Saturday, August 7, 2010

WHO REALLY CREATES JOBS IN AMERICA?

Jobs, jobs, jobs......when is the Obama administration going to create jobs? That's the question being asked, but is this notion a fallacy? Can any administration truly create jobs without out and out creating them and paying the salaries? Of course not.
The creation of jobs (non-governmental positions) happen in the private sector. It is as much a result of economic confidence as much as anything, my friends. As the stock market rebounds back to normal, the auto industry experiences growth, and many other indicators improve, the nation holds onto their cash with a death grip. A record death grip, in fact.
Non-financial corporations in the S & P 500 index reported cash on hand of nearly $837 billion, an increase of 26% over the previous year. Needless to say, they are nervous about our economic futures.....and their reticence to invest and / or hire is having a dramatic effect on any economic recovery. Companies are currently holding, on average, cash on hand equal to 10%+ of their total value, twice as high as in 1999. And as their cash increases, their inventories reduce to extremely low levels.
This lack of confidence is not limited to corporations. Consumers are holding onto their cash in record amounts as well; American households are hoarding their cash whenever they can, rising 6.4% over last year. And if they will not spend, corporations will not spend...in compensation or inventory stocks. No wonder unemployment continues to be stuck at 9.5%.
So is the nation out of financial danger...certainly not. In fact, we may succumb to a looming recession. Growth has been extremely sluggish, albeit positive for the past three quarters.
But for the recovery to continue at a appreciable rate, a sense of economic optimism has to be created, and I do not see this happening at any time soon. Naysayers far outnumber optimists these days, and certainly the GOP is leading the charge, a charge maintained in order to gain Congressional seats in November.
So as they continue to tout the frightful economic times in the nation (and blaming Obama for it), what they fail to admit is they are playing a role in the sluggish recovery as well.
Personally, I continue to be cautiously optimistic for the near future. Yes, historically a deep economic lull turns around in a quick, booming manner, and that certainly has not materialised. But corporate profits are up....way up. Cash on hand is way up, for both corporations and individuals (at least those gainfully employed).
All we need is a little confidence in the numbers, in our ability to fight our way out of it, and a little leadership. I am afraid the character attacks on the Obama administration has taken hold to such an affect that it may delay any real robust recovery for a few years. In my opinion, this is a situation caused, and maintained equally by both parties. For all the talks of the GOP rebounding back, truth is, the American voters are disenchanted with both parties performances over the past ten years. Trouble is, they are our only two choices...at least for now.

7 comments:

晨晨 said...

easier said than done. 一起努力吧!............................................................

Papa Giorgio said...

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I will take this hicks understanding in confirmation of yours. Presidents do not create private sector jobs... they can however -- help or hurt these private sector jobs by their and their party's policies:

Best Caller of the Week!


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Papa Giorgio said...

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