The 2012 American election is going to be about one thing – The Economy. Why the economy? Because unemployment is high which mean a lot of people do not have jobs, and this makes everyone nervous with the fear that they will never get a job; or for the employed, that they will become unemployed soon.
So really, the election is about Jobs, and which Candidate/Party can change the situation in a positive way that will give people hope that the can get a job, or keep their job.
The sides are clearly divided; one side is less government, low taxes, the rich will help the poor – the other side is more government, higher taxes, and wealth redistribution will help the poor.
The fact is that elections are won by the person who has the most money. For this election, this will be the Republicans.
That is cynical you say:
In the 2008-2010 elections, 93 percent of House of Representatives races and 94 percent of Senate races; the candidate who spent the most money ended up winning, according to a post-election analysis by the nonpartisan Center for Responsive Politics. The findings are based on candidates’ spending as reported to the Federal Election Commission.
The Buck Will Not Stop Here
OK, so Romney wins, how will that really affect the economy and jobs? That is a good question, because Romney has yet to actually spell out the details of his economic plan, except to say that it is based on ‘Republican economics principles’.
The U.S. economy has expanded at a healthy clip for most of the last 70 years, but by a wide range of measures, it stagnated in the first decade of the new millennium.
Job growth was essentially zero, and modest job creation from 2003 to 2007 wasn’t enough to make up for two recessions in the decade. Rises in the nation’s economic output, as measured by gross domestic product, was weak. And household net worth, when adjusted for inflation, fell as stock prices stagnated, home prices declined in the second half of the decade and consumer debt skyrocketed.
The below chart shows a definite flattening of job growth curve during the Republican term of George Bush:
The numbers below are the overall jobs growth data for each presidential term from Carter till Obama and based are Bureau of Labor Statistics.
President Party Term Ave. Job Growth for Term
Jimmy Carter D 1977–1981 +2.30%
Ronald Reagan R 1981–1985 +1.75%
Ronald Reagan R 1985–1989 +2.53%
George Bush R 1989–1993 +0.69%
Bill Clinton D 1993–1997 +2.60%
Bill Clinton D 1997–2001 +1.60%
George W. Bush R 2001–2005 +0.51%
George W. Bush R 2005–2009 -0.84%
Barack Obama D 2009–2013 +0.75%
The Republican polices of George W. Bush clearly show the lowest and worst job growth numbers since his father. The decade of the 2000’s (The W Bush Decade) shows stunningly low job growth rates, even though the Republican policies of low taxes (Bush Tax Cuts), less government regulation, strong military spending were in full effect:
The main gist of Romney’s campaign right now is that there have been no jobs created during the Obama administration, except for the public sector (government). The data actually shows significant private sector job growth, and declining public sector job growth:
The Republicans are positioning themselves against the Democrats by stating that Obamas policies are ‘Socialist’ and are destroying job growth in the USA.
The Facts say something else:
654,000: The net gain in jobs since the national job number hit a 10-year low of 129.6 million in December 2009, seasonally adjusted.
54.2 million: The number of jobs created during the nearly 30 years in which Democrats have held the presidency, beginning with President Truman in April 1945. (Comparable BLS data is not available for full presidencies before then.)
34.6 million: The number of jobs created during the 36 years in which Republicans have controlled the White House during the same time period.
4.3 million: The jobs created since President Barack Obama took office in January 2009. More than the 8 years that George W. Bush was in office.
1.1 million: The number of jobs gained under President George W. Bush, the smallest job growth for any president completing at least one term. The seasonally adjusted jobs number fell in each of Bush’s last 12 months in office as 4.4 million jobs were lost.
22.7 million: The number of jobs gained under President Clinton, the biggest job growth of any president.
This chart shows how job growth experienced it worst decline ever as the Bush/Republican policies achieved full effect:
The Obama/Democrats policies clearly had a positive effect on job growth, even though we still have traditionally high unemployment:
Job Creation in the 2000’s flattened out, one of the lowest in history, and now unemployment number are coming down at the slowest pace ever recorded after a recession.
The question: Is the flat job growth, and slowly declining unemployment number related to the economic policies of our government who has been purchased by the 1% percent and the corporations, or is it something else?
There are many factors related to the question of why job growth has flattened in the last decade, and why employment is taking too long to recover from the recession.
I think one of the most over looked and least discussed factor is the effect that technology has had in our society and economy.
The current conventional thought on technology is that even though technological change may adversely effect the demand for labor in some industries, the overall effect of technological change on total employment may be positive.
Technological change tends to increase the rate of economic growth. Higher rates of economic growth are generally associated with lower unemployment rates.
“Okun’s law,” states that this relationship between changes in the rate of economic growth and the change in the unemployment rate. It says that a 1% increase in the rate of economic growth lowers the unemployment rate by 0.3%. While there is some doubt about the exact magnitude of this effect, there is substantial evidence that unemployment rates tend to fall when the rate of economic growth is higher.
Basically, the jobs created by the economic growth provided by new technology, will off-set the job loses created by the new efficiency and productivity that a new technology will provide.
The question of whether the widespread use of computers in the workplace has enhanced productivity, is an important debate. Preliminary studies suggested that the introduction of computers had no significant effect on productivity. More recent studies have generated mixed results.
It is fairly clear, though, that the widespread introduction of computers has, to date, had a less dramatic effect on productivity and economic growth than resulted from the widespread introduction of such earlier innovations as the steam engine, electricity, and the internal combustion engine.
I think that this train of thought about technology is missing and important point.
How has the technology changed society and the way business functions?
Recently I have discovered through my own work experience in the last year, the real effect of technology on jobs – and why they are not coming back.
20 years ago, in order to run a small service business, you needed 10 employees and a building for them to work out of and meet.
10 years ago, you would need 5 employees, and a building to work out of and meet.
Now, you could run the same business with 2 people, and work out of their homes.
Actually, this is exactly what a growing number of people are doing. They work from home. They find work as a small business, with a website as their business face, and they cruse other websites and Craigslist in search of work.
Many small businesses run with a minimum of people, often spread over the country, working out of their homes.
This way of running a small business is due to the technological advances such as VOIP telephone, video conferencing, internet, payroll and accounting service now provided by you bank and a whole host of other innovations.
For years it has been said that small business power job growth. Well, then if that it true, no wonder job creation has flattened out and slowed in the last decade.
Small businesses are not hiring the numbers of people as they did in the past, and they are not renting small offices like they used to, which is why industrial real estate is so bad.
This does not mean small businesses are not hiring people, but as more and more small businesses become more virtual, then the less people they will need to hire.
There is only so much business to go around, small business can now run very lean, which means there are more of them, but they need significantly less staff with the technology now at hand.
So What to Do About It?
Here are some things that America and it’s people can do about jobs in the new and efficient 2010’s:
1) Create manufacturing jobs for workers who need they type of job, by sticking tariffs on imported goods from countries that have tariffs on our products (like China)
2) Train yourself in the basic computers skills and technologies: Office suite, teleconferencing, basic networking, VOIP, accounting software, website technologies like WordPress and mobile technologies and apps.
3) America needs to find a way to make higher education affordable again. Students are having to take on a mortgage in order to get a basic university education, and there is no really good reason for this high cost.
4) Vote this election.
Good Luck America!!!
Here is the chart the Republicans and Romney don’t want anyone to see or think about: