And Now We're Headed For The GREATEST Depression

[dmcowen674]

People should not underestimate the importance of this. When people with capital feel they can succeed, they invest and expand. When uncertainty and risk is high, they protect what they have.

So you have businesses paralyzed by uncertainty and won't hire people, and regulations keeping the average person from starting a business on his/her own. The unemployment rate is at least 7 percent higher than what is officially reported, and is not getting any better. Do people not understand what is going on?

When we finally comprehend the horrendous impact of what has been done in the last couple years - the health care bill, the bailouts, etc. - it will probably be too late to do anything about it. We're on the road to becoming Greece.

Oh come on, putting this on Obama is retarded, you Republicans set this up over the last 8 years before Obama.

 

[Acanthus]

People should not underestimate the importance of this. When people with capital feel they can succeed, they invest and expand. When uncertainty and risk is high, they protect what they have.

So you have businesses paralyzed by uncertainty and won't hire people, and regulations keeping the average person from starting a business on his/her own. The unemployment rate is at least 7 percent higher than what is officially reported, and is not getting any better. Do people not understand what is going on?

When we finally comprehend the horrendous impact of what has been done in the last couple years - the health care bill, the bailouts, etc. - it will probably be too late to do anything about it. We're on the road to becoming Greece.

small business are specifically exempt from the health care requirements.

 

[Craig234]

And its often not....

Another good story, 2 years ago we did a project for one of my all time favorite .gov bureaucracies the Corp of Engineers (yes, that is sarcasm). They wanted the new building to be "hurricane resistant" so they hired a consultant to design the roof system. He came up with this system that was completely absurd and had never been done OR TESTED. No manufacturer even made the material because it was simply absurd. We went to the COE and proposed using a roof system that had been designed AND TESTED to withstand 150MPH winds, well above their 130MPH requirements and either met or exceeded all other design criteria. Not only did we want to give them a BETTER roof system we wanted to give them 3/4 of the cost back ($400K for the roof we proposed, $1.6mil for the roof their consultant invented after consuming copious amounts of drugs). We would have even made less money (granted, it would of freed up a ton of a project managers time to pursue other projects) but our profit is a straight percentage of the total estimated cost of the project.

They wouldn't even entertain the idea. It gets better too, the deck that this roof was attached to had ZERO engineering in it. I am not an engineer but I would bet a months pay that in a 110mph blow that the roof will perform exactly as designed and stay attached to the decking. The decking, along with the roof still attached to it, will probably be found a few blocks away though. We brought that up top but they didn't want to hear that bullshit either because they were over budget. We then offered to redesign the entire roof framing structure, decking and the actual roof to withstand 150MPH winds for LESS than the cost of just the roof and they told us, in writing, that if we weren't willing to build it as designed then they would hit our bond and get another contractor.

You just can't make shit like this up. On a good note, I got a huge bonus from that project. We found a plant to make the product a bit cheaper and laughed all the way to the bank. So I guess I should thank the COE, although I won't because they are lower than alligator shit in my book, for buying me a nice ass boat that year.

Ain't it funny when the "evul corporations" can't even give money back to Uncle Sugar? Bet ya think I am the bad guy for profiting off of it too even though I couldn't have gave them the money back if I wanted to. The boat has been an absolute blast though, taking her out again labor day weekend. I'll be sure to drink a cold one for ya.

Actually, I find a story like that outrageous and frustrating, and we need to keep looking for ways to do government better to reduce that sort of thing.

If I had the info, I'd contact the legislative representative relevant and perhaps the newspaper to expose the story and look for improvement.

Whether the cause is corruption or in this case just apparently poor officials (I haven't heard their side of the story), it's an actual example, apparently, of waste.

I don't see anything here where you're the bad guy, unless you did something unethical in not reducing the price when you got it done cheaper.

As far as I've seen that's not the case, so enjoy the beer.

You didn't really address the bigger parts of my post, but that's your choice, your story is still useful on its own.

For example, with all the waste, was it better to get this done the bad way it was with the waste, or to not have done it at all (speculation about it blowing away aside)?

 

[Craig234]

It's not that simple. If the big companies and small countries weren't bailed out (i.e., the banks, GM, Chrysler, Greece, Spain, etc.), it would have started a domino effect via the world-wide derivatives market (DM). Supposedly, the DM (i.e., "bets" on literally EVERY kind of happenings around the world) is ~$700T world-wide. Once a dozen or 2 large BETs go bad, it would have triggered more and more bets to go bad (i.e., parties won't be able to cover their losing bets which triggers other parties from being able to cover their bets, and so on and so on).

