Help Wanted

We are in Minot, North Dakota and looking at the activity there is no doubt it has an unemployment rate of 2.2%.  High employment and commercial activity was evident as soon as we entered the outskirts of Williston, North Dakota which is about twenty miles from the Montana border.

Oil and gas have fueled tremendous job growth in this state and workers are flocking here from all over the country.  Workers that is who want to work, and are willing to separate themselves for a steady paycheck.  I met a man in the elevator of our hotel who is from Mississippi.  He appeared to be in his late 50's and told me he had been here for a few weeks and is working on seismic drilling north of town.  Most importantly to him, "I have a guaranteed job for the next six months and then will most likely be able to hook up with something else."

Like workers in other eras during economic downturns, those coming to North Dakota are leaving families behind so they can earn a good income to send back to those families.  Rather than waiting for their 99 weeks to run out, these men, and women, aren't worried about the North Dakota winter cold or summer heat.  What they are worried about is feeding and housing their families.

The hotels here are filled with pick up trucks from out of state--we have seen license plates from Oklahoma, Minnesota, Colorado, Wyoming, Montana, Nebraska, Idaho and many other states.  The car dealer lots are filled with pick up trucks--the local Lincoln dealer's lot is filled with Ford pick ups overflowing from the Ford dealer down the street.  There are no "Sale--50% Off!" signs in the furniture store windows, instead the marquee out front is advertising for help, as it just about every other business in town.

Driving across the state on highway 2 we saw impromptu towns of mobile homes and trailers that have been put on huge lots for housing workers---one such "town" had about a hundred such trailers that looked like barracks lined up and a huge central hall that looked like a World War II airplane hanger with a large "Lodge" sign on it signifying it is the central gathering place.

I imagine this is what the boom towns in Oklahoma in the early 20th century, or California or Alaska in the 19th century looked like when oil and gold were discovered.  North Dakota is filled with boom towns, with plenty of jobs attracting men and women wanting to work.  Be it in the oil or gas fields or in industries supporting those jobs, or in building the infrastructure we have seen going up in towns across the state--hotels, restaurants, manufactured homes, roads.  Jobs, jobs, jobs are in this state unlike any other.

The boom in jobs in the gas and oil fields has more than trickled across the economy: restaurants, gas stations, grocery stores, furniture stores, car dealers, apartment landlords, department stores, shoe stores, hotels all are benefiting from the flow of paychecks. Next time you hear a politician say that public spending is needed to spur on economic development know they know little of how our economy works.  Minot, Williston and hundreds of other towns are seeing great economic activity not because of government programs, welfare checks, unemployment checks or social security disability checks.  They are growing because of private enterprise providing jobs that are paying into the government not taking out of it.

Why?  Because the state has aggressively pursued the extraction of oil and gas from it lands for the past several years, fighting the federal government on many occasions and finally being able to open up rich fields for extraction.  Seeing the robust activity and economic activity throughout the site I can only wonder, what if the elected officials and bureaucrats of California had been as active in pursuing the extraction of hydrocarbons from its land instead of actively blocking the drilling and extraction of oil and natural gas?

Final leg of the first half of our trip tomorrow, we should arrive at Camp Birchwood sometime just before or after the dinner bell rings.  Can't wait to see the girls!

Sign on the door of our hotel in Minot that is filled with out of state workers

GOP Candidates Are Crabs In A Bucket

A man walks is in a small town by the Chesapeake Bay. He walks by a store and sees a bucket of crabs without a lid sitting by the door. The man goes into the store and asks the woman behind the counter, "excuse me ma'am but you know your crab bucket out there has no lid. Aren't you afraid some will get out?"

"No they won't escape, they are Republican crabs."

"Why are they Republican crabs?"

"Because as soon as one starts to get ahead and get up out of the bucket the others reach up and pull him back into the bucket."

That is what I think about as I watch the Republican Presidential candidates go at each other on issues that they should not be focusing on. Instead of focusing all their efforts on the poor performance President Obama has had in the White House, his failed economic and fiscal policies, the rising unemployment during his tenure, the continued lack of confidence of consumers and business owners, the candidates are attacking each other and pulling each other down. This only plays to the benefit of Obama and his re-election as the media will use the sound bites of Republicans to discredit whichever candidate gains the nomination.

Republican candidates, voters and pundits need to focus on what matters to our nation: jobs, jobs, jobs and economic growth.

Focus on the $4 trillion spent in deficit spending since Obama took office that has not stimulated our economy.

