Thread: Of Course Unemployment Is Rising Govt Policy GUARANTEEING IT

Of Course Unemployment Is Rising ... Government Policy Is GUARANTEEING It

Saturday, July 9, 2011
many links on this post

As many writers have reported, the latest jobs report is dismal.

In fact, as I have demonstrated, unemployment may rival the Great Depression.

These bad numbers caught many by surprise. But as I repeatedly noted, government policy guarantees rising unemployment.

For example, I wrote last September:

I predicted a growing, long-term unemployment problem last year.

In fact, as demonstrated below, the government's actions have directly contributed to the rising tide of unemployment.

The Government Has Encouraged the Offshoring of American Jobs for More Than 50 Years

President Eisenhower re-wrote the tax laws so that they would favor investment abroad. President Kennedy railed against tax provisions that "consistently favor United States private investment abroad compared with investment in our own economy", but nothing has changed under either Democratic or Republican administrations.

For the last 50-plus years, the tax benefits to American companies making things abroad has encouraged jobs to move out of the U.S.

AP noted last year:

Corporate profits are up. Stock prices are up. So why isn't anyone hiring?
Actually, many American companies are — just maybe not in your town. They're hiring overseas, where sales are surging and the pipeline of orders is fat.

The trend helps explain why unemployment remains high in the United States, edging up to 9.8% last month, even though companies are performing well: All but 4% of the top 500 U.S. corporations reported profits this year, and the stock market is close to its highest point since the 2008 financial meltdown.

But the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9%, says Robert Scott, the institute's senior international economist.

"There's a huge difference between what is good for American companies versus what is good for the American economy," says Scott.

Many of the products being made overseas aren't coming back to the United States. Demand has grown dramatically this year in emerging markets like India, China and Brazil.
Most of the Emergency Money Went Abroad

In addition, a large percentage of the bailouts went to foreign banks (and see this). And so did most of money from the second round of quantitative easing.

That's not going to help the American worker.

Continuing on with my post from last September:

The Government Has Encouraged Mergers

The government has actively encouraged mergers, which destroy jobs.

For example, the Treasury Department encouraged banks to use the bailout money to buy their competitors, and pushed through an amendment to the tax laws which rewards mergers in the banking industry.

This is nothing new.

Citigroup's former chief executive says that when Citigroup was formed in 1998 out of the merger of banking and insurance giants, Alan Greenspan told him, “I have nothing against size. It doesn’t bother me at allâ€

related

Here's Why Small Business Isn't Hiring, And Won't Be Hiring
http://www.alipac.us/ftopict-243279.html