ADP: Private sector only added 13K jobs in June

posted at 10:55 am on June 30, 2010 by Ed Morrissey

The monthly ADP report on private-sector employment gives analysts a big indicator on the next Department of Labor report on employment — and if so, batten down the hatches.  The payroll-data giant estimates a growth of only 13,000 jobs in the private sector, down from last month’s 57K and far below expectations:

Payrolls processor ADP said Wednesday that hiring by private companies climbed slightly in June, with a paltry 13,000 jobs added during the month, compared with a revised gain of 57,000 jobs in May.

The amount was lower than expected. A survey of economists surveyed by Reuters for the ADP EmployerServices report, jointly developed with Macroeconomic Advisers LLC, was for a rise of 60,000 private-sector jobs in June.

The report, released at 8:15 a.m. ET, is often seen as a precursor to the Labor Department’s big monthly jobs report, which is due out Friday morning. ADP’s data only includes jobs created by private companies so it can vary widely from the Labor Department data, which also includes government jobs.

Friday’s report is expected to show employers cut a total of 110,000 jobs in June. However, the net loss of jobs is tied primarily to the government laying off temporary workers that were hired to work on the 2010 census.

The numbers fall short of even May’s disappointing figures, when the DoL survey showed an expansion of 431,000 jobs — but only 41,000 of them in the private sector.  This shows that whatever momentum the Obama administration had in improving the jobless rate has dissipated.  It appears certain that the number on Friday will go negative, with a net loss of jobs probably into six figures.

This should surprise no one.  The numbers of initial jobless claims has remained constant all year long (the next report will come tomorrow), which indicates a stagnant job creation environment.  In the last two years, we have only had one month of private-sector job growth above population expansion, in March, which underscores the difficulty in catching back up to the near-full employment the US had before the current recession and recovery.

But is this a recovery at all?  CNN Money editor Paul LaMonica argues that it’s a barbecue recovery — low and slow:

But first and foremost, continued signs of sluggish job growth and weak demand for housing in the U.S. show that the rebound from the Great Recession is not going to be sharp and fast like a letter V.

It will more likely be, as I like to refer to it, the barbecue recovery. Low and slow. The low refers to subpar rates of growth and the slow indicates that a recovery is probably going to unfold over a long period of time.

Should we really be surprised though? It definitely seemed before the markets started to tank in May on fears about Europe that the run-up in stocks from March 2009 was a little excessive. Investors were starting to believe this fantasy, that it would take only a year or so to fully recover from the Great Recession.

LaMonica argues that the fantasy was unsustainable because of the years that went into feeding the credit and housing bubble and in the stock markets.  However, that’s not the real problem with the recovery.  The real problem is the future, not the past, and investors fear the future.  They see a government gorging on debt and spending, and that high taxes and capital seizure is the most likely endgame for it.  Instead of pro-growth policies, the agenda in Washington intends on government encroachment on the private sector.

Maybe we should call it the bruschetta recovery, because right now it looks as though we’re toast.


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Unexpected!

Electrongod on June 30, 2010 at 10:57 AM

But that can’t be!

Sergeant SmartAss declared this Recovery Summer!!!

pilamaye on June 30, 2010 at 10:59 AM

I’m sure the bubble-headed bleach blonde who comes on at five (and we do have one, KETV 7) will report this as great news.

rollthedice on June 30, 2010 at 11:00 AM

I was not prepared for another AP article on the unexpected. It was rather…unexpected.

NotCoach on June 30, 2010 at 11:00 AM

..uh oh. When this crap sandwich is served up, The Pantload’s numbers are gonna tank.

Custard, smart-ass?

The War Planner on June 30, 2010 at 11:01 AM

Sure but this is countered by the government hiring 3.7 million workers, so it’s all good.

This is the shape of the economic recovery:

___________________________________________________________

Bishop on June 30, 2010 at 11:01 AM

I’m sure the bubble-headed bleach blonde who comes on at five (and we do have one, KETV 7) will report this as great news.

rollthedice on June 30, 2010 at 11:00 AM

Dirty laundry?