Focus on the myriad of business restrictions and job killing policies from Obama's regulators.

Focus on ObamaCare that was put through Congress with only Democratic support and is hindering business expansion.

Focus on Dodd-Frank passed with only Democratic support that is restricting lending and the ability for small businesses to obtain credit.

Quit focusing on "gotcha's" in debates on other GOP candidates and attack the incumbent, his party and their policies that has stifled business growth and economic development. Present what will happen when you take office to eliminate these programs.

Focus not on your opponent in the primaries but our opponent in the general election in 2012. Quit acting like crabs in a bucket.

Are Subsidies and Payment Transfers Stimulus?

It appears that after practically in third, from $120 billion to $34 billion, that a few Republican Senators will jump the aisle and pass a bill that will re-new extended unemployment benefits. The bill has been held up as Republicans have asked, "how are we going to pay for this?" With no budget in place, and not budget being presented nor debated in Congress, Republicans wanted to see some cuts in spending made elsewhere before passing the bill.

Using the politics of division that are so natural in Washington, Democrats, led by House Speaker Pelosi and President Obama, accused the Republicans of cold-heartedness, not caring about American families and blocking a bill that was "about jobs." Jobs? How is extending unemployment benefits about jobs?

Once again we see this Administration and Democrats confuse economics with social policy. While this Congress has passed three huge bills that have transformed our national debt and both the healthcare and financial industries, none of the bills have really done or been about jobs. Preaching the Keynesian religion, Democrats feel that the best way to stimulate a moribund economy, increase hiring in an economy and promote economic growth is through sweeping government regulation and spending.

The practice has never worked as a long term economic policy and as is being seen in our current economy is failing now. Jobs created to work for the federal, or state, or local, government, are not jobs upon which an economy is built nor sustained. As the number of people reliant upon tax dollars and government spending increases the burden for making those payments becomes focused more and more on a shrinking number of net tax payers instead of takers. Eventually this system collapses under it own weight. Unbridled public spending and borrowing cannot continue for prolonged periods of time without leading to insolvency, which leads to economic crisis and melt down.

Jobs that allow an economy to grow and sustain itself are created in the private sector. In America this mostly means within the small and medium size businesses that support local communities and larger businesses. Locally these businesses are hurting because of the lack of manufacturing businesses in California that support smaller subcontracting companies and suppliers. Through tax policy, environmental policy and costs to operate businesses have left the state and/or country to manufacture their products.

Nationally the uncertainty created by the 111th Congress and Obama Administrations have led companies to hang onto cash and not reinvest in their businesses. Having found out what was in it after it passed as promised by Pelosi, corporations are estimating their costs due to Obamacare in the billions of dollars. Bent on overtaking and controlling the banking system the financial reform bill puts tremendous powers in the hands of an appointed official, the Chair of the Federal Reserve, to dictate credit policies and asset ratios of banks. Businesses are holding onto cash because they are not able to get credit lines secured by receivables due to Fed auditors scrutiny of bank balance sheets and discouraging credit extensions they consider risky. Businesses are holding onto cash as they are uncertain if/when the Cap and Trade movement will gain ground in Congress between the mid-term elections and the end of this Congress. If passed Cap and Trade will increase taxes and costs for businesses.

Every piece of legislation this Administration and Congress has passed has increased to costs on businesses. Instead of loosening the cash and anxiety among business owners by extending the Bush tax cuts (which increased revenue for the Treasury every year from passage to 2007 as predicted by the Laffer Curve), stopping "comprehensive" reforms, and allowing the private sector to heal, the constant drumbeat to reform all of America at the expense of the private sector has killed economic growth.

Into this dying economy the Administration plunges ahead with more speeches for reform that is about "jobs" but in reality is about votes. Looking to use the immigration issue as another wedge to divide the country for political advantage, Obama knows that if he is able to naturalize many or most of the 12 million illegal immigrants in our country he has secured the votes of the Hispanic and Latino communities for the Democrats for decades. Somehow his language will make his quest for these votes about jobs, but we won't know until legislation is passed what it will mean.

Regarding the bill to re-new extended unemployment benefits, Senate Finance Chairman Max Baucus (D., Mont.) said, "This bill is about jobs, and this bill is about compassion." I will grant that the money given in the form of unemployment benefits will trickle through the economy for food, rent, gas, but to say it is primarily about "jobs" is deceitful. Extending the payments is not about creating or saving jobs, it is about using the Federal Treasury without limit as a social welfare system.

