Unemployment

Rise Of The Droids: Will Robots Eventually Steal All Of Our Jobs?

February 4, 2013 by Michael

Will a robot take your job? We have entered a period in human history when technology is advancing at an exponential rate. In some ways, this has been a great blessing for humanity. For example, I am absolutely blown away by all of the things that my little iPod can do. But on the other hand, all of this technology is eliminating millions upon millions of high paying jobs. In the past, I have written extensively about how millions of American jobs have been sent to the other side of the world, but now we may be moving into a time when workers all over the planet will be steadily losing jobs to super-efficient robots. For employers, robots provide a lot of advantages to human workers. Robots never complain, they never get tired, they never need vacation, they never show up late, they never waste time of Facebook, they don’t need any health benefits and there are a whole lot of rules, regulations and taxes that you must deal with when you hire a human worker. In the past, robots were exceedingly expensive, and that limited their usefulness in the workplace, but as you will see later in this article that is rapidly changing. As robots continue to become even more advanced and even less expensive, will there eventually come a point where the “human worker” is virtually obsolete?

Of course I can hear the objections already. Many of you will insist that even though automation has always eliminated jobs in the past, it has also always created new jobs that were even better. For instance, once upon a time most of the U.S. population worked on farms, but thanks to automation now hardly any of us do.

But what happens when we get to the point where super-intelligent robots are more efficient at everything?

What will be left for “human workers” to do?

And if human workers are no longer needed for most tasks, what will their role in society be?

Personally, I still complain about self-service check-in kiosks at airports and self-checkout lanes at supermarkets, but most people seem to have accepted them. There are even many bank branches now that don’t have any humans in them at all. The number of jobs where a human worker is absolutely “required” is dwindling all the time.

And a lot of the jobs that are disappearing thanks to advances in technology are fairly high paying jobs. In fact, one recent study of employment data from 20 countries discovered that “almost all the jobs disappearing are in industries that pay middle-class wages, ranging from $38,000 to $68,000.”

As I mentioned earlier, in the past robots were simply far too expensive to perform most tasks. So human workers had an advantage.

But that advantage is disappearing right in front of our eyes. For example, one company has produced a new robot called “Baxter” that only costs $22,000. The following is from an article about Baxter in the MIT Technology Review…

Baxter was conceived by Rodney Brooks, the Australian roboticist and artificial-intelligence expert who left MIT to build a $22,000 humanoid robot that can easily be programmed to do simple jobs that have never been automated before.

Eventually, the goal is to produce versions of Baxter that will perform tasks even more cheaply than Chinese workers do…

Brooks’s company, Rethink Robotics, says the robot will spark a “renaissance” in American manufacturing by helping small companies compete against low-wage offshore labor. Baxter will do that by accelerating a trend of factory efficiency that’s eliminated more jobs in the U.S. than overseas competition has. Of the approximately 5.8 million manufacturing jobs the U.S. lost between 2000 and 2010, according to McKinsey Global Institute, two-thirds were lost because of higher productivity and only 20 percent moved to places like China, Mexico, or Thailand.

The ultimate goal is for robots like Baxter to take over more complex tasks, such as fitting together parts on an electronics assembly line. “A couple more ticks of Moore’s Law and you’ve got automation that works more cheaply than Chinese labor does,” Andrew McAfee, an MIT researcher, predicted last year at a conference in Tucson, Arizona, where Baxter was discussed.

So it won’t just be American workers that will be displaced by robots – it will literally be workers all over the planet.

In the future, when you call someone for customer service you probably won’t be talking to someone in India. Instead, you will probably be talking to a robot. In fact, this transition is already starting to happen…

IPsoft is a young company started by Chetan Dube, a former mathematics professor at New York University. He reckons that artificial intelligence can take over most of the routine information-technology and business-process tasks currently performed by workers in offshore locations. “The last decade was about replacing labour with cheaper labour,” says Mr Dube. “The coming decade will be about replacing cheaper labour with autonomics.”

IPsoft’s Eliza, a “virtual service-desk employee” that learns on the job and can reply to e-mail, answer phone calls and hold conversations, is being tested by several multinationals. At one American media giant she is answering 62,000 calls a month from the firm’s information-technology staff. She is able to solve two out of three of the problems without human help. At IPsoft’s media-industry customer Eliza has replaced India’s Tata Consulting Services.

Even some of the largest companies in China are starting to make the transition from human workers to robots. The following is from a recent TechCrunch article…

Foxconn has been planning to buy 1 million robots to replace human workers and it looks like that change, albeit gradual, is about to start.

The company is allegedly paying $25,000 per robot – about three times a worker’s average salary – and they will replace humans in assembly tasks. The plans have been in place for a while – I spoke to Foxconn reps about this a year ago – and it makes perfect sense. Humans are messy, they want more money, and having a half-a-million of them in one factory is a recipe for unrest. But what happens after the halls are clear of careful young men and women and instead full of whirring robots?

So what will the world look like as robots begin to replace humans in just about every industry that you can imagine?

A recent Wired article described what this transition might look like…

First, machines will consolidate their gains in already-automated industries. After robots finish replacing assembly line workers, they will replace the workers in warehouses. Speedy bots able to lift 150 pounds all day long will retrieve boxes, sort them, and load them onto trucks. Fruit and vegetable picking will continue to be robotized until no humans pick outside of specialty farms. Pharmacies will feature a single pill-dispensing robot in the back while the pharmacists focus on patient consulting. Next, the more dexterous chores of cleaning in offices and schools will be taken over by late-night robots, starting with easy-to-do floors and windows and eventually getting to toilets. The highway legs of long-haul trucking routes will be driven by robots embedded in truck cabs.

All the while, robots will continue their migration into white-collar work. We already have artificial intelligence in many of our machines; we just don’t call it that. Witness one piece of software by Narrative Science (profiled in issue 20.05) that can write newspaper stories about sports games directly from the games’ stats or generate a synopsis of a company’s stock performance each day from bits of text around the web. Any job dealing with reams of paperwork will be taken over by bots, including much of medicine. Even those areas of medicine not defined by paperwork, such as surgery, are becoming increasingly robotic. The rote tasks of any information-intensive job can be automated. It doesn’t matter if you are a doctor, lawyer, architect, reporter, or even programmer: The robot takeover will be epic.

I don’t know about you, but the phrase “robot takeover” is not exactly comforting.

Perhaps I just watch too many movies.

In any event, as technology advances there will eventually be very few jobs that robots cannot perform. In fact, you might be surprised to learn some of the things that robots are already doing. The following is from a recent Yahoo News article…

Google and Toyota are rolling out cars that can drive themselves. The Pentagon deploys robots to find roadside explosives in Afghanistan and wages war from the air with drone aircraft. North Carolina State University this month introduced a high-tech library where robots — “bookBots” — retrieve books when students request them, instead of humans. The library’s 1.5 million books are no longer displayed on shelves; they’re kept in 18,000 metal bins that require one-ninth the space.

So what will the 3.1 million Americans that drive trucks do for a living once robots are driving all of our trucks?

What will the 573,000 Americans that drive buses do for a living once robots are driving all of our buses?

