Posted on 09/25/2010 5:15:52 AM PDT by Son House
The nation is technically out of the recession. But while many corporations are actually making more money, it comes at the cost of jobs and hardships on many Americans.
The economy is growing, but at a sluggish 3 percent, according to Martin A. Regalia, senior vice president for economic and tax policy and the chief economist for the U.S. Chamber of Commerce.
"We are in an economic malaise," said Regalia, who was a recent guest speaker for the Southern Frederick County Rotary Club in Urbana.
There are about 90,000 jobs created each month, and while that may sound like a lot, it would take 150,000 jobs created a month to get the U.S. economy stable and more than 290,000 created a month over the next 24 months to get back to what was lost during the recession.
"At 90,000 jobs a month, it will take eight years to recover," he said.
Unlike previous recessions, since the 1950s, the current one is taking much longer to recover from. Companies, Regalia said, are finding they can operate with less people and less business sites. With cuts in employees and overhead, the companies are making revenue, it just isn't going out to the public.
That has pushed income growth to about 2 percent, down from a normal 4.5 percent to 5 percent, Regalia said, and consumer consumption is two-thirds of the economy.
Housing has been hard hit, leaving even those with homes paid for finding their houses have less value for borrowing on or selling, he said.
"And there were all those homes in Ninja loans -- no income, no job, but you still could buy a house. And there was the push for homeownership by both parties. Owning a home is Mom, apple pie and America. Those in Washington didn't want to crack down on that," Regalia said.
The flood of foreclosures on the market has created an "artificial supply" of homes with not enough demand, or at least people who can get a loan to buy a house.
Regalia criticized Congressional leaders who "have never owned a business, never had to meet a payroll, yet want to call bankers and business owners 'stupid.'"
The Obama administration wants to put more regulations and control on big businesses, failing to realize that it is small businesses that work with the big ones to keep the economic engine going, according to Regalia.
"I have a friend who has a business and has 99 employees. He would like to have 120 employees, but if he goes over 100, he has to deal with OSHA regulations, so he doesn't hire them," he told club members.
Multinational corporations, often criticized for sending work overseas, may have plants or offices in the U.S.
"The U.S. is the only nation that taxes foreign revenues. A company that operates in the U.S. pays taxes for operations here. If it has a plant in France, it pays French taxes. Then the U.S. wants to double tax it, on those foreign revenues."
The national unemployment rate was about 9.7 percent in August, Regalia said. "We have people who are chronically unemployed." With much of the U.S. manufacturing gone, in a service economy the skills held by many unemployed wouldn't be there even if the economy picks up strongly. "Paying people to stay out of work may be the wrong move. The chamber supported the extension of unemployment benefits, but there are now many who simply gave up looking for work. Those that want to work need re-tooling, new skills as the jobs themselves are changing."
Incumbents in Washington are facing an obstacle, Regalia said. "A politician would rather run against an opponent than the economy."
I'm no economist, but 3 percent is considered normal from everything I've ever read. I have to wonder where this guy is coming up with this crap.
I think usually, coming out of a recession, you see more accelerated growth—5 to 8%. The bounce back is going to be slow, if we’re lucky.
Take into consideration the Government spending that is propping up that 3%
I thought this was revised down to 1.6%?
I found this:
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.