We are a resourceful nation populated with so many who have an entrepreneurial spirit. Despite the recession individuals across the country are creating their own businesses. I have spoken in the past several months with many small business owners who have started what I have termed "Recession Businesses." Each has said they took the opportunity of being laid off to start their own business so they would not be dependent on a single source of income for their future. Sure there is risk and they may not make it, but maybe they will. One owner of a small hot dog and hamburger shop has hired at least two or three workers, and has created business with his suppliers that did not exist before. No boss to give him a pink slip, not dependent on the government for survival, he represents many small business owners spring up in Long Beach and across the country.

It is my belief that 99 weeks of unemployment benefits is too many, it appears that my sentiment is shared by about half the country so it is a divisive issue that crosses party lines. My solution to the issue would be a multi-pronged series of actions.

First, on the benefits scale back the payments as the traditional 26 week benefit is passed. Lower the payments by 5% per month until the maximum of 99 weeks is reached.

Second, to pay for the deficit created by the benefits instead of recirculating repaid TARP money and profit into more government bailouts and takeovers, transfer the funds to cover the unemployment benefits.

Third, with some more of the funds left over make one-time cash payments to community colleges to jump start programs for re-training laid off workers, assisting small business owners and start ups.

Fourth, extend the Small Business Association lending program that is currently being phased out. Allow small and community banks to assist local businesses in loans to purchase equipment and obtain cash flow as they grow and secure their business. Instead of re-circulating TARP funds into government programs and jobs, use the funds as intended--to assist banks with their assets. Use the re-paid funds as funds for small and community banks to make small loans, $10-50,000 to small and medium size businesses.

Fifth, repeal or at least suspend Obamacare. This gets a guffaw from those who supported major healthcare reform, but was reforming our entire healthcare system for 10% of the populace when we have 10% unemployment a wise decision? Reduce the costs to employers and increase the chance they will hire and extra worker, or two or three.

Six, extend the Bush tax cuts. Facing increasing tax burdens to pay for increasing debt burdens at the state and national level, businesses, and small business owners, are holding cash to bridge the pending gap between revenue and expenses created by this hit to their bottom lines. Most businesses are Schedule C or S Corporations, meaning personal tax returns are in play. Reducing the tax burden allows business owners to expand their business.

America needs private businesses. It needs them to thrive to provide jobs and stability in local communities. Private businesses create tremendous velocity of money through payrolls, suppliers and tax revenues they generate. Since January 2009 Washington has passed legislation that has only hindered and hurt private businesses and economic growth.

Extend unemployment benefits? Congress and Obama need to extend private business, let them take care of getting rid of unemployment benefits with jobs.

DCS07212010

More Jobs On Your Payroll

On Friday the Labor Department released employment figures for the Month of May. To those who just read the headlines the news was fantastic, 431,000 net new jobs in the economy. Unfortunately headlines are not news, except to the lazy and continuously uninformed. Beyond the headlines we learned that the actual number that should have been highlighted by news publishers was 41,000. That was the number of private sector jobs created in May.

Of the 431,000 jobs created 411,000 were temporary Census workers hired by the Federal Government. And according to some reports the Census is firing workers and then re-hiring them to pad their employment reports (NY Post, Neil Cavuto, CBS Sacramento). So we do not know is if the 411,000 being touted as new hires by the Census are representative or inflated. Keep in mind that to count as a new job the Census Bureau must hire someone to work one hour in a month. Sounds like unemployment to most people but not the Labor Department.

What gets lost in these numbers are the payments these workers receive, the cost to train them to knock on doors and say "How many people live here," are paid by taxpayers. Taxes that come from public sector jobs are just recirculating dollars within the government sink, taxes that come from the private sector are adding new water to the sink--water to replace that which has gone down the drain.

With only 41,000 new jobs in the private sector supporting 411,000 new jobs in the public sector it seems well continues to run dry to support expanding, or even current levels, of government employment. Meanwhile the majority in Washington (and Sacramento, Albany, Springfield...) and the Chief Executive feel more spending will create more jobs. This may be so on a very limited basis if any spending is actually being done to create private sector jobs, but that is not what has occurred or what is planned to be spent next.

