Monday, December 21, 2009

Interesting "Surge" for the Economy

An unprecedented surge in the hiring of "temporary workers" has taken place over the past four months. This surge accompanied a continued loss of permanent jobs to the economy, as the economy grew slowly in overall output. What does this mean?

In prior recessions, an early surge in temporary workers quickly led to the hiring of permanent employees. Not so, this time. Why?

According to William J. Dennis, Jr., director of research for the National Federation of Independent Business:

"When a job comes open now, our members fill it with a temp, or they extend a part-timer's hours, or they bring in a freelancer -- and then they wait to see what will happen next."

There is a message here. The Obama mandates are making it less and less attractive to hire full time employees. While permanent employment will eventually pick up, we are headed toward much higher unemployment levels for a recovery than has been the postwar (post World War II) pattern. The overwhelming presence of big government overseeing the financial sector and the pattern of existing and proposed mandates on employees is stifling the natural forces of economic recovery.

Cap-and-trade, health care reform and "card check" are enough to discourage anyone from expanding their business and hiring employees -- temporary or otherwise. Only the select beneficiaries of Obama largesse (read: green industries) have anything to celebrate from this government's war on the economy.

The normal credit provision from the financial system has been strangled by regulatory overkill, financial uber czars, and credit card legislation. Now, new and expensive new SEC rules, combined with the excessive costs of Sarbanes-Oxley, threaten to dampen the outlook for public companies as well.

The Democrats war on business and on employees continues unabated. The midnight cloture vote on health care is an icon for future disaster for the American economy.

The good news is that the American public is opposed to the President and the Congress by overwhelming numbers. Nearly 60 percent of the public are now opposed to the Congressional action on health care. But, the President doesn't care, nor does the Congress. "Bi-partisanship" has taken on a new meaning. Not only the opposition is left out of the equation, the public's views don't matter either.

No amount of rhetoric and obfuscation can blur the real issues. The economy is in deep trouble and the Administration and the Congress could care less as they pursue their own agenda regardless of the negative consequences for the economy and for the unemployed.