And eventually even our skies may be filled with robotic drones that are busy performing one task or another. Just check out what a recent Time Magazine article had to say about the emerging drone industry…

But the drone industry is ramping up for a big landgrab the moment the regulatory environment starts to relax. At last year’s Association for Unmanned Vehicle Systems International (AUVSI) trade show in Las Vegas, more than 500 companies pitched drones for filming crowds and tornados and surveying agricultural fields, power lines, coalfields, construction sites, gas spills and archaeological digs. A Palo Alto, Calif., start-up called Matternet wants to establish a network of drones that will transport small, urgent packages, like those for medicine.

In other countries civilian drone populations are already booming. Aerial video is a major application. A U.K. company called Skypower makes the eight-rotored Cinipro drone, which can carry a cinema-quality movie camera. In Costa Rica they’re used to study volcanoes. In Japan drones dust crops and track schools of tuna; emergency workers used one to survey the damage at Fukushima. A nature preserve in Kenya ran a crowdsourced fundraising drive to buy drones to watch over the last few northern white rhinos. Ironically, while the U.S. has been the leader in sending drones overseas, it’s lagging behind when it comes to deploying them on its own turf.

Unfortunately, many people will not understand what I am really trying to get at in this article.

They will just say something like this: “Well, they are going to need someone to build all of those robots.”

Even if that is true, they won’t need hundreds of millions of us to build them.

No, the truth is that when human workers become “obsolete”, those that dominate society with technology will look at the rest of us as “useless eaters” that are not contributing anything to society at all.

Already, there are many economists that are warning that advancements in technology are steadily reducing “the natural employment rate”.

And we are already seeing this happen in the United States. As I wrote about the other day, the percentage of the labor force that is employed has declined every single year since 2006…

2006: 63.1

2007: 63.0

2008: 62.2

2009: 59.3

2010: 58.5

2011: 58.4

In January, only 57.9 percent of the civilian labor force was employed.

Of course there are certainly a lot of factors involved in why those numbers are declining, but without a doubt technology is playing a role.

So what do we do with all of the workers that are being displaced?

Are we just going to put everybody on food stamps?

Will the gap between the rich and the poor grow even larger than it is today?

Will most people eventually become dependent on the government in order to survive?

We are moving into uncharted territory, and nobody is quite sure what comes next.

As time goes by, robots will even start to look more like us. In fact, this is already starting to happen. Just check out the following description of a “bionic man” that has been created from a recent article in the Guardian…

He cuts a dashing figure, this gentleman: nearly seven feet tall, and possessed of a pair of striking brown eyes. With a fondness for Ralph Lauren, middle-class rap and sharing a drink with friends, Rex is, in many ways, an unexceptional chap.

Except that he is, in fact, a real-world bionic man. Housed within a frame of state-of-the-art prosthetic limbs is a functional heart-lung system, complete with artificial blood pumping through a network of pulsating modified-polymer arteries. He has a bionic spleen to clean the blood, and an artificial pancreas to keep his blood sugar on the level. Behind the deep brown irises are a pair of retinal implants, giving him a vista of the crowds of curious humans who meet his gaze.

He even has a degree of artificial intelligence: talk to him, and he’ll listen (through his cochlear implants), before using a speech generator to respond.

As robots become more like us, will we eventually become more like them?

Will we be told that we must “merge with the machines” in order to keep up and be useful in society?

As we rapidly approach the “technological singularity” that futurist Ray Kurzweil and others have talked about, will humans increasingly seek to “enhance” themselves with technology in an attempt to “get an edge”?

What will happen to those of us that refuse to “merge with the machines” and that refuse to “enhance ourselves” with technology?

Will we be outcasts?

Those are some important questions. Feel free to share your thoughts on those questions by posting a comment below…

Shocking Numbers That Show The Media Is Lying To You About Unemployment In America

February 1, 2013 by Michael

Did you know that the percentage of the U.S. labor force that is employed has continually been falling since 2006 according to the Bureau of Labor Statistics? Did you know that the increase in the number of Americans “not in the labor force” during Barack Obama’s first four years in the White House was more than three times greater than the increase in the number of Americans “not in the labor force” during the entire decade of the 1980s? The mainstream media would have us believe that 157,000 jobs were added to the U.S. economy in January. Based on that news, the Dow broke the 14,000 barrier for the first time since October 2007. But if you actually look at the “non-seasonally adjusted” numbers, the number of Americans with a job actually decreased by 1,446,000 between December and January. But nowhere in the mainstream media did you hear that the U.S. economy lost more than 1.4 million jobs between December and January. It is amazing the things that you can find out when you actually take the time to look at the hard numbers instead of just listening to the media spin. Back in 2007, more than 146 million Americans were employed. Today, only 141.6 million Americans are employed even though our population has grown steadily since then. When the government and the media tell you that we are in a “recovery” and that unemployment is lower than it was a couple of years ago, I encourage you to dig deeper. The truth is that even the government’s own numbers tell us that the percentage of the U.S. labor force that is employed continues to fall and that the U.S. economy is heading into a recession. The Obama administration and the media have been lying to you about unemployment and about the true condition of our economy. After you see the numbers that I have compiled in this article, I think that you will agree with me.

First of all, let’s take a look at the percentage of the civilian labor force that has been employed over the past several years. These numbers come directly from the Bureau of Labor Statistics. As you can see, this is a number that has been steadily falling since 2006…

2006: 63.1

2007: 63.0

2008: 62.2

2009: 59.3

2010: 58.5

2011: 58.4

In January, only 57.9 percent of the civilian labor force was employed.

Do the numbers above represent a positive trend or a negative trend?

Even a 2nd grader could answer that question.

So how in the world can the Obama administration and the mainstream media claim that the employment picture is getting better and that we are in a “recovery”?

But most Americans believe what they are told. It is almost as if we are in some kind of a “matrix” where reality is defined by the corporate-controlled propaganda that is relentlessly pumped into our brains.

The only way that the government has been able to show a declining unemployment rate is by dumping massive numbers of Americans into the “not in the labor force” category.

Just check out how the number of Americans “not in the labor force” has absolutely skyrocketed in recent years…

2006: 77,387,000

2007: 78,743,000

2008: 79,501,000

2009: 81,659,000

2010: 83,941,000

2011: 86,001,000

In January, there were supposedly 89,868,000 Americans that were at least 16 years of age that were not in the labor force.

That number has risen by more than 8 million since Barack Obama first entered the White House, and that is highly unusual, because the number of Americans “not in the labor force” only increased by 2,518,000 during the entire decade of the 1980s.

You sure can get the numbers to look more “favorable” if you pretend that millions upon millions of American workers simply “don’t want a job” any longer. The truth is that if the labor force participation rate was at the same level it was at when Barack Obama was first elected, the official unemployment rate would be well above 10 percent.

But that wouldn’t do at all, would it? 7.9 percent sounds so much nicer.

And of course even if you do have a job that does not mean that you are doing okay.

If you can believe it, in America today 41 percent of all workers make $20,000 a year or less.

To me, that is a mind blowing statistic. It would be incredibly challenging for anyone to live on $20,000 a year, much less try to support a family.

If you live in Washington D.C. or New York City and you have a “good job” working for the establishment, you may not realize it, but there are tens of millions of American families that are really hurting out there. According to the U.S. Census Bureau, more than 146 million Americans are either “poor” or “low income” at this point, and most of those people actually do have jobs.

For much more on the “working poor” in the United States, please see my previous article entitled “35 Statistics About The Working Poor In America That Will Blow Your Mind“.

If something is not done, the middle class will continue to disappear and poverty in America will continue to explode.

In a previous article, I noted that during Obama’s first term, the number of Americans on food stamps increased by an average of about 11,000 per day.