Government spending to stimulate the economy is referred to as Keynesian Economics, after economist John Maynard Keynes. Keynes' philosophy of government fiscal policy to stimulate an economy was very popular with Western governments after World War II and the policies seemed successful as economies boomed. That economies had tremendous manufacturing bases built to produce war material now converted to consumer goods seems lost on the economic historians touting the success of Keynesian activity during the Fifties and Sixties. As the economies slowed and the oil embargoes pushed the cost of production higher in the Seventies Keynesian policies began to unravel. No mind to Europe as social democrats continued their progress to where they are today, deep in debt, high percentage of their populations on government payrolls or entitlements and being forced to rapidly retract government spending and handouts.

The White House is under the economic policy advice of Keynesian philosophy. The modern neo-Keynesian philosophy is that for every dollar the government spends economic output will grow 1.5 times, a fifty percent return. Under this philosophy the "Stimulus Plan" in February 2009 of $787 Billion should have a return of almost $1.2 Trillion. Except there has been practically no return as most of the funds did not go into jobs stimulation in the private sector.

Underlying the Keynesian $1 of spending is that dollar has to come from somewhere, and that somewhere is the private sector. For the efficiency of government spending it needs to collect almost $2 for $1 it wishes to spend in transfer payments (social security, Medicare, government salaries). Further exacerbating the current situation is that most of the spending on "jobs" bills in Congress have nothing to do with enabling the private sector to create jobs, but rather end up increasing taxes on the private sector that inhibits job creation. Increasing payments to unemployed workers is not a "jobs" program, it pays people not to work. Making massive payments to state governments, $100 billion so far and requests for at least $25 billion more, to retain teachers is not a "jobs" program. Increasing taxes over $80 billion on small businesses is not a "jobs" program. All these measures continue or expand government payrolls, benefits and pensions that are being supported by a shrinking private sector.

Small and medium size businesses provide the overwhelming majority of jobs in the private sector. For the past few years credit has been almost non-existent to this sector restricting operating expenses, growth and expansion. Credit has been tight as banks are concerned about balance sheet audits and federal take-overs of banks considered "risky" by the Feds. Lending to small businesses can be risky. Too many small business loans by a local community bank results in a balance sheet that the Feds may not appreciate and require the bank to be absorbed by a larger regional or national bank. With the risk of losing a charter on the horizon smart bankers are sitting on their deposits.

Small and medium size businesses generally do not operate with the reserves or ability to gather capital like large businesses and multinational corporations. With the entitlement and benefit mandates included in Obamacare and other industry specific legislation passed many businesses do not have an idea of what their future costs will be. If I hire a new worker at $45,000 per year will it end up costing me $60,000 per year? Will the extended benefits I will have to provide to my current workers equal $45,000 so I should save the funds to insure against future employment costs? Uncertainty leads to stagnation. Few businesses expand into an uncertain economic environment. Faced with higher costs in benefits and taxes most businesses are not going to take on new employees until they know exactly what the cost-benefit analysis will be.

With many small and medium sized businesses family owned as either LLCs, Sole Proprietor or S Corporations profits and net income flow from the company income statement onto the personal tax returns. If the company profits $250,000 and the business owner decides to retain $150,000 in capital for reserves and cover operating costs, lines of credit or future equipment replacement, he is still taxed on the $250,000. A magic number with the Obama Administration to eliminate tax deductions for home interest deductions, increase marginal tax rates and expand taxes to health care premiums and other expenses. Facing increased costs on the business and personal side of the income stream business owners are not willing to invest in expansion or growth to further increase the net negative on their personal net incomes.

Throughout the current Congress every piece of legislation has expanded government and restricted private business. American Recovery and Reinvestment Act (Stimulus), Obamacare, Cap and Trade, Financial Reform, all programs near or over $1 Trillion have expanded government spending on government employees and increased the taxes, and therefore burdens, on the private sector.

Currently our federal debt is $13 Trillion and our national Gross Domestic Product is $14.4 Trillion. We owe 90% of what we produce. The debt is growing at a pace of $1 million every thirty seconds, the GDP is growing at a pace of $1 million every two minutes. Our debt is growing four times as fast as our production.

We need our elected representatives to stop pouring hundreds of billions of dollars into spending that does not directly produce private sector jobs. Failure to do this will create an economy that is an upside down pyramid with the balancing on the private sector becoming less and less secure. For examples of this look at the economies in Europe with huge public payrolls and entitlements balances on a shrinking private sector no longer able to support the taxes required for those payments.

Here's a "jobs" bill: expand the 2001 tax cuts across the board; reduce taxes by 10% on small and medium size businesses; suspend revenue collections under Obamacare for a minimum of twelve months; kill Cap and Trade; cap Federal payroll and benefits at 2% growth per year for the next five years.

