Get Your Shovel Ready

Get out your shovel because here comes the latest jobs pitch from Congress and the President.

Congress is currently squabbling over transportation bills that would cost hundreds of billions of dollars and the promise of millions of jobs.

Harry Reid just the other day pushing the merits of one such bill before the Senate:

"We're trying to pass a bill that would save about 1.8 million jobs and produce about 700,000 more jobs. That's what this is about."

A similar bill backed by Speaker John Boehner costing $260 billion fell apart earlier this year. House Republicans wouldn't vote for it.

They're working on another one.

The President is pitching his own plan. This one costs nearly half a trillion dollars over six years, but it's unlikely that will get through Congress.

But one thing is consistent in all these plans and proposals.

The authors argue this kind of spending on roads and bridges and other so-called shovel ready projects is the best way to “create or save jobs,” but recent history has shown that argument to be tenuous at best.

Even the President admitted as much:

"Shovel-ready was not as …uh…shovel-ready as we expected."

The Federal Highway Administration says for every one billion spent on highways it leads to 35,000 jobs.

But economists say it's almost impossible to put a precise figure on the number of jobs created by transportation spending.

One thing is clear: big government programs are not the way to create jobs.

Getting out of the way of the private sector is.

Take Apple for example.

No government bailouts there, and no taxpayer handouts either.

And, for the first time ever, Apple has attempted to quantify how many jobs in this country can be credited to its line of iPhones and iPads.

Apple says it created or supported 514,000 American jobs.

The precise number can be debated, and to be sure, Apple has created more job outside this country.

But it shows you just how ineffective the government is in creating jobs compared to the private sector, and leads to the inevitable conclusion that the best way for Washington to help manufacturers here in the United States is to get out of the way.

And it wouldn't hurt to cut the corporate tax rate in the U.S., which is about to become the highest in the world.

These numbers make it clear. It's the private sector that creates jobs; not the public sector.

Obama's Jobless Track Record

Jobs...The number one issue in this country. You know how bad things are. You've seen the numbers: Unemployment over 8%, more than 40% have been out of work six months or more, a labor participation rate plummeting.

This White House says it has the solution: Government retraining. Now, the President's preferred way to do this is through community colleges. He used one as the stage to unveil his 2013 budget. Declaring on one campus that he had visited so many times, “I'm about three credits short of graduation."

Obama's latest plan? Devoting $8 billion to help community colleges work with businesses to train two million Americans giving them the skills they need to be employed. And it's not his first shot at this.

In 2009, as part of the massive stimulus law, he wanted to set aside $12 billion for community college training programs - Congress eventually sliced that to $2 billion - and just last year, he proposed giving the nation's 1,200 two-year colleges $5 billion for renovations. All told, according to the Government Accountability Office, the number of these programs has skyrocketed to 47 since 2009 costing approximately $18 billion.

But here's the thing. There is no evidence any of these programs that we keep throwing money at actually work. The Washington Post points to a recent study by the Labor Department showing additional education and training for these dislocated workers didn't translate into better pay or higher employment…at least not anytime soon. Actually, some even made less money than those who did not go back to school.

One of the most egregious examples of government waste, this President's insistence on green jobs being the savior of the jobs market. As usual, the numbers tell a different story. The stimulus law appropriated $500 million to train workers for these so-called green jobs promising to train 125,000 people.

But guess what? Three years in - less than 53,000 workers have been trained - only 42% of the expected amount. And only 10% of the target of 80,000 workers have actually been put in jobs. It's not just the federal government. Last year, California gave $59 million for green job training, and only 719 people have gotten jobs. That's $82,000 per job.

Unsuccessful government re-training programs are nothing new. Back in the 1990’s, the New York State Job Development Authority promised to create 1,200 jobs but ended up with fewer than 400. In 1973, the Comprehensive Employment and Training Act was passed spending $53 billion, but only employing about 15% of its recruits.

To make matters worse, ten years later as the program was expiring, 50% of them had been laid off. And in 1961, the Area Redevelopment Administration managed to retrain only about 6,500 workers, and of that, only about 1,300 found jobs in their field. Look, joblessness is a huge problem, but government clearly has no track record when it comes to providing a solution.

The better track for government is to create an environment in which businesses can succeed, make corporate tax rates competitive with other countries. Provide carrots, not sticks, to businesses that outsource jobs.

