The jobs report released yesterday was bad; not just bad but really, really bad. It showed a total of 431,000 new jobs created and of those, 411,000 were part-time, temporary census jobs. That means 20,000 new jobs to divide between seventeen million unemployed. You have a better chance of throwing a dart into into the Grand Canyon and hitting a bird on the way down than you do of finding a job.
Twenty thousand jobs divided by 50 states is four hundred jobs per state. That's bad news in North Dakota but that is unbelievably bad news for states like California or New York. The Labor Secretary, Hilda Solis, interviewed yesterday on CNBC explained that the economy has been adding jobs for the past five months compared to last year when we were losing 500,000 jobs a month. That is a false premise. An economy cannot continue to lose half a million jobs a month before all or most of the excess labor force has been eliminated.
When Ms. Solis was asked if, due to the poor job numbers, perhaps the economy needed a government public works project, the answer was a firm "No." Her plan and the President's plan to solve the unemployment crisis is "tax credits" and "creating a sound business environment." Those are indisputably core Republican positions. Let the free market work to solve all the problems and help business and all will be well.
The President spoke yesterday at a Maryland truck dealership praising his administration's job creation performance. He said of the jobs report that 431,000 was a disappointing number but only later, almost as a footnote, added that "Most of those jobs were census jobs." Not most of those jobs but 96 percent were census jobs, yet another pinprick in the myth of the recovering economy balloon. The President pointed to the truck seller's improving sales and the dealer cited to Obama that there was a pent-up demand.
This is exactly what the tax credits in the President's program targets:
$5,000 tax credit for each new employee hired;
Wavier of 12.4% Social Security contribution;
$12 billion for homeowners' $8,000 tax credit.
The Recovery Act added funds to the Small Business Administration for government-backed loans to small business. The loans would be guaranteed up to 90 percent by the Federal government.
The Recovery Act also calls for tax cuts for small business investments. Investors who purchase stocks in qualifying small businesses will receive favorable tax treatment if they hold the investment for five years. They can also skip paying any capital gains taxes on the investment. The Recovery Act pushed that provision up retroactively to 75 percent of investments made in 2009 and 2010. Another provision allows small businesses to deduct up to $250,000 in qualified capital investments through accelerated depreciation.
These aren't bad job creation ideas, that is, if you're a Republican. Republicans love tax cuts for business owners. They love tax cuts for stock purchases and accelerated depreciation because it helps them to hold on to their profits. No one is going to hire anyone unless they need to hire them.
If you own a trucking company and plan on staying in business you have to buy new vehicles. Normally purchases run in a three-year cycle. So you didn't buy any new trucks in 2008 because the economy was in the tank and you didn't buy any in 2009 because the economy was in the tank. Now you've got tax cuts and accelerated depreciation, making your trucks cheaper and your tax bill lighter, and that filters down to your employees how?
I've worked for a small business that was incorporated. The father owned 50 percent of the stock and his wife owned 25 percent of the stock and their nitwit son owned the other 25 percent. As a qualifying small business, Dad could sell 25 percent of his stock to his wife and she could sell her 25 percent to the nitwit son. The nitwit son then sells his 25 percent back to Dad. Everybody is happy. It's a family business so they all plan to be there for five years, and it helps the employees how?
Ms. Solis was then asked what the unemployed workers should do in the meantime. "Congress is working on extending unemployment and the administration has expanded the Cobra program."
Well" kinda sort of, the bill that Congress passed extended the deadlines for filing for unemployment; it didn't extend unemployment. As for Cobra, you can only keep what you can afford.
"In need of a home: Greenwich shelter overwhelmed with abandoned pets" May 12, 2010
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