Finally, quit thinking that the Federal Government can spend my money better than I can. Small business owners want to increase their company payrolls not the payrolls supported by their taxes.


DCS06072010

"Agenda 2010" = Jobs or More Pandering?

Yesterday I read several accounts of Sacramento Democrats' new assault on the job markets of California.  Pushing what they are calling "Agenda 2010", Sacto Demos are trying to show the people of the state they actually care about those of us who do not work for the government and pay dues to the SEIU or other public employees union.  Democrats think they are creating jobs, but just because you call your pig a horse doesn't mean you can ride it to market.

In the Press-Telegram (I would link the article but trying to find articles on the P-T website is too frustrating this early in the morning) an AP article touted a bill that is part of "Agenda 2010" that would end furloughs for 80,000 state workers.  As a reminder Governor Arnold Schwarzenegger mandated furloughs three days a month for 200,000 state employees.  Calculating a four week month that amounts to a 15% cut in expenses, and salaries for those furloughed. 

Since the furloughs have taken effect I have been asking if anyone has noticed any change or been inconvenienced because of the lay-offs.  With the exception of those furloughed I am yet to have someone say, "yes I have been affected..."  So overall the citizens of California are seeing a 15% savings with virtually no impact to services.  Not good enough for Senate Pro-Tem Darrell Steinberg D (naturally) from Sacramento.  Since Steinberg's district is chock full of government workers, and since Steinberg and his statewide party receive much largess from state employees for their campaigns, Steinberg is obligated to ignore the savings the rest of us are seeing and get some payback for his allies.

Steinberg's office has said the employees his bill would un-furlough are from departments not dependent on the general funds, departments where 95% of the funding comes from the feds (which is our tax dollars) and are self-funded through fees and collections, which become our funds.  To wit Steinberg wishes to un-furlough employees at the State Franchise Tax Board  and the Department of Motor Vehicles.

Steinberg said that the state is losing $300 million a year in uncollected taxes because of the furloughed workers.  What?  We are losing $25 million a month because employees are missing three days a month?  Sounds to me that instead of furloughing people at the Franchise Tax Board we should be firing them.  And does anyone really believe these numbers?  Where they worked up by the same mathematicians who brought us the false global warming temperatures?  An official sounding Senate Office (of Oversight and Outcomes) calculates that for every $1 in savings at the tax board the state loses $7 in collections.  This would be the same office that does budget projections with assumed revenue and fudges when spending actually starts so the budget appears balanced, but then the state runs out of cash after five or six months. 

Regarding the DMV, Steinberg says the furloughs "inconveniences" motorists.  Those dumbe enough not to make and appointment have to wait an average of 45 minutes instead of 27.  So we are going to un-furlough thousands of workers to save people who are incapable of planning ahead for something with a known date, like a license or registration expiration, 18 minutes?  We are going to add 24 hours per worker per month of salary and benefits to trade off 18 minutes per unscheduled visitor?

This is what the Democrats call saving jobs.  Re-employing government workers to full time, which increase not just costs today but also long terms as it adds 15% to their long term benefit and retirement plans as well.  Reading through the "Agenda 2010" website one is overwhelmed with the buzz words used that pander to the political correctness and progressive terminology that really means nothing.  "Green jobs," "brown fields," "low and very low income housing," "value working families." 

Green jobs?  How about a tortoise preventing solar and wind farms?  What about nuclear power?  What about off shore drilling that would reduce millions of miles of ship, train and truck transportation of foreign oil?

Brown fields? Those areas where factories could be built?  Where new companies could start up and employ Californians? Those areas that are laying fallow except for a butterfly that could support an energy plant more efficient than the one it would replace?

Low and very low income housing?  More tax breaks for low income home ownership? Isn't our housing crisis because people with too little income bought homes?  Does every housing bill have to only be for low and very low income families, thus attracting more low and very low income families into a community?  And the subsequent impacts on schools, hospitals, emergency services?

"Value Working Families."  From the same people that raised income tax rates? Raised sales tax rates?  Raised state DMV fees?  Cut child tax credits?  Imposed ridiculous diesel particulates regulations that will cost one million jobs in the state?  Value those families?

Agenda 2010 is ripe with using Federal funds and money from past propositions to pump money into other state and local bureaucracies that essentially moves funds from one government pot to another and another with skimming along the way.  Government money does not create jobs in the private sector, government money takes jobs away from the private sector. 