IMO, the real problem was the greed of the world power players (large companies and most countries) which caused them to resort to unlimited amounts of debt and derivatives in the 1st place. The whole economic system increased productivity rates, increased debt and captured sales/profits over a decade when it should have taken several decades to capture. Now the world can't "unwide" the debt and derivatives positions without it falling apart so they do everything possible to keep it going until eventually, it will fail.

Seems like we won't be able to produce our way out or pay down the debt in time so at the very most, the system will collapse within a few years. Unless there's world-wide debt forgiveness. And that's very unlikely to happen (i.e., the rich will no longer be nearly as rich as they "seem" to be now).

We're in a bad situation.

Yes, it's pretty questionable the effect on society of having so much capital tied up in 'bets' that profit a few people, of having 40 percent of all US profits going to the finance industry - how many Americans are partaking in those gambling profits, and how are Americans affected by all this wealth extracted from the economy, when in the era before Reagan finance had a percent share of the profits?

One question is what the 'average American' does in this situation to make money.

 

[Craig234]

Every time the Democrats write more legislation, they make it more and more difficult for new companies and new smaller businesses to start and they they make it easier for large corporations to stay in business. Corporations like complicated laws that make it hard for the small guys. If the democrats in office dont enforce the current laws, why do we need new laws to make things even more difficult for small businesses?

Whatever you're talking about, Dems helped GM stay in business, and that seemed good for America and the economy, unlike the Republicans' opposition policy would do.

Rather than the big economic hit the Republicans would have given the country, GM is back profitable and a lot of economic activity and employment is going on from them.

The Republicans seem to have alleged the Democrats' motive was to help an industry because it donates to Democrats - it seems more likely that's why Repubs fought it.

In Germany they had a program to get old cars off the road. $5.000.00 payout for anyone with a car over 10 years old. So what did the democrats do? They designed a process so complicated that it only rewarded people who purchased gas guzzlers

I recall the cars had to have better mileage than the clunkers.

, and they manged to waste almost 2/3rds of the tax payers money on administration and paperwork.

Link?

 

[kranky]

Oh come on, putting this on Obama is retarded, you Republicans set this up over the last 8 years before Obama.

Dave, please don't throw labels at me. I never mentioned Democrats, Obama, or Republicans.

 

[kranky]

small business are specifically exempt from the health care requirements.

Maybe so. But it doesn't matter, because small businesses aren't sure of the impact, and they aren't hiring because of the uncertainty.

 

[Acanthus]

Maybe so. But it doesn't matter, because small businesses aren't sure of the impact, and they aren't hiring because of the uncertainty.

Silly me, I thought they weren't hiring because they couldn't compete with large corporations.

Look at retail small businesses vs Walmart, they have crushed thousands of jobs across the country.

 

[Zorkorist]

It's not a crushing point, it's a melting point.

It's not like we are going to wake up tomorrow, and only Wallmarts exist.

There will ALWAYS be small business, and they are a hell of a lot mor important.

They are 80% of our economy.

-John

 

[Acanthus]

It's not a crushing point, it's a melting point.

It's not like we are going to wake up tomorrow, and only Wallmarts exist.

There will ALWAYS be small business, and they are a hell of a lot mor important.

They are 80% of our economy.

-John

It depends on the definition of "small."

 

[Zorkorist]

It doesn't depend on squat.

Small business will always be 80% of our economy.

Just as it is in China, etc.

-John

 

[Acanthus]

It doesn't depend on squat.

Small business will always be 80% of our economy.

Just as it is in China, etc.

-John

Show me some defined statistics and ill believe you.

Many people like to consider companies with 4999 employees "small"

 

[Zorkorist]

Common sense defines a company with 5000+ employees as large.

A small business is one with 1-25 employees.

-John

 

[manimal]

I know multiple companies that want to hire a few more employees. Nothing earthshartering or anything, and nothing that would cause them to lose money/jobs if they didn't have the employees, but they currently have no plans to do so. Why? Probably the largest reason is because they have no idea how much those employees, or their existing ones, are going to "cost" going forward. A not so distant 2nd is because they think their (the owners) income is going to be significantly reduced in the near future via increased taxes, retarded regulations (mounds of 1099's and such) and rising HC costs.