Change the rhetoric of the White House so that it comes clear that the people employing Americans are worthy of respect not derision.

Romney's Achilles' Heel?

On this first in the nation primary day, the “Nomneys” on the attack, trying to score votes by blasting Mitt Romney and his tenure as the head of Bain Capital, a private equity firm.

Here's a portion of a recent ad by “Winning Our Future”, a pro-Gingrich Super PAC, that'll give you the flavor of these attacks:

“A story of greed, playing the system for a quick buck… a group of corporate raiders led by Mit Romney, more ruthless than Wall Street. For tens of thousands of Americans, the suffering began when Mitt Romney came to town."

Sounds scary, right?

Is Bain in particular and private equity investing in general morally bankrupt?

Is Romney a corporate raider more ruthless than Wall Street?

To answer the question, you first have to understand what private equity is, which the critics clearly don't.

Private equity firms look for companies that have lost value.

They buy those companies, and then invest more in them.

That means everything from new strategy to new equipment to new paint on the walls.

That investment costs more money, and usually that leads to borrowing, but it is borrowing the company could never have gotten in its previous state.

Consider Axle Tech -- an manufacturer in Michigan that supplies our soldiers in Afghanistan.

Since Carlyle Group took over the company in 2005, it has doubled both production and employment, 30 percent of which is a unionized workforce.

Likewise, the "victims" of Bain were out of favor and performing poorly.

Which is to say, if Bain hadn't come along, these companies might have closed their doors and shut down entirely.

Not a recipe for job gains.

What about the charge that Bain was a hit and run investor -- in it for a quick buck?

Not if you look at the facts.

The Wall Street Journal analyzed 77 of the companies Bain invested in - their relationship lasted as long as eight years.

That ain't short term to me.

Look, the real critics of private equity believe the targets of private equity firms would have been better off struggling along on their own.

But doesn't it make more sense to transform a business into a thriving entity rather than watching them hang on by their fingernails hoping things get better? That's really what the critics are talking about. Wishing, hoping, and waiting. The charge that private equity firms fire people is true.

Often, the first out the door is senior management. Others may follow.

But if the firm is successful more people are hired.

Even the Federal Government knew enough to try slim down the automakers they bailed out three years ago, pressuring them to slim their bloated dealership networks.

Slashing thousands of jobs.

I don't have a problem with critics discussing how well Bain performed -- 22 percent of its investments went belly up.

But the firm also launched Staples, Dominos Pizza and Sports Authority.

Today those companies employ a total of nearly 116 thousand people.

And, Bain investors tripled their money.

Other companies that have benefitted from private equity investors include the following that you might have heard of GNC, Burger King, and HCA.

So was Bain greedy? Maybe.

Ruthless -- well -- in their quest for profits, yes.

But many people benefitted from their efforts.

In other words, I'd say companies like Bain do more good than harm.

Stop Cooking the Books, Mr. President!

In accounting, they call it cooking the books. Fudging the numbers to make them work for you.

Today's White House is taking that to a new level using today's jobs numbers to paint a rosy picture that doesn't exist.

Here's what the President said today:

“This morning we learned that American businesses added another 212,000 jobs last month.”

So we added 212,000 jobs minus the 12,000 government jobs lost. That's a net gain of 200,000.

So what kind of jobs?

Remember the video of the UPS guy hired over Christmas to help with deliveries?

He threw a customer's package to the ground and made an obscene gesture.

And that's where most of the jobs were. "Couriers and Messengers.”

There was a lot of hiring there because of the record amount of holiday shopping done online.

And job quality is a big issue here, because most of the jobs added over the past year were in low-paying sectors, bars, restaurants and retail.

Unemployment may be coming down, but higher paying jobs are not coming back.

Today's jobs report also shows that in the service sector - including those couriers and messengers - average hourly earnings wages went down.

Even though for the whole year average hourly earnings were up more than two percent - was not enough to keep pace with inflation at nearly three and a half percent.

So in real terms, wages are actually going down. That's how it feels to our pockets.

Here's the reality.

There are fewer people working in the private sector today than when President Obama took office.

The same is true for manufacturing, and that brings me to something you won't hear the President talk about.

A better measure of unemployment is what the Labor Department calls "marginally attached workers."

That includes everyone who can't find a full-time job or quit looking for work altogether.

