Ramirez on job creation
posted at 11:36 am on April 27, 2010 by Ed Morrissey
Why haven’t jobs reappeared in the American economy? Normally, post-WWII recessions would have already dissipated by now, with job growth returning at around the 12-month mark at the latest. We’re now at the 29-month point and we’re still looking at massive unemployment and underemployment. Barack Obama demanded that business leaders start taking some risks, but as two-time Pulitzer Prize-winning editorial cartoonist Michael Ramirez points out, their hands are tied:
Red tape isn’t the only thing hamstringing American business. The Obama administration has sent plenty of price signals on taxes and burdensome regulation that will keep investors and businesses from betting on expansion. As long as the administration pursues those policies, it will keep the engine of American economic growth bound and gagged.
Ramirez has a terrific collection of his works: Everyone Has the Right to My Opinion, which covers the entire breadth of Ramirez’ career, and it gives a fascinating look at political history. Read my review here, and watch my interviews with Ramirez here and here. And don’t forget to check out the entire Investors.com site, which has now incorporated all of the former IBD Editorials, while individual investors still exist.
Blowback
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bondage.
moonbatkiller on April 27, 2010 at 11:41 AM
Well i know i’m not participating until the current administration is neuterd.
heshtesh on April 27, 2010 at 11:42 AM
Good cartoon, as usual from Ramirez. But I fear that the reality will be worse. If unemployment stays high (very likely, even according to WH staff), and if the Democrats remain in power (hopefully not so likely), we will see punitive measures on employers who do not hire more people. Bet on it.
jwolf on April 27, 2010 at 11:43 AM
While corporate America is bound and gagged, Obama can’t see or hear or care what corporate Americans and main street Americans are fighting.
fourdeucer on April 27, 2010 at 11:46 AM
+1
Monica on April 27, 2010 at 11:46 AM
It’s all about control, folks. Obama and the dems will not be happy unless they are calling all the shots and corporate USA is groveling at their feet.
docdave on April 27, 2010 at 11:50 AM
Sigh…yeah.
Bob's Kid on April 27, 2010 at 11:50 AM
It is more like Ogabe has an axe over their heads and is daring them to make a profit .
He is here to destroy capitalism . That is his only goal .
DeweyWins on April 27, 2010 at 11:50 AM
It’s like an RNC fundraiser up in here.
Abby Adams on April 27, 2010 at 11:51 AM
You’re looking in the wrong places:
Obama Announces New Entrepreneurial Exchange Programs with Muslim-Majority Countries
April 26, 2010 7:43 PM
From Sunlen Miller:
Fulfilling his commitment made last year in Cairo to help deepen ties between business leaders, foundations and entrepreneurs in the United States and Muslim communities around the world, President Obama today kicked off a two-day Entrepreneurship Summit in Washington, DC.
“We know that over the years, despite all we have in common, the United States and Muslim communities around the world too often fell victim to mutual mistrust,” Obama said from the Ronald Reagan building this evening, “That is why I went to Cairo nearly one year ago and called for a new beginning between the United States and Muslim communities—a new beginning based on mutual interest and mutual respect. I knew that this vision would not be fulfilled in a single year, or even several. But I knew we had to begin and that all of us have responsibilities to fulfill.”
The president announced a series of new partnerships and initiatives with this goal in mind, including new exchange programs that will bring Muslim-majority countries and the United States together.
http://blogs.abcnews.com/politicalpunch/2010/04/obama-announces-new-entrepreneurial-exchange-programs-with-muslimmajority-countries.html
Zippy is interested in helping to create jobs just not here in the USA.
Cody1991 on April 27, 2010 at 11:53 AM
As insane and idiotic as it sounds, liberals see the federal government as an endless font of wealth. And they live in abject fear that private enterprise will result in tyranny if not strictly constrained.
The lowest level employee sitting in the basement of a building in Washington DC has more power to ruin your life than the President, CEO and board of directors of the biggest corporation in the world.
