Quote of the Day
It takes less time to do things right that to explain why you did it wrong.
Henry Wadsworth Longfellow
8.5% Unemployment? Really?
The talking points are that 200,000 jobs added by private sector employers in December and a further drop in the unemployment rate to 8.5% is a positive sign for Obama, that voters will give him a benefit of a doubt Oddly enough, although he indirectly criticizes Obama's tax, spend and regulate agenda, M.J. Perry on his Carpe Diem blog has been heavily promoting positive economic news on the blog (DESPITE Obama, not BECAUSE OF him): he regularly posts news on larger rail shipments (if people and businesses aren't buying, rail shipments should be low and static), low inflation, statistics of improving job statistics for college graduates, super employment in America's soon to be #2 state in oil production (bypassing California and Alaska, just behind Texas), North Dakota, etc.
But I'm skeptical. The global economy is struggling; there's some evidence that China itself is having to deal with its own real estate bubble (and heaven knows that Chinese accounting isn't as transparent as in the Western world), Hungary's debt just got classified as junk level status, etc. But I've got my informal signals from having been in the market as both a perm employee and as a contractor over 15 years in an in-demand profession as a DBA. But here's a summary of what I've seen over the last few years: fickle spot-hiring practices with unrealistic long wish lists of chicken-or-the-egg experience technological skills, with explicit preference for local, cheaper, LESS-QUALIFIED applicants; employers or clients refusing to pay relocation or business travel expenses (including for out-of-area interviews); almost no perm positions available, with most contracts varying up to a year in duration; withdrawn or deferred hiring, and long decision cycles, even for short assignments (for example, I know a lab in Laurel, Maryland last year which had a female DBA going on short-term maternity leave; they were offering a contract rate at below market salary levels without benefits--and they got a number of applicants).
The point against hiring better-qualified candidates is not understood very well by most people (but I saw a similar attitude when I left academia). Even though superbly-qualified personnel are willing to cut their rates or salary demand, there are several issues at play. (For example, I remember when I took an option-year (federal contract) gig at NASA-GSFC, the contractor management almost tried to talk me out of it, noting that the work was not challenging, worried that I would get bored and quit.) Employers figure that once the market improves, well-qualified people (like myself) will quickly be hired away at a fair market salary, and they don't want to invest (say, training dollars) in an employee they know they are paying below intrinsic value
In better times, talented people get more realistic rates: clients are funding more IT projects (upgrades, etc.); employers with improving funding for hiring are willing to pay for higher rates (because ultimately, you get what you pay for) and accept expenses for hard-to-find, typically out-of-area talent; employers know bright people pick up nonessential skills very quickly and are more flexible, so they don't have to set up specialized hiring criteria (intended to help cope with the number of applicants); and decision processes are more responsive (because if they delay, the hard-to-find resource may no longer be available). For example, I can still remember in California having just become available; I got a cold call from a recruiter at 6:30 PM on a Monday in Santa Clara, and Wednesday morning I was in Orange County at the client site. This was a PERM hire. I will not say this was typical, but in this environment, it often takes that long just to arrange a phone screen.
Now, of course, there's only a limited generality from my anecdotal observations of my ongoing professional career--but, for instance, I remember one of my best friends, with whom I shared an office as UH doctoral students; I had moved to the Dallas area after the end of my teaching career, and he soon did the same, building a nice house, including a home office, in a northeast Dallas suburb near one of my siblings. (In fact, his sons and some of my nephews were in the same Boy Scout troop.) He has a CPA for at least 30 years (and holds several other industry certifications, e.g., in EDP auditing). Yet during a slow economy years later, he ended up moving to Georgia to work for a non-profit. My friend is extremely bright, the most nonjudgmental person I've ever met, and (unlike yours truly) one of the nicest people you'll ever meet. I know another brilliant guy whom has served as a high-ranking IT manager/director for leading telecommunications companies whom has been working part-time for just over minimum wage at a Texas branch university. These things don't happen in a "real" recovery.
