T Nation

Reducing Unemployment


#1

What the headlines and talking heads didn't mention was that there are still 15.3 million people lying around on the couch watching Oprah and Ellen every day and a record 46 percent of these folks have been out of work for six months or longer.

The government's U-6 unemployment measurement, which includes workers unemployed less than one year and are thus termed "short-term discouraged," rose to 17.1 percent. And adding back "long-term discouraged" workers gives us an unemployment rate of 22 percent.

Read more: Should We Be Upbeat on Unemployment? - Doug French - Mises Daily http://mises.org/daily/4355#ixzz0nwzPu6DB

Question, why is everyone so emotionally involved of reducing unemployment?

Wouldn't it be easier to stop looking at the problem and just come up with a solution that is slightly tiresome but rewarding for everyone involved, starting up a business??


#2

What % of the currently unemployed do you think have the capital required to start a small business...


#3

I am talking about 100% of pundits, politicians, &c. that say that we need to fix unemployment. It does not take much effort to start up a business, but it sure seems to take a lot of effort to 'fix' unemployment from these guys.

As well, anyone think that we should really worry about unemployment? Or that is an arbitrary number that people throw out to set in panic?


#4

lol wut?


#5

It wasn't hard when I did it.


#6

I started a business last year. Start up of $1,000. Since then I have put another $2,750, but I did make $1,200, so that is a net of $2,550 I have put into it so far.

$1544 was spent on expanding the business. So effectively in running the business I have lost $6. But that includes all the extra stuff I bought to help me run the business that I no longer need to purchase. (Some of which I may not have needed as much as I wanted for the business.) If I ran my business as is without any more expansion I would probably be netting about $100 a month.

Yes that isn't much , yet. But it is just a start, and you have to admit that this is an excellent ROI. A full third of the money that went into the business came from the business, and most of future expansion will come from reinvesting the profits.

I am trying to decide if I want to take over a similar business for another person, but that would require me to take on some debt, and start thinking of the possibilities of a part time employee. And I am not sure if I want to deal with all the government BS involved, and I am sure if I buy it, I would want an employee eventually.

Too many people think you can't start a business without tens of thousands of dollars. Yet I know a couple of people who started businesses with just a mower or two, and they are making decent money.

On the subject of reducing unemployment, many people are under the false impression that WWII ended the Great Depression. But the government realized after the war they didn't have the jobs for all the people coming back, and the idea was to cut taxes. And it worked.

Oh yeah, if you search online you will find a lot of propaganda that says the opposite. But that is all it is, propaganda.

A research paper found that FDR's programs actually increased the Great Depression by 7 years. And anyone who lived through the high tax 70's, and Reagan's lower tax 80's can't argue the results. Well, they still try.

And again in the 90's, when Clinton increased taxes, and the economy that was in recovery slowed until the Republicans took over Congress, and enacted changes that resulted in the "surpluses" Clinton took credit for.

After the 911 attacks we were headed in a very bad direction, but the economic tax cuts enacted after that did stop the fall. (Didn't stop the complaining though.)

Now we have an economic problem, and business is trying to position themselves for tax increases. And that means avoid hiring people, and not making any long term investments or business deals that may be derailed by future tax increases.

The VAT is being blamed (for good reason) for causing an economic downturn in Japan. Does that make this a good time to introduce it to America?

Tax cuts would have saved this economy, and at barely the cost of the TARP bullshit. In fact the results of a recovered economy would have resulted in more money coming in to the government then there is now.


#7

It can't be done. The government has crossed a line where increased spending actually increases unemployment. Then, if they cut spending, that increases unemployment too. In either case, a new level of unemployment around 10% (official, which is a crock) is the new norm.


#8

Who was the kid over in SAMA who wanted to start a string of whorehouses, and he detailed all of his insane adventures?


#9

No, I didn't consider it difficult either, but it also depends on what business you are starting. If you don't need much capital to start with then yes, the process becomes much easier. My business required a decent amount of money and at the time, banks didn't want to give loans for small businesses. And I was even using USAA (as a veteran) and they still wouldn't go for it.

