Tag Archives: Jobs

Eight years of socialism: more debt, more regulation, fewer Americans working:

Has the economy been doing well lately? When I ask Democrats that question, they often point me to the stock market. I know that the stock market has done very well in the last 8 years. But I really question which Democrat policies have been responsible for this winfall.

Certainly, policies like Obamacare, Dodd-Frank, green energy subsidies, blocking Keystone XL, creating a student loan bubble, and even loosening mortgage lending again to create another housing bubble, cannot cause any economics growth. My personal opinion is that all the growth came from adding over $10 trillion dollars to the debt – a process that started with the election of Nancy Pelosi and Harry Reid to the House and Senate majorities, respectively, in 2007.

Look at the national debt:

Gross public debt, Democrats control spending in 2007
Gross public debt, Democrats control spending starting in 2007

If you add $10 trillion to the national debt in 8 years then OF COURSE the stock prices will go up. You would look richer too if you took your credit card balance from $8,500 to $18,500. But what is behind all this consumer spending and government spending? Just trillions of dollars of new debt.

I think a better measure of how the economy is doing is to ask job creators how it is doing. For example, we can ask small businesses, since they are responsible for so much of the job creation in this economy.

Here’s an article from the Daily Signal about that.

It says:

More than five years after the end of the “Great Recession,” only 21 percent of small businesses* say they have fully recovered. During the recession, lack of sales ranked as the top problem small business faced. Taxes placed second, and “government regulations and red tape” placed third. And since 2012, at least one in five small business owners identify government regulations as their most important problem.

The reason for this is simple—small business owners directly feel the impact of federal regulation in the daily life of their businesses. The small business owner is often the main person in a business who bears the burden of complying with regulations and paperwork requirements. According to a 2010 study, small businesses spend $10,585 per employee on regulation, which amounts to 36 percent more per employee than larger companies spend.

With that as a backdrop, it is easy to see how small business owners continue to wonder why Washington just does not get it when it comes to regulation. For decades, Congress has sought to solve societal problems through mandates on business. Too many Americans without health insurance? Congress tries to solve that by requiring businesses to provide health insurance to their employees (regardless of whether or not they can afford it) or pay hefty penalties. Too many Americans unable to care for a sick relative? Congress seeks to address that by mandating that a business keep a position open three months out of every year for qualified employees, using a cumbersome reporting system.

Always entrepreneurial, with a keen focus on the bottom line, the American small business owner looks for ways to minimize the time and money spent on things other than running his or her business. Since many of these regulations wisely exempt the smallest of small businesses, some employers purposefully do not increase hiring because they do not want to have to comply with the regulatory regimes that await businesses that expand to 10, 15, and 50 or more employees.

This might be why the labor force participation rate is at a 38-year low.

CNS News explains:

A record 94,031,000 Americans were not in the American labor force last month — 261,000 more than July — and the labor force participation rate stayed stuck at 62.6 percent, a 38-year low, for a third straight month in August, the Labor Department reported on Friday, as the nation heads into the Labor Day weekend.

[…]In August, according to BLS, the nation’s civilian noninstitutional population, consisting of all people 16 or older who were not in the military or an institution, reached 251,096,000. Of those, 157,065,000 participated in the labor force by either holding a job or actively seeking one.

The 157,065,000 who participated in the labor force equaled only 62.6 percent of the 251,096,000 civilian noninstitutional population — the same as it was in July and June. Not since October 1977, when the participation rate dropped to 62.4, has the percentage been this low.

So… do you still think that the economy is in good shape? Any economy is going to look better if you take an $8.5 trillion debt and run it up to $18.5 trillion. But if you look a little closer, you see that small businesses are hard-pressed, and it’s affected the real unemployment rate.

Ideas for higher education reform from a disillusioned professor

We need to reform higher education
We need to reform higher education

A friend of mine who is a full professor sent me this article from the radically leftist site Vox. I was so surprised to find that I agreed with the author – a university professor  – pretty much across the board. See what you think of some of his points about how higher education needs to be reformed, and then I’ll comment at the end.