Electrongod on June 30, 2010 at 11:01 AM

In the last two years, we have only had one month of private-sector job growth above population expansion

Ah yes…I love reminiscing about the good old days. What a wonderful month that was.

forest on June 30, 2010 at 11:01 AM

WeeWeeConomics

faraway on June 30, 2010 at 11:04 AM

Man those numbers dont even cover the number of kids graduating from college in one small state looking for jobs. Gonna be a poopy summer for all the new college grads.

Johnnyreb on June 30, 2010 at 11:05 AM

When job creation numbers do not even meet the net increase to the labor force, any name given to the fill in the blank recovery is inaccurate.

WashJeff on June 30, 2010 at 11:05 AM

Who anointed this the “Great Recession”? Seems like an excuse, and a media-driven parallel to FDR. Wouldn’t it be more accurate to call it the Progressive Recession? The irony in that name seems to be more in line with the enigma that is Keynesian economic policy.

BKeyser on June 30, 2010 at 11:05 AM

Sure but this is countered by the government hiring 3.7 million workers, so it’s all good.

This is the shape of the economic recovery:

Bishop on June 30, 2010 at 11:01 AM

Lucky for America, Superpresident Smartpower McKickass created the US Census as a successful federal job creation program, overcoming the defective job creation record of the private sector.

ChrisB on June 30, 2010 at 11:06 AM

Odamna: Let me be clear, this is unprecedented, unexpected and the direct result of the Bush policies. The only solution is greater and immediate stimulus spending.

Sheesh. How did we elect these clowns?

Crusader Rabbit on June 30, 2010 at 11:07 AM

Can’t wait to see Barry go out there Friday and say with a straight face the good news about the positive job growth in the private sector. And you know even though I’m being facetious that this is exactly what he’s going to do.

Doughboy on June 30, 2010 at 11:07 AM

I’m confused, I thought the stimulas was gonna save all of us….BTW Where did all that money go?

SHARPTOOTH on June 30, 2010 at 11:12 AM

..uh oh. When this crap sandwich is served up, The Pantload’s numbers are gonna tank.

Custard, smart-ass?

The War Planner on June 30, 2010 at 11:01 AM

I disagree with your guess about why the weekend numbers go up.

Remember that Rass numbers have about a 2-3 day lag. So what we have here are welfare libs who crash from their crack binge on Monday, and they only recover enough to answer the phone by Wed-Thurs. Then it’s binge time again on Friday.

Daggett on June 30, 2010 at 11:13 AM

Its the Obama Rcovery;
Losin more jobs than creatin,

Rackin up more debt that can be paid back,

Destroying a whole area of the United States that is Republican,the southern border and southern golf states,

but increasing unaccountable unaccomplisehed incompetent federal FEMAs, EPAs, NEAs, SEIUs, AFLCIOs, ACORNs and soon ILLEGALS!

We can’t afford anymore of this liberal experiment IMPEACH NOW!

dhunter on June 30, 2010 at 11:13 AM

Maybe we should call it the bruschetta recovery, because right now it looks as though we’re toast.

Ed, you win the thread with this last line. A perfect zinger!

jwolf on June 30, 2010 at 11:13 AM

Dirty laundry?

Electrongod on June 30, 2010 at 11:01 AM

Heh, I caught that too. Good one.

Missy on June 30, 2010 at 11:14 AM

I disagree with your guess about why the weekend numbers go up.

Remember that Rass numbers have about a 2-3 day lag. So what we have here are welfare libs who crash from their crack binge on Monday, and they only recover enough to answer the phone by Wed-Thurs. Then it’s binge time again on Friday.

Daggett on June 30, 2010 at 11:13 AM

That 49% Rasmussen figure was a fluke just as I suspected. He basically got a huge boost from the Sunday number. The guy’s pretty much hovering around 45% right now when you average all the polls.

Which is not horrible necessarily, but his real dilemma is that it’s hard to see how it climbs back up with the prospect of a double-dip recession and massive tax increases on the horizon.

Doughboy on June 30, 2010 at 11:16 AM

Maybe we should call it the bruschetta recovery, because right now it looks as though we’re toast.

Ed, you win the thread with this last line. A perfect zinger!

jwolf on June 30, 2010 at 11:13 AM

I call this the SOS recovery. (Sh*t On a Shingle)

Electrongod on June 30, 2010 at 11:17 AM

Only 13K in the whole country?