I've made it clear that I believe that Barack Obama is the worst President in American history. (I would be lying if I said otherwise--it's not personal, it's business.) It's difficult to put into words, but look at many startups. People who are good at starting businesses are not necessarily that great at management and control, but they are more interested in grabbing market share and don't want bureaucracy to get in the way. I'll give a simple example: I worked for a private company that was growing about 30-40% a year; the owners, citing competitor risks in their market niche, eventually sold the company to Equifax, and immediately deals that used to happen overnight were now caught up in bureaucracy (it was like we now needed to procure pencils out of Atlanta), and we lost some big deals. Revenues for the year after we were acquired were flat. What you want to do is encourage growth, not put obstacles in its way: don't kill the fowl laying the golden egg. When Obama and his fellow Dems started their agenda in the 111th Congress, most of these new regulations were like a Gulf of Obama regulation spill gumming up the economy: you can't get away from it. It's a sticky gooey mess. and it's everywhere.
When you're trying to nurture fragile growth in a sputtering economy, you don't dump thousands of pages of regulations on top of it (not to mention dozens of new bureaucracies gushing out God knows what more regulations that affect business and hiring that nobody can predict with certainty). ALL OF THESE REGULATIONS ARE PUSHING ON STRINGS; they constitute real costs in compliance and in oversight--costs that often put us at a global economic disadvantage, and no one knows how to quantity the alleged benefits of said arbitrary rules.
What the Dems SHOULD HAVE DONE (if they were smart) was not to target winners in the economy (like teachers, green energy investors, and money-losing high-speed trains) but to let the economy be the economy and hire people organically, not through some megalomaniac delusion of the the necessity of ineffectual progressive policies enforced by bureaucrats in over their head.
Tyler Durden of Zero Hedge points out that government statistics can be misleading (for example, you may simply count whom is in the labor market in an arbitrary way--if you define long-term unemployed out of the labor force, you artificially lower the unemployment rate. The fact is when people cling onto jobs longer than expected (because they're afraid of finding a follow-up job), that job is not available to a currently unemployed person. Durden attempts to normalize the labor force rate (to promote a more apples-to-apples approach) and his statistics bear out the real unemployment rate is 11.4%--nearly 3 points more than official statistics--assuming a stable labor force percentage over the past several years. More importantly, he's suggesting that bureaucratic gimmicks have widened the discrepancy over time.
I think certainly the President has a better argument to make in the sense if the economy continues to add 200,000 a month, we're better off than when the labor force contracts 200,000 a month. But do I need to remind the reader that we need over 100,000 a month simply to accommodate new entrants into the labor force? Obama can put lipstick on a pig, but the fact is that Obama's recovery has barely kept pace with new workers, never mind making up 7 million jobs lost during the Great Bush/Obama Recession. There are progressives out there wanting to measure current job gains against the former job losses, but if you leave out the new jobs that should be generated for new workers, the record looks even worse.
Political Potpourri
Three new NH polls came out today, showing a Romney edge of roughly 23 points higher than his closest rival (e.g., Ron Paul). True, Santorum did get a bounce, but when you start out at a single-digit, that's not saying much. Remember Huckabee didn't earn much above 10% in NH after his upset win in Iowa 4 years ago. The South Carolina polls are more interesting; it looks like Gingrich and Santorum are splitting the non-Romney vote and Romney has taken a significant lead. I think Gingrich and Santorum are trying to approach this weekend's debates like a two-on-one handicap wrestling match, but Romney can hold his own against either. What Romney needs to worry about is avoid losing his cool like he nearly did against Perry the other week (betting him $10K)--Romney was right on the point, but what the press focused on was an "out-of-touch" bet. One of the things most people disliked about Gore during the 2000 debates was his aggressive approach of Bush and his audible, condescending sighs. What Romney needs to do is respond briefly to the attacks, but counter with an unswerving focus on Obama.
Political Humor
"Mitt Romney says President Obama's promises are like Kim Kardashian's wedding vows. President Obama shot back. He said Romney’s positions last about half as long as a Kim Kardashian wedding." - Jay Leno
[And Romney responded by saying that Obama's decisions take twice as much time as a Kim Kardashian marriage and that Obama's Presidency won't last as long as a Gingrich marriage.]
"Mitt Romney has come under fire for his pledge to eliminate federal funding for PBS. Romney said, 'When I'm president, the only operated puppet speaking to kids will be me.'" - Conan O'Brien
[President Obama has defended his position by putting lipstick on Miss Piggy. Romney responded by noting that Miss Piggy is just another example of government pork.]
Musical Interlude: My Favorite Groups
Styx, "Lorelei"
