Saturday, May 23, 2009

Episode 60: Jobs Baby Jobs!


Commentators from the right side of the aisle will tell you the way to crush Obama and the democrats in 2010 is by highlighting just how very crappy the job market is. I can attest to the dire straits we are in regarding the job market from personal experience. I am earned my Masters degree last year in hopes of getting my career in the entertainment industry started. Keep in mind this is not the flashy stuff you see on TV, but the behind the scenes work in audio post production, where a career in audio is more realistic. I did what all of us graduating did – packed my bags and moved to L.A.! I had a great internship, earned lots of wonderful recommendation letters, and even got to hang with Hollywood’s elite. None of this was able to stop the bulldozer of hard economic times. Fact of the matter is I chose the absolutely worst time to begin a career, especially one as volatile as the entertainment industry. For all the reasons we have debated many times, the economy simply fell apart. I happen to live in a state with inept politicians to add more fuel to the jobless fire. And as I look around me, it is clear my story is not unique. Most of my classmates who took the plunge are in as bad a shape as I am as well, living literally penny to penny. Read a newspaper, blog or watch TV and millions of college grads will tell a variation of my story.

I was all for the stimulus, seeing the greater good it could provide. The stimulus does just about nothing for people in my position. College grads, who are more likely to create the jobs of tomorrow, got the short end of the stick with the stimulus plan. Still there are far more in the working class than the academic class, so logic dictates policy should benefit the needs to the many, not the few. I get that 100%. Still sucks to be us though.

So yes, republicans do indeed have a very valid talking point here, and if they want to go on the offensive yet again, that is their best card. However, as I’m sitting on the plane on my way back to California, I had a thought about jobs I figured I’d share. I think the economy is completely busted, and we are going about fixing it the wrong way. It is true that despite stimulus, Americans continue to lose jobs. I read in the NY Times America is about to overtake Europe for a higher unemployment percentage. Throwing money at broken businesses is not going to work. This is because the stock market, in my opinion, has never been worth the amount the ticker tells us. Based on reports I’ve been reading from various sources, I’m convinced the financial problem is way deeper than the bank and housing crisis, and has spilled into the private sector. Much like the Dot Com bust, most companies were overvalued, and the housing crisis brought the whole charade down like Jenga blocks. Take Starbucks for example. There is no way they could be worth so much that there are 5 (empty) Starbucks within 2 blocks of each other. The lack of consumption is a problem, but I think the way bigger problem is that current value of the stock market is what businesses are *supposed* to be. Let’s take Apple’s stock. Many have applauded them for surviving the recession/depression, but Apple is a VERY smart company, thus their stock is high because their business practice in the personal computer market is second to none.

If the value of stock is where it’s supposed to be, that means hiring new, or bringing back old employees will be very difficult, because the busted companies never really had the cash to do so. I think that is the true reason while unemployment continues to decline. That is makes construction jobs that much more important. First, it mitigates the damage of a busted economy, because there are more people in the working class than academic class. And because something always needs to be built, it lays the foundation for the point of this post; investment in construction will help us build the foundation for the jobs of tomorrow. The way out of this recession is through new technologies and innovation. Rebuilding our current model is a waste of time and money because it has already reached its maximum potential. I argue that the crisis is largely due to overextending the potential of our economic model to the point of bursting. Now, the unemployment crisis WILL bottom out. Like the bubbles in a fizzy soda, we have to wait for all of the bubbles to pop before the unemployment rate flattens like old Pepsi.

Thus the solution is creating entirely new business sectors. I have argued for green tech many a times, but that’s not the only route. There are exciting innovations in the tech sector, digitizing medical records will provide jobs for at least a decade, electric and hydrogen cars are the cars of tomorrow, rebuilding our broadband infrastructure for the 21st century is essential for making the listed opportunities possible. Instead of bailouts, the government should move to fund innovation. The private sector can’t do it because venture capitalists are strapped for cash as well. We have a plan for the working class – let’s get the academic class into the fold. They longer you keep us on the sidelines, the longer it will take to create true growth.

So while I agree with the republicans that ultimate growth has to come from the private sector, the government is the only entity with cash. We have to shed away our hatred for the government and make them do their job. Get involved with your politics at the congressional level and hold your representatives responsible. The government is only as bad as we are negligent and complacent. Obama has said many times, that once things have stabilized, the reigns of economic growth will go back to the private sector. I urge the GOP to drop the socialist rhetoric and actually Youtube his speeches. It’s very clear that Obama has no intention of turning America into Europe. Let’s make the debate about what new industries we can create, and when and how. If we continue on our current trajectory, the job loss crisis will not improve. The answer is new industries, new innovations, and maintaining, not rebuilding current industries.