What's that number? 15.2 percent.

That means the number of people hit by the bad economy is nearly twice what the official number would suggest.

And the real crux of the issue - the percentage of working-age Americans in the labor force - or the so-called - 'labor force participation rate' - is lower now than when President Obama took office.

This also makes the official number look better than it actually is.

The unemployment rate fell slightly for Whites and Hispanics - the unemployment rate for Blacks is 15.8 percent - exactly where it was a year ago.

For Black women the rate actually went up.

Hardly progress.

At the current rate of job growth, it would take until about 2020 to get back to where we were before recession.

Mister President?

“We're starting to rebound. We're moving in the right direction. We have made real progress. Now's not the time to stop.”

Yes, we do need to stop. We need to stop the crazy spending in Washington. Like the "Green Energy" grants by the Obama Administration; billions spent... A handful of jobs produced.

We can't spend our way to prosperity. If that was the case Europe would be booming, but it's not - it's bust.

And that's where we're headed if this President doesn't change course.

Some Positive Economic News ... for a Change!

Are you as sick of all the bad news in the economy lately as I am?

Well despite what feels like a bombardment of negative headlines - there are definite bright spots in the economy - a recovery may be in sight!

First of all, a recent Wall Street Journal poll shows nearly half of us feel the worst is behind us when it comes to the economy. They may very well be right - this country is structured for growth!

And guess what? We are growing! The economy grew at an annual rate of two and a half percent in the third quarter - the best performance in a year! And many economists are forecasting similar - if not stronger numbers - for this quarter.

Now while hiring is not going gangbusters - there are positive signs here as well.

Even though October only saw a boost of 80,000 thousand jobs - the government revised upward the number of jobs added in August and September.

And today - the number of people applying for unemployment benefits fell to the lowest level since early April - 388,000 marks the fourth decline in five weeks.

It's also the first time in nearly seven months that the four-week average fell below 400,000.

Where are these jobs? Well for starters American manufacturing is back on the rise. Output at the nation's factories rose three-quarters of a percent in October. While that doesn't sound like a lot, it's the fastest rate in three months!

In fact, according to USA Today industrial production is up nearly 13 and a half percent since the "end of the recession" in June 2009.

Car sales - along with the retail sector as a whole - much higher last month - than October of 2010. It probably helped that the Labor Department just announced consumer prices fell for the first time since June.

Bottom line - of course things are going to get better. This is the greatest country in the world - despite only having five percent of the global population - we still have the biggest economy!

We have a culture that enflames the entrepreneurial spirit.

Things are going to get better because there's no room for failure in America. No time to throw our hands in the air and give up. Wwe're going to succeed because in the end we always do, and we always will.

What My First Job Taught Me

I didn't start out wanting to be a business reporter or a commentator on personal finance. Not by a long shot - I wanted to cover politics. And, like a lot of grads today - I hit the job market at a terrible time. A deep recession hit this country in the early 1980s, and in 1981, I was happy to even land a job.

I went to work for a small daily newspaper called The Lima News in Lima, Ohio, which at the time had a population of about 50,000 and a Ford plant. My beat was City Hall - I spent endless hours covering City Hall meetings. I was happy as a clam. But then a funny thing happened.

The local Ford plant began laying off people lots of people. And the layoff packages back then, well, they weren't as good as they are now. After several months, folks started forming informal bartering arrangements, trading toilet paper for light bulbs. The effects began to ripple: Other businesses that were reliant on Ford employee spending had to lay off people as well.

It was horrible to watch. I wrote stories about how people were coping with the situation. And about how the mayor and the city council of that town tried to resurrect their economy -- and lure new business. They set up special economic development zones and romanced scores of corporations. But nothing really worked.

And so, at a fairly young age I learned something fundamentally important: that the private sector - business, not government - had the real power to make a difference in people's lives - to send the kids to school with a full lunch pail - to put food on the table - to provide.

I don't think a lot of Americans have that confidence in companies and the private sector right now - and that's what I worry about.

They think the government can fill the gap ... and it can't.

The government doesn't have the money or the know how to create wealth - it can only disperse other people's money. Today, a lot of people believe that the private sector - companies and businesses - are the problem - that they monopolize the money.

More than three-quarters of people surveyed in a WSJ poll said the nation's economic structure is out of balance and favors the rich over the rest of the country.

