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9% unemployment in California

Unemployment in California has hit 9%.  That is just plain bad.  So I can’t understand why so many politicians are trying to put the brakes on Obama’s stimulus package.  At the Democratic caucus, Obama reiterated the point of a stimulus package …to…spend money to create jobs.  And with so much money going toward infrastructure rebuilding, I can’t understand what keeps so many so small-minded and so focused on the small picture.  This is a big picture problem and if the government can really through money toward infrastructure, then the benefit will be to America.  There are 10,000 schools slated for renovation.  Federal buildings will be “green-ified”. 

The plan is hanging on by a thread right now in the Senate, according to a newly released article from the Associated Press

Last month, in Detroit for the North American International Auto Show, I had a great conversation with a highly experienced E-flex director, Gregory Cesiel, at General Motors.  One of the great challenges of changing propulsion systems is having the consumers eager to purchase the vehicles…i.e. enough customers to make producing the cars viable.  I asked him why the government didn’t change their own government fleet contract to hybridize all their vehicles.  He was surprised that I asked the question and, in fact, that was exactly what some of the discussion was at the time.  This was confirmed in Obama’s speech on Thursday — the government fleet will be hybridized — creating jobs in the auto industry and for the American manufacturing plants that will be producing American-made lithium-ion car batteries.  It was just a sentence…but what a sentence.  Those few words may equate to over 900,000 related jobs in the US alone, never mind European markets.

In Obama’s prepared speech (which he departed from in his passionate address), this is what was scripted:

This plan will save or create over three million jobs – almost all of them in the private sector.

This plan will put people to work rebuilding our crumbling roads and bridges; our dangerously deficient dams and levees.

This plan will put people to work modernizing our health care system, not only saving us billions of dollars, but countless lives.

This plan will put people to work renovating more than 10,000 schools, giving millions of children the chance to learn in 21st century classrooms, libraries, and labs – and to all the scientists in the room today, you know what that means for America’s future.

This plan will provide sensible tax relief for the struggling middle-class, unemployment insurance and continued health care coverage for those who’ve lost their jobs, and it will help prevent our states and local communities from laying off firefighters, teachers, and police.

Finally, this plan will begin to end the tyranny of oil in our time. It doubles our capacity to generate alternative sources of energy like wind, solar, and biofuels in three years. It saves taxpayers billions of dollars by making federal buildings more energy efficient, and it saves the average working family hundreds on their energy bills. After decades of empty rhetoric, that is the down payment that we need on energy independence.

There is NO mention of a government fleet of hybrid vehicles.  But in his empassioned departure from the teleprompter, he talked about changing over the government fleet to alternative fuel vehicles.  This is a big, big statement.  And offers MANY prospects for recovery.

Is anyone listening?

8 comments to 9% unemployment in California

  • Prof. Samuel D. Bornstein

    The January ADP Employment Report found for the first time that Small Businesses showed a spike in job loss. I authored the National Association for the Self-Employed (NASE) survey which was sent to its national membership which confirmed my research that small business owners used their home’s equity to access cash for their businesses.

    http://advocacy.nase.org/research.asp

    There are nearly 4 million small business owners with Alt-A and Option ARMs mortgages that will “reset” in 2009 through 2012 as part of the 2nd Wave of Foreclosures.

    California is the State most at risk at this time because Californians holds 60% of these “Toxic” mortgages. I believe that many CA small businesses are at-risk at this time for foreclosure, business failure, and the resulting job loss. CA has an unemployment rate of 9.3%. I believe that it will rise due to these “Toxic” mortgage “resets” and the “payment shock” that will result in foreclosures and job loss.

    Thank you,

    Samuel D. Bornstein
    Professor of Accounting & Taxation
    Kean University, School of Business, Union, NJ
    Tel: (732) 493 – 4799
    Email: bornsteinsong@aol.com

    • Thank you so much for sharing your very enlightened commentary. Not only will I check out your report (and I’m a Californian, so I see first-hand what you are talking about), but I’d like to invite you to share your thoughts more often. Economists have talked about following waves of layoffs and unemployment, but to see it spelled out so clearly and to know that the downward spiral extending to 2012 and beyond is pretty much a certainty is extremely sobering. I know of quite a few friends and colleagues who borrowed against their home equity to keep businesses and lifestyles going.

  • Hi Janet,

    Thanks for addressing this issue.

    The stall of Obama’s stimulus package is perhaps not surprising, since politics always involves gaining consensus among the legislators – all with their own egoes and their own axes to grind…

    But in this time of economic crisis, and with Obama’s being elected by a mandate, not to mention that we are in the worst economy since the Great Depression – a scenario all of us Boomers were schooled could “never happen again,” we all certainly hoped politics would take a back seat to action.

    Perhaps at this point, we all need to look at ways we can personally stimulate our own economies.

    Anne

  • Anne, I agree with you. Innovation has to be the key to rebuilding the economy. Politics will always be politics and there is a reality that most of us are facing that cannot be addressed by political agendas. Many of us are wondering how we’ll save our homes, our jobs, our children’s futures. We must play a personal part in stimulating the economy, but communal inventiveness is the only way I can see to evolution of a new economic model.

  • Dan

    One of my concerns is looking at the projected cost and dividing that by the number of jobs created. Just under $900 trillion to create 3 million jobs, works out to $300,000 cost to create each job. That doesn’t seem very efficient. Plus, there are things in the stimulus bill that don’t seem sufficiently well-explained. One of my main issues is that never mind defecits, the country is already in so much debt with no indication of if or when that will be paid off. It’s all well and good to say spend first and ask questions later, but I think that’s the issue that got consumers in trouble. I don’t see how anyone can spend their way out of debt (personal, companies or governments).

  • Dan,
    If you look at a straight cost per job and ROI, you’d be right. My perspective is a bit different…that the stimulus package is just that. A stimulus. This huge amount of money will certainly not get us out of debt. In my opinion, the only way we’ll work our way out of this is for our economic base to shift from a fuel-based one to something entirely different. Just no one really knows what that is yet. Hopefully it will evolve over the next decade — in part from the areas the stimulus intends to push. Either that, or our very young country will crumble like many great empires in the past. I just hope we are collectively smart enough, and inventive enough to imagine ourselves forward.

  • [...] Wendy at Gen Plus is steaming mad over stalls on the stimulus package in the US and wondering if politicians are really listening to Obama and to the will of the people, or if [...]

  • There is obviously a lot to know about this. I think you made some good points here. Thanks!

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