How bad do things have to get before people realize that we are living through a nightmare?

Sadly, most Americans still have faith in the system.

Most Americans are still convinced that our politicians will somehow find a way to turn things around.

Most Americans will gather around their television sets this weekend and watch the Super Bowl and laugh at all the funny commercials without even thinking about how America is literally falling apart all around them.

But there is one group of Americans that is acutely aware of how bad things have really gotten. Small businesses have traditionally been the primary engine of job growth in this country, but right now small business owners all over the nation are facing a tremendous crisis.

Millions of small businesses are on the verge of extinction, and yet our politicians just continue to pile on more taxes, more rules and more regulations.

A recent Gallup poll found that 61 percent of all small business owners in America are “worried about the potential cost of healthcare”, and that an astounding 30 percent of all small business owners in America are not hiring and fear that they will go out of business within the next 12 months.

In a previous article entitled “We Are Witnessing The Death Of Small Business In America“, I detailed how small businesses in America are being systematically wiped out. Small businesses are dying all around us, and the number of new small businesses continues to decline.

According to economist Tim Kane, the following is how the decline in the number of startup jobs per one thousand Americans breaks down by presidential administration…

Bush Sr.: 11.3

Clinton: 11.2

Bush Jr.: 10.8

Obama: 7.8

Is that a good trend or a bad trend?

All of this is so simple that even the family pet should be able to figure it out, and yet most Americans seem oblivious to all of this. They just keep gobbling up the mainstream media propaganda and they just continue to go out and wildly spend money.

It is almost as if we didn’t learn any lessons from 2008.

Even while household spending in Europe has moderated, household spending in the United States continues to soar. Just check out the chart in this article.

And guess what? The infamous “no money down mortgages” are back. If we wait long enough, perhaps “interest only mortgages” will make a comeback as well.

Unfortunately, I am afraid that time is running out. we have been living in the biggest debt bubble in the history of the world, and it is only a matter of time until it bursts.

2008 was just a “hiccup” compared to what is coming. Our politicians and the Federal Reserve were able to keep the house of cards from completely crashing down back then, but they are not going to be able to avert the economic horror show that is rapidly approaching.

I hope that you are getting prepared. Back in 2008, millions of Americans suddenly lost their jobs, and because many of them did not have any savings, many of them suddenly lost their homes. One of the most important things that you can do to prepare for the coming crisis is to build up an emergency fund. If things suddenly go bad, you don’t want to lose your house and everything that you have always worked for.

In addition, anything that you can do to become more self-sufficient and more independent of the system is a good thing, because the system is failing. The years ahead are going to be much more chaotic than what we are experiencing right now, and when the next crisis strikes you will be very thankful for the time and the energy that you put into preparing.

So what are all of you seeing in your own areas?

Are businesses shutting down?

Are people having a hard time finding good jobs?

Please feel free to post a comment with your thoughts below…

35 Statistics About The Working Poor In America That Will Blow Your Mind

January 15, 2013 by Michael

In America tonight, tens of millions of men and women will struggle to get to sleep because they are stressed out about not making enough money even though they are working as hard as they possibly can. They are called “the working poor”, and their numbers are absolutely exploding. As a recent Gallup poll showed, Americans are more concerned about the economy than they are about anything else. But why are Americans so stressed out about our economic situation if things are supposedly getting better? Well, the truth is that unemployment is not actually going down, and the real unemployment numbers are actually much worse than what is officially being reported by the government. But unemployment is only part of the story. Most American workers are still able to find jobs, but an increasing proportion of them are not able to make ends meet at the end of the month. Our economy continues to bleed good paying middle class jobs, and to a large degree those jobs are being replaced by low income jobs. Approximately one-fourth of all American workers make 10 dollars an hour or less at this point, and we see them all around us every day. They flip our burgers, they cut our hair and they take our money at the supermarket. In many homes, both parents are working multiple jobs, and yet when a child gets sick or a car breaks down they find that they don’t have enough money to pay the bill. Many of these families have gone into tremendous amounts of debt in order to try to stay afloat, but once you get caught in a cycle of debt it can be incredibly difficult to break out of that.

So what is the solution? Well, the easy answer would be that we need the U.S. economy to start producing more good paying jobs, but that is easier said than done. Our big corporations continue to ship huge numbers of good paying manufacturing jobs out of the country, and millions of Americans have been forced to scramble to find whatever work is available. Today, there are so many very talented American workers that are trapped in low wage work. According to the Working Poor Families Project, “about one-fourth of adults in low-income working families were employed in just eight occupations, as cashiers, cooks, health aids, janitors, maids, retail salespersons, waiters and waitresses, or drivers.” A lot of those people could do so much more for society, but they don’t have the opportunity.

Sadly, the percentage of low paying jobs in our economy continues to increase with each passing year, so this is a problem that is only going to get worse. So don’t look down on the working poor. The good paying job that you have right now could disappear at any time and you could end up joining their ranks very soon.

The following are 35 statistics about the working poor in America that will blow your mind…

#1 According to the U.S. Census Bureau, more than 146 million Americans are either “poor” or “low income”.

#2 According to the U.S. Census Bureau, 57 percent of all American children live in a home that is either “poor” or “low income”.

#3 Back in 2007, about 28 percent of all working families were considered to be among “the working poor”. Today, that number is up to 32 percent even though our politicians tell us that the economy is supposedly recovering.

#4 Back in 2007, 21 million U.S. children lived in “working poor” homes. Today, that number is up to 23.5 million.

#5 In Arkansas, Mississippi and New Mexico, more than 40 percent all of working families are considered to be “low income”.

#6 Families that have a head of household under the age of 30 have a poverty rate of 37 percent.

#7 Half of all American workers earn $505 or less per week.

#8 At this point, one out of every four American workers has a job that pays $10 an hour or less.

#9 Today, the United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.

#10 Median household income in the United States has fallen for four consecutive years.

#11 Median household income for families with children dropped by a whopping $6,300 between 2001 and 2011.

#12 The U.S. economy continues to trade good paying jobs for low paying jobs. 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.

#13 Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.

#14 According to the U.S. Census Bureau, the middle class is taking home a smaller share of the overall income pie than has ever been recorded before.

#15 There are now 20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001.

#16 Low income families spend about 8.6 percent of their incomes on gasoline. Other families spend about 2.1 percent.

#17 In 1999, 64.1 percent of all Americans were covered by employment-based health insurance. Today, only 55.1 percent are covered by employment-based health insurance.

#18 According to one survey, 77 percent of all Americans are now living paycheck to paycheck at least part of the time.

#19 Millions of working poor families in America end up taking on debt in a desperate attempt to stay afloat, but before too long they find themselves in a debt trap that they can never escape. According to a recent article in the New York Times, the average debt burden for U.S. households that earn $20,000 a year or less “more than doubled to $26,000 between 2001 and 2010“.

#20 In 1989, the debt to income ratio of the average American family was about 58 percent. Today it is up to 154 percent.

#21 According to the Economic Policy Institute, the wealthiest one percent of all Americans households on average have 288 times the amount of wealth that the average middle class American family does.

#22 In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.

#23 According to Forbes, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.

#24 The six heirs of Wal-Mart founder Sam Walton have a net worth that is roughly equal to the bottom 30 percent of all Americans combined.

#25 Sadly, the bottom 60 percent of all Americans own just 2.3 percent of all the financial wealth in the United States.

