the Census Bureau). As I personally would have considered anything under a 200,000 increase in private sector jobs to be disappointing, the figures this morning are quite bad from my point of view. (Ignore the slight drop in the unemployment rate, it really means nothing.) Quote Link to comment Share on other sites More sharing options...
SEC=UGA Posted June 4, 2010 Share Posted June 4, 2010 Where the hell have you been? Out counting the number of new private sector jobs? Quote Link to comment Share on other sites More sharing options...
Caveman_Nick Posted June 4, 2010 Share Posted June 4, 2010 the economy added about 430,000 jobs in May--now this would be a very good number except for the fact that of those jobs only 41,000 were from the private sector (most of the increase jobs was from the Census Bureau). As I personally would have considered anything under a 200,000 increase in private sector jobs to be disappointing, the figures this morning are quite bad from my point of view. (Ignore the slight drop in the unemployment rate, it really means nothing.) This kind of job growth is what I expected from the kinds of economic stimulus this administration is trying to enact. The jobs might look good short term, but they are an additional strain on the private sector. I am no economist, but it seems to me that the only real way that the government can help the private sector grow is to stop leaching money out of it. Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted June 4, 2010 Share Posted June 4, 2010 I am no economist, but it seems to me that the only real way that the government can help the private sector grow is to stop leaching money out of it. +1 Not only that but as I've pointed out the recently passed health care legislation and caused a number of medical facilities to shelf projects, which not only impacts construction (which the numbers show declined), but also jobs in the medical field itself as people don't build buildings to let them sit vacant, they use them employing doctors, nurses, cooks, janitors, maintenance, etc... I saw this coming and was screaming it from the roof tops, but was largely ignored or played off as a partisan hack. Quote Link to comment Share on other sites More sharing options...
wiegie Posted June 4, 2010 Author Share Posted June 4, 2010 Where the hell have you been? Out counting the number of new private sector jobs? I was at an economics conference in Portugal. Quote Link to comment Share on other sites More sharing options...
i_am_the_swammi Posted June 4, 2010 Share Posted June 4, 2010 The jobs might look good short term, but they are an additional strain on the private sector. How so? Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted June 4, 2010 Share Posted June 4, 2010 How so? Public sector jobs are paid for by the government, the government has to pay for them somehow. This is typically through taxation, and our current tax system taxes those that in a position to create jobs at a much higher rate then most. This additional tax liability will take money that could be used for expansion and thus job creation. Quote Link to comment Share on other sites More sharing options...
westvirginia Posted June 4, 2010 Share Posted June 4, 2010 How so? Two ways: 1) It removes capital from the economy which would make the most efficient use of it, skims off the top for bureaucracy, increases the cost of borrowing, etc. 2) Perch is absolutely right in what he's been railing. There are parts of the economy that look pretty good, and you'd usually figure on that for creating jobs (with a lag, of course). But there is too much uncertainty out there precisely because of government. Businesses won't expand right now. They aren't really sure of the affects of the HC legislation, and if Cap & tax passes, along with other wet-dream ideas, they could need that cash/borrowing capacity to stay afloat. They can't afford to spend it on expansion. Quote Link to comment Share on other sites More sharing options...
Caveman_Nick Posted June 4, 2010 Share Posted June 4, 2010 How so? How are jobs in the public sector funded? Quote Link to comment Share on other sites More sharing options...
i_am_the_swammi Posted June 4, 2010 Share Posted June 4, 2010 How are jobs in the public sector funded? If those jobs weren't created in the public sector, wouldn't the gov't be paying them in the form of unemployment benefits instead? Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted June 4, 2010 Share Posted June 4, 2010 If those jobs weren't created in the public sector, wouldn't the gov't be paying them in the form of unemployment benefits instead? Whenever a job is created in the public sector it takes away the ability of creating a job in the private sector, and the private sector is usually much more efficient with it's funds then the government is. So, to answer your question no, they just created a more expensive job, and increased the size of government. Quote Link to comment Share on other sites More sharing options...
i_am_the_swammi Posted June 4, 2010 Share Posted June 4, 2010 But there is too much uncertainty out there precisely because of government. Businesses won't expand right now. They aren't really sure of the affects of the HC legislation, and if Cap & tax passes, along with other wet-dream ideas, they could need that cash/borrowing capacity to stay afloat. They can't afford to spend it on expansion. There are ton of other things out there that you should be uncertain about...the government is only a small piece of the puzzle. Wait until interest rates start to rise. Wait until Wall Street takes a beating in the next 6-18 monhts when the commercial real estate sector completely collapses, and there are dark buildings everywhere (FYI...this, perch, is something you should be more concerned about. I doubt there will be much of a need for new construction when there will be so much made avaialble to owners at far below replacement cost). Wait until the fallout of the Euro, and the devaluation of the pound, is felt worldwide. These are much more important and pain-inflicting issuses than the cost increases the HC legislation and Cap & Tax might require. Quote Link to comment Share on other sites More sharing options...