He complains about the university bureacracy and the office politics, then says this:

I realized not even students were too invested. When my best friend visited my campus to give a talk, he observed one of my lectures. I’ve got many shortcomings as an academic, but lecturing isn’t one of them. I’ve been on TV, radio, podcasts — you name it. By professor standards, which admittedly aren’t that high, I could rock the mic. But while my friend sat there, semi-engrossed in the lecture, he found himself increasingly distracted by the student in front of him.  That student, who like all in-state students was paying $50 per lecture to hear me talk, was watching season one of Breaking Bad. In a class with no attendance grade, where the lectures were at least halfway decent, he was watching Breaking Bad.

Later during that same visit, my friend asked me, in total sincerity, “Why aren’t you doing something meaningful with your life?”

“This is important,” I insisted. But there was no passion behind my words. I was a priest who had lost his faith, performing the sacraments without any sense of their importance.

So why are there so many students who have no interest in university who nevertheless attend in order to get the credential? After all, university is very expensive.

Here is his explanation:

As recently as a year ago, I remained willing to work inside that fractured system of pay-to-play higher education. If students wanted to take out federal loans to buy degrees, who was I to stop them? Let the chips fall where they may; graduate them all and let the invisible hand sort them out.

But that system is unsustainable. Liberal arts programs, and the humanities in particular, have become a place to warehouse students seeking generic bachelor’s degrees not out of any particular interest in the field, but in order to receive raises at work or improve their position in a crowded job market.

Once upon a time, in a postwar America starved for middle managers who could file TPS reports, relying on the BA as an assurance of quality, proof of the ability to follow orders and complete tasks, made perfect sense. But in today’s world of service workers and coders and freelancers struggling to brand themselves, wasting four years sitting in classes like mine makes no economic sense for the country or for the students — particularly when they’re borrowing money to do so.

See, this is not going to make any sense to my readers who have STEM degrees or vocational training. When STEM or vocational training students are in class, we learn, because we expect to have to do the job shortly after. We were not preparing for easy “talking” jobs, we were preparing for “doing” jobs. We were there to learn how to do something for money, not to have fun. We were there to learn how to produce value for customers, not to be indoctrinated by liberal professors holding red marking pens. Many liberal arts students are not there to learn to do a job, they are there to get a credential. In fact, many of the graduates of liberal arts programs these days have to be retrained by their employers.

The author of the Vox article has a solution:

Our federally backed approach to subsidizing higher education through low-interest loans has created perverse incentives with disastrous consequences. This system must be reformed.

When I started out, I believed that government regulation could solve every problem with relatively simple intervention. But after four years of wading though this morass, I’m convinced these solutions should be reevaluated constantly. If they’re not achieving their objectives, or if they’re producing too much waste in the process, they ought to be scrapped. We can start with federal funding for higher education.

The quickest and most painful solution to the crisis would involve greatly reducing the amount of money that students can borrow to attend college. Such reductions could be phased in over a span of years to alleviate their harshness, but the goal would remain the same: to force underperforming private and public universities out of business. For-profit universities — notorious for their lack of anything resembling good academic intention — should be barred altogether from accessing these programs; let them charge only what consumers in a genuinely free market can afford to pay for their questionable services.

Without the carrot of easy access to student loans, enrollments would shrink. Universities would be forced to compete on a cost-per-student basis, and those students still paying to attend college would likely focus their studies on subjects with an immediate return on investment. Lower tuition costs, perhaps dramatically lower at some institutions, would still enable impoverished students eligible for Pell Grant assistance to attend college.  Vocational education programs, which would likely expand in the wake of such a massive adjustment, would offer inexpensive skills training for others. The liberal arts wouldn’t necessarily die out — they’d remain on the Ivy League prix-fixe menu, to be sure, and curious minds of all sorts would continue to seek them out — but they’d no longer serve as a final destination for unenthusiastic credential seekers.

I agree with this idea, in fact I blogged about it before. This is the right solution to the problem. The problem of higher education costing too much will be solved when we stop attaching taxpayer money to students and urging them to attend university. If they want to get a job, then they should be trained to do a job. Only the students who are really interested in liberal arts should be there, and they should have to weigh the costs against the benefits. Maybe we should be taking the student loan decisions out of the hands of the government, and back in the hands of bankers who actually expect the money to be paid back. Or maybe we should give a tax credit to private sector businesses who agree to stake a student through his education, in exchange for working for them for some period after graduation. Anything is better than the mess we have now.

Do unemployment benefits discourage people from working?

I noticed that the latest jobs report showed that the percentage of work-eligible Americans working was at a 38-year-low.