#26 The average CEO now makes approximately 350 times as much as the average American worker makes.

#27 Corporate profits as a percentage of GDP are at an all-time high. Meanwhile, wages as a percentage of GDP are near an all-time low.

#28 Today, 40 percent of all Americans have $500 or less in savings.

#29 The number of families in the United States living on 2 dollars a day or less more than doubled between 1996 and 2011.

#30 The number of Americans on food stamps has grown from 17 million in the year 2000 to more than 47 million today.

#31 Back in the 1970s, about one out of every 50 Americans was on food stamps. Today, about one out of every 6.5 Americans is on food stamps.

#32 More than one out of every four children in the United States is enrolled in the food stamp program.

#33 Incredibly, a higher percentage of children is living in poverty in America today than was the case back in 1975.

#34 If you can believe it, the federal government hands out money to 128 million Americans every single month.

#35 Federal spending on welfare has reached nearly a trillion dollars a year, and it is being projected that it will increase by another 80 percent over the next decade.

We Are Witnessing The Death Of Small Business In America

December 13, 2012 by Michael

Historically, small businesses have been the primary engine of new job creation in the United States. If the economy was getting healthy, we would expect to see the number of jobs at new businesses rise. Instead, we are witnessing just the opposite. We are told that the economy is supposed to be “recovering”, but the number of “startup jobs” at new businesses has fallen for five years in a row. According to an analysis of U.S. Department of Labor data performed by economist Tim Kane, there were almost 12 startup jobs per 1000 Americans back in the year 2006. By 2011, that figure had fallen to less than 8 startup jobs per 1000 Americans. According to Kane, the number of jobs in the United States at businesses that are less than one year old has fallen from 4.1 million in 1994 to 2.5 million in 2010. Overall, the number of “new entrepreneurs and business owners” has fallen by more than 50 percent as a percentage of the population since 1977. The United States was once known as “the land of opportunity”, but now that is fundamentally changing. At this point we truly do have a “crisis of entrepreneurship” in this country, and that is a huge reason why America is in decline. We are witnessing the slow death of the small business in America, and that is incredibly bad news for all of us.

Unfortunately, the problems that small businesses are experiencing right now have been building up for decades. The economic environment for small businesses in America has become incredibly toxic. Sadly, we can see this in the numbers. According to Kane, the following is how the decline in the number of startup jobs per 1000 Americans breaks down by presidential administration…

Bush Sr.: 11.3

Clinton: 11.2

Bush Jr.: 10.8

Obama: 7.8

Obviously, we are headed very much in the wrong direction. Kane speculates about why this may be happening in his paper…

There is anecdotal evidence that the U.S. policy environment has become inadvertently hostile to entrepreneurial employment. At the federal level, high taxes and higher uncertainty about taxes are undoubtedly inhibiting entrepreneurship, but to what degree is unknown. The dominant factor may be new regulations on labor. The passage of the Affordable Care Act is creating a sweeping alteration of the regulatory environment that directly changes how employers engage their workforces, and it will be some time until those changes are understood by employers or scholars. Separately, there has been a federal crackdown since 2009 by the Internal Revenue Service on U.S. employers that hire U.S. workers as independent contractors rather than employees, raising the question of mandatory benefits. New firms tend to use part-time and contract staffing rather than full-time employees during the startup stage. According to Labor Department data, the typical American today only takes home 70 percent of compensation as pay, while the rest is absorbed by the spiraling cost of benefits (e.g., health insurance). The dilemma for U.S. policy is that an American entrepreneur has zero tax or regulatory burden when hiring a consultant/contractor who resides abroad. But that same employer is subject to paperwork, taxation, and possible IRS harassment if employing U.S.-based contractors. Finally, there has been a steady barrier erected to entrepreneurs at the local policy level. Brink Lindsey points out in his book Human Capitalism that the rise of occupational licensing is destroying startup opportunities for poor and middle class Americans.

Kane raises some very good points in his analysis. Without a doubt, small businesses in the United States are being taxed into oblivion. If you doubt this, just read this article.

And the regulatory environment for small businesses is more suffocating than it has ever been before. Unfortunately, our politicians never seem to learn that lesson. During his first term, Obama piled on mountains of new regulations, and now that he has won a second term he is preparing to unleash another massive wave of new regulations.

But many times the worst offenders are politicians on the state and local level. There are some areas of the country (such as California) that have created absolutely nightmarish conditions for small businesses. California had the worst “small business failure rate” in the country in 2010. It was 69 percent higher than the national average. And in 2011, the state of California ranked 50th out of all 50 states in new business creation.

Yet the politicians in California just continue to pile on even more regulations and even more taxes.

Sadly, this kind of thing is happening from coast to coast and it is killing off hordes of small businesses. Just consider the following statistics…

-According to the U.S. Census Bureau, the U.S. economy lost more than 220,000 small businesses during the last recession.

-As a share of the population, the percentage of Americans that are self-employed fell by more than 20 percent between 1991 and 2010.

-As a share of the population, the percentage of “new entrepreneurs and business owners” dropped by a staggering 53 percent between 1977 and 2010.

-The average pay for self-employed Americans declined by $3,721 between 2006 and 2010.

So what needs to be done?

Well, first of all, the tax burden and the regulatory burden on small businesses both need to be greatly reduced.

Secondly, the balance of power in our nation needs to be dramatically shifted. Conservatives run around talking about the need to reduce the power of government and liberals run around talking about the need to reduce the power of corporations, and actually both of them are right.

Our founding fathers intended to establish a Republic where power would never be concentrated in the hands of just a few. That is why they tried to strictly limit the power of the federal government in the U.S. Constitution, and that is why they greatly restricted the size and scope of corporations in early America. For much more on this, please see this article: “Corporatism Is Not Capitalism: 7 Things About The Monolithic Predator Corporations That Dominate Our Economy That Every American Should Know“.

Our founding fathers wanted to empower individual citizens and small businesses. They never intended for us to have a system where big government and big corporations dominate everything and crush the “little guy” at every opportunity.

Even as we witness the death of the small business in America, corporations are absolutely thriving. The following chart shows how corporate profits after tax have exploded to new record highs in recent years…

So has this been good for workers? No, it has not translated into more jobs and higher wages. In fact, wages and salaries as a percentage of GDP are now at an all-time low…

That is why it is imperative that we change “the rules of the game” so that the balance of power is shifted back in the direction of individual citizens and small businesses. We desperately need to turn back to the principles that this nation was founded upon.

If nothing is done, these trends are going to get even worse. Barack Obama certainly has no plans to reduce the size and the power of the government. Since he was elected, an average of 101 new federal employees have been added to the government payroll every single day…

In the 1,420 days since he took the oath of office, the federal government has daily hired on average 101 new employees. Every day. Seven days a week. All 202 weeks. That makes 143,000 more federal workers than when Obama talked forever on that cold day in January of 2009.

And if nothing is done, the monolithic predator corporations that dominate our economy will just get even larger and even more powerful. Meanwhile, hundreds of thousands more small businesses will close up shop all over the country.

Unfortunately, most Americans seem totally apathetic about these issues. They seem content to wear “meggings“, watch “Honey Boo Boo” on television and let our government and corporate overlords run everything. Most of them have even been brainwashed into believing that this is the American way of doing things.

So where do we go from here?

Well, this nation will probably continue to keep doing the same things that it has been doing, and it will continue to get the same results.

