Where’s the Jobs?

December 3, 2010

Guest post by Peter Morici.

Only 39,000 new jobs created is awful.

After we back out health care and social services, which are largely gov’t funded, the private sector is not creating permanent jobs.

None, zero, nada. 

Where's the Jobs?

After health care, social services and temp services are backed out, the private sector ACTUALLY LOST lost 24,000 jobs

Ugh! (SpeakingofPrecision asks-IS THAT A TECHNICAL TERM?) 

So much for the gradual recovery.

 Meanwhile Congress and President negotiate extending the tax cuts–which everyone knows will end in a compromise in the range of $500,000 to $1,000,000 for the cutoff or a temporary extension or both, and extending unemployment benefits, again. 

Deck chair anyone?

 Rearranging the chairs on the deck of the Titanic! 

The economy must add 13 million private sector jobs by the end of 2013 to bring unemployment down to 6 percent.

 President Obama’s policies are not creating conditions for businesses to hire those 350,000 workers each month, net of layoffs. 

Peter Morici

703 618 4338 

Peter Morici is a professor at the Smith School of Business, University of Maryland School, and former Chief Economist at the U.S. International Trade Commission.

 Photo credit.

Actual photo of Titanic Deck Chairs


An Engineer’s Point of View

March 25, 2010


I received an email from a trusted colleague that had a letter attached describing the writers frustration with outsourcing.

Here at pmpaspeakingofprecision. com, we are all about people making things to make our world safer and our lives better. So when we read this letter describing one engineers frustration when trying to do exactly that, well, we asked for permission to share it with you.

Keeping the dock from opening up the oil tanker like a can opener.

The writer, a maritime design engineer, is trying to source wheel fenders so that hulls of  “80,000 DWT” oil tankers don’t rupture when contacting a fixed surface of the dock. It really matters, when “The potential impact of failure is 2000 years” if the hull tears. This post takes some highlight’s from that letter.

Guest post by Vitaly Feygin

My name is Vitaly Feygin. I am a Structural Engineer, not a writer, but I urge you to read this post.

Like many immigrants I came to this great country 20 years ago.

Twenty years ago we all were shocked to discover the prosperity of this country and how much this country achieved using competition of small and medium size businesses.

Great career for twenty years as an engineer.

Today, I want to ask you: “Where is that competition? Where are professionals and skilled craftsmen who made this country?”

Instead of professionals who are doing and managing their work and are proud of what they were doing, we developed a gang of MBA (Masters of Business Administration) who mastered bureaucracy, who have not created anything but hurdles for those who could work. What these MBA have done to us- they sold us out.

Doing nothing, their only significant task was to sell our work to countries like China or India. That is the “real” Business Administration. Here is an example.

I am a Maritime Structural Engineer. In our business we are quite frequently use special rubber fenders that protect ships from destruction during dock operations.

Five years ago there were 5 companies producing these fenders in US. Today there is only one company, and after that company swallowed all her competitors they moved manufacturing facilities to where? You are right, to China.

We became a nation that sells to each other Chinese products- products that are produced in Communist China at a time when millions of US workers are without work and with no means to support themselves.

Go to any store and try to find any merchandise that is produced in this country.

You will find none.

We are discussing Health Reform with whom?

With destroyed small and medium size businesses who cannot compete with subsidized Chinese labor.


More than half of the 763,000 jobs lost in the first two quarters of 2008 were lost in small firms, and unincorporated self-employment fell from an average of 10.4 million in 2007 to an average of 10.1 million in 2008—9.6 million by November and December.


You probably heard that China artificially keeps her currency undervalued.

We send to them our jobs and now they peg their currency to keep us at a disadvantage.

 China has growth.

We have enduring unemployment




Economy Sheds More Jobs

March 11, 2010

Obama’s policies not enough.

Guest post  by Peter Morici

 The Labor Department reported the economy shed 36,000 jobs in February and the unemployment rate held 9.7 percent. Counting workers compelled to work part time for lack of full time opportunities and discouraged workers that have quit looking, the unemployment rate rose to 16.8 percent.Continuing job losses indicate President Obama’s stimulus spending and support for the banks have failed to turn the economy around. In an economic recovery, jobs are a  lagging indicator, not a never indicator.Eight months into the much touted recovery, the economy should be adding jobs not losing jobs at a slower pace. No study of economic history could yield a conclusion other than that the U.S. economy walls along the precipice of a double dip recession.To add jobs, businesses need customers and capital. Businesses lack customers because of the yawning trade deficit with China, and capital because the Bush-Obama bank bailout enriched Wall Street financiers without fixing the problems of the 8,000 regional banks that do the tough lending.

Nearly all the sustainable GDP growth accomplished in the second half of 2009-GDP growth less adjustments for inventory changes–went into the pockets of Wall Street bankers as bonuses.

When dollars leave the United States to purchase imports and do not return to purchase exports, Americans cannot sell all they make-be it manufacturers, software makers, movie producers, or clean shirts from the corner laundry. 

