My guess going forward is the politicians are going to placate the masses by talking about creating jobs. I will be shocked if it isn't a major message in Obama's speech tomorrow. But what can the government really do about the job situation? Let's take a look.
How are jobs really created? Oh sure, the feds could create ten million jobs today with a stroke of the pen, but at what cost? Government jobs are non-producing jobs, unless you include the hideous creature resulting with the demise of GM and what has risen from the morass.
To create a job, first someone has to create a business. This happens when somebody gets an idea that fills a need and is willing to risk capital, time, and effort to fill that need. If that person doesn't have the capital, it can be raised from others who have saved that money and is willing to save it in a bank that can lend it to you, or that person is willing to invest in your plan. In any case, in theory, somebody needed to deny current desires and save money.
Yet what is the current environment? For years, savers have been vigorously punished. If you put your dough in a bank savings account, maybe you get 1% interest, then the feds tax you on that. And that doesn't even take inflation into account. (I know, the fed has said there has been no inflation for two years. If you believe any numbers from the government then you haven't been paying attention). If you save money in a savings account, you haven't given things much thought. The feds want you spending, not saving. You see, the feds think the only thing needed to build the economy is more spending, but they have the cart before the horse. If people don't have savings to spend, the only spending that can occur is the result of borrowing. And who wins if you borrow? The banksters.
So the only real significant thing the politicians could do to "create jobs" would be to lower regulations and business taxes, in other words, make the environment more palatable for businesses to grow. Also, if the free market set interest rates to historical standards instead being manipulated by the fed, people would be more inclined to save. But what are the odds of these things happening? If you think they will, place your bets in the comments section and I will take them.
What we are seeing is a meltdown of Keynesian central planning which is being blamed as a failure of capitalism. Capitalism would have let the banksters fail. Too Big To Fail is NOT an element of capitalism.
So what can you do about it? That is a good question, especially if you work at a job or need a job. The environment is not conducive in the United States to creating jobs right now. If you have any suggestions feel free to add them. Also, when there is a negative savings rate, (interest rate minus inflation rate), you get punished when saving cash in a bank. But commodities rise in price in a negative rate environment. Did you know silver was up 82% last year? Virtually all of the food commodities have been going gangbusters. People still need to eat. You can save, just don't save paper dollars. Save silver or gold. Gold has risen ten years in a row. Even in the meltdown of 2008 it was up.
If there is one thing we can count on, it is the government will without a doubt do the wrong thing. Raising the deficit and spending more money will continue to destroy more jobs, not create them like Obama will tell you. But they all want to get reelected. Borrowing and spending more will make billions more for the banksters. How long does this have to go on before the people understand? As long as people get unemployment and food stamps, I don't think they care. With a two-year plus vacation and free food, they aren't complaining. We now have 43 million Americans getting food stamps. I believe the sole purpose of food stamps is to quell a revolution, but then what do I know?
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