The death of small business in America is happening right in front of our eyes, and everybody can see it happening, but very few people are doing anything to stop it.

Sorry Protesters: Your Jobs Are Being Sent To China And They Aren’t Coming Back

December 11, 2012 by Michael

Did you see the huge crowds of protesters that flooded the Michigan Capitol on Tuesday? They were there to protest two bills there were being considered by the state legislature that would limit the power of unions in the state. Michigan lawmakers approved the bills and this absolutely infuriated the protesters. There is a lot of passion on both sides of this debate, but I am afraid that both sides in this debate are missing the bigger picture. If we keep shipping millions of our jobs to China, there isn’t going to be work for anyone no matter how much power unions have or don’t have. During the month of October, the U.S. trade deficit increased to 42.2 billion dollars. Our trade with China accounted for most of that deficit. Our trade deficit with China in October increased to a new all-time one month record of 29.5 billion dollars. Nearly 30 billion dollars that could have gone to U.S. businesses and U.S. workers went to China instead. Since 1975, a total of about 8 trillion dollars that could have gone to U.S. businesses and U.S. workers went to the rest of the world instead. Shiny new factories are going up all over China, and meanwhile our once great manufacturing cities are degenerating into desolate wastelands. So what is going to happen when all of the good paying manufacturing jobs are gone? Are we all going to fight bitterly over whether we should unionize the low paying jobs that remain at places such as Wal-Mart and McDonalds? Such an approach is not going to bring back prosperity to America. We desperately need to start building things and start creating real wealth inside this country once again. We desperately need to stop sending tens of thousands of businesses, millions of jobs and trillions of dollars of our national wealth out of the country. Unfortunately, I don’t see anyone out there holding protests about our trade deficit. Nobody really seems to care, so our economy will continue to bleed good jobs and the middle class will continue to be destroyed.

The funny thing is that the workers that are out there protesting these union bills actually voted for the politicians that are killing their jobs. Both parties are married to the one world economic system and the “free trade” agenda, and Barack Obama has been one of the worst offenders. He has been pushing for more “free trade agreements” throughout the past four years, and yet union workers continue to support him enthusiastically.

How foolish can they possibly be?

Yeah, let’s merge American workers into a global labor pool with workers in third world countries on the other side of the globe that work in absolutely nightmarish conditions for as little as 45 dollars a month. That sounds like a great idea, doesn’t it?

Oh, but you don’t want to work for 45 dollars a month?

You don’t even want to work for 450 dollars a month?

Well, then the big corporations that fund politicians like Obama will just take your jobs and send them halfway around the planet.

Do you think that your unions will save your jobs?

Michigan already has the highest rate of union membership in the Midwest.

It also has the highest rate of unemployment in the Midwest.

Over the past couple of decades, thousands of businesses in Michigan have either closed down or moved facilities overseas.

Did the unions prevent any of that?

No.

If union bosses really wanted to do some good, they would be organizing protests against our incredibly foolish trade policies.

But instead, they tell their members to vote for politicians like Obama and then they run out to the stores and fill their carts with huge piles of products that were made in China.

Union workers need to wake up to one fundamental economic fact – in a one world economic system, the big corporations simply do not need you. They can make their products in lots of other countries where it is legal to pay slave labor wages.

But instead of getting upset about what is really killing their jobs, union workers in Michigan are screaming mad about a couple of new laws that will take some power away from the unions.

That is kind of like being obsessed with a broken fingernail when your leg has just been sawed off and you are gushing blood all over the floor.

Oh, but union workers did put on a good show up in Michigan. The following is how a Bloomberg article described the protests…

Officials spent days gearing up for crowds brought out by the legislature’s sudden action last week to give initial approval to three anti-dues bills, which exclude police and firefighters. At least one helicopter buzzed overhead today, and mounted police surveyed the protesters. Signs reading “Don’t hurt working families” dotted lawns.

The crowd numbered more than 10,000, according to State Police Inspector Gene Adamczyk, with more buses still arriving. The Capitol was closed when it reached its capacity of 2,000.

The anger surrounding these protests was almost palpable. One state representative even declared that “there will be blood”.

Meanwhile, many of those same protesters will buy toys for their kids that were made in China with wrapping paper that was made in China and they will put them under a Christmas tree that was made in China.

Merging our economy with the economy of communist China was one of the stupidest economic moves that we could have ever made. They are systematically taking our wealth, and then we have to go over there and beg them to lend money back to us.

Pretty soon the Chinese economy will dwarf ours. According to the National Intelligence Council, the GDP of Asia will have surpassed the GDP of North America and the GDP of all of Europe combined by 2030.

But if we had never opened up trade with communist China none of this would have ever happened.

Why won’t American workers get upset about this stuff?

Do you really want your standard of living to decline to the level of a Chinese factory worker?

You can see some photos of what life is like for workers in China’s toy factories right here. This is what the future holds for American workers unless something is done.

For much more on how our trade policies are absolutely gutting our economy, please see the statistics in this article: “55 Reasons Why You Should Buy Products That Are Made In America This Holiday Season“.

But no, the big unions will never dare oppose Obama. They love him far too much to do that.

Meanwhile, we continue to bleed good jobs. Large companies have announced the elimination of more than 100,000 jobs since November 6th, and it looks like 2013 is going to be a very difficult year for American workers.

If you are an American worker, you need to ask yourself why anyone would want to hire you in this kind of economic environment. You are 10 to 20 times more expensive than workers on the other side of the globe. In addition, our politicians just keep piling more rules, regulations and taxes on to the backs of the employers in this country. It is more difficult than ever to make a profit from the labor of an American worker.

Honestly, I understand why most small businesses don’t want to hire anyone in this economic environment. It just doesn’t make sense. For much more on this, please see this excellent article by Charles Hugh-Smith.

And there are signs that things are going to get even worse. For example, the NFIB Small Business Outlook survey dropped like a rock during November. That is a very bad sign for hiring.

And another ominous sign for the economy was that the latest trade report showed that imports and exports are both declining. That is usually a signal that a recession is coming. Exports fell faster than imports did, and that is the reason why the trade deficit grew. If imports and exports both fall again next month, it will be time to become extremely concerned. When imports and exports both decline, that is a sign of slowing economic activity.

The United States will always need to trade with other nations, but we need to do it in a way that is balanced and that protects American workers. Right now there is a one way conveyor belt taking businesses, jobs and money out of this country. If we don’t do something about our mammoth trade deficit, we will have no chance of reversing the steady decline of the U.S. economy.

Hopefully we can get the American people to wake up and realize this. Instead, most of the comments at the end of this article will probably be about the pros and cons of unions. That will be yet another sign that most people still don’t get these issues.

Unemployment Is Not Going Down: The Employment Rate Has Been Under 59 Percent For 39 Months In A Row

December 8, 2012December 9, 2012 by Michael

The mainstream media is heralding the decline of the official unemployment rate to 7.7 percent as evidence that the U.S. economy is improving. But it is a giant lie. The truth is that unemployment in America is not actually going down. The percentage of working age Americans with a job actually dropped slightly in November. During the last recession, the percentage of working age Americans with a job fell from about 63 percent to under 59 percent and it has stayed there for 39 months in a row. In September 2009, during the depths of the last economic crisis, 58.7 percent of all working age Americans were employed. In November 2012, 58.7 percent of all working age Americans were employed. It is more then 3 years later, and we are in the exact same place! So how in the world are they able to pretend that the “unemployment rate” is going down steadily? Well, they get there by pretending that hundreds of thousands of unemployed workers “leave the labor force” each month. According to the government, another 350,000 Americans left the labor force during November, and when you keep pretending that huge chunks of workers “disappear” each month it is easy to get the “unemployment rate” to go down. But any idiot can see that there is something really funny about these numbers. Barack Obama has been president for less than four years, and during that time the number of Americans “not in the labor force” has increased by nearly 8.5 million. Something seems really “off” about that number, because during the entire decade of the 1980s the number of Americans “not in the labor force” only rose by about 2.5 million. At this point the official unemployment rate is so manipulated that it is of very little value at all.

