'I'm just quitting': why there's no recovery and where the jobs are going

Thanks to Tom Blumer at BizzyBlog, I read this post by David McElroy, a writer and filmmaker in Birmingham, Ala., called "I'm just quitting': A scene right out of ‘Atlas Shrugged’ in Birmingham.

It's about a businessman - a job provider - who happens to have a permit to start an underground coal mine which will employ about 125 people. He attended a public hearing in an inner-city Birmingham neighborhood to hear what government officials, environmentalists and the public had to say about a proposed coal mine in their area. After listening for two hours to attendees and officials bash companies - actual job providers - he spoke. McElroy has his complete statement, but he finishes with this:

I got a permit to open up an underground coal mine that would employ probably 125 people. They’d be paid wages from $50,000 to $150,000 a year. We would consume probably $50 million to $60 million in consumables a year, putting more men to work. And my only idea today is to go home. What’s the use? I don’t know. I mean, I see these guys — I see them with tears in their eyes — looking for work. And if there’s so much opposition to these guys making a living, I feel like there’s no need in me putting out the effort to provide work for them. So as I stood against the wall here today, basically what I’ve decided is not to open the mine. I’m just quitting.
Thank you.

As if his statements weren't enough, you MUST read the comments on the post. Individuals sharing their similar stories of business men and women just saying 'no' to doing business - hiring people, purchasing supplies which leads to support jobs, paying taxes, creating a profit, contributing to their communities.

These are the stories media should be focused on. Rather than demonize people who want to (gasp!) pay people to work for them, we should be celebrating these job creators.

We should be encouraging them in their efforts and government should be asking how they can help - rather than looking for ways to shut them down, tax them more, impose more rules upon them and make them the source of all evil in the world.

Read the article and the comments - and then you'll know just how far from the American Dream we've actually come ... and then ask yourself what you're going to do to help put our country back on track.

Sen. Schumer ups job losses exaggeration

I've previously written about President Barack Obama's misrepresentation of the job losses when he took office, but apparently, that exaggeration just isn't enough.

Now Sen. Chuck Schumer (D-NY) is upping the ante:

"Before the stimulus, we were losing 700,000, 800,000 jobs a month, a huge amount."

See? Now it's up to 800,000 jobs a month...

And the reason this number gets exaggerated? To make today's job losses look like improvements.

The problem is, they ARE improvements. To have 300,000 job loses is better than 400,000 or 500,000 from the months prior to Obama taking office. Everyone will agree that the numbers are still too high, but there's no need to distort the facts to try and paint an even 'prettier' picture.

Of course, they're also saying these numbers are an indication that government spending in the form of the stimulus is working, even though most of that money hasn't even hit the economy yet.

The problem with that scenario is clearly demonstrated by the similar 'cash for clunkers' spending. The minute the money ran out, so did the supposed 'stimulus.' But that just leads to calls for even more government spending by those on the left....a vicious downward spiral because, as Margaret Thatcher once said, eventually you run out of other people's money.

H/T Warner Todd Huston at Publius' Forum

Study shows Estate Tax is killing Ohio jobs

This just in from The Buckeye Institute:

For Immediate Release
Wednesday, June 17, 2009

Estate Tax is Killing 58,000 Ohio Jobs Study Says

COLUMBUS - Ohio could add 58,363 new jobs at no cost to taxpayers if the federal estate tax were repealed, according to a new analysis by the Buckeye Institute for Public Policy Solutions. The estimates are based on research by the former director of the nonpartisan Congressional Budget Office, Douglas Holtz-Eakin. The research was conducted for the nonprofit American Family Business Foundation (AFBF), Washington, DC. The full report can be found at http://www.buckeyeinstitute.org/estatetaxreport.pdf.

"As this study clearly shows, the federal estate tax is hurting Ohio's families and businesses," said Buckeye Institute analyst Marc Kilmer. "The penalties this tax imposes on Ohioans who save and invest are ridiculous. Our state's economy would be in better shape if this death tax died and Ohioans were allowed to keep and pass on the assets they worked so hard to build."

The AFBF study found the estate tax has a significant impact on family businesses. Many small businesses are hit especially hard by the estate tax's high marginal tax rate. The current federal estate tax will be eliminated for one year, 2010, but in 2011 it will be reimposed at a rate of 55% on estates over $1 million.