The worst thing any business can do to any employee is to stop paying him in return for his services. No matter how bad the employee screws up, he gets to keep every single penny he was ever paid.
Business owners, on the other hand, are always one mistake away from losing everything they spent their entire lives building.
And who is it that liberals think that society needs to protect?
logis on April 27, 2010 at 11:54 AM
mmphh mmmmphhh
*removes tape from mouth*
Palomino?
lorien1973 on April 27, 2010 at 11:57 AM
Here in Dallas there are warehouses on the market for $25/sqft that used to go for $50+/sqft. I have been paralyzed with fear and indecision because even at that bargain rate you don’t know that you will find a tenant and every day you await the news of some boneheaded new law or regulation by the Dems and Obama.
This mental terrorism affects everyone in business.Even in good times, buying real estate, or starting or expanding a business is always fraught with peril. How can you justify taking a risk in this climate?
mrsmwp on April 27, 2010 at 11:59 AM
Here is a perfect example of red tape.
The gov’t passes the Home Valuation Code of Conduct a year ago. It purports to eliminate the undue influence of mortgage loan originators upon appraisers, thus making appraisers more independent. Result should be more reliable estimates of property value, and thus, less loan defaults.
Reality? The price of an appraisal increases 25-50%. The banks now control which appraiser is assigned to an appraisal request, which allows the banks to skim 25-50% of the appraisal fee away from the appraiser. Some estimates put the number of appraisers leaving the industry, and thus losing their jobs, in excess of 50%. Appaisals quality drops as many appraisers are working on reports outside of their ‘markets’, and they no longer worry about poor quality reports affecting future revenue.
If this isn’t the perfect example of how governemnt intrusion into the market results in higher costs, lower employment and lower quality, I don’t know what is.
DrW on April 27, 2010 at 12:04 PM
Meanwhile…. Greece’s debt has been cut by S&P with Portugal on the ropes to follow soon.
Socialism at work. The Democrats dream for the USA.
Cody1991 on April 27, 2010 at 12:06 PM
Hey Scooter, how about some commitment for your country?
Oh wait. Nevermind.
fogw on April 27, 2010 at 12:06 PM
Still a ripoff. I’m paying like $6.50 a sqft here in Tampa.
lorien1973 on April 27, 2010 at 12:06 PM
If banks take a risk and lend money, they can get in big trouble with Obama. If gas goes up, Obama seized the 2 large car makers. Home builders Can’t tell what kind of building codes The One will beat them up with. Obama knows how to choke growth in the economy.
seven on April 27, 2010 at 12:09 PM
Obama doesn’t care what you do, as a business, as long as you don’t collect any evil profit. There’s been too much of that in American history, and Obama’s going to fix that.
RBMN on April 27, 2010 at 12:09 PM
The System….is working. I am certain that the Ministry of Truth will tell us tomorrow that new unemployment filings are falling, jobs are being created in the energy, healthcare, and industry sectors to the tune of 141% of predicted growth, an astounding testament to the gilded leadership and strong economical virility that is Big Obama. The Ministry of Plenty shall have us believe that we are now better off, have more money, more opportunity, and, of course……we should be thanking him.
Orwellian, indeed.
ted c on April 27, 2010 at 12:10 PM
Our survey showed warehouse rent was less money In Kansas City that most big industrial cities in asia. They have a labor advantage.
seven on April 27, 2010 at 12:11 PM
Unemployment rate Dallas area – 8.4 percent
Unemployment rate Tampa area – 13.1 percent
docdave on April 27, 2010 at 12:12 PM
Industrial Counterrevolution
You guys just don’t understand. If you start from the axiom that the highest calling of a human being to to succor those who lack possesions by taking from those who have them, our present path is leading to paradise. Just don’t notice that Robin Hood was usually taking the lupens to peasants who seemed to be sitting around a dumpy house doing nothing all day and there was never a suggestion about a future with productive activity on their part. Those ancients didn’t have Asians to supply electronic devices and ugly little cars to keep them occupied and the ennui of living without the illegal drugs, NFL Draft and Oprah is the only reason the west had an industrial revolution.