I think, more importantly, that starting a business is (relatively) easy, ensuring that the company grows and stays afloat is the difficult part.


#10

A better question:

In a world that is rife with imperfections how can there be so many people unemployed when there is so much work to do to fix them?


#11

The word 'hard' is relative to knowledge. The more knowledge you have in your hands, the easier things are.

My business is a 500 acre farm in Southern Oklahoma that grows feed for cattle in Northern Oklahoma. Yes, I had to get someone to give me a loan, but it still wasn't harder than finding the money to help me out, and finding the work hands.


#12

Because the State hasn't hired 'em! :wink:

Or, because it is a natural economical phenomenon to have people unemployed, either through lack of will, or transition through changing demands.


#13

Or the know-how or the product. Or the ability to provide services for which there is a demand. Ha. Let's just start a business. Yeah. That is not an option for a great many unemployed.

Incidentally, I do have some friends who recently started small businesses. And you know how they were able to do it? The bank bailout which loosened credit and started loans to small business owners again. Specifically the $30B in TARP funds slotted to this. Something that many here opposed.


#14

What is the business?


#15

Of course we did and still do. Kicking the problem down the road by adding to the problem will no longer be an option, before long. It's time to break the cycle of creating larger future crises out of trying to solve the previous smaller crises. Instead, we decided to try and avoid much of the pain, again. It'll come back around bigger and badder, 'needing' an even larger response. And so on, and so on. That is, until the snowball hits wall at the bottom of the hill. It is the defining characteristic of our times. Solving our problems by bankrupting future generations.


#16

Most of the banks that received TARP funds have already paid them back. WITH interest. The government (AKA the people) will ultimately profit from those particular initiatives.

I am much more skeptical of the stimulus than the bailout because I see little evidence that this money is actually calculated to foster growth and employment. I don't think it's really going to do anything except drive up the deficit.


#17

Unless of course the people would've, ultimately, profited more by keeping their own money, and allowing the too big to fail, to fail. That is, to take the pain now, and allow the consequences of excessive risk and greed to teach a very, very, valuable lesson. Instead, there's been a new short-sighted lesson taught. One you just made the beginning of an argument for. Not only do the too big to fails exist, but that status must also be protected. All at the expense of the out of favor not too bigs who've been competing with the too bigs. What should've happened was a decentralization of power, over time, to the not too bigs and the prudent. Decentralization, it's not solely a for the gummit thang.

Instead, it looks like we've made justification for a new partnership, if you will. Sounds familiar.


#18

Your are completely misinformed. Most of the banks that received the TARP funds did not want them or did not need them. All the top banks were forced by Paulson to participate in TARP because the government did not want the public to know which banks were actually insolvent. The banks that did not need TARP payed them back as soon as they were allowed because it was costing them money due to the high interest rate of the TARP funds. Fifth Third banks CEO said they lost 100 million because of TARP but where forced to take it. Also, though not a bank, GM paid their TARP funds back with government stimulus money they received, even though they falsely calim to have repaid the government. We have along way to go


#19

Get rid of all the illegal immigrants working and it will create a vacume , people will haave to take jobs they consider below them , all they have to do is wait until the wage exceeds what public assitance will pay


#20

Some of the Banks that received funds did not need or want the money for capital purposes. But the were not 'forced' to take it. The implementing legislation did not grant the government that power. They were arguably strong-armed into taking the money, but they really did it for selfish reasons. Take JPMOrgan as an example. Jamie Dimon is quoted as saying that JP Morgan did not need the capital but also is quoted as, nonetheless saying "we accepted TARP funding because we believed it was in the best interests of our financial system and our country." The real reason JP Morgan, Goldman and the banks that were doing ok all accepted the TARP money was so that AIG would make good on the CDSâ?¦ If AIG were left to fail, these banks would have lost a bundle...

With the exceptions of JP Morgan, Goldman, and Wells Fargo, most of the banks DID need help and most of THESE banks have paid back GM has not really paid the money back. There is a good argument that the banks that were doing well never should have been given or accepted TARP funds. But at the end of the day, the government made a nice little return on the "investment." However heavy-handed. I am not misinformed. You are saying I said things that I never did.