driveby Posted June 4, 2010 Share Posted June 4, 2010 There are ton of other things out there that you should be uncertain about...the government is only a small piece of the puzzle. Wait until interest rates start to rise. Wait until Wall Street takes a beating in the next 6-18 monhts when the commercial real estate sector completely collapses, and there are dark buildings everywhere (FYI...this, perch, is something you should be more concerned about. I doubt there will be much of a need for new construction when there will be so much made avaialble to owners at far below replacement cost). Wait until the fallout of the Euro, and the devaluation of the pound, is felt worldwide. These are much more important and pain-inflicting issuses than the cost increases the HC legislation and Cap & Tax might require. Yeah but HC legislation and cap and tax are still bullets we have time to dodge. Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted June 4, 2010 Share Posted June 4, 2010 There are ton of other things out there that you should be uncertain about...the government is only a small piece of the puzzle. Wait until interest rates start to rise. Wait until Wall Street takes a beating in the next 6-18 monhts when the commercial real estate sector completely collapses, and there are dark buildings everywhere (FYI...this, perch, is something you should be more concerned about. I doubt there will be much of a need for new construction when there will be so much made avaialble to owners at far below replacement cost). Wait until the fallout of the Euro, and the devaluation of the pound, is felt worldwide. These are much more important and pain-inflicting issuses than the cost increases the HC legislation and Cap & Tax might require. Swammi, I'm not saying there aren't other factors, but in a down economy why not try to make things better,or at least do little to cause more instability, than do things that any rational minded person knows are only going to make things worse? If you have two employees stealing from you, one stealing $1,000 a week, and another stealing $500 a week, are you just going to concentrate on the one stealing $1,000? There are definitely other things to worry about, but the government has done nothing but throw additional fuel on the fire, instead throwing water on it, or at least letting it burn itself out. Quote Link to comment Share on other sites More sharing options...
SEC=UGA Posted June 4, 2010 Share Posted June 4, 2010 Wait until Wall Street takes a beating in the next 6-18 monhts when the commercial real estate sector completely collapses, and there are dark buildings everywhere (FYI...this, perch, is something you should be more concerned about. I doubt there will be much of a need for new construction when there will be so much made avaialble to owners at far below replacement cost). This is already occurring. For instance, there is extremely little work in the Retail and Self Storage Sectors of the construction industry (which is what we do). We have gone from 40+ million a year in Self Storage to around 6. Retail is in much the same boat. Only projects going on right now are government contracts (for the most part). Much of this slow down is due to the potential/current collapse in the commercial sector and the banks unwillingness to loan on these projects (couple that with the increased equity demands placed on the developers and youhave a perfect strom that has completely stalled the construction sector.) Within three miles of my office there are roughly 7 retail centers (60 to 200K SF) that are dark and in different stages of completeness. There is no sign that this side of the industry is coming back in a major way for a couple of years. There will be projects here and there, as certain markets rebound or have remained stable (MD, VA, DC area, Huntsville, Raliegh is pretty good, parts of NY state, etc...), but overall it is going to be a rough ride. Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted June 4, 2010 Share Posted June 4, 2010 Where the hell have you been? Out counting the number of new private sector jobs? he's been hanging out with dubya. Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted June 4, 2010 Share Posted June 4, 2010 How so? read this, from one of the leading finance economists in the world. Quote Link to comment Share on other sites More sharing options...
i_am_the_swammi Posted June 4, 2010 Share Posted June 4, 2010 This is already occurring. i agree the darkness of the real estate market is currently underway, but the effect on the capital markets and Wall Street hasn't really begun. many lenders are kicking the can down the road in terms of extending debt, and hoping the market recovers. the waterfall of assets that was expected to hit the streets has not happened yet, and these banks/REITS/public companies have yet to take the massive losses on these assets. they don't book the losses untilt he assets are sold, which many think will be Q3 or Q4, and into 2011. When BofA, Wells Fargo, etc start taking billions of dollars in write downs, their stock will tuble, and Wall Street will follow. they aren't writing much new debt at this time, so they have much smaller future income streams. If banks aren't lending, business isn't expanding, and job growth witll continue to suffer. it is going to get exceptionally uglier. Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted June 4, 2010 Share Posted June 4, 2010 the economy added about 430,000 jobs in May--now this would be a very good number except for the fact that of those jobs only 41,000 were from the private sector (most of the increase jobs was from the Census Bureau). As I personally would have considered anything under a 200,000 increase in private sector jobs to be disappointing, the figures this morning are quite bad from my point of view. (Ignore the slight drop in the unemployment rate, it really means nothing.) what's the rate of job growth again that the economy would have to add per month just to keep up with population growth? I remember that was something you talked about all the time during the bush administration. Quote Link to comment Share on other sites More sharing options...