IlikedAUH2O on April 27, 2010 at 12:13 PM
KC has an enormous illegal alien presence.
Inanemergencydial on April 27, 2010 at 12:17 PM
Less than 10% of Obama administration has any, ANY, private industry experience.
S-M-A-R-T Power!!!!!1111111!!!!!!!eleventy
jukin on April 27, 2010 at 12:17 PM
I wonder quite frequently how anyone on Wall Street who is a Democrat can possibly support this Regime.
I also wonder how anyone who is African-American can support this Regime since African-Americans are being slammed by this economy created by this Regime.
Pounding big business as being all things evil, and out to hurt the little guy I think is going to wear thin as we get closer to the November elections. Despite the total ineffectiveness of the GOP to get out a clear message that big business is needed in order to have jobs, it cannot escape the notice of Joe and Jane America that as goes big business so goes the jobs.
Many people may not understand the financial lingo, or all things Wall Street, but common sense says a rich man is needed in the mix in order to produce a pay check. Someone has to show me the money in order to show me a job!
freeus on April 27, 2010 at 12:25 PM
Obama and the rest of the National Socialist Left are either too incompetent to know what they are doing will hamstring businesses and stunt the recovery.
OR they are doing this on purpose.
Can any of the resident trolls explain which way is it?
Chip on April 27, 2010 at 12:30 PM
They’re holding their hands out like everyone else. And a small handful of them (individuals, not industries mind you) are getting filthy rich.
That’s the way all collectivist governments work – at all levels. For every one person who is genuinely connected; there are a hundred others who THINK they are connected and are willing to pay fealty, because they’re certain they’ll get their cut of the pie.
logis on April 27, 2010 at 12:50 PM
Why do you guys assume that they know the eventual results and aren’t just into the breathless Zen of pretending to be a proletarian hero?
IlikedAUH2O on April 27, 2010 at 12:52 PM
I like you Ed, but you haven’t figured out that this isn’t a normal recession yet? Everything remains the same until it doesn’t and then it’s never the same again. This is the game changer, and nothing is going to be as it was before.
DFCtomm on April 27, 2010 at 12:57 PM
It isn’t Obama alone. The downturn is 29 months old, yet the enabling policies in the housing market have been around for years — starting with Jimmy Carter’s CRA. It took a while for the problem to reach critical mass, while the Democrats insisted there was no problem and castigated the Bush Administration officials who came before them claiming there was a problem and Congressional action was needed.
Obama was indeed there — he was one of the attornies in Chicago who forced Citibank into the NINJA loan marketplace.
Franks and Waters were there, accusing the Bush Administration of being racist by attempting to rein in the housing marketplace.
Now we are here, and the guys who caused the problems are in charge, and, of course, their solutions will not address the roots of the problem.
unclesmrgol on April 27, 2010 at 1:00 PM
I like Gary Varvel’s cartoon better.
Dr.Cwac.Cwac on April 27, 2010 at 1:03 PM
Exactly. I’ve been listening to the hearings with GS. It’s political theater and little else.
Wall St. responded to a situation that Congress created. The problem was caused by them. They bailed the investment banks out and handed the public a huge bill.
Most of the people in Congress have to be replaced.
Cody1991 on April 27, 2010 at 1:04 PM
What is it with you guys and the CRA. The problem is the creation of the CDO that allowed banks to bundle bad loans and move them off their balance sheets and onto the balance sheets of investors. If not for the CDO then banks would have been forced to own these loans which would have created a backlash against the CRA. The CRA calls for banks to conduct business
It’s ok to be against the CRA, and I’m with you, but yo should know the truth. The CDO is a powerful destructive tool, that does have it’s place, but needs to be respected in the same way as electricity, or radiation.
DFCtomm on April 27, 2010 at 1:16 PM
You answered your own question.