For that reason, we need to painstakingly rebuild our faith in the power of the country's private sector. Because it's companies that will hire the jobless, companies that will expand payrolls, and companies that will seed the growth of this economy.

Today Lima is in better shape. It's diversified its economy and grown. It's doing better. And, the rest of us can, too.

It's Open Enrollment Season! Are You Prepared?

It's that time of year again -- open enrollment. That's when companies that provide health insurance to employees announce tweaks to their plans. If you've been employed anytime at all, you know the drill. You get a complicated looking packet from your HR office and you try like heck to compare the plans. Often, you're not successful. The only thing you're likely to figure out - that your contribution to your coverage will be more than it was last year.

And, so it is this year. Despite all the promises of ObamaCare -- that it would slow health care inflation or that it would allow you to keep your plan -- the costs continue to rise and the options narrow. The average annual premium this year $15,073 for a family and $5,429 for a single person -- the family premiums are up 9 percent year over year.

And, if your premium is different -- well consider, that the numbers differ across the country!

Don't get me wrong, I am glad that my employer offers health insurance -- job-based coverage is still the most common type of health insurance in the nation, covering just shy of 60 percent of folks who aren't retired.

And, contrary to conventional wisdom, America is not the land of the uninsured. The percentage of working-age Americans with coverage is 81.5 percent.

Still, things could be better. For example, this year more than ever you are likely to be offered something called a high-deductible plan. It allows you to save money on monthly premiums -- but at a cost. If you do find yourself in need of health care, you could face a deductible of a thousand dollars or more. Typically, younger workers use these plans because they don't expect to face expensive illnesses.

But if you ask me, that's asking for trouble. Setting aside money in a tax-protected account may help you meet those bills -- just in case, you get hit by the proverbial bus.

Other changes most of us will see -- deductibles jumping 7 percent on average. And, watch out for what insurers are calling "co-insurance," that's your charge for care. Think of it as a co-pay on steroids.

Also keep your eyes peeled for changes in networks of doctors and hospitals. Some providers are making those networks smaller.

One positive here: More employers are offering incentives to workers who actively try to improve their health by say, reducing their body mass index, or signing up for cholesterol or blood pressure screening.

And, one more thing -- most workers spend less than an hour deciding what plan to go with -- if you're new to the company and even if you're not -- do yourself the favor of figuring out the details. Your health is on the line.

Fed Drifting into Obama's Territory

I spoke at the top of today's show about the need for leaders to stop using the terms "fixing" problems and "spending" money on them as interchangeable. But it happens all the time. As a matter of fact, the Wall Street Journal reports today that Federal Reserve officials are beginning to think about a new program to help the struggling housing market by cutting mortgage rates.

Now, the Fed doesn't directly control mortgage rates but it does influence them. In fact, Federal Reserve Chairman Ben Bernanke has been holding rates close to zero for three years - and mortgage rates have moved to 50-year lows - rising slightly only recently. None of that effort has paid off with a rising housing market yet - but the Fed may well double down on that policy.

To do that, the Fed would buy mortgage-backed securities -- the assets that nearly cratered the financial industry during the financial crisis. And that means it would print money or use its own reserves to buy them - both of which could cost us in the long run by raising inflation.

Look, I think there is widespread agreement that the factors standing in the way of a housing recovery aren't mortgage rates - after all, 30-year fixed rates stand at 4.18 percent - while a 15-year mortgage rate is just 3.47 - according to Bankrate.com. The real problem for a housing recovery is 9.1 percent unemployment.

Without jobs, consumers can't buy homes. No income, no loan.

And that's the other problem - qualifying for a loan these days is difficult - lenders want sparkling credit scores and solid employment histories. In other words, just as bank loan officers were loosey goosey during the housing boom they are incredibly strict in their terms now.

The Fed seems to be drifting into territory that the Obama Administration itself has failed at time and again. Whether you talk about HAMP or HARP or any one of a number of other programs - none of them have worked.

The main reason? Banks just haven't wanted to lend - regardless of the benefits or perks or muscle applied by the White House.

Ultimately, our housing market will have to shake off these doldrums on its own - work through the downdraft. More government spending and more federal promises aren't going to do it.

President Obama's Big Jobs Lie?

Today I'm writing about these three words: created, saved and supported.