CNS News reports:

A record 93,626,000 Americans 16 or older did not participate in the nation’s labor force in June, as the labor force participation rate dropped to 62.6 percent, a 38-year low, according to the Bureau of Labor Statistics.

In June, according to BLS, the nation’s civilian noninstitutional population, consisting of all people 16 or older who were not in the military or an institution, hit 250,663,000. Of those, 157,037,000 participated in the labor force by either holding a job or actively seeking one.

Now, let me ask you this. Does paying people to not work cause more people to not work? It seems to me that whatever you subsidize, you get more of, and whatever you tax, you get less of.

Now look at this article from the radically-leftist New York Times.

It says:

Before this recession, most economists probably thought that some amount of unemployment benefits were just and compassionate, and offered a sense of security even to people who were lucky enough to retain their jobs, despite the fact that the program would raise unemployment rates and reduce both employment and economic output.

In other words, unemployment benefits shrink the economy to some degree, but shrinking the economy a bit may be a price worth paying.

Unemployment benefits were thought to reduce employment and output because, by definition, working people were ineligible for the benefits. In particular, an unemployed person who finds and starts a new job, or returns to working at his previous job, is supposed to give up his unemployment benefits. Economists had found that a large fraction of unemployed people delay going back to work solely because the unemployment insurance program was paying them for not working.

Here’s a new study explaining how the “generosity” of the big government Democrat Party actually encourages people to avoid working, and to remain dependent on the government for their “income”.

A study published by two labor economists, Stepan Jurajda and Frederick J. Tannery, looked at employment histories for unemployment insurance recipients in Pittsburgh in the early 1980s. Unemployment rates got quite high in Pittsburgh in those days, reaching 16 percent at one point, and staying over 10 percent for two and a half years.

The chart below summarizes their findings for Pittsburgh.

The chart displays the fraction of persons (in Pittsburgh) receiving unemployment benefits who began working again, as a function of the number of weeks until their unemployment benefits were scheduled to be exhausted. For example, a “hazard” value of “0.04″ for week “-14″ means that, among unemployed persons with 14 weeks remaining until their benefit exhaustion date, 4 percent of them either began working a new job or returned to their previous job.

The chart:

Unemployment offers a disincentive to find work
Unemployment benefits offer a disincentive for Americans to find work

The most troubling thing about this is what is not said in the chart or the study – think about the children growing up in these households where their parents, especially the fathers, are not working. What are they learning about self-sufficiency and the role of government? They are the ones who we are going to task with paying for our lavish entitlement programs in the future. Are people who think that dependency on government is normal being trained to pay for the exploding costs of Social Security and Medicare?

Supreme Court rules against EPA’s job-killing tax on electricity

Atmospheric temperature measurements though April 2015
Atmospheric temperature measurements though April 2015

If you have to pay your own electricity bill out of your own earnings, then I have some good news for you.

The Daily Signal has the story.


Today, the Supreme Court in Michigan v. EPA held that the Environmental Protection Agency improperly ignored costs when it decided to regulate hazardous air pollutants from power plants. The court, in this 5-4 opinion, struck down this extremely costly rule, known as Utility MACT or Mercury and Air Toxics Standards (MATS).

Under Section 112 of the Clean Air Act, which applies to power plants, the EPA administrator shall regulate if the regulation is found to be “appropriate and necessary.” According to the EPA, they didn’t have to consider cost when deciding to regulate, even though the statute specifically says that the regulation has to be “appropriate.”

Justice Antonin Scalia, writing for the majority, explained, “[a]gainst the backdrop of this established administrative practice [consideration of cost], it is unreasonable to read an instruction to an administrative agency to determine whether ‘regulation is appropriate and necessary’ as an invitation to ignore costs.”

The EPA was going to ignore an astonishing amount of costs. The EPA estimated the costs to be $9.6 billion annually. This compared to benefits of $4 million to $6 million annually. As pointed out by Scalia, “[t]he costs to power plants were thus between 1,600 and 2,400 times as great as the quantifiable benefits from reduced emissions of hazardous air pollutants.” As the court succinctly explained, “[n]o regulation is ‘appropriate’ if it does significantly more harm than good.”

Unfortunately, energy prices are still going to go up, and jobs are still going to be lost as a result of previous EPA regulations.