The study found permanently eliminating the death tax would create 1.5 million additional small business jobs. In addition, it would increase hiring by almost 9%, increase payrolls by almost 3%, and expand investment by 3%. The state estimate is calculated based on the percentage of national small-business jobs located in Ohio.

By imposing a high marginal rate on savings and asset accumulation, an estate tax gives entrepreneurs incentives to spend and not save. In a small business context, this hurts the ability of businesses to grow and expand, leading to higher unemployment.

"President Obama has put job creation at the top of his priority list," said Kilmer. "Permanently eliminating the estate tax would be one of the most effective stimulus packages our nation could see."

The Buckeye Institute for Public Policy Solutions is a nonpartisan research and educational institute devoted to individual liberty, economic freedom, personal responsibility and limited government in Ohio. The American Family Business Foundation is the research and education voice of the American Family Business Institute, an organization representing American family business owners and farmers.

Debunking "Eight Years of Economic Pain"

As to be expected, two Lucas County officials yesterday held a press conference to denounce President George W. Bush as part of a partisan effort in the 2008 presidential campaign. That Bush is not running this year seems to be missed on Commission Pete Gerken and Treasurer Wade Kapszukiewicz, but that's a discussion for another post.

As proof of the 'Bush is evil, McCain's the same' mantra, they produced a 'report' that claims to document "Eight Years of Economic Pain, How GOP Economic Policies in Washington have Devastated Ohio." Media covered the press conference and have referenced the 'report' but without the clarification below.

The first thing you need to know about this report is that it wasn't done by any independent body or researcher, it was done by the Ohio Democratic Party and the Ohio Campaign for Change, which is the Barack Obama campaign. This is not an objective analysis, it is a partisan attempt to portray the Democrats' view of things.

It contains a listing of all companies that either closed or laid off workers since 2001. According to the report:

The bulk of the data on factory, company and operation shut downs and layoffs is a result of Ohio’s Worker Adjustment Retraining Notification (WARN) Act. The WARN Act provides protection to workers, their families and communities by requiring employers to provide notification 60 calendar days in advance of plant closings and mass layoffs. WARN notices are provided by employers to the Ohio Department of Job and Family Services, Bureau of WIA, Rapid Response Section. This current and historical data can be found at http://jfs.ohio.gov/warn/.

This initial State of Ohio data was supplemented by private service databases, including Lexis‐Nexis, online searches, BuildCentral information, archived business directories at the local library, and business street address information from InfoUSA’s business databases. This information was then compiled into a master database used for the analysis.

They admit two problems with the data: 1) it doesn't include companies that are exempt from the WARN requirements, and 2) it doesn't account for companies that issued WARN notices, but then did not lay off all notified employees or actually close.

Based upon this clarification and the methodology identified, I find no reason to challenge the actual data. Attributing the data to a specific reason, however, certainly deserves to be challenged.

The report is primarily charts and graphs with the data broken down by county, Congressional District, House District, etc. Of the 80 pages, there are only five that contain wording: preface page, overview page, why John McCain is wrong for Ohio, Appendix A with the methodology and Appendix B with the McCain quote references.

The report never explains any specific policy that results in the job losses. In fact, the report does not even attempt to identify any reason why a particular company or industry laid off workers or closed. The closest they come to any analysis or explanation is a single bullet point on the overview that many of the jobs left the U.S., "moving to to countries such as China, Mexico,Taiwan, India, and Columbia, to name a few." But they don't identify any of those companies specifically.

In fact, a cursory review of the listing of lost jobs raises more questions than it answers when it comes to WHY those companies closed and WHY it is the fault of GOP economic policies.

For example, they cite the closing of the Farmer Jacks stores in Toledo in 2006. But those stores were closed as part of a larger company restructuring decision decision by Montvale, N.J.-based Great Atlantic & Pacific Tea Co, according to a May 11, 2005 Blade report.

Also from the story:

"Shamie Singh of Maumee said the problem at Farmer Jack was their prices seemed high.

"If they had good prices I'm pretty sure they'd have had more customers. People will go elsewhere for better prices," said Ms. Singh, who also shops at Kroger and Meijer."

Obviously, there was more to this particular closing than presidential policies.