These are the words the Obama administration has used when talking about the number one issue in the country right now: jobs.

And there's also an evolution in how and why they are using them.

When President Obama started selling the first big stimulus package he said it would create four-million jobs. Lots of shovel-ready jobs we were told. The President used that argument again recently when selling stimulus two:

"It'll create good jobs for local construction workers right here in Denver and all across Colorado, and all across the country," he said.

It's so obvious the trillion dollars in spending did virtually nothing to help the economy. The president even joked about it: "I guess shovel ready wasn't so shovel ready after all," he said.

So with that argument shoveled out the window - the words from the White House and its allies in Congress shifted from 'created' to 'created or saved.'

Nancy Pelosi said this: "President Obama was a job creator from day one. The Recovery Act created or saved over 3.5 million jobs."

Of course we now all know it didn't quite work out that way.

So here we are once again - the President with a new spending package he's selling around the country.

But this time, it's not about saving or creating jobs . Because the White House knows that message is not working.

Now its policies are about 'supporting' jobs, take a listen to the President just a short time ago in Michigan: "Here in the United States this trade agreement will support at least 70,000 American jobs" he said.

So why the evolution? Well, you can easily count how many jobs you create.

Saved? Not so much .. And supported? Not at all.

It's a formula that can't be wrong.

It's a 'non-measurable metric' - as one former White House insider said.

What's clear is current policies on job creation are not working.

The Solyndra scandal taught us that.

Half a billion dollars of your money - with nothing to show for it. Or SunPower - over a billion dollars spent for 15 full time jobs.

Our own analysis of the Energy Department's green loan programs showed the billions of dollars resulted in just a few thousand jobs. Or six million dollars per job.

This administration needs to learn how to do the math -- to analyze their own programs to figure out the cost benefit analysis -- and to abandon programs that don't work -- more stimulus spending is like throwing good money after bad. All of it borrowed from future generations.

The White House needs to stop trying to change the language - and start trying to change the number.

This number: 14 million.

The number of Americans who are looking for work and can't find a job.

Thousands of Workers Needed!

The jobs depression continues to plague this nation. If you're not unemployed yourself, no doubt you know someone who is. Fourteen million of us looking for work two years after the Great Recession. But there is a myth about this economy that I want to expose tonight. That myth is that it is impossible to find a job because there are no jobs. But guess what, it's not exactly true.

Manufacturers are struggling to fill thousands - yes thousands - of jobs!

A survey by Manpower Group found a record 52% of employers have difficulty filling positions. Thank about that - they can't find workers for the jobs they have.

On average, companies usually take seven weeks to fill job openings. But for some manufacturing companies it's taking more than twice that long! And I'm not talking a few jobs here and there.

Technology giant Siemens has over 3,000 jobs open all over the country!

According to the Labor Department - there were nearly a quarter of a million open jobs in manufacturing in August - up nearly 39% from a year ago!

If unemployment is so high, why are these companies struggling to find workers? Why aren't people lining up for a paycheck?

Simple: Many just don't have the right skills for the job!

Most of the hard-to-fill jobs are for skilled trades, technology, engineers and machine operators.

Back in 1980, math, engineering, technology and computer science students accounted for more than 11 percent of college graduates.

Thirty years later, the number is less than nine percent.

Students are choosing different directions despite the fact the numbers clearly favor these types of skills.

According to the Conference Board: One worker applies for every three of these types of jobs.

Compare that to roughly three people for every one job in sales!

And it's not like these jobs are the assembly line jobs you've seen depicted in the movies. You know 20 hour days, no pay, no breaks. In fact, many of these jobs are really high-paying ones!

Workers at low levels can make as much as $30 dollars an hour.

Annual salaries for engineers can reach the six figures in some cases!

That company, Siemens, I just mentioned - the average salary for their three thousand open positions, $89,000!

An aging population of skilled workers is adding to the problem - as with many industries retiring baby boomers are tough to replace.

It's also a potential sign of the future. That the jobs market isn't just in a downturn - it's completely changing.

Many companies are trying short-term solutions. But the only long-term one is to get America back into the manufacturing game!

We need to want to make things again - and we need to educate people enough to do it.

So this can serve as a message to all those younger people camping out on Wall Street: It's not "the man" keeping you unemployed. Maybe you're just not looking in the right places!