There are one-horse towns in Texas larger than that in population. So last month, Duh Won’s economy couldn’t even give everybody in Bugtussle a job?

Sekhmet on June 30, 2010 at 11:17 AM

Weekend numbers go up because unionized government workers are 8-5 M-F kind of folks.

Sekhmet on June 30, 2010 at 11:18 AM

don’t know about you all, but I think this calls for a ROUND OF GOLF!

SDarchitect on June 30, 2010 at 11:20 AM

The guy’s pretty much hovering around 45% right now when you average all the polls.

Which is not horrible necessarily, but his real dilemma is that it’s hard to see how it climbs back up with the prospect of a double-dip recession and massive tax increases on the horizon.

Doughboy on June 30, 2010 at 11:16 AM

Who are these 45%? They’re the reason we have velcro shoe closures now and warning labels on hot beverages. And they can vote.

Monica on June 30, 2010 at 11:21 AM

Gonna be a poopy summer for all the new college grads.
Johnnyreb on June 30, 2010 at 11:05 AM

There’s at least one who is smiling, or sort of smiling; son of a good friend is a brand new employee of mine. He has a shiny, fresh degree in something useless and will now spend his days lugging metal scrap around, sweeping, filling sand blaster tanks, working a forklift and running to the deli for my lunch.

But hey, he will learn some useful trades because I make sure all my guys have the chance to get their hands in the shops workings, and it beats manning the window at BK.

Bishop on June 30, 2010 at 11:24 AM

Low and slow. The low refers to subpar rates of growth and the slow indicates that a recovery is probably going to unfold over a long period of time.

Slow….. refers to the time when Repubs take back control of Congress. Then,perhaps, hope will spring eternal.

humdinger on June 30, 2010 at 11:25 AM

Who are these 45%? They’re the reason we have velcro shoe closures now and warning labels on hot beverages. And they can vote.

Monica on June 30, 2010 at 11:21 AM

70-80% of Dems still support him. Along with a small percentage of independents and a couple of Republicans(I believe they’re both journalists named David).

And to be frank, he’d have to try(and he certainly is) to get below 60% favorability amongst Democrats. They’re too ideologically rigid to abandon him. But that could still land him in the mid-to-high 30′s and he’d be unelectable in 2012 with those ratings.

Doughboy on June 30, 2010 at 11:25 AM

Yes, but how many government jobs were added? Cuz that’s what matters.

lorien1973 on June 30, 2010 at 11:26 AM

But hey, he will learn some useful trades because I make sure all my guys have the chance to get their hands in the shops workings, and it beats manning the window at BK.

Bishop on June 30, 2010 at 11:24 AM

You got any more openings?

Electrongod on June 30, 2010 at 11:26 AM

Can’t wait to see Barry go out there Friday and say with a straight face the good news about the positive job growth in the private sector. And you know even though I’m being facetious that this is exactly what he’s going to do.

Doughboy on June 30, 2010 at 11:07 AM

..a couple of thoughts:

(1) Pre-weekend media dump.

(2) Friday afternoon tee-time.

..but he’ll have been on it since Day One, which is most likely the crux of the problem.

The War Planner on June 30, 2010 at 11:27 AM

A crouton recovery…

Captain Kickass will not be pleased!

Haiku Guy on June 30, 2010 at 11:28 AM

But hey, he will learn some useful trades because I make sure all my guys have the chance to get their hands in the shops workings, and it beats manning the window at BK.

Bishop on June 30, 2010 at 11:24 AM

Amen.

WitchDoctor on June 30, 2010 at 11:29 AM

The recession is OVER!!!

W00T!!

BigWyo on June 30, 2010 at 11:29 AM

Yes, but how many government jobs were added? Cuz that’s what matters.

lorien1973 on June 30, 2010 at 11:26 AM

That’s the problem. Reportedly hundreds of thousands of census gigs were slashed. So even the government jobs figure will be bad on Friday.

Doughboy on June 30, 2010 at 11:31 AM

Who anointed this the “Great Recession”? Seems like an excuse, and a media-driven parallel to FDR. Wouldn’t it be more accurate to call it the Progressive Recession? The irony in that name seems to be more in line with the enigma that is Keynesian economic policy.

I call it the Diversity Recession.