From 2005 to 2008, by consuming more than they produced and earned, through excessive foreign borrowing, Americans sustained a false prosperity with a trade deficit in excess of 5 percent of GDP.  That line of credit has run out, and either Americans balance their trade accounts or reconcile to slow growth, no jobs and economic decline.

Stimulus spending and subsidies for Wall Street financiers are palliatives-more accurately, an ice pack for the hangover from the Bush years of heavy borrowing, and shabby financial practices that began with Enron and continue at Goldman Sachs today, through shameful tactics such financial engineering to cover up Greece’s financial blight to selling of mortgage backed securities to investors while it shorts the market.

Regional banks have not benefited from the TARP, which was intended to create an elaborate analog to the Savings and Loan Crisis Resolution Trust Corporation. Instead, the 8,000 regional banks lack money to lend businesses.

No customers, no capital, no jobs

Failing to address root causes of economic malaise invites decline.

President Obama and speaker Nancy Pelosi obsess about income redistribution in every piece of legislation, ranging from health care reforms to road construction.

A just distribution of wealth is a noble goal, but there must be wealth to distribute.

The American economy is at sea. Without rudder or compass, America navigates an iceberg field while the ships’ captain and pilot focus on a well stocked bar, lest the passengers become aware of their imminent peril.

Peter Morici is a professor at the Smith School of Business, University of Maryland, and former Chief Economist at the U.S. International Trade Commission.



On These Maps, Dark Is Not Good

March 2, 2010

Sometimes, our eyes can help us see what is really going on, no matter what the talking heads in the media try to tell us.

On this first map, a satelite image of the Korean peninsula, the light indicates urban and economic activity as evidenced by electric lights in South Korea. The absence of light at the top of the peninsula indicates an apparent lack of economic and industrial activity in North Korea.

Darkness means no economic activity that can afford outside lighting.

Link: Korean Peninsula

On this map of unemployment rates by county, again darkness indicates lack of economic activity.

Darkness means county unemployment 10% or more

Here is the interactive version posted on YouTube:

Click here to see this interactive map show the growth of unemployment by county from Jan 2007 to January 2010.

Sometimes, it’s easier to just show what you mean.


Manufacturing Education for Congress and Administration

January 28, 2010

Guest post by Jeff Wiltsie, Vanamatic Company

Result of Washington policies.

It’s time for a reality check. Congress authorized the administration to spend hundreds of millions of dollars of stimulus to keep unemployment from reaching 8% which is now at 10%.  The real unemployment rate is estimated to be as high as 17% when you include the people that have given up looking for work.  The stimulus money has eluded the manufacturing sector which provides more economic activity per dollar than any other sector.  Each job in the manufacturing sector supports as many as four other jobs.   What’s wrong?

2010 Gross National Debt estimate – $14.456 Trillion

The debt is 98.1% of the United States GDP

China owns 5.5% of the debt – $798.9 Billion

Have you ever heard the comment, “It’s the economy stupid”?  That statement was famous in 1992.  Today’s statement should be, “The answer is manufacturing stupid”.  Debt is piling up while manufacturing is declining.  Remember, manufacturing provides more economic activity per dollar than any other sector.  Unemployment is expected to exceed 10% in 2010 while manufacturing is declining.  Remember, each manufacturing job supports as many as four other jobs.

Manufacturers continually improve productivity while reducing costs; this is good for the consumer!  Congress and the Administration print more money and don’t worry about costs; this is NOT good for taxpayers.  Manufacturers work with suppliers and customers to reduce or eliminate non-value added costs.  Congress and the Administration inflate costs.

During President Obama’s 2010 State of the Union, he acknowledged the need to focus on getting people back to work.  The President said, “Now, the true engine of job creation in this country will always be American businesses.  But government can create the conditions necessary for businesses to expand and hire more workers” … “We should start where most new jobs do – in small businesses, companies that begin when an entrepreneur takes a chance on a dream, or a worker decides its time she became her own boss.”

Job creation is an area where Republicans and the administration can turn rhetoric into reality.  Working together they can develop a response which will encourage job creation in the private sector.  Virginia’s Bob McDonnell’s Republican response included, “We must enact policies that promote entrepreneurship and innovation so America can better compete with the world.  What government should not do is pile on more taxation, regulation, and litigation that kill jobs and hurt the middle class.”

Building a reputation for quality, delivery, integrity and ethical behavior is of the utmost importance for long term business survival.  Imagine an automotive executive speaking at a dealer conference, telling the dealers, “It’s vital to the survival of the company to promote and sell this new model.  Building a new model is a daunting task, we don’t always get it right the first time but we can fix it after we get sales up.”  This executive would be fired and the company sued for knowingly putting out a potentially unsafe vehicle.

Al Franken recently said, “Big pieces of legislation often need to be fixed and improved after passage.  Health care would be no different.”[1]  Building a reputation for quality, delivery, integrity, and ethical behavior should also apply to Congress and the Administration.

Congress and the Administration can learn a lot from manufacturers and help put more people back to work at a greater pace.

[1] http://www.minnpost.com/derekwallbank/2010/01/28/15403/franken_urges_house_to_pass_senate_health_bill_and_fix_it_later