At the same time, every project they bid/do they are putting their own asses (and pocketbooks) on the line and their profit margins are already down to 6ish%. There is an insane amount of competition in the market already which is the reason for the razor thin profit margins, so if these guys say fuck it there won't be anyone starting up a new competing business to hire the ex-workers. The owners have plenty of money/assets and could probably live comfortably for the rest of their lives off of what they currently have or with a bit of low risk investment. At some point the risk simply isn't worth the reward and if my anecdotal stories are any sort of indicator then we are pretty close to that point or at least people perceive we are.

Yes, the people I am talking about are "rich" but they are not willing to risk becoming not rich or significantly less rich for the possibility of very little reward. Especially when they can sit at home, take significantly less risk and earn even 1/6 of what they were when they worked 18 hour days. Don't get me wrong, like most rich folk they have a huge desire to become more rich but only if the risk/reward makes sense.

The problem your describing is principally because of a competitive market.

 

[manimal]

Maybe so. But it doesn't matter, because small businesses aren't sure of the impact, and they aren't hiring because of the uncertainty.

The problem I have with this argument is that it is so intentionally vague....


If margins are too low then get your controllables in order. If the market is too saturated innovate or die. Fox business rails on this uncertainty incessantly and while I do fault the current administration for not taking harder and more defined stances on the important issues to biz health care and the bush tax cuts will impact small businesses very little..

I again point out the tax rates of the 90s... I did very well in the 90s and would not have a problem if my capital gains/taxes were at the same rates as they were then..

If any businesses are worried about health care costs they would hire part time seasonal workers and have short term fixed contracts... If they cant figure this out then they are idiots.....

 

[olds]

The problem in California is that the liberals have regulated and taxed the small businesses so much that they couldn't afford to operate. Now they are driving the big businesses out of state. Utah is one of the states vying for CA businesses.

 

[soccerballtux]

I wouldn't hold my breath waiting for the good times or depression to bloom. I try to look at everything with an optimistic view. Tho, I think that if we go down a depression road... We won't be able to BUY our way out of it but I believe we still haven't fully recovered from bush's fuck ups. But... What my point of view.

When you had an idiot that didn't know how to run a country for 8 years it doesn't take a very smart person to figure out that we are still paying for it. Were not out of the woods yet. It may take a few more terms to fully recover that is if we don't get any more idiots running the nation. Not to say that obama is doing a grand job but he's doing 2-300% better then bush. And probably 5-600% better then palin.

if you think Obama is any better then you're still drinking the coolaid that both parties want you to drink.

 

[dmcowen674]

Dave, please don't throw labels at me. I never mentioned Democrats, Obama, or Republicans.

Yeah right, did you have this sentiment when Bush was saying "The Economy is strong" and I said Bullshit?

No you and everyone was doing the bobblehead dance and agreeing with Bush and McCain that everything was fine.

 

[StageLeft]

Yeah right, did you have this sentiment when Bush was saying "The Economy is strong" and I said Bullshit?

No you and everyone was doing the bobblehead dance and agreeing with Bush and McCain that everything was fine.

Indeed, you are one of the more pivotal economic forecasters of our time. Maybe not this year, maybe not the next, but I have total faith that in time your posts, which to the rest of us seem like nothing more than the frustrated ramblings of a person with severe and varied psychological shortcomings, will be seen as prescient perfection. I expect that "The articles of The McCowen", a compilation of your writings, will be a top-selling book on Amazon and required reading for all doctorate graduates. The rest of us mock because we do not understand, that's all.

 

[bamacre]

Indeed, you are one of the more pivotal economic forecasters of our time. Maybe not this year, maybe not the next, but I have total faith that in time your posts, which to the rest of us seem like nothing more than the frustrated ramblings of a person with severe and varied psychological shortcomings, will be seen as prescient perfection. I expect that "The articles of The McCowen", a compilation of your writings, will be a top-selling book on Amazon and required reading for all doctorate graduates. The rest of us mock because we do not understand, that's all.

:awe::awe:

 

[JSt0rm]

Maybe so. But it doesn't matter, because small businesses aren't sure of the impact, and they aren't hiring because of the uncertainty.

oh thats the reason? hahahaahahahahahaha

 

[kranky]

oh thats the reason? hahahaahahahahahaha

What do you think the reason is? My source is a local bank VP who handles lending to small businesses and that's what the business owners are telling him. I don't know why they would lie about it. They are bringing in contract help but not full-time employees.

 

[JSt0rm]

What do you think the reason is?

Well I dont know what "the reason" is but I can assure you there are more then one.