CDeb on June 30, 2010 at 11:31 AM

You got any more openings?
Electrongod on June 30, 2010 at 11:26 AM

If you can beat the skills of any of the fabrication wizards I currently have working for me, come on in, be warned though, my guys are masters.

Or if you don’t mind doing whatever needs to be done you can join the revolving door of sons of my buddies who populate the place. Plus, you will learn how to weld, fabricate, troubleshoot all sorts of stuff you never knew existed, learn how to ride a horse, and get to play Xbox360 at whatever time I feel like calling a break.

Bishop on June 30, 2010 at 11:34 AM

The recession is OVER!!!

W00T!!

BigWyo on June 30, 2010 at 11:29 AM

Red Ink is the New Black…

Haiku Guy on June 30, 2010 at 11:34 AM

Who are these 45%?
Monica on June 30, 2010 at 11:21 AM

That’s about the percent of the population who are living at public expense. They aren’t going to have a problem until the gravy train stops. When it does, things are going to get really ugly really fast.

And most of them are going to blame “greedy” taxpayers for stealing all their free money.

logis on June 30, 2010 at 11:35 AM

Is anyone really surprised by this? Before you know it we will all be employees wards of the government.

milwife88 on June 30, 2010 at 11:35 AM

barbecue recovery“???

hmmm….where did I put my recipe for barbecued unicorn???

Apparently the goal is to have just one guy (or gal) working in the private sector…and all the rest of us “working” for the government. The plan is progressing nicely!

Justrand on June 30, 2010 at 11:36 AM

CBS Radio just reported that it was 30000 Private Sector jobs gained in June. Those lying Rat****ers

Amadeus on June 30, 2010 at 11:36 AM

But it will be all OK in Racine, Wisconsin by this afternoon.

Barry is firing up Air Force One and winging over to Racine to give a speech about how things are getting better. Racine’s unemployment (14.2%) has outstripped the national average.

Will this be one of those 10 minute, half-million dollar I’m-gonna-make-ya-feel-better-with-my-presence speeches?

Yoop on June 30, 2010 at 11:39 AM

There is no recovery.

DFCtomm on June 30, 2010 at 11:41 AM

With 350-500k new job seekers entering the market each month, 13k is a huge net loss.

barnone on June 30, 2010 at 11:41 AM

Solution: give 20 million illegals citizenship of course

angryed on June 30, 2010 at 11:42 AM

What recovery?

GarandFan on June 30, 2010 at 11:43 AM

Interesting that so many analysts who were claiming we were going to have a “V” shaped recovery are now discussing a “W” shaped recovery (or double bottom). Most of them are government shills, and none of them could explain the logic of a “jobless” recovery. They are now seeing that because of this administration’s antipathy toward the private sector it’s dead in the water.

The estimates I’m seeing so far for Friday’s NFP are – 105,000.

Cody1991 on June 30, 2010 at 11:49 AM

Try owning your own business, that will cast some light on the depths and stubborness of this ‘recession’. It’s no wonder private sector jobs aren’t being added, it’s a miracle some of the businesses that might be expected to do the hiring are surviving. Then I read this blurb for a new non-fiction book at the library about who and how the folks were who got rich on the housing boom.Will try to get ahold of it whne it’s back. I’ll bet I can guess at a few of those names.

jeanie on June 30, 2010 at 11:51 AM

Interesting that so many analysts who were claiming we were going to have a “V” shaped recovery are now discussing a “W” shaped recovery (or double bottom). Most of them are government shills, and none of them could explain the logic of a “jobless” recovery. They are now seeing that because of this administration’s antipathy toward the private sector it’s dead in the water.

The estimates I’m seeing so far for Friday’s NFP are – 105,000.

Cody1991 on June 30, 2010 at 11:49 AM

I anticipate an “L” shaped recovery.

Doughboy on June 30, 2010 at 11:56 AM

Will this be one of those 10 minute, half-million dollar I’m-gonna-make-ya-feel-better-with-my-presence speeches?

Yoop on June 30, 2010 at 11:39 AM

Well, unless he’s showing up to kick somebody’s a$$, that’s pretty much all he’s got.

BigWyo on June 30, 2010 at 11:59 AM

“It is now generally expected that the peak level of census employment was in May and that in June there will be a decline in census hiring,” Prakken said.