Here is my Agenda for 2010 jobs a day in California, it is pretty simple:

1. Cut the corporate tax rate from 8.84% in half.  It is currently the 4th highest in the nation, cutting it in half will retain existing companies and attract other companies to move from Oregon (who just raised corporate rates), Nevada, Arizona and other states where jobs have been lost.
2. Cut the unemployment insurance costs.  Again attract businesses and major corporations.
3. Cut the sales tax by a third.  Free up funds for citizens to spend and lower costs for businesses for their materials and equipment.
4. Suspend the California Air Resources Board and all their draconian edicts based on false reports and science.
5. Cut personal tax rates by a third.  Again free up personal income for spending an investment.
6. Provide five year tax breaks for companies that start up new manufacturing facilities.
7. Kick back more tax revenue for five years to cities and counties that approve permits and land use for manufacturing facilities once those plants begin operating.

With our failed state government, failing municipal governments and a political climate that sees elected officials on looking for more taxes instead of cutting government spending and expansion of entitlements that burden businesses and workers in the private sector our state is the least attractive in the nation for an entrepreneur or corporation to start a new business enterprise and create jobs in California.  And as "Agenda 2010" proves, the majority in Sacramento has no clue what attracts businesses and allows them to create new jobs.

There are two groups that Sacramento Democrats see as their constituents, and neither of them provide jobs or have a net positive impact on the bottom line:  government employees and the low and very low income earners.  Our budget is incredibly skewed to these two groups and is paid for by moderate income earners, average income earners (which by math makes up about hald the work force) and high income earners.  It is the last two groups who create jobs.  Our state is on the verge of bankruptcy because the Legislature has sucked more and more money out of those who work at decent jobs to pay for those who work for the state or are uneducated, unemployed--generationally, and living off the free education, health care and emergency services others provide.

That pig the Democrats are trying to ride to market isn't going to make it.  In the meantime the farmer has taken his horse and moved to Texas. 


Google has changed their posting format and has removed the spellcheck button, having always been a poor speller this is a much needed tool for me.  My apologies to those who stumble over and get frustrated with the mistakes!  I, and many other bloggers, hope they correct this soon!


DCS02172010

Back to Jobs

With the defeat in Massachusetts last Tuesday President Obama and the Democrats shifted their focus from trying to force bad legislation through Congress to "putting Americans back to work." Good idea, but then so is reformation of aspects of our healthcare industries.

As a quick recap, in February 2009 with Obama in office less than a month Congress passed the American Recovery and Reinvestment Act of 2009. Quickly signed by the President, ARRA, known at "the Stimulus" had a price tag of $787 billion. The purpose of the Act was to create and preserve jobs and, according to the White House, prevent U.S. unemployment from reaching 8%. Money was going to go to communities across the country for "shovel ready" projects to promote infrastructure development and create local jobs.

As I wrote last January, the Congressional Budget Office in analyzing the bill stated it would have little impact on the recession or creating jobs before the current recession ends. Almost all of the spending in the bill would occur in the months leading up to the 2012 election cycle. Almost all of the funds went not to private sector companies and projects, but rather to state and local bureaucracies. The CBO analysis appears to have been correct, the ARRA would have no impact during the fiscal year it was passed. Unemployment has crested 10%. Because of red tape and inherent government inefficiencies communities across the country have nice signs that say "This work project funded by the American Recovery and Reinvestment Act of 2009" that sit on corners or streets for months with no visible work being done. Chalk ARRA up as the first misstep, or failure, of the Obama Administration and his Congressional allies who at the time needed not one Republican vote to pass any legislation--and none in Congress voted for ARRA.

In the past year private sector unemployment has been shrinking month after month. This past week another 485,000 filed for first time unemployment claims. The number of Americans on unemployment roles has stayed somewhat constant because the number of Americans falling off the unemployment roles has about equalled the number going on. Stretched out because part of the ARRA funds went to states to extend unemployment benefits--a jobs stimulus bill that paid states to pay those not working longer, an oxymoron only government cannot understand--the true, or real, unemployment number in the United States is in excess of 10%.

Almost all of the jobs lost in the current economic cycle are from the private sector. Amazingly while Americans working for private companies have seen lay-offs, business closings, salary and bonus cuts, and other economic hardship, government employees have been mostly untouched--especially Federal employees. In California the economic reality of a broke state and many municipalities has caused many workers to share the pain of the private sector with furlough days, but overall employment in the sector has not shrunk, especially compared to their private sector neighbors.

