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Thoughts from the Frontline

Where Will the Jobs Come From?

November 5, 2011

Choose your language

I find myself in Liam's taxi on the beautiful drive to Kilkenny through the Irish countryside for a few hours this very early Friday morning, so what better time to begin writing about employment than in a country that is struggling, just as most of the developed world is, to find good jobs for its people. I'm on my way to a conference that will talk about the economics that is driving the world's leading governments to distraction in Cannes. Is Greece going to vote? Take the money? Will it be an orderly default? Should Ireland default? Whatever I write, the situation will change as soon as I hit the send button tonight. (For the record, I think Greece should have a referendum. You don't go into what they are getting ready to suffer without national buy-in. No elitist deals. Put it to the people to decide, one way or the other.)

Where Will the Jobs Come From?

With seven kids, jobs have been on my mind of late. It has not been easy for some of them. It helps me to remember what it was like to be in my 20s in the '70s and to really struggle to pay the rent and put food on the table for a family. Savings? Hah! And while I have been able to help the kids here…

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Jim Pope

Nov. 25, 2011, 5:44 p.m.

John, in the current economy a successful new business does not necessarily equate to new jobs. Software patents as in your example, often merely reward the inventor/developer (plus you, the investor/backer, as it should) but may not need any labor component. And if there is a required labor component, it is likely to be off-shored. Automation, robotics and global communications have brought us to a point where many new businesses have no labor component. We are the victim of our greatest successes.

Nelson Swanberg

Nov. 13, 2011, 2:41 a.m.

Take the black market under paid illegal Mexican immigrants out of Rick Perry’s self described Texass miracle and the results do not look so good unless you are alredy wealthy and taking advantage of that situation. Maualdin already knows why people from Ohio do so well in Texas.

“Ms. Henry wants to tax the millionaires, as if they are somehow sucking the system dry and should “pay their fair share.” Her answer is to tax them and hire more government workers. But that simply transfers income from one party to another and does nothing to create real wealth. And this has been brought home to me recently in a very personal way.”

The wealthy always view taxes as robbing Peter top pay Paul when the reality is it is taxing Peter and Paul to rebuild and reinvest in the infrastructure that makes such wealth possible. Any individual or corpration making more than 10 million dollars a year ought to be happy to pay 40% in federal income taxes in order to protect the politicial stability of the country that allows you to earn such an income.

Richard Guldi

Nov. 8, 2011, 9:50 a.m.

It really galls me when John suggests that we should not increase taxes on wealthy people because that would reduce the amount they invest in new businesses.  The most famous startups (Microsoft, Apple, etc) were funded under Reagan tax rules.  Today wealthy people pay an average of $100K/year less annual tax than they did under Reagan tax rates.  I see their extravagance in building more 10K square foot mansions (several per family), big yachts, and wielding political influence.  This profligacy has ballooned our national debt and ruined my grandchildren’s future.  Surely we can find a better way to fund new businesses than giving my grandchildren’s money to people who don’t need it!

Tim Holman

Nov. 7, 2011, 4:10 p.m.

I’ve read Mr. Mauldin’s newsletter for a couple of years now and find it interesting, thought provoking and useful.  I join many other commenters in disagreeing with the conclusion, if not the premise of this week’s entry.

I’ve been to Texas on business and pleasure and take exception to the comment people wouldn’t move there for the weather.  I know it gets hot and you are having a terrible drought, but Texas attracts people from all over the country because of the warm weather.  You also have mountains in the west and the Gulf, with all it’s ports for moving goods.  You cannot discount these advantages when it comes to economic gains.

I’m a little younger than Mr. Mauldin, but remember clearly when I graduated college in 1980 how many of my classmates went to Texas, California and Colorado seeking work.  My home state, Iowa, didn’t offer much to young people, and still doesn’t.  No politician or businessman can create a mountain range or ocean, although I expect a few GOP politicians will say they can if you just cut taxes enough.

I’m not going to quibble about too much regulation in California, too high taxes in New York or any other similar assertions made in the article.  I don’t know enough about business to discuss it intelligently.  But having read Mr. Mauldin, Stratfor, and many other insightful sources, I have concluded it isn’t too much regulation and red tape, or too high taxes that caused our current problems, it was too much debt and too little oversight of the big banks and investment houses.  It will take years to deleverage at personal, business and governmental levels and our economy will “muddle through” because of it.  Funny you never hear any politician state this; it’s bad for their business if they do.

Government spending on infrastructure won’t solve all our problems, but it will plant the seeds for future business growth, just as much as any legislation that makes it easier for business to start up and operate.

We’re in between a rock and a hard place.  We need to reduce our debt, but if we do our economy will slow, potentially increasing our debt due to decreased revenues.  I think we have to spend more on infrastructure and increase government revenues, which includes taxing people that make and have a lot of money. 

I don’t see any reason why we can’t make the tax increase temporary, tying them to econmic growth numbers, just like the Bush tax cuts were temporary.  But I just don’t see too much government as the source of our problems.  We had too little government where we needed it, regulating the Wall Street gunslingers.

Swen Bos

Nov. 7, 2011, 12:45 p.m.

Hi mr Mauldin,
High unemployment is a symptom, not the disease. It is the output of a failing economic system. By trying to answer the question ‘where will the jobs come from’, one does not pay enough attention to the real problem, this failure of the current economic system. And unemployment is only one of the symptoms. Pollution, overexploitation of the earths resources, widespread poverty, hunger, extinction of species, global climate change; all are symptoms, all affect a substatial proportion of the human population. The fact that the system is still working for some of us does not proof that it is functioning as a whole. No matter what your political ideology is, we can all agree on this.