But the mainstream media is just eating up this “good news”. They are very excited that the “unemployment rate” has fallen from its peak of 10.0 percent in October 2009 to 7.7 percent now…

But if unemployment was actually going down, we should be seeing the percentage of Americans with a job go up.

Unfortunately, that is NOT happening.

As I mentioned above, the “employment rate” fell below 59 percent during the last economic crisis and it has stayed there for 39 consecutive months…

So all of that stuff about the employment situation getting better is just a load of nonsense. The percentage of Americans with a job has stayed very, very steady since the end of 2009. It is almost as if someone has hit a “pause button” and won’t let unemployment get better or get worse.

This is the first time since the end of World War II that we have not seen the employment-population ratio bounce back in a significant way after a recession has ended.

To me, that is a very bad sign.

I also find it very interesting that the government revised the “job gains” for September and October downward in this recent report…

The government revised down job gains for September and October by a total 49,000. September’s additions were revised from 148,000 to 132,000 and October’s, from 171,000 to 138,000.

So it turns out that the glowing employment reports from those months that helped get Obama re-elected were really not that great after all.

The truth is that it takes somewhere between 100,000 and 150,000 new jobs a month just to keep up with the growth of the population. So at best we are treading water.

And who is “creating” those new jobs?

According to an analysis performed by CNSNews.com, 73 percent of the jobs “created” over the past 5 months have been “created” by government.

But government does not create real wealth.

Real wealth is only created by the private sector.

It would be very nice if I could report a major employment turnaround, but it simply is not happening.

Instead, we continue to see an increase in the number of Americans living in poverty.

If things are getting better, then why are organizations like the Salvation Army seeing record numbers of families coming to them for help this holiday season?

For much more on the continued growth of poverty in the United States, just see this article.

Sadly, an increasing number of Americans find themselves forced to turn to the government for assistance, and the cost of caring for all of them has become extremely expensive…

According to the Republican side of the Senate Budget Committee, welfare spending per day per household in poverty is $168, which is higher than the $137 median income per day. When broken down per hour, welfare spending per hour per household in poverty is $30.60, which is higher than the $25.03 median income per hour.

But if you think that things are bad now, you should brace yourself, because things are going to get even worse.

For example, how much worse will things get if a fiscal cliff deal is not reached and millions more Americans find themselves in desperate need of help? According to ABC News, more than 3 million Americans will lose unemployment benefits by the beginning of April if Congress does not do something…

Millions of unemployed Americans have another reason to worry about “fiscal cliff” budget talks that seek to avoid looming tax increases and dire spending cuts come January.

About 2.1 million people will stop receiving jobless benefits immediately if Congress doesn’t reauthorize federal unemployment insurance programs by year’s end. Another 1 million will lose benefits over the first three months of 2013.

2013 is already shaping up to be a very tough year.

But the mainstream media is not really talking about how the middle class is systematically being destroyed or about how our once great manufacturing cities are being turned into desolate wastelands.

They just want us all to be happy, but the cold, hard reality of the matter is that the U.S. economy no longer produces enough jobs for everybody and it never will again.

Both of our major political parties have fully embraced the emerging one world economic system which puts average American workers into direct competition for jobs with workers in third world countries where it is legal to pay slave labor wages.

Millions of good paying American jobs have been shipped to countries where workers work very long hours in absolutely horrific conditions for as little as 45 dollars a month.

Are you willing to work for 45 dollars a month?

Meanwhile, Americans that still do have jobs are piling up more debt than ever before. It appears that most people have not learned any lessons from the last major economic crisis. It has just been reported that consumer borrowing in the United States has hit a new record high…

Americans swiped their credit cards more often in October and borrowed more to attend school and buy cars. The increases drove U.S. consumer debt to an all-time high.

The Federal Reserve said Friday that consumers increased their borrowing by $14.2 billion in October from September. Total borrowing rose to a record $2.75 trillion.

Isn’t that lovely?

And of course the biggest offender of all is our federal government. They just keep borrowing money as if there was no tomorrow.

During the first two months of fiscal year 2013, the U.S. government has run a deficit of $292 billion dollars ($57 billion worse than last year) and during that time it has borrowed an average of $4.8 billion dollars a day.

30 years ago, the U.S. national debt was about 1.1 trillion dollars.

Now it is more than 16.3 trillion dollars.

To get an idea how much money 16 trillion dollars is, just watch this 2 minute video.

How could we be so stupid?

Yes, much of America is still experiencing “prosperity” right now. But it is a prosperity that has been fueled by the greatest debt bubble that the world has ever seen.

When that debt bubble bursts the pain is going to be unbelievable.

If you actually believe that America is going to prosper in the years to come, you are just fooling yourself.

Our economy is declining and has been declining for quite some time. If you doubt this, just read this: “34 Signs That America Is In Decline“.

So that is the bad news.

But the good news is that even though the entire nation is not going to prosper, there will be those that will have prepared and that will have gotten themselves into position to take advantage of what is coming. During the coming crisis a massive amount of money and wealth will change hands. Instead of living in fear and cowering under a blanket, now is the time to figure out how you and your family can thrive during the hard times that are on the horizon.

During the economic crisis of 2008 and 2009, there were some people that actually did amazingly well. So don’t lose hope just because the U.S. economy is headed for disaster.

Everything that can be shaken will be shaken. But if you understand what is happening and you prepare for it, the times that are coming can actually be a great adventure and a great blessing for you and your family.

But if you just stick your head in the sand and have blind faith in the system and pretend that everything is going to be okay somehow, then you will be blindsided by the coming crisis and you will only have yourself to blame.

From Good Jobs To Bad Jobs To No Jobs – The Tragic Downfall Of The American Worker

December 5, 2012December 5, 2012 by Michael

There was a time in America when virtually anyone that wanted a job could go out and get one and the United States boasted the largest and most prosperous middle class in the history of the world. Sadly, those days are long gone. Back in 1969, 95 percent of all men between the ages of 25 and 54 had a job. But now there are millions of Americans in their prime working years that cannot find a job. Millions of others are working low wage jobs or part-time jobs because that is all they can get. The other day I went to a large retail store and I got into a conversation with the lady who was checking me out. She said that she had worked professional jobs all her life, and that she had taken this job to tide her over as she searched for a new job, but now she had been there for two years with no end in sight. I felt really bad for her, because she was obviously a sharp lady with a lot of skills. But this is the new reality. Good paying manufacturing and professional jobs are being replaced by low paying service jobs. We are transitioning from an economy with plenty of good jobs to an economy with plenty of bad jobs. The next stage in our transition will be to an economy where it seems like there are no jobs for anyone. We are witnessing the tragic downfall of the American worker, and it is heartbreaking.