And then there is the listing of St. Anthony Villa, also in Toledo, which closed in 2001. This agency ran a chemical dependency program and a residential behavioral program that handled about 600 youth a year. They were closed by their parent company after receiving reduced funding from the United Way, though they stated that the loss of funding was not the reason for the closing. According to press reports at the time, there were not enough youth going through the programs.

Now, this would seem to be a good thing, that less youth are in need of chemical dependency programs, but not if you're the Ohio Democratic Party looking for another example to represent your claims.

Chrysler is another Toledo company on the list. Their layoffs had more to do with the American automotive market, their sale by Daimler, and their regular shutdowns than anything else. And then, with the increase in the price of gas and the decline of the SUV market, is it any wonder that they had longer than normal shutdowns on the Jeep lines?

General Mills is another large employer from Toledo listed in the report. They were purchased by International Multifoods in 2002 which sold the entity to J.M. Smucker in 2004. The job losses were a result of the sale and the consolidation within the new companies.

Other Toledo firms listed:

Craft House International - according to a story in the Toledo Blade at the time:

Craft House is best known for paint-by-number sets, but sells more than 300 activity toys, craft and hobby kits, and outdoor sport toys.

An industry expert said the action in Toledo could be linked to problems at several retail chains that carry the firm's craft products. Ames, Zany Brainy, and Jo Ann Fabrics & Crafts have experienced difficulties recently, said Michael Hartnett, publisher of Creative Leisure News in Tremont, Ill.

"The industry has been fairly flat and is going through difficult times," he said.

Jacobson's Department Store - closed after filing for bankruptcy. The Toledo store was one of the chain's worst performers and all the stores in Ohio were closed as part of their efforts to restructure their financing.

CVS Pharmacies - they were a victim of the 'drug store wars' when multiple drug store chains inundated the Toledo regional market in an effort to gain part of the $328 million spent annually at drug stores in the metro area (dollar amount from 2001). Some intersections in the city had a different drug store on every corner. According to the chain's spokesman at the time, these stores were all low-performing.

Convergys - a call center that was closed in 2003 as part of the company's world-wide restructuring, including consolidation of locations.

The reasons these companies closed had more to do with their industries or their own internal operations than with any presidential policy.

But that's not the purpose of the 'report.' The purpose is to provide quotes to be used by elected officials and reported in the media to promote Barack Obama over John McCain.

Their 'proof' of their choice - again, not surprising since they are the Democrat Party - is a single page that is supposed to document their positions.

On the "McCain wrong for Ohio" page, they cite his votes in favor of free trade, including NAFTA, though they fail to explain why McCain is wrong on a policy that was implemented by Democrat President Bill Clinton. They also criticize McCain's positions against many union-sponsored and promoted initiatives like minimum wage increases, prevailing wage requirements and extension of unemployment benefits.

Of course, none of this should come as a surprise considering the differing platform and philosophical positions of the Democrat Party and the Republican nominee.

Something else they don't tell is how many jobs were created in Ohio during that same time frame. We all know that politicians love to take credit for jobs created by the private sector. But to include the number of jobs created might give you more information than they want you to know.

According to the Ohio Department of Job and Family Services, the yearly average number of people employed in Ohio has risen steadily since 1992. Two years, 2002 and 2003, saw the numbers decline, but even then, the 2003 employment numbers were higher than any year between 1992 and 1998. By 2006, Ohio had more people employed than they did in any year going back to 1992.

Toledo's average employment numbers increase from 1992 to 1998, and hit their peak in 1999. Since 1999, the average number of people employed in Toledo has been in steady decline. In fact, from 2002 through 2007, Toledo has not even reached its previous low (in the time frame examined of 1992-2007) which was in 1992.

Interestingly, despite the state's decline in average employment in only two years, Lucas County and Toledo had 8 years in which their employment declined. So the question that should be asked is this: what is different between Toledo/Lucas County and the rest of the state? Does it have anything to do with the Democrat leadership that has held almost all elective offices in the city and county since that time? Or is it really 'all Bush's fault'?

I'm currently awaiting the job creation figures from ODJFS and will include them upon receipt.

CONCLUSION: This 'report' is nothing but a compilation of unrelated factors presented by a partisan organization in an attempt to generate news/media coverage that is beneficial to their candidate and detrimental to their opponent. The question is, will the media - and the public - fall for it?