Unemployment indicative of deindustrialized economy

rioting in streets

“You’ve got to have someone in the store, and if you’re down to one person in the store, you can’t cut any more.”

The question is not whether a low growth of 0.1% a quarter signals the end of the recession or not. It is whether the leaders of major financial companies and automobile industries have learned something about declining sales and not new and innovative ways to ensure their huge bonuses.

America (USA & Canada) have learned that the transfer of labor from manufacturing to Asia results in loss of ability at home, and not only the ability to manufacture products. It is the ability to improve these products and, possibly, the ability to invent new products that matters and produces wealth for a nation. People in Asia are intelligent people who will find ways to improve manufacturing techniques and improved products. The original designers in America are left behind every day.

Look at how many products are not made here: cameras, semiconductors, computer components, consumer electronics. It is time we took back the initiative and began designing and manufacturing new products using U.S. and Canadian workers. The sad state of the auto companies in Canada and the United States shows that this industry is in grave danger.

Four things need to be done:

  • The banks need to put funds into companies that manufacture goods in America.
  • Companies need to bring manufacturing home.
  • Companies and governments need to fund Research & Development.
  • The educational institutions need to improve and to graduate better trades people, better technicians, better designers and better, more responsible executives.

Va. to borrow $1.26 billion for depleted unemployment funds
By Tom Shean The Virginian-Pilot November 30, 2009

This is what will kill small business. They cannot afford to pay these increases in taxes.

As Virginia wrestles with ways to replenish its depleted fund for unemployment benefits, Hampton Roads employers expressed concern about the impact that higher unemployment taxes could have on the health of their businesses.

The sorts of tax increases described by the Virginia Employment Commission earlier this fall may be difficult for some small businesses to absorb without job cuts, said Jim Shirley, owner of Bennett’s Creek Farm Market in Suffolk.

The state’s average unemployment tax per employee will jump from $95 this year to $171 in 2010 and to $263 by 2012, the VEC said in a Sept. 29 presentation to the Commission on Unemployment Compensation.

Adjusting to those sorts of increases may require reviewing the number of hours that he keeps his store open, Shirley said. The store, which employs 25, is open seven days a week from 7:30 a.m. to 7 p.m.

Retailers could be hit especially hard by the tax increases because many consumers have clamped down on their spending.

Retailers “are surviving by cutting costs because the sales growth isn’t there,” said Jeff Miller, president of Miller Oil Co., a Norfolk-based fuel distributor with 38 convenience stores in Virginia and 350 employees.

For small retailers, the financial pressure from weak sales and higher unemployment taxes could be intense, Miller said. “You’ve got to have someone in the store, and if you’re down to one person in the store, you can’t cut any more.”

In addition to boosting unemployment taxes on employers, Virginia will have to borrow more than $1.26 billion from the federal government in coming years to continue paying jobless benefits, the VEC said in its forecast.

That’s because the deficit in its unemployment-benefits fund will hit $194 million by the end of this year and balloon to $561 million by the end of 2010, the VEC said.

The VEC predicted in September that initial claims for jobless benefits would jump 78 percent to 633,931 this year from 356,220 claims in 2008.

The state’s unemployment taxes are calculated according to the volume of claims that an employer’s workers make on the trust fund and the fund’s solvency.

Housing Meltdown, Ground Zero
The American Home-Owning Dream on Life Support
By Andy Kroll November 30 2009

Snipped from the original source:

The turnout was staggering: close to 45,000 desperate homeowners showed up during NACA’s five-day stand at the Cow Palace for the chance to renegotiate their disastrous subprime mortgages or sky-high interest rates or interest-only payments. For them, this event beat any chance at a star-studded concert — and best of all, it was free.

Inside, homeowners received housing-related financial advice and met with NACA’s counselors, a stoic crew, always with coffee or energy drinks in hand and clad in red and yellow T-shirts with STOP LOAN SHARKS and SHARKS BEWARE emblazoned on their backs. Here, homeowners could have their income, taxes, and spending habits analyzed, and possibly walk away with a monthly mortgage payment that actually fit their situations. With that payment figure in hand, homeowners could then meet with representatives from their mortgage companies in the same arena and try to hammer out new terms on more affordable mortgages.

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