Yes, remember last report the bump was from mostly census workers, and yet allowed “Capt’s KA and SA” to brag about the “recovery”.

How many of these 57,000 are high school and college students doing the part time fast food shuffle for the next 2 months until August when there is another “unexpected” drop off.

garry on June 30, 2010 at 12:01 PM

How many of these 57,000 13,000 …

Correction …

garry on June 30, 2010 at 12:02 PM

Maybe we should call it the bruschetta recovery, because right now it looks as though we’re toast.

ed is on a roll today….go buddy

cmsinaz on June 30, 2010 at 12:04 PM

I anticipate an “L” shaped recovery.

Doughboy on June 30, 2010 at 11:56 AM

Yep. The pundits are muttering about a “W” shaped recovery unwilling to concede that it might be overly optimistic. We have to change Congress in November and get rid of the fraud camping out in the WH. It’s going to take some legislators with grit to do it after all the damage that’s been done.

Cody1991 on June 30, 2010 at 12:08 PM

ed is on a roll today….go buddy

cmsinaz on June 30, 2010 at 12:04 PM

Ed is finally catching on.

DFCtomm on June 30, 2010 at 12:08 PM

It’s going to be a black Friday this week.

Schadenfreude on June 30, 2010 at 12:12 PM

Maybe the government ought to start thinking about getting out of the mortgage business….it’s done nothing but add dead weight to an already crippled housing sector. That’s a huge factor in the continuing drift along the bottom we are seeing. Until housing prices can settle naturally and private capital returns to that market, we’re not going to see any real growth.

rockmom on June 30, 2010 at 12:12 PM

I’m still unemployed.

madmonkphotog on June 30, 2010 at 12:12 PM

But we did hit 3 foul balls.

tomas on June 30, 2010 at 12:16 PM

Red Ink is the New Black…

Black ink is RACIST!!!

djtnt on June 30, 2010 at 12:17 PM

Maybe the government ought to start thinking about getting out of the mortgage business….it’s done nothing but add dead weight to an already crippled housing sector. That’s a huge factor in the continuing drift along the bottom we are seeing. Until housing prices can settle naturally and private capital returns to that market, we’re not going to see any real growth.

rockmom on June 30, 2010 at 12:12 PM

IT’S THE UNCERTAINTY STUPID!

That would be a great slogan except 3/4 of the brain dead Americans wouldn’t get it.

Prices will settle eventually since no amount of govt intervention can undo the laws of supply and demand. The uncertainty is when. Is it this year, next year or 2020? And until that uncertainty is removed nobody with money to invest will go anywhere near it.

angryed on June 30, 2010 at 12:23 PM

DFCtomm on June 30, 2010 at 12:08 PM

:)

cmsinaz on June 30, 2010 at 12:28 PM

CBS Radio just reported that it was 30000 Private Sector jobs gained in June. Those lying Rat****ers

Amadeus on June 30, 2010 at 11:36 AM

…and yet the real numbers and reality of why our economy is really getting worse will not get to a large part of the electorate.

…..my daughter had a sleep over last night and I was talking with several of the soccer moms about how badly we were lied to concerning the Health Care bill and the huge amount of debt it is adding to our bottom line (reference the recent CBO report)…….to which they all shook their heads in disgust ……but then proceeded to ask me how I could read all of that “depressing” news all of the time.
They said there was just so much that they could handle and chose not to “go there” very much….

…I was stunned and just stated that I don’t like being lied to and need to know the truth of what was going on around me.

…….I know we conservatives are counting on big changes in November……but we are going to have to fight day and night to get even close to the turn over we are hoping for.

Baxter Greene on June 30, 2010 at 12:30 PM

IT’S THE UNCERTAINTY STUPID!

That would be a great slogan except 3/4 of the brain dead Americans wouldn’t get it.

angryed on June 30, 2010 at 12:23 PM

They might get the “stupid” part. Recovery Bummer!

ya2daup on June 30, 2010 at 12:31 PM

Rush ran the numbers and it is 257 jobs per state.Staggering
eh?

docflash on June 30, 2010 at 12:33 PM

And then, in the midst of this W shaped recession, construction workers in Illinois, after getting money and tearing apart numerous roads, are threatening to do this if they don’t get a 5% raise!!

http://www.dailyherald.com/story/?id=390939

journeyintothewhirlwind on June 30, 2010 at 12:34 PM

They see a government gorging on debt and spending, and that high taxes and capital seizure is the most likely endgame for it.

