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January 09, 2014

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The DEPENDENT GENERATION What does it do to kids when you send them to college and there are not jobs? When they can stay on your healthcare bill until 26? When the President designs a healthcare plan that requires millions of 24 year olds to support the old guys to work but has them on their parents plan for zero until 26? When they receive first time home buyers bonuses? When he subsidizes electric cars? When the government forgives the tax on their bad real estate buys?

Today the study released say 58% expect to drive non gasoline powered cars in the next 5 years BUT 60% say they expect the government to pay them to do it.

This generation are moving to the cities, living in apartments and riding mass transportation/bikes. They prefer the emergency room to Obamacare. They work in contract jobs that allow them to take home the benefits package in cash.

It is scary to watch what happens to a generation losing hope in an economic recovery where it is possible to find a job, buy a house, buy a car and pay your own way.

Yesterday, for the first time the Presidnet actually talked about something that makes sense--training for kids who don't need to go to college to work in high paying IT/technical jobs. Unfortunately, he has no understanding of how to do it. Choosing UNC to do the pilot program in NC. A college with the exact opposite marketing plan has little incentive to do cheap training of IT people not going to college. Industry must do it. Industry knows what they need now and in the future to keep their jobs in America. Universities have failed to keep up. They have no clue. They are reactionary marketers. They respond to current demand. More Nurses needed , more nursing classes offered. you think UNC is going to produce kids with IT skills to drive a bull dozer or run an automated assembly line? No and they don't even know or care we need them.

ARE YOU KIDDING ME? Today the President said he is no longer going to wait on Congress to improve the economy and jobs--he's going to do it on his OWN. You got to be kidding me. Six years into his Presidency he knows how to create jobs? All he knows is how to get the people looking for jobs to quit looking. Last week he told the nation he has never seen an unemployed person who does not want a job--you got to be kidding me. Has he ever visited a family with preschool kids where the mom or dad stay unemployed in order to draw unemployment because it pays more than a job after child care? There are millions of them. Did he ever meet Octomom?
His version of creating jobs is to raise minimum wage. His version of creating jobs is to have the government fund a new extension of unemployment benefits. Small businesses reeling from higher payroll and personal taxes, reeling from healthcare reform, reeling from higher local taxes and regulations and with no access to capital are NOT hiring. Oh yes--does he really think Congress knows what to do? What we need is the White House to stop doing things to inhibit hiring.

US Iran Agreement? Iran has announced that the US and the West have surrendered to Iran in the new agreement on nuclear enrichment. Will the US now rush to get Iranian oil back on the market and Iran the resources to fund the terrorists again? Stay tuned.

Good thoughts, AL!

A nice post, Bill, which gives some perspective to the problems facing our descendents. They do not recall diving under their school desks during nuclear bomb drills. The general belief of our generation growing up was not “if” a nuclear war would occur, but when. Survival was viewed as a long shot.
[I had to pinch myself to verify that I had survived the Cuban Missile Crisis]

Our Nation needs serious debate about competing political themes currently being played out that will impact the economic well being (but not physical survival) of their generations.
One—Are employment “opportunities” so limited that we must have an ever increasing number of people on food stamps, disability, and unemployment compensation?
Two-- “Must” we grant amnesty to un-documented workers to fill jobs in the agricultural sector and entry level positions? (So says the Chamber of Commerce & Democratic Party)
Three—Does economic “fairness” demands that resources of the most wealthy (earned, not inherited?) be redistributed to those having less?
It seems that there is a serious misalignment between expectations and reality, probably due in part to shifting dynamics as the world moves inexorably toward a more global economy. Data from the recent census shows that most of our “poor” have a car, tv, cell phone, and computer. Somewhat different from the picture one sees in most of the developing world (or from Appalachia when President Johnson declared the “War on Poverty” that would forever eliminate USA poverty).

As an aside, I am not certain that the declining college attendance levels are a “bad thing”. Maybe parents (and teenagers) are wising up that it does not make sense to spend 5 years, accumulating a mountain of debt, to obtain a degree in Women’s Studies, Black Literature, Medieval History, or some other degree where the demand is limited to teaching positions. Or, in advance degrees in grossly overpopulated fields such as law (an acquaintance recently told me that the incoming law class at Tulane was down about a third from his student days)?

In a free economy, things tend to level out with time. Government controls (whether they be wage and price controls, socialization of segments of industry/services, or whatever) tend to distort the natural leveling forces and create a cottage industry of the “favored” clientele (look at the huge K Street lobbying industry, farm subsidies, the TVA and Rural Electrification Agency, etc.). Not every “ill” benefits from the government stepping in with a bureaucratic solution, which never will be erased even when the “problem” is long gone.

This does not diminish our “problems”. But, a serious debate on the issues/solutions will lead to more positive advances for our Great Country than calls for class warfare and suggestions that all would be well if only the Government stepped in to create social justice.