Many of our politicians insist that things are getting better for American workers, but that is simply not true. Just look at the chart below. Back at the start of 2008, the percentage of working age Americans with a job was sitting at about 63 percent. Since then it has fallen below 59 percent and it has stayed there for over 3 years. After every other recession in the post-World War II era the employment-population ratio has always bounced back. That has not happened this time…

If this number was going to recover, it would have done so by now. We are rapidly approaching the next major economic crisis and the percentage of working age Americans with a job is going to go even lower.

And our politicians are certainly not helping matters. Many of the things that they have done are actually going to accelerate the loss of good jobs. For example, as one small business owner recently pointed out, Obamacare is going to force businesses all over the United States to minimize the number of full-time workers they are using and replace them with part-time workers…

Here is what I am doing for the rest of the year — working with every manager in my company so that as of January 1, 2013, none of our employees are working more than 28 hours a week. I think most readers know the reason — we have got to get our company under 50 full time employees or else I am facing a bill from Obamacare in 2014 that will be several times larger than my annual profit. I love my workers. They make me a success. But most of my competitors are small businesses that are exempt from the Obamacare hammer. To compete, I must make sure my company is exempt as well. This means that our 400+ full time employees will have to be less than 50 in 2013, so that when the Feds look at me at the start of 2014, I am exempt. We will have more employees working fewer hours, with more training costs, but the Obamacare bill looks like about $800,000 a year for us, at least, and I am pretty sure the cost of more training will be less than that.

This will be unpopular but tolerable to most of my employees. The vast majority of them are retired and our company is merely an excuse to stay busy, work outdoors, and get a little extra money.

But this is going to be an ENORMOUS change in the rest of the service sector. I have talked to a lot of owners of restaurants and restaurant chains, and the 40-hour work week is a thing of the past in that business. One of my employees said that in Hawaii, it was all the hotel employees could talk about. Many chains are working on mutli-team systems where two teams of people working part-time replace the former group of full-time employees. 2013 is going to see a lot of people (who are not paid very well to begin with) getting their hours and pay cut by 25%. At the same time that they are required, likely for the first time since many are relatively young, to purchase health insurance.

How could we be so foolish?

Unfortunately, this is not something new. Our economy has been replacing good jobs with bad jobs for quite some time. If you can believe it, 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.

Will nearly all of us eventually be working in fast food restaurants or stocking shelves at retail giants like Wal-Mart?

Amazingly, the United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.

No wonder our middle class is being absolutely destroyed.

At this point, wages as a percentage of GDP are at an all-time low in America. As millions more good jobs are shipped out of the country, the competition for the remaining jobs will become incredibly fierce and that number will get even lower.

Many Americans that actually do have jobs right now find that they simply don’t make enough to take care of themselves and their families. They are called “the working poor”, and their ranks are growing steadily. Today, about one out of every four workers in the United States brings home wages that are at or below the federal poverty level.

American households are getting poorer at a time when prices continue to rise. Median household income in America has declined for four years in a row. Overall, it has fallen by over $4000 during that time span.

But have the prices in the stores declined?

Of course not.

No wonder middle class families are feeling more financial stress than ever before. A survey conducted by the Pew Research Center found that 85 percent of middle class Americans say that it is harder to maintain a middle class standard of living today than it was 10 years ago.

The transition from good jobs to bad jobs in our economy has been taking place for a very long time, and it is not going to be reversed overnight. Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs. There are less tickets to the middle class than there used to be, but neither political party seems interested in stopping the flow of good jobs out of the country.

If we keep doing the same things that we have been doing, we will continue to get the same results.

When I was young, I was told that there would always be “good jobs” available for anyone that got a good education and that worked hard.

What a crock of baloney that turned out to be.

According to a paper that was recently released by the Center for Economic and Policy Research, only 24.6 percent of all jobs in the United States qualify as “good jobs” at this point.

In a previous article, I detailed the three criteria that they used to define what a “good job” is….

#1 The job must pay at least $18.50 an hour. According to the authors, that is the equivalent of the median hourly pay for American workers back in 1979 after you adjust for inflation.

#2 The job must provide access to employer-sponsored health insurance, and the employer must pay at least some portion of the cost of that insurance.

#3 The job must provide access to an employer-sponsored retirement plan.

More than 75 percent of all jobs in the U.S. today are not “good jobs”, and things are not looking promising for the future.

No wonder so many families are barely surviving these days. Right now, approximately 77 percent of all Americans are living paycheck to paycheck at least some of the time. That is a dreadful number.

But if you still do have a job, you should consider yourself to be fortunate.

There are millions upon millions of Americans out there without any job at all.

Did you know that 53 percent of all Americans with a bachelor’s degree under the age of 25 were either unemployed or underemployed during 2011?

Hordes of fresh college graduates are entering the marketplace each year only to find that the good jobs that they were promised simply are not there.

And now it looks like things are getting even worse. This week Citigroup announced that it plans to eliminate 11,000 jobs in an attempt to reduce costs. But Citigroup is far from alone. We have seen dozens of major layoff announcements since the election. If you doubt this, just see this article and this article.

It is time to wake up and admit that our economy is in an advanced state of decline, that we need to quit shipping our jobs out of the country, and that what we are doing now is clearly not working.

If we are “the greatest economy on earth”, then why are approximately 48 percent of all Americans either considered to be “low income” or are living in poverty?

We need to return to the principles that our Founding Fathers founded this country on or else things are going to get a lot worse and people are going to get very, very angry.

Our politicians have been pitting different groups of people against one another and many of them have been blaming the wealthy for all of our problems. Never before in my lifetime have I seen so much anger directed toward those that have money. This anger is even being expressed in ways that you would not normally expect. For example, the California Federation of Teachers recently produced a video that portrays wealthy people peeing on poor people. That shocked me.

Eventually, all of this anger is going to lead to violence if we are not careful. When the next major wave of the economic crisis strikes and unemployment gets significantly worse, I fear for what might happen. I believe that it is very possible that we may see mobs of struggling people storm into wealthy neighborhoods and play “Robin Hood” with their possessions.

Instead of hating one another, we need to return to the principles that once made our economy so great. Those principles would enable everyone to prosper.

Unfortunately, this country continues to turn away from those principles and hate and anger continue to grow.

If we continue down this path, the end result is going to be a complete and total nightmare.

It is possible to turn this economy around. But we can’t do the same things that we have been doing. We have to start making better decisions.

The Twinkie That Broke The Economy’s Back?

November 18, 2012November 18, 2012 by Michael

Can you hear that sound? It is the sound of the air being let out of the economy. Since the election, there has been a massive tsunami of layoffs and business failures. Of course the company that is making the biggest headlines right now is Hostess. On Monday, Hostess will be in a New York bankruptcy courtroom as it begins the process of liquidating itself. Needless to say, Twinkie lovers all over America are horrified. Many are running out to grocery stores and hoarding as many as they can find, and some online sellers are already listing boxes of 10 Twinkies for as much as $10,000 on auction websites such as eBay. Well, there is really no reason to panic. It is very likely that another company will purchase the Twinkie brand and continue to produce them. In fact, it is already being rumored that a Mexican company may have the inside track. But even though the Twinkie may survive, the failure of Hostess is yet another sign of how weak the U.S. economy has become. Approximately 18,500 Hostess workers will be losing their jobs, and even if some of them are rehired by the company that takes over the Twinkie brand, the truth is that those workers will almost certainly be looking at greatly reduced pay and benefits. Sadly, we are seeing this kind of thing happen all over America. Large numbers of once thriving businesses are either shutting down or laying off workers. Overall, the failure of Hostess is not that big of a deal for the U.S. economy. But we may look back someday and remember Hostess as a symbol of the economic problems that were unleashed by the election of 2012. Since November 6th, a wave of pessimism has swept over the economy and we are now seeing some of the worst economic numbers that we have seen in more than a year. Many fear that we may have reached a tipping point and that things are only going to get worse from here.