How to tweak the system into a better functioning one is the real challenge of this generation. We have seen the politicians play their little games, we have seen (financial) industry learn nothing and play no limit poker with the livelihoods of people all around the globe. We know in the long run the future looks grim, and none in power appear to care as all their focus is on tomorrow and maybe next week.

If only politicians and policymakers, bankers and CEOs, union leaders and researchers, would ask themselves one little question at the beginning of each day: “In what kind of world would I like to see my (grand-) children grow up in?”.

None of them would answer: a world without jobs, a world without safe drinking water, a world without panda bears (for the sentimental among us), a world full of hunger, a world full of inequality, a world full of violence over resources, a world full of debt.

I’m just a young man from Europe, wanting to start a family soon. And I fear a future in which my children will say: Why were those in charge so f…... stupid!

If you would like to write a book, and have some high placed friends on key positions in industry and/or policy, ask them this very simple question: In what kind of world would you like to see your (grand-)children grow up in? And record their version of an ideal future for us all to read. And maybe, just maybe it might even inspire them to take responsibility for their (grand-)childrens future.

Jobs are created in those places that facilitate people to work for a better future for themselves and their children, not places where even feeding them is a struggle.

Jon Parker

Nov. 7, 2011, 11:06 a.m.

Before we brag too much about the Texas job creation miracle, letâ??s look at some facts.

47% of all government jobs added in the US between 2007 and 2010 were added in Texas.  Texas employment wasnâ??t down much at all in these years, as the state lost only 53,000 jobs. But looming behind that number are large losses in the private sector (down 178,000) and large gains (up 125,000) in government jobs.

Gerald Ferguson

Nov. 6, 2011, 8:23 p.m.

The public does not understand economics. Our politicians, judging by their statements, do not know economics. The economists, it seems from what I have learned from you and other blogs, do not understand banking. i do not see new ideas, and the only good old job ideas date from the New Deal. A new CCC or WPA could again use young (learning new skills) being paid modestly to build infrastructure, not just roads or bridge repair, but needed transmission lines from windmills, Broadband cables to the smaller cities, Electric car charging stations, etc. These will be needed in the near future for a healthy modern economy, but business seems afraid to stick its neck out as it has doubts about our future, which is self-fullfilling. Uninformed journalists also think we can go the way of Greece. They, like the politicians still think we are on the gold standard! Oh well. Keep up your teaching, many of us have more to learn.

dwight kellogg

Nov. 6, 2011, 5:28 p.m.

Suggest readers obtain Thomas Freidman’s new book, That Used to be Us. US has fallen far behind in the global race by many social well-being measures(Texas ranks poorly even within the US), including education attainment, income equality, health, etc. We will not be competitive again until will ditch the myth of American exceptionalism and return to the hard work of rebuilding political, economic and social institutions. Entrepreneurs risk grabbing all the marbles in a game where everyone loses if we don’t pay attention to rebuilding the foundations of our past success.  My experience as a well-off retiree is that no one in my wide circle of age 60+ acquaintances is a “job creator”, to use the current buzz word, but we all benefit from the lifetime low rates of taxation of the affluent. Also, I have observed that affluent people of all ages are preoccupied with collecting the accoutrements of wealth: expensive vacation homes, lavish entertainment, absurdly-equipped automobiles, etc. This suggests that they have the wherewithal to invest in their businesses if there were final demand for their products and services.

Rea Laiblin

Nov. 6, 2011, 4:03 p.m.

Capitalist/Christian - the ultimate oxymoron.  Capitalists pursue money as their God.  And the more they have, the more they want.  It’s their measure of success.  Christianity is fine, so long as you don’t touch my money.  Want a war?  Sure, go for it, but don’t ask me to pay for it.
True Christrians live the teachings of Jesus - love they neighbor.  I think most people who consider themselves Christians in America really only give lip service to it. 
Having said that - I don’t see jobs coming to America in sufficient quantities to get us out of this mess.  We were fortunate/unfortunate to have the development of computers that provided jobs for so many Americans for so many years.  I can’t imagine another innovation that would provide so much for so many again.
Since demand for product and services is the only thing that drives jobs, and since the demand dries up as people are less able to afford goods and services, where does that leave us?  Up a creek?
I agree that spending on infrastructure is sorely needed and long neglected - not enough profit in it -, but I don’t see that as being enough to pull us up.  That will provide jobs for construction workers, but who else?
The elite in America are perfectly willing to let high speed stock trading - with a guaranteed profit for the trader - go on.  I think that’s a sad commentary on the morality of our leadership.  Until the morality of our leadership changes, not much else will.  Any hope there???

Robert Meador

Nov. 6, 2011, 3:46 p.m.

I just returned from Midland Texas where the unemployment rate is less than 3%. Restaurants have waiting lines at 8:30 at night because people are getting off work late and eating out because they have money. If you want to put people to work , then open up our energy policy and stop sending money to foreign countries. Their previous jobs have been eliminated and will not return, so they may need to go to work in service jobs, or in the oil fields. The pay is good but they have to work. The governments task of returning jobs to the US is a long term solution of re-educating people and repatriating jobs. We need action now and this is the first step to open an abundent resource and create service jobs for the population

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