My republican friends, attacking unemployment is probably not your best platform if you want to look like you’re looking at the long term strategy. It is hard for businesses to say they busted because that would involve admitting failure. Now, the better idea is to attack which industries to grow and when. TO only highlight problems and offer no solution creates an unhealthy political environment and will ensure the GOP failure.
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7 comments: on "Episode 60: Jobs Baby Jobs!"

Left Coast Rebel said...

TL - I came here to argue ('wink'), and I find your article here very well thought out and articulate. I congratulate you on taking the plunge and moving to L.A., no one could have predicted the economic calamity that has ensued. I'm finding it hard to argue against most of the points here but I do have a few 'gripes'.

1) - The 'stimulus' bill. Simply put, it was nothing more than a political grab-bag, much of the money spent years from now. I'm not saying that the Republicans did anything different than this recently either. I was just another spending bill with negligable stimulative effect IMO.
2) - You said "the government is the only entity with cash". I disagree, the Fed government is as much, if not more broke than the private sector at this point. The 'cash' that they have is being printed out of thin air, our currency is going to inflate to astronomical proportions, and the debt burden on future taxpayers and yourself will be a terrible burden. All of that on top of the past precedents of Keynesian type spending solutions actually iprolonging the Great Depression. I implore you to read The Forgotten Man..... As is true in CA, the Feds simply don't have the money to do everything that they are right now.....

The Law said...

LCR, thanks for joining the debate!

I wasn't terribly happy about the stimulus bill either, but I can see how it was necessary as an immediate soloution to stabilize the rapidly falling economy. The idea is to get the money we gave to businesses back after they companies recovered and made money again. How much return on investment the tax payers get remains to be seen, but I'm certain we'll get a large amount back.

And the government really is the only entity with cash... businesses can't print money or create taxes. Printing money is a bad idea. How I see it, there are only 3 ways to generate revenue: increase taxes, decrease expenditures, or print more money. The only choice EVERYONE can agree with is choice 2, as no one wants higher taxes, and printign too much money casues inflation. Problem with choice 2 is you can't beging to cut programs withotu carefully analyzing how the loss of a program effects other programs. McCain's spending freeze would have casued a MASSIVE problem, as it serves as an anti-stimulus, completely stopping the flow of money. It is not realistic. If you lose your job, you can't go on a spending freeze... you still have bills to pay.

I think the feds are doing something interesting, which is a simulataneous clean up up the mess generated over a couple of decades WHILE creating necesaary programs to stabile then grow the economy. I think it is the most pragmatic approach you can take... just focuing on the clean could last for the length of this first term!

Grog said...

You know I'm in the same boat but I think that we are or are progressing towards an information based economy. we saw heavy industry go overseas decades ago and see a similar trend today starting with customer service and call centers. The greatest natural resource the US has is the intelligence and freedom of our citizens.
Genetics, Nanotech, and Robotics are three areas with potential for explosive growth and unless we take advantage of our intellectual capitol right now we won't be able to compete on the world stage in the future.
yes we need to provide for blue collar workers but we also need to invest in a future where we are still the dominant nation on earth.

Devrim said...

tL I am way too wasted too Google it up, but please let me know how much CO2 is produced to build a windmill producing electricity. You can not threaten an industry with higher taxes and expect them to expand their operations.

Let's say my credit cards are maxed out, my house is underwater, my income is barely enough to afford food for my family; Should I go ahead an buy that 52" LCD TV? No ? But it will stimulate the economy and create/preserve jobs and an LCD uses less electricity than a cathode ray one so is better for the environment!!! It is the same way with the government, the Chinese are threatening not to buy anymore US assets unless we change our monetary policies, Standard&Poors are mentioning US might loose its AAA status, should the government go ahead and buy another 52" TV, should they tax me and you to make sure the alcoholic bum on the corner has a 52" TV ?

Do you believe current government supports Darwin or Creation theory ? I believe in Darwin, I believe in "survival of the fittest/smartest". What I don't believe is programs that enable the weakest to survive, to breed while limiting my options to survive.

Go ahead and take a look at , he is a Marxist asswipe, but every now and then he makes good points on how we are destroying ourselves.

The Law said...

"Thus the solution is creating entirely new business sectors. I have argued for green tech many a times, but that’s not the only route.

Gee dev, I thought you'd gove me a high five for that one lmao

I'm not quite sure if you're responding to the right post? My point here is economic growth has to come from the private sector. The stimulus had to stabilize the economy to keep it from falling, but it is a bad idea to use that money to continully bail out old business. We should be investing in private enterprise and new innovations instead.

Grog said...

The Law said...

I'm thrilled to hear about this! Geothermal does seem to be th emost promosing, and I know google is very interested in the geothermal frront as well. Plus, it will hopefully get the academic class in action.

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