Cody1991 on April 27, 2010 at 1:32 PM
Without economic freedom, all other freedoms are merely an academic exercise. -Rush
SKYFOX on April 27, 2010 at 1:36 PM
Brilliant.
Free speech, for example, doesn’t mean much if you can’t even buy a newspaper…
Dark-Star on April 27, 2010 at 1:38 PM
Causality relationship. CRA begets Freddie and Fannie, “sound accounting practices” are redefined to allow a larger number of low/no income borrowers, laws are modified to penalize banks which do not practice diversity in lending (codewords for “lending to low/no income people”), banks try to accomodate said people by offering new mortgage vehicles such as interest-only short term mortgages…
We are in violent agreement — I just go back further to address the root of the problem — the original government intervention into the housing marketplace.
unclesmrgol on April 27, 2010 at 1:44 PM
No I didn’t. I’m against the CRA as a mandate to corporations, but the CRA is not why we are where we are at today. The CDO, or Collateralized debt obligation is why we are where we are. People keep attributing %100 percent of the problem to the CRA, but in reality the CRA would never have become a problem if not for the creation and misuse of the CDO. The CRA is just a distraction, but if you want to use it for political traction, then that’s your business but you should know the truth.
DFCtomm on April 27, 2010 at 1:44 PM
I’m fine with this as long as you have a handle on what happened, and it seems that you do. Once we have that settled then we can have fun arguing about which came first the chicken or the egg.
DFCtomm on April 27, 2010 at 1:47 PM
See unclesmrgol on April 27, 2010 at 1:44 PM
I was in the mortgage business. Typically banks would never have made the loans they were forced to make. Some parties set themselves up as lenders, but they were simply middle men. Yes, they found a way to pass the loans off. The bottom line is that good lending practices would have ensured that the loans never existed.
Why did they exist? Go back to Congress, the root cause. I’m not defending Wall St. What they did was a reaction. They always find ways to make money.
Don’t accuse me of not knowing the truth. I was there. And I know some folks who are in jail.
You might need to do some more research.
Cody1991 on April 27, 2010 at 1:51 PM
That’s my point that the CDO and not the CRA is the big problem. If the CDO was only used to move the bad loans made to minorities off the books, then how come I a non-minority was even offered a HELOC when I bought my house. Why were CDSs created to short the CDOs?
P.S. I didn’t mean to insult your knowledge of the system.
I get use to dealing with the general public and forget that commenters here are generally more knowledgeable.
DFCtomm on April 27, 2010 at 2:02 PM
A liberal, who is afraid to post here, wrote to tell me that the government creates wealth for us all. They cited the highway system and the broadcast networks as examples.
I shall handle this with them as soon as i finish a fight with a racist reactionary who wants VAT to get some of the money out of the next American economy since it will be all cash consumer transactions by folks who never file income tax returns. He estimates that the whole country will look like Chicago sometime in the near future and wants me to stop joking about the movie Idiocracy.
IlikedAUH2O on April 27, 2010 at 2:11 PM
I’m talking about purchase price not lease. If you can purchase a warehouse for $6.50/sf then I’m coming to Tampa! Here we lease them for $3-8/sf.
mrsmwp on April 27, 2010 at 2:11 PM
landlines on April 27, 2010 at 2:12 PM
He may not be far off. And Idiocracy isn’t something to joke about any longer, not after the last election.
Dark-Star on April 27, 2010 at 2:20 PM
It’s really, really complicated! There are so many layers.
Being offered a HELOC as a non-minority doesn’t really factor into this particular discussion as I see it, however, as property values inflated, lending practices relaxed, and people were offered loans at 100%, 125% of the value of their property. I remember credit score qualifications being lowered although typically they had to be far above average. The (false) assumption was that property values would continue to rise – classic “bubble” mentality.
During the 1990′s up to the meltdown there were many new “lenders” cropping up everywhere. Mortgage lenders that were traditionally involved only in conventional lending got into subprime. But there were a lot of guys who were formerly “brokers” who suddenly became “lenders”. They weren’t banks as advertised. They were middle men a step up from where they were previously. What they did was scour the subprime market, package the loans and sell them.