Nationally, the number one industry for job security and growth has been working for the government. While the number of Americans paying taxes has shrunk, the number of Americans benefiting from tax revenues in the form of salary and benefits has increased. And incredibly many are making more today than they did in 2008. This past week it was announced that for the first time in history the number of Americans in public employee unions exceeds the number of those in private sector employee unions (while government owned I believe the GM members of UAW are counted as private sector).

So in the past year Congress and Obama dedicated $787 billion for job growth and protection. Millions of Americans have lost their jobs in the private sector, millions more have seen cuts in salary and benefits. Those collecting paychecks and benefits for working in government jobs have seen increases in their paychecks and an increase in co-workers on the job as government payrolls have grown not only in salary but in numbers of checks issued.

Now as Obama talks about focusing on jobs Americans need to hold on to their pocket books because we know more spending is on the way. Blessed with the inability to acknowledge mistakes, missteps and the people, Obama, Speaker Nancy Pelosi and Senate Majority Leader Harry Reid do not see ARRA as the rush-to-spend that it was, but rather a success. Their myopia, as seen with their reactions to Massachusetts, leads them on a collision course with more bad legislation and policies that will not increase jobs in our country, but more likely add to the dissonance in the private sector preventing investment and growth.

Step one of the next misstep is Obama attacking banks. Trying to rally the mob, Obama attacked the bonuses and salaries of bank executives, bemoaning their paying themselves but not lending and extending credit to start and aid economic recovery. He stated he was going to reform the banking system and establish new rules for them. Ignoring, or ignorant of, the incredible Federal oversight currently going on of U.S. banks, Obama has promised more oversight and accountability.

But banks are not lending money because they have no idea what the repercussions of lending to small and medium businesses will be. Under attack since the TARP funds were put into the system, whether some banks wanted them or not, banks have been very tight on credit. Seeing the PR damage to their industry and to the executives who make the decisions, banks are not going to stick out their necks making small business loans. Risky loans invite federal scrutiny. Federal scrutiny leads to federal takeover. Better to not make risky loans and instead invest in more secure investments like Treasury bills and overnights to major corporations.

Jobs are created by entrepreneurs and those with vision. In a bad economic environment most business owners hunker down. They cut expenses, the number one expense almost always being payroll. They hoard cash and do not expand or invest. Advertising gets cut. Marketing gets cut. A little bit lower grade of supplies are used. This behavior maintains or worsens a recession. To reverse the process risk takers are needed.

Small and medium businesses are the number one employers in America. Towns and cities across the nation are dependent on these companies for economic health and growth. For growth they need capital. For capital they need banks to loan them money. For banks to loan them money they need some room from regulators to be able to extend some risky loans to those willing to expand in a shrinking economy.

Until the rules are set for banks. Until banks are secure in knowing they can extend credit with some risk attached. Until banks are not governed to a zero-loan loss expectation. Until a small business owner with a plan and an idea that needs ten, twenty, fifty thousand dollars to implement is provided the capital. Until these happen our economy will be stuck on unemployed.

Obama's Administrations says they are focused on jobs in America. Great. Connect the dots. Jobs need employers. Employers need capital. Capital needs banks. Banks need firm and set rules.

Quit the rhetoric and playing to the fawning press. Rhetoric is killing the markets and investments in America. Let the banks lend and see what happens. Quit trying to legislate to prevent failure and instead allow for some risk to enable growth.

J-O-B-S. JOBS! JOBS! JOBS!

With a nod to Jets fans, the cheer in the title is what all Americans should be cheering in unison in front of their state houses and the nation's Capitol. Particularly here in California, the chant of "Jobs, jobs, jobs" should be loud, clear and constant from all sectors of the economy and state as it appears our political season, commonly known as "budget discussions" are starting up again.

Last week Governor Schwarzenegger gave his State of the State speech and presented his budget; which needs to fill a $20 billion plus budget gap. Naturally the opposition immediately decried the budget because the Governor is requesting significant cuts to many programs, departments and sectors of the state government. Programs, departments and sectors that have grown exponentially in the past decade, primarily in the early part of this decade when unemployment was shrinking, incomes and property values were increasing and tax revenue was flowing into Sacramento like never before. The members of our Assembly and Senate during those boom times behaved as one would expect selfish, narcissist, self-serving politicians to behave: they gave political favors (read: money) to their friends and supporters, expand pet projects and liberal programs, and entrenched the primary financiers of the State Democratic party and its politicians, the public employees' unions, as the most powerful political force in the state.