 

[kranky]

Another business owner blames uncertainty for a reluctance to hire people.
http://online.wsj.com/article/NA_WSJ_PUB:SB10001424052748704017904575409733776372738.html

 

[Phokus]

Another business owner blames uncertainty for a reluctance to hire people.
http://online.wsj.com/article/NA_WSJ_PUB:SB10001424052748704017904575409733776372738.html

Here's the full article

We had a discussion about this article on another forum.

1) This is ari fleischer's brother (ari fleischer was Bush's press secretary)

2) The REAL reason why he isn't hiring is because his business is terrible. He lost around 14 million last year and his business is one of those terrible OTC pink sheets companies.

http://www.google.com/finance?q=PINK%3ABOGN Edit: I guess anandtech's screwing up the percent sign so you have to type in 'bogen' in finance.google.com)

3) He gets a lot of business from public schools and Iraq contracts, so him complaining about taxes is = LMAO

So in short, it's just another republicans shill lying yet again.

By MICHAEL P. FLEISCHER

With unemployment just under 10% and companies sitting on their cash, you would think that sooner or later job growth would take off. I think it's going to be later—much later. Here's why.

Meet Sally (not her real name; details changed to preserve privacy). Sally is a terrific employee, and she happens to be the median person in terms of base pay among the 83 people at my little company in New Jersey, where we provide audio systems for use in educational, commercial and industrial settings. She's been with us for over 15 years. She's a high school graduate with some specialized training. She makes $59,000 a year—on paper. In reality, she makes only $44,000 a year because $15,000 is taken from her thanks to various deductions and taxes, all of which form the steep, sad slope between gross and net pay.

Before that money hits her bank, it is reduced by the $2,376 she pays as her share of the medical and dental insurance that my company provides. And then the government takes its due. She pays $126 for state unemployment insurance, $149 for disability insurance and $856 for Medicare. That's the small stuff. New Jersey takes $1,893 in income taxes. The federal government gets $3,661 for Social Security and another $6,250 for income tax withholding. The roughly $13,000 taken from her by various government entities means that some 22% of her gross pay goes to Washington or Trenton. She's lucky she doesn't live in New York City, where the toll would be even higher.

Employing Sally costs plenty too. My company has to write checks for $74,000 so Sally can receive her nominal $59,000 in base pay. Health insurance is a big, added cost: While Sally pays nearly $2,400 for coverage, my company pays the rest—$9,561 for employee/spouse medical and dental. We also provide company-paid life and other insurance premiums amounting to $153. Altogether, company-paid benefits add $9,714 to the cost of employing Sally.

Then the federal and state governments want a little something extra. They take $56 for federal unemployment coverage, $149 for disability insurance, $300 for workers' comp and $505 for state unemployment insurance. Finally, the feds make me pay $856 for Sally's Medicare and $3,661 for her Social Security.

When you add it all up, it costs $74,000 to put $44,000 in Sally's pocket and to give her $12,000 in benefits. Bottom line: Governments impose a 33% surtax on Sally's job each year.

Because my company has been conscripted by the government and forced to serve as a tax collector, we have lost control of a big chunk of our cost structure. Tax increases, whether cloaked as changes in unemployment or disability insurance, Medicare increases or in any other form can dramatically alter our financial situation. With government spending and deficits growing as fast as they have been, you know that more tax increases are coming—for my company, and even for Sally too.

Companies have also been pressed into serving as providers of health insurance. In a saner world, health insurance would be something that individuals buy for themselves and their families, just as they do with auto insurance. Now, adding to the insanity, there is ObamaCare.

Every year, we negotiate a renewal to our health coverage. This year, our provider demanded a 28% increase in premiums—for a lesser plan. This is in part a tax increase that the federal government has co-opted insurance providers to collect. We had never faced an increase anywhere near this large; in each of the last two years, the increase was under 10%.

To offset tax increases and steepening rises in health-insurance premiums, my company needs sustainably higher profits and sales—something unlikely in this "summer of recovery." We can't pass the additional costs onto our customers, because the market is too tight and we'd lose sales. Only governments can raise prices repeatedly and pretend there will be no consequences.

And even if the economic outlook were more encouraging, increasing revenues is always uncertain and expensive. As much as I might want to hire new salespeople, engineers and marketing staff in an effort to grow, I would be increasing my company's vulnerability to government decisions to raise taxes, to policies that make health insurance more expensive, and to the difficulties of this economic environment.

A life in business is filled with uncertainties, but I can be quite sure that every time I hire someone my obligations to the government go up. From where I sit, the government's message is unmistakable: Creating a new job carries a punishing price.

Mr. Fleischer is president of Bogen Communications Inc. in Ramsey, N.J.