I met guys who were former Wall St corp. fin. guys who set up shops like this. Why? Because the window of opportunity was there. The government was going to buy these loans. I remember talking to someone about subprime, and he said, “Don’t be ridiculous. Who’s going to buy this $hit?!”
The point is that the subprime market exists because of government policy. The rest of what happened is simply a reaction. Goldman and the rest of the investment bankers did what they normally do, and they also knew that the government would bail them out – with the exception of Lehman Bros, but I think that could have been avoided. GS and the rest of the boys at Morgan wanted to limit the playing field. That’s my theory, fwiw.
Here’s an example of what can happen on a local level with all of these “layers.” A very ambitious mortgage broker in my state got into the game of becoming a “lender.” He milked the subprime market aggressively, and at the same time he encouraged people locally to invest in his company enticing them with a return of 15% on their money.
I met the guy and decided he was a train wreck in the making and refused to do business with him. At the time my boss wasn’t happy with me, however a few years later he has been convicted and is serving a rather lengthy sentence. in a Federal jail.
This post is too long, but what I am really saying is that this debacle developed over many years based on policy that did not have sound economic principles behind it. It was politically motivated ending in an economic disaster – globally.
Also, Fannie Mae was a bigger accounting scandal than Enron. How many people know about this?
The only ‘political traction’ that interests me is sound public policy with the government getting its claws out of the private sector.
Cody1991 on April 27, 2010 at 2:32 PM
You may very well be right about the initial use of the CDO as a tool to mitigate the risk of sub prime loans, but my point is that it grew way past that. I wasn’t there so I cannot comment on motivation. It swept out into the mainstream and Credit default swaps were even created to short the CDOs. The house of cards that was eventually built on these loans went way past just dealing with the federally mandated CRA.
DFCtomm on April 27, 2010 at 2:38 PM
OK. Here are my question for you. Why were DCO’s designed, and did they exist prior to the subprime mortgage market?
If not, what is the root cause?
We disagree there. I think the answer is pretty simple. The events in between and the results are, indeed, complicated.
Cody1991 on April 27, 2010 at 2:48 PM
The first CDO was created around 87, but CRA didn’t get teeth until Clinton installed them in 94 so was the CDO created as a reaction to the CRA, or was it just created as another instrument for banks to create mortgages then move them off their books so they could create more? That is an insider question that I don’t have the answer to.
If the CDO was simply a reaction to the CRA then why was the CDS created? What purpose could those serve in relation to the CRA?
DFCtomm on April 27, 2010 at 2:59 PM
If the government requires a company to assume risk as part of its operations, any company worth anything will find a way to mitigate that risk. In this case, toxic loans are packaged into neat bundles and sold to investors who are sold that the real estate balloon will never burst — that properties can do nothing other than increase in value.
That escalator was created by the Government, in much the same way that escalators in medical care costs and college education costs have been created by the Government. That the escalator would break down was a given — there was no way that the Government was going to hazard its own full faith in its maintenance.
At least up until now. The new bill “to rein in Wall Street” doesn’t just tap a minor capillary to help the bottom feeders, it creates a pipeline into a major artery, and that pipeline can be any volume a minor agency of the Federal Government chooses.
We are seeing a whole new era of feeding at the trough emerge. All those vampire movies — they make sense now. This is a unique fusion of socialism and capitalism — where the well connected are truly “too big to fail” and the rest of us…
unclesmrgol on April 27, 2010 at 3:05 PM
Thanks. You are articulating my thoughts and concerns better than I am able to do.
I listened to quite a bit of the hearings with GS. This bill is absurd because these banks have already been deemed ‘too big to fail.’ The taxpayer is always on the hook. We are the end users of bad public policy. This bill changes nothing.
Cody1991 on April 27, 2010 at 3:17 PM