Don’t forget all of the regulations that are going to be put on the employer via healthcare and the like. I bet most employers feel they can’t afford new hires.

Cindy Munford on June 30, 2010 at 12:35 PM

The medium to long term effects of having more government employees at the expense of private sector jobs is not going to be pretty.

reaganaut on June 30, 2010 at 12:42 PM

Higher taxes, more regulations, and uncertainty are the building blocks of a booming economy.

jukin on June 30, 2010 at 12:54 PM

Red Ink is the New Black…

Black ink is RACIST!!!

djtnt on June 30, 2010 at 12:17 PM

ANY color ink is racist. We need ink that has no color in it. Which means it will be… oh, crap…

Daggett on June 30, 2010 at 12:59 PM

I’m still unemployed.

madmonkphotog on June 30, 2010 at 12:12 PM

Half of those jobs are repo men and people that work in cube farms on the phone as bill collectors.

seven on June 30, 2010 at 1:30 PM

These numbers will seem like the good times by the time DOTUS is finished with us.

You see we are Americans (actually European invaders) and we need to have our “CHICKENS COME HOME TO WOOST”. We’ll be thanking our lucky stars if we even have jobs since having a private sector job means you’re consuming, and polluting.

PappyD61 on June 30, 2010 at 1:35 PM

Baxter Greene on June 30, 2010 at 12:30 PM

My wife is the same way. Any time I mention anything in the news, she gets mad at me for bringing up things that make me upset. In a way I wish I could live with my head in the sand like that. My blood pressure would be a lot lower, that’s for sure.

angryed on June 30, 2010 at 1:41 PM

You know it’s not only Bushs’ fault…………it’s really 200+ years of unfettered Capitalist greed and consumer spending and debt.

It’s unsustainable” to quote the DOTUS.

Time for more emergency powers for the Executive Branch.

PappyD61 on June 30, 2010 at 1:43 PM

Half of those jobs are repo men and people that work in cube farms on the phone as bill collectors.
seven on June 30, 2010 at 1:30 PM

A BRIEF ECONOMIC HISTORY OF THE UNITED STATES OF AMERICA:

For the first hundred years of American history, we were an agrarian economy.

For the second hundred years, we were aN industrial economy.

Starting in the Seventies, we became a service-based economy.

In the ninties, America transitioned to a consumer-driven economy.

During 2000-2010, America’s economy was based primarily on credit services and interest payments.

And now, America is about to become a collections-based economy.

logis on June 30, 2010 at 1:52 PM

Baxter Greene on June 30, 2010 at 12:30 PM
My wife is the same way. Any time I mention anything in the news, she gets mad at me for bringing up things that make me upset. In a way I wish I could live with my head in the sand like that. My blood pressure would be a lot lower, that’s for sure.

angryed on June 30, 2010 at 1:41 PM

Ignorance is bliss but theres’ a solution here, for anyone who says they do not want to hear it,
Here’s what you say,
“I understand you do not like to hear about this and being a man of solutions rather than a complainer here’s what I’ll do:
I will not bring these subjects up to you again if you allow me to fill out, witness your signature and mail your absentee ballott!” (Because Dems and dem voters are filthy liars who cannot be trusted to do whats’ right even if they are wives)

“This does not mean I will not talk to others about this though as I do not want to see Junior and Miss Junior be slaves to the Lyin rats that inhabit D.C. and be forced to pay for lazy lyin rats and union workers their whole lives!”

dhunter on June 30, 2010 at 2:26 PM

Or if you don’t mind doing whatever needs to be done you can join the revolving door of sons of my buddies who populate the place. Plus, you will learn how to weld, fabricate, troubleshoot all sorts of stuff you never knew existed, learn how to ride a horse, and get to play Xbox360 at whatever time I feel like calling a break.

Bishop on June 30, 2010 at 11:34 AM

Can’t possibly be any worse than 7 to 7 kitchen drudgework and pushing a mop. Where’s your shop?