Complicit in the spending increase has been the myopic California voter. Voting for measure after measure focused solely on the short term and/or the feel good "progressivism" of the measures on the ballot, the majority of California voters have saddled the state's income (or rather deficit) statement with hundreds of millions of dollars in interest payments on bonds. Bonds for water, bonds for science, bonds for rail, bonds for prisons, bonds for schools, bonds for bonds. Without any ability to connect the dots, without any desire to see the burgeoning budgets eating up temporary tax revenue windfalls, without any vision to see the long term consequences not only of the cost of the bond measures but the costs of expanding the size of the state government and subsequent salaries, benefits and pensions, the California voter checked "Yes" "Yes" "Yes" and (D) (D) (D) on their ballots.

Since January 1, 2008 the American economy has shed over 7.25 million jobs, almost 4.2 million in 2009 (U.S. Bureau of Labor Statistics). The worst hit states, as you can see from the map at left, are the far West, and swath from Michigan down to the Southeast. In a boondoggle of public spending and waste, in February Congress passed and President Obama signed the Stimulus Act whose purpose was to prevent unemployment from reaching 8% and would be used for "shovel ready" infrastructure projects. While some of us at the time screamed, "Pork!" now more are seeing how correct that cry was.

While Schwarzenegger complained in his State of the State that California only gets a little over seventy cents back on every tax dollar sent to Washington from California, he should have followed Texas Governor's Rick Perry's lead and refused any of the American Recovery and Reinvestment Act ("Stimulus") money. The funds are going overwhelmingly to public agencies which perpetuates their inefficient use of funds, creates more salaries, benefits and pensions on public payrolls and budgets, and do not create jobs. While title the ARRA, it should have been titled the Public Employee Job Guarantee and Expansion Act. Perry recognized this and did not want to burden his state with long term liabilities and government growth as a result of a Federal bribe to public employees.

Our state Legislature is behaving the same way as Congress. Their primary purpose at this point seems to be more about saving public jobs than improving conditions in the private sector and economy of the state. Since their campaigns, "their" being the Democratic majority who control budget negotiations, are financed primarily by public employee unions they focus their efforts on protecting those jobs, protecting those payrolls and protecting those automatic payroll deductions into the labor PACs. Schwarzenegger is properly focused in his budget to cut spending to reduce the budget gap.

With gerrymandered districts protecting the incumbent Democrats there will be little political consequences when the primaries coincide with the annual budget negotiations as the June 30, 2010 "deadline" approaches. The guaranteed majority in the districts will follow their same voting patterns with the result being zero accountability for the politicians who have created and perpetuated our budget crisis. And we can expect those same voters to protest and complain about the budget cuts being called for by Schwarzenegger and the members of the GOP in Sacramento. The guaranteed result is budget cuts and tax increases, and a budget deficit next year over $30 billion as the cycle repeats itself.

In order for the unemployment rate in January 2015 to reach 6% it will take 225,000 new jobs added to the economy every month for sixty consecutive months. This rate of job growth has occurred once in history: 2006. We will not add 225,000 jobs in January 2010, or February, or March, in fact we will see more job losses. So the number of jobs needed to get back to 6% unemployment increases accordingly. By adding more tax burdens to employers state and federal governments are disincentivizing job growth and hiring. Higher taxes reduces tax revenue, it has been proven time and time again. To create jobs and income tax revenue taxes must be cut, or at least the current tax rates retained, federally.

For California, we are losing jobs, people and wealth to other states by the tens of thousands. Who is left and what is the level of employment those left are able to achieve? We have a negative environment for new jobs in energy and manufacturing. Our service industries are leaving because with the technology and taxes available in other states it is easier and cheaper to work from another state, or country, than California. Our income tax, and sales tax, revenues will continue to decline as long as the Legislature is anti-business, anti-growth and pro-taxes and regulations that kill businesses and industries.

This past week saw typically bitter and freezing winter weather over much of the country east of the Rockies. In Southern California our weather has been over seventy degrees for the past few weeks. It, beautiful weather, is one of our primary resources that should draw and attract businesses, entrepreneurs and vital economic growth. Unfortunately our political climate is sufficiently foul as to counteract the incredible climate Divinely provided.

Jobs. Jobs. Jobs. Private sector jobs should be the only focus of our Legislature as they tackle the current and future budgets for California, and the United States.