Sadly, the reality is that Hostess is not the only iconic American company that is in a huge amount of trouble right now. Sears just announced a loss of nearly 500 million dollars in the third quarter. Sears has been bleeding money like this for a couple of years, and if they continue to do so it will just be a matter of time before Sears is headed for liquidation as well.

Can you imagine trying to explain the Sears catalog and Twinkies to future generations in a world where those things no longer exist?

Our world is changing at mind blowing speed, and the pace of change is only going to keep accelerating.

A few days after the election, I wrote an article about the huge number of layoff announcements that we saw after Barack Obama won.

Well, it has gotten even worse since then. The following is a partial list of the layoffs and job losses that have been announced since November 6th…

Abbott Labs 700
Activision 30
Adventist Health 48
Airlines SAS 6000
AMD 400
American Cotton Growers 110
ArcelorMittal 20
American Independence Museum 4
Ameridose 790
American Airlines 4400 + 800 leaving voluntarily
American Coal 54
Atlantic Lottery Corporation 16
Assc Milk Producers 130
Aveo Oncology 45
ATI 172
Bankia 5000
Bechtel Power Corp 277
Bigpoint Games 47
Boston Scientific 1200
Brake Parts LLC 75
Brattleboro Retreat 31
Bristol Myers 500
Career Education 900 + Closing 23 Campuses
Cigna 1300
Citigroup 100
Commerzbank 6000
Consol Energy in W.V. 145
Covidien 595
Crouse Hospital Syracuse NY 70
Cummins 150
CVPH 27
DEP in Tallahassee FL 15
DuPont, Co. 64
Eagle-Tribune, Andover 21
Emanuel Medical Cente 24
Energizer Holdings 1500
Ericsson 1550
Exide Tech, Laureldale 150
City of Findlay, OH 39
First Energy 400
Gameforge Berlin 20
Gamesa Energy 92
GenOn Energy Inc 33
Glen Falls Hospital 29
Groupon 80
GT Advanced Tech 165
Harris’ Broadcast 17
Hawker Beechcraft 400 + Facilities closing
Hill Rom 200
Hills Holdings 300
HMX Group 567
Hostess 627
Iberia Airlines 4500
ICM of Colwich 25
ING 2350
Judson University 21
Juniper Networks 500
Kaiser Permanente 84
Kinetic Concepts 427
Kratos Defense Security 125
Lackawanna County PA 11
Lightyear Network Solutions 12+
Lonza 500
Majestic Star Casino/hotel 80
Major Wind Company 3000
Martha Stewart Living 70
Medtronic 1000
Mills Manufacturing NC 68
Momentive, Inc. 150
Monitor Group 235
Montco Behavioral Health/Dev 58
NBC 500
Nebraska Medical Center 38
Neovia Logistics Services 52
New Energy 40
Ormet 200
Panasonic 10000
PayPal 320
Penn Refrigeration 40
Penske Logistics 50
Pepsi 4000
Philips Electronics 218
Pierce Mfg 325
Pratt & Whitney Rocketdyne 100
Research in Motion 200
Rheem Manufacturing 50
Sentry Foods 70
Shaw’s Supermarket 700
Shawano foundry WI 90
Smith & Nephew 770
Smithfield Packing Co. 125
Solel Solar Systems 140
Southeastern Container 15
SpaceX 100
SRA Intl Inc 222
St. Jude Medical 300
Stryker 1170
Sulake 60
Sun Media 500
TE Connectivity 620
TECO Coal Corporation 90
Texas Instruments 1700
The Providence Journal Co 23
TMX Group Ltd. 100
Turbocare 220
Turkey Point Nuclear Plant 277
Oce North America, Inc. 135
Turbocare OCE 220
UBS 10000
US Cellular 980
UtahAmerican Energy Inc 102
Volvo Trucks Pulaski County 300
Wake Forest Baptist Medical 950
Welch Allyn 275
West Ridge Mine 102
Westinghouse 50
World Media Enterprises Inc 105
WPS Health Insurance 600
Wright Patterson AFB 115
Wyodak Coal Mine 11
Xerox 2500

Sadly, the list actually keeps going. You can view the remainder of the list right here.

Even companies owned by Obama supporters are laying people off. Just check out this excerpt from a report by CitizenLink…

A corporation whose part owner gave $2 million to a group committed to re-electing President Obama announced this week that it will be forced to lay off more than 1,000 employees in lieu of the financial hardship imposed by the president’s signature health care law.

Overall, more than 100,000 job losses have been announced since the election. It is almost as if the election was the straw that broke the camel’s back. Everyone in the business community that had been hoping for something different now realizes that no change is coming.

Meanwhile, Obama continues to pour on even more rules and regulations. According to CNSNews.com, the Obama administration has posted a total of 6,125 regulations on its reguations.gov website during the past 90 days. Our politicians are clueless and they simply don’t understand what they are doing to the business community.

But of course this goes for politicians from both sides. For decades we have been consuming far more than we produce and spending far more money then we bring in, and most of our politicians seem to be under the delusion that this can continue indefinitely.

The other night my wife had me watch a documentary entitled “The Queen of Versailles” that followed the lives of time share mogul David Siegel and his wife Jackie. I found it to be a perfect metaphor for what America is going through right now. David Siegel built the greatest time share empire the world has ever seen on a mountain of easy money and cheap credit. At the beginning of the movie, David and Jackie were living the high life and were constructing the largest house in America down in Florida.

Well, things dramatically changed when the financial crisis of 2008 struck. Suddenly nobody wanted to lend to David’s company and the house of cards started to crumble. But even though they were facing massive financial problems, Jackie found it incredibly difficult to adjust her lifestyle. She just kept spending and spending and spending.

It would be easy to pass judgment on David and Jackie, but the truth is that they are a perfect example of what this entire country is going through. Thousands of businesses are failing, our economic infrastructure is being gutted, millions of jobs are being shipped overseas, our financial system has become a gigantic casino and we keep piling even more mountains of debt on top of the mountains of debt that we already have. We have been living way above our means for so long that we don’t even have any concept of what “normal” is anymore.

If you have not seen “The Queen of Versailles” yet, I encourage you to do so. Don’t watch it to laugh at the downfall of David and Jackie Siegel. They are just trying to make their way in this world like all of us are. Rather, watch for parallels between their lives and what the United States is experiencing as a whole. As I mentioned earlier, I found their story to be a perfect metaphor for what is happening to this entire country. You can find the trailer for “The Queen of Versailles” right here.

As the economy falls apart, it is going to be really easy to point fingers at one another and blame one another. But what will really be needed is more love and compassion. A lot of workers at Hostess and a lot of other good companies just lost their jobs. The unemployment epidemic in this country is going to get a lot worse. These people are going to need our love and support.

In the end, we are all in this together. The coming economic storm is not going to be averted, but we can choose how we respond to it. Hopefully the crisis that is coming will bring out the best in many of us.

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