Dark-Star on June 30, 2010 at 3:48 PM

I’m still unemployed.

madmonkphotog on June 30, 2010 at 12:12 PM

Me too. Goldman Sachs foreclosed (company went into receivership) on the company I had worked at for 10 years. The owner of the company (a personal friend of mine) had built the company from the ground up for 30 years and killed himself the day the bank came in to take the company over.

This is a bit lengthy but IMHO important:

A significant part of the company failing was the owners decision to start up a repackaging division to augment the warehousing and distribution business that was profitable for 20 years. The repackaging division required lots of capitol to get started and keep it running but due to mismanagement of the repackaging division it was never making any money. Instead it was sucking the life out of the warehousing and distribution division that were profitable.

The VP/GM of the repackaging division was low-balling quotes for the sake of bringing in business in order to justify his job and the division and it eventually bled the company dry. I still for the life of me cannot understand how the owner of the company could not or would not see what was obvious to most of us that the repackaging division was bleeding out the company and it needed new management or needed to be cut to save the company.

Also, prior to Goldman Sachs (GS) foreclosing on the company it seems to me that they could have conducted a forensic audit of the company’s financials to determine its ability to be profitable. Had they done so it would have quickly become obvious that the repackaging division was the source of the company’s decline but the warehousing and distribution divisions were solid. GS could have provided additional funding with a stipulation that the repackaging division be operated under new management for a year to see if it could be made profitable and after a years time re-evaluate the division and if it’s still not profitable then GS could require the division be liquidated before additional funding would be provided.

Instead GS foreclosed on the company and bit off quite a Shiite Samich, that Shiite Samich being well over a million dollars in hazardous material disposal costs and commercial property not worth what was owed due to the bad commercial real estate market.

Now I’m not normally a conspiracy theory minded person but this situation makes me think that because GS had received bailout money from the feds and GS had the opportunity (as I outlined above) to possibly help the company I worked for get back on its feet thus protecting GS’s considerable investment (loans) to the company GS instead chose to foreclose at a considerable loss therefore I cannot help but think GS has someone else (the feds) pulling the strings with the goal of destroying our economic machine, why else would they pull the plug and take such a huge loss?

Seriously, the scenario I provided above for saving the company is a no-brainer, the fact someone like me with no Bachelors or Masters degree in business administration can come up with the idea and the bean counters at GS couldn’t gives one pause and makes one wonder if GS has a hidden agenda and cards they aren’t showing.

Regardless, as a result 100 more people are out of work, a good man took his own life, and his widow had everything (including her husband of 35 years) taken from her.

Liberty or Death on June 30, 2010 at 4:02 PM

CNN Money editor O’bama kneepad Paul LaMonica argues that it’s a barbecue recovery — low and slow

Fixed.

Del Dolemonte on June 30, 2010 at 4:05 PM

I heard on Kudlow that businesses have over $1.5 trillion on hand, but are not spending it on expansion. They are too worried about all the new taxes (capital gains, overseas income, Obamacare, bank tax, etc) and rules to risk it on new commitments to growth. So they are sitting on the sidelines waiting for all the sh-t from DC to blow by and for all the uncertainty to dissipate, for better or worse. Their unwillingness to invest in their own businesses is a big reason why they are not going to hire for some time to come.

MJBrutus on June 30, 2010 at 4:06 PM

Red Ink is the New Black…

Haiku Guy on June 30, 2010 at 11:34 AM

Hey, that comment is RRRAAAAACCCIIISST to native Americans and blacks, next thing you’ll be talking about those raaaacciiisst astronomers and their black holes!/major sarc

Liberty or Death on June 30, 2010 at 4:32 PM

Crrickets

CWforFreedom on June 30, 2010 at 5:49 PM

Hey, Bishop

O/T – Kudos to you, an entrepreneur. Thanks for creating some real jobs for Americans.

I’m a software engineer who misses the days when I used to do hands-on work in the trades, building tangible things. Now it’s just sitting in a chair tippedee-typedee all day. I miss working with REAL tools.

Teach those college kids the meaning of a good, hard days work. EARNING a paycheck. The work ethic I learned from working with my Dad in the trades has stood me in good stead all these years.

Godspeed with your business.

Flatlander

FlatlanderByTheLake on June 30, 2010 at 6:25 PM