SEC=UGA Posted June 4, 2010 Share Posted June 4, 2010 I was at an economics conference in Portugal. Were they showing you first hand how not to run an Economy? How was Portugal, always wanted to go there, have heard it is beautiful and that the food is pretty good. Quote Link to comment Share on other sites More sharing options...
i_am_the_swammi Posted June 4, 2010 Share Posted June 4, 2010 read this, from one of the leading finance economists in the world. taken for face value, I agree with his sentiment. But what he fails to mention or include is his analysis is: 1. The cost to pay unemployemnt benefits to the workers who have otherwise been employed by stimulus-related programs 3. The jobs saved by stimulus-related programs, preventing higher levels of unemployment. 2. the effect of the spending power those that were employed, or remained employed, have had on the economy. 3. The homes that were saved due to workers remaining employed. ...and so on, and so on. Had all of the above (and those items I listed were just off the top of my head) not happened, I'd think that out economy would have had just as serious issues as we are facing today, and perhaps even worse. Moreover, how can the author ignore these exceptionally-important factors in his analysis? Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted June 4, 2010 Share Posted June 4, 2010 This is already occurring. For instance, there is extremely little work in the Retail and Self Storage Sectors of the construction industry (which is what we do). We have gone from 40+ million a year in Self Storage to around 6. Retail is in much the same boat. Only projects going on right now are government contracts (for the most part). Much of this slow down is due to the potential/current collapse in the commercial sector and the banks unwillingness to loan on these projects (couple that with the increased equity demands placed on the developers and youhave a perfect strom that has completely stalled the construction sector.) Within three miles of my office there are roughly 7 retail centers (60 to 200K SF) that are dark and in different stages of completeness. There is no sign that this side of the industry is coming back in a major way for a couple of years. There will be projects here and there, as certain markets rebound or have remained stable (MD, VA, DC area, Huntsville, Raliegh is pretty good, parts of NY state, etc...), but overall it is going to be a rough ride. Retail sucks! It is impacted a whole lot more by swings in the economy than educational and medical facilities which is our bread and butter. We used to do a lot of retail in the 80's but changed our focus then because we got sick of the roller coaster ride. With increasing populations and an aging baby boomer population we should be fairly well situated. Unfortunately the HC bill has most Health Systems canceling projects and scratching their heads trying to figure out the impact the legislation has on them and what to do. It will be a rough few years. Had health care failed I am positive I would make money next year, now barring something extraordinary I'm equally positive I will be losing money next year. More than likely long term I personally will be better off in a few years as this will Josh Gordon out a lot of less solvent competitors, putting me in a position to do really well in a few years. The problem is in the next couple of years, particularly next year. My main concern is for the people working for me, as well as some of my friends that are trade contractors. Quote Link to comment Share on other sites More sharing options...
Caveman_Nick Posted June 4, 2010 Share Posted June 4, 2010 If those jobs weren't created in the public sector, wouldn't the gov't be paying them in the form of unemployment benefits instead? What is your point? These jobs add nothing to the section of the economy that must pay for them. Whatever backwards logic you are trying to use about unemployment is backwards. These jobs are not an improvement, and the more of them that are permanent the worse off the section of the economy that must pay for them is. Quote Link to comment Share on other sites More sharing options...
i_am_the_swammi Posted June 4, 2010 Share Posted June 4, 2010 These jobs add nothing to the section of the economy that must pay for them. Whatever backwards logic you are trying to use about unemployment is backwards. These jobs are not an improvement, and the more of them that are permanent the worse off the section of the economy that must pay for them is. I never said they were an improvement....I merely stated the hard fact that, if the goverment hadn't funded these jobs, they would have funded a similar amount in paying unemployment benefits. The cost would have relatively remained the same, and the toll on the private sector would have remained the same. Which sounds better to you: jobs funded by the government, or unemployment benefits funded by the government? They both have the same net effect. Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted June 4, 2010 Share Posted June 4, 2010 I never said they were an improvement....I merely stated the hard fact that, if the goverment hadn't funded these jobs, they would have funded a similar amount in paying unemployment benefits. The cost would have relatively remained the same, and the toll on the private sector would have remained the same. Which sounds better to you: jobs funded by the government, or unemployment benefits funded by the government? They both have the same net effect. They don't have the same benefit. Unemployment until recently anyway has always been viewed as temporary. Government job with the exception of census workers are rarely temporary so they would cause a continued strain on the economy long after those that were unemployed found work in the private sector. Unfortunately government rarely shrinks. Quote Link to comment Share on other sites More sharing options...
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