Today, over 14 million people are unemployed. We now have more idle men and women than at any time since the Great Depression. Nearly seven people in the labor pool compete for every job opening. Hiring announcements have plunged to 10,248 in May, down from 59,648 in April. Hiring is now 17 percent lower than the lowest level in the 2001-02 downturn. One fifth of all men of prime working age are not getting up and going to work. Equally disturbing is that the number of people unemployed for six months or longer grew 361,000 to 6.2 million, increasing their share of the unemployed to 45.1 percent. We face the specter that long-term unemployment is becoming structural and not just cyclical, raising the risk that the jobless will lose their skills and become permanently unemployable.” — Mort Zuckerman
Years ago when my retail business was expanding I interviewed and hired quite a few prospective employees. It didn’t take long for me to realize that the best employee wasn’t always the smartest applicant. In fact, more often, rather than a college graduate, an applicant with average intelligence but an above average work ethic was the best choice.
The retail business has its ups and downs. Many factors dictate whether sales will be strong or weak during any given period. But, regardless of the economic climate, I learned that the best way to boost sales during a downturn was to get back to basics.
By getting back to basics, I mean returning to the systems and philosophies that made my business successful in the first place. Among others, get back to providing the customer service that made people want to buy. Reevaluate product lines and seek those that provide the better value than offered during the periods in which there was success. Take a fresh look at the advertising that worked in the past. And lead employees in a return to the positive work ethic that they exhibited when they were new employees.
Right now America is enduring a recession that has gone on far too long. The best and brightest academics are running things. These are the kids that understood every theoretical concept in school but have no practical skills. That’s why they don’t seem to have a clue as to how to quell the economic bleeding. Federal Reserve chairman, Ben Bernanke is one of the clueless, and even Barack Obama, the “smartest guy in the room”, is AWOL.
According to Canadianbusiness.com, Bernanke told reporters that the central bank had been caught off guard by recent signs of deterioration in the economy. And he said the troubles could continue into next year. “We don’t have a precise read on why this slower pace of growth is persisting.” According to Bernanke the weak housing market and problems in the banking system might be “more persistent than we thought.”
Last week Senate Minority Leader Mitch McConnell, after Eric Cantor walked out of deficit talks with the administration said, “For weeks, lawmakers have worked around the clock to hammer out a plan that would help us avert a crisis we all know is coming — all the while knowing that at some point the President would have to sign it. So it’s worth asking: Where in the world has President Obama been for the past month? … He’s the President. He needs to lead. He needs to show that he recognizes the problem. And do something about it”
Hey guys, allow this college drop-out to clue you in. Ronald Reagan wasn’t an Ivy League academic, but he knew how to run a country. If you want the economy to turn around you need to get back to Reaganesque basics. Allow me to channel Reagan and provide a few thoughts on how I would change things if I had the power to do so.
- Realize that government can’t fix the economy by injecting cash into the system. Sure, an increase in money into the economy is needed to turn things around, but not from government coffers, and not from the Federal Reserve printing presses. The best source for cash into the economy is private citizens making purchases and private businesses investing in and expanding their own enterprise.
- Reduce or eliminate income taxes. Reductions in taxes leave more money in people’s pockets so that they can make the purchases that will strengthen our economy. A revenue system that excludes income tax entirely would be best. That’s why I support a Fair Tax.
- Downsize the government and reduce the government payroll. Government doesn’t produce anything. Instead it takes all its revenue from the very private sector that Obama seems to dislike so much.
- Change policies that inhibit the growth of business. A major problem with government is that it thinks it has to regulate everything. Sure, some regulation is necessary for the wellbeing of citizens, but too much regulation stifles growth.
- Eliminate all subsidies. Government should never be in the business of choosing winners and losers. Our current system of subsidizing weak industries and unpopular products is counter productive. Get out of the way and let the marketplace decide which businesses and products are viable.
- Do whatever it takes to provide cheap energy. The high cost of energy saps the strength out of the marketplace. It’s time to forget about ineffective “alternate” sources of energy and utilize our god-given resources of oil and natural gas. Begin to drill wherever oil is found and get us off foreign oil exports. Allow investors to build new refineries and clean coal plants. Build nuclear plants wherever it is safe to do so.
- Eliminate agency redundancy. Too often multiple agencies are performing the same tasks with different personnel. While we are at it, eliminate ineffective agencies like the Department of Education. Leave education up to the states and the communities in which the children live.
- Stop giving preference to worms, snakes and desert rats. Reevaluate the EPA endangered species regulations and allow business to expand on their own property. After all, our American way of life is truly endangered if we don’t do something about our failing economy.
These are ideas that, if implemented, would help to quickly turn things around. Of course I’m afraid that no one in government will listen. After all, I’m not the smartest guy in the room.