ON GENERATIONAL POLITICS: There are a few things I see as different in the generations:

1. There is a definite sense of team play with married couples where one spouse works for the benefits that support the family namely medical, child care and in lower income families welfare/unemployment benefits. The second spouse works for income. This is much different than the baby boomers who were all about career and saw the moms move from housewife in the 50's to career mom's through the 60's,70's,80's,90's. That generation was all about women's emergence as a political and working segment. To the detriment of the blue collar white male job security.

2. 31 Million illegal Mexican immigrants went from seasonal farm workers harvesting vegetables and fruits in California, Texas and Florida to construction workers building houses, commercial office cleaners, business owners in the landscaping areas, state and county workers building roads, manufacturing laborers, fast food workers, etc. These people took away the lower priced jobs of black men and then moved to cannibalize the jobs of blue collar black and white men.

3. The evolution of the IT generation. IT skills is a huge factor on employment. As we watched on TV in the first Gulf War IT skills in the hands of US soldiers changed the whole nature of the battle between those with IT and those without. Bombs flying through windows, bombs hitting a man running down the road in the middle of the night, surveillance from space with resolution of the eye of an eagle, etc. Soldiers are not college graduates. They are high school graduates trained in IT skills to operate million dollar equipment at age 19 in the highest stress conditions that exist. And, they do it well. Today America has 3,000,000 open it jobs for people with IT skills who can maintain IT based equipment. Only a fraction of the new generation has been trained in the education system to do it. But, the US Army can do it. To get an idea of the spread of IT into the work place just take a look at your grandkids Christmas toys. Most have IT in them. Take a look at your new car--way more IT than you can learn. My wife's car can park itself. You can close your garage door from work on your cell phone. You need an appointment to go to an Apple retail store to buy a MAC. They have people who will teach you how to use it. As you drive down the road you pass bull dozers that run with IT systems just like US tanks. Most companies have websites that need to be maintained and evolve into interactive consumer sales and education systems. How many years will it be for the education system to catch up to US industry? We don't need colleges, we need tech schools.

So what does this have to do with politics? Blacks still vote only for one party who rewards them with dependency--no change. Hispanics vote mostly Democratic in order to keep the border from closing, to keep from being arrested and sent back home, to keep access to US education systems and to keep the movement for amnesty programs alive. This is the growing force for Democratic control. White senior citizens vote for whatever party will protect their entitlements--normally thought to be Democrats. Finally there are the vanishing white middleclass and wealthy. Wealthy stay split between those who favor free enterprise (Republican) and those with some misguided idea that they need to take care of the people who can't find a job.(Democrats) The white middle class swings based on the candidate and the economic swings. They are the so called "Independents". Only when they swing hard right do Republicans win national elections.

BOOMING ECONOMY? I guess by now you have seen the jobs report this morning. 74,000. This is what the interview numbers from our company have shown. Manager confidence of the job creators in America, small business owners, is definitely damaged by the healthcare regulations changes and the uncertainty that has created. Small businesses are not being created because of the fears of regulations and healthcare cost increases and now minimum wage increases. Remember that we were all hit in 2013 with the payroll tax increase and personal tax increases as well. We have a very misleading economy out there. Retail sales were not good in December. Take for example Macy who had same store comps up 1% and announced layoffs of 7500 people. How many people do you think are going to lose their jobs at Sears? Big businesses continue to fail to hit their top line revenues and swtill increase earnings per share. They can only do that by cutting costs and that is jobs gone (mostly through retirement jobs not filled), and small business contracts cancelled or reduced. I am currently listening to the Labor Secretary explain what we need to do to get jobs going and the attitude of employers. First words out of his mouth is we need to extend unemployment benefits—that will create jobs? Then he says he was in Kentucky talking with Ford and Ford wants to invest in jobs. Ford is a big business—BIG BUSINESS does not create jobs in America. We are currently in one of the lowest ever new business formation periods in American history. Why? No capital, healthcare and tax increases, regulations blitz’s. All the Secretary can do is talk about the unemployed people—we could use a person in the Administration who understands small business. Look it is pretty simple: 10,000 baby boomers are retiring ever DAY. So participation over the next 8 years will drop 300,000 a month. If businesses were refilling these jobs then unemployment would drop like a lead balloon but they are not yet. We are creating about 210,000 jobs a month. The only way to get job creation going is to stop the “rape” of small businesses. Get the overseas profits back in the USA. Lower corporate taxes and more small business owners will leave the $$ in their companies. The policies of this President are actually making the rich richer and destroying the middle class. They are, however, raising the living standards of the 3rd world. It appears we took the low income people in America, made them dependent, destroyed the environment that encouraged small business formation that employed them and chased our companies overseas were they make record profits employing 3rd world people and selling to them as well. I am pretty clear on what “leveling the playing field meant” now—it wasn’t for the US poor, it seems it was for the 3rd world people.

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