Sit Down, Grab a Cup of Espresso, Here's What I Have to Say About the Economy

If you are  going to  read this, standard issue equipment is a cup of strong espresso, as this post may prove why Thomas Carlyle called economics “the dismal science”.

The most recent snapshot of the Florida job market shows a one month decline of 22,100 jobs. The labor force in Florida, this year, has shrunk by 56,000 people.

This trend is reflective of a larger national trend which shows that the percentage of the population employed has steadily declined from January 2001, when we had 64.4% of the population employed, to this month which shows 58.1% of the population employed. This is a 6.3% decline in the working population in the past ten years.  A population that has increased over the past decade.

I feel that it is important that we all keep in mind that honest people can honestly disagree.  Depending on the individual,  the way forward varies.  A common theory is the trickle down theory that has been initially ascribed to Will Rogers.   The idea being that the top income producers will invest more into business infrastructure.  This will have the effect of stimulating demand which will lift all sectors of the economy.  I would suggest that this is idea behind the “Bush era tax cuts.”  As a statement of fiscal policy these tax cuts are at the least controversial.

There are many who have staked their political reputation on continuing this policy.  The question that should be asked - is this the best policy not for the individual but for the nation as a whole? “ We have seen this discussion played out in the press. Warren Buffet and Charles Koch certainly have different opinions on this topic.  

A former staffer of both Congressmen Ron Paul and Jack Kemp, Bruce Bartlett, in an article titled “Bush tax cuts have had little positive impact on the economy” argues that the tax cuts should expire.

One of the most important functions of all levels of government is to provide a stable regulatory base for society.  Ideally the regulatory environment should be coordinated so that all levels and functions of government work together.  

Unfortunately, this  is not always the case.  An example of the failure to provide a stable regulatory base is playing out in the efforts to reasonably regulate Assisted Living Facilities.

The cost of meeting regulations is a real cost that a business must meet.  The real impact of these costs, however,  are all too often tossed about like a shuttlecock. Periodically,  we have seen individuals erroneously overstate the real costs of regulation.  Rarely, do we hear someone praising regulators. However, can you picture the equity markets without the regulatory efforts of the Security and Exchange Commission?

We need to demand that our politicians dial down the overheated exchanges. Fireworks make a great show on July 4th, however, today is August 24. We need people coming up with real rational solutions to our many real problems.
I suggest what is needed are  positive ways of spurring demand.  

Recently, my wife and I were in one of the big box stores in our neighborhood. Seemingly every item we looked at was imported.  We need to efficiently make that stuff here.  Stuff you and I will take off the shelves of the local big box store to our homes.  I would contend that service sector jobs are not productive. During this economic downturn we must refocus our efforts on manufacturing, on making stuff.