The Stream says:

While this is a major legal win for the coal industry, it may have come too late. Power plant operators have already slated to retire 13 gigawatts of coal-fired power by the end of this year. Coal plant owners also must ready themselves to comply with upcoming ozone and greenhouse gas regulations.

Well, it’s been a rough week, but we have to take our victories where we can. A win’s a win. Hopefully, the next President will abolish the EPA and the Department of Energy entirely, so that those clowns have to get real jobs doing something useful for a change.

Why is it so hard for young people to find a job?

Young people have a sense of entitlement
Young people have a sense of entitlement

Bloomberg News discusses the “Professionalism in the Workplace” survey of human resources specialists from York College of Pennsylvania.

Forty-nine percent of [those surveyed] stated that less than half of new employees “exhibit professionalism in their first year.” More than half (53 percent) have noticed “a sense of entitlement” rising among younger workers; almost 45 percent have seen a “worsening of the work ethic,” including “too casual of an attitude toward work” and “not understanding what hard work is.”

Younger workers believe they can multitask and remain productive, the human-resources people told the York researchers. Thirty-eight percent of respondents blamed multitasking for the lack of “focus” among younger workers. The authors of the study explained that the younger generation “believes that it is possible to multi-task effectively” and that using social media, for example, is an efficient way to communicate. In interviews, the applicants check their phones for texts and calls, dress inappropriately and overrate their talents.

“The sad fact is some of these persons probably do not understand what is wrong with this,” the authors note.

Older workers have always complained about younger workers, of course, but there’s a difference: This time they attribute the youthful flaws not to ignorance or waywardness, but to a “sense of entitlement.”

We might forgive 18-year-olds fresh out of high school for lacking employability skills (the manufacturing sector hires many workers lacking undergraduate degrees). But when he or she reaches 23 and has four years of college, employers expect a white-collar worker to recognize basic norms of dress and deportment.

What happened in college, then? The survey by York College’s Center for Professional Excellence assigns colleges part of the blame, observing that letting students miss deadlines without penalty and assigning good grades for middling work only make them form the wrong expectations.

Meanwhile, the UK Daily Mail had the results from a 2013 survey:

Young people’s unprecedented level of self-infatuation was revealed in a new analysis of the American Freshman Survey, which has been asking students to rate themselves compared to their peers since 1966.

Roughly 9 million young people have taken the survey over the last 47 years.

Psychologist Jean Twenge and her colleagues compiled the data and found that over the last four decades there’s been a dramatic rise in the number of students who describe themselves as being ‘above average’ in the areas of academic ability, drive to achieve, mathematical ability, and self-confidence.

But in appraising the traits that are considered less invidualistic – co-operativeness, understanding others, and spirituality – the numbers either stayed at slightly decreased over the same period.

Researchers also found a disconnect between the student’s opinions of themselves and actual ability.

While students are much more likely to call themselves gifted in writing abilities, objective test scores actually show that their writing abilities are far less than those of their 1960s counterparts.

Also on the decline is the amount of time spent studying, with little more than a third of students saying they study for six or more hours a week compared to almost half of all students claiming the same in the late 1980s.

Though they may work less, the number that said they had a drive to succeed rose sharply.

[…]Twenge is the author of a separate study showing a 30 per cent increase towards narcissism in students since 1979.

‘Our culture used to encourage modesty and humility and not bragging about yourself,’ Twenge told BBC News. ‘It was considered a bad thing to be seen as conceited or full of yourself.’

Just because someone has high self-esteem doesn’t mean they’re a narcissist. Positive self-assessments can not only be harmless but completely true.

However, one in four recent students responded to a questionnaire called the Narcissistic Personality Inventory with results pointing towards narcissistic self-assessments.

Narcissism is defined as excessive self-love or vanity; self-admiration, or being self-centered.

Twenge said that’s a trait that is often negative and destructive, and blames its boom on several trends – including parenting styles, celebrity culture, social media, and easy credit – for allowing people to seem more successful than they really are.

I think what I am seeing is that not only do they work less, but they work at things they “like”, rather than at things that will allow them to provide value to others. So, you’re not going to find a lot of computer programmers or petroleum engineers among young Americans, but you will find a lot of people gravitating to jobs that are easy that make them feel good about themselves, and look good to other people, too.

Obviously, there are policy reasons for youth unemployment being so high, but I think this attitude that young people have is definitely part of it.