Friday, July 06, 2012

My President needs to get some sleep. He looks tired. His love of this country can take a break once in awhile.

I know he is dedicated. I know he believes in his mission. I know there is nothing in the way of taking care of his responsibilities, but, there is one thing he can do without for only a reasonable period of time and that is sleep.

Romney has a really poor history of job growth, especially in manufacturing.

BloombergBusinessweek did an article that is a real eye opener about the ruthlessness of Romney (click title to entry - thank you).

Romney has no right to talk about manufacturing jobs in the USA. He and Bain single handedly used their equity to destroy an entire segment of the USA economy.

Back in 1992, Bain acquired a manufacturer called American Pad & Paper, or Ampad. Bain then used Ampad as a vehicle to buy and restructure similar companies. Following standard “roll-up” strategy, Bain closed factories and laid off workers in anticipation of selling off a leaner, more profitable company via an initial public stock offering.
Two years into the roll up, Bain had Ampad acquire an office supplies plant in Marion, Ind., a manufacturing town 70 miles northeast of Indianapolis. At the time, Johnson worked the night shift making hanging files. “We come back from the July 4th holiday, and this is what we find posted,” Johnson says, producing from the Romney box a one-page notice: “As of 3 p.m. today, July 5, 1994, your employment with SCM Office Supplies Inc. will end.” Most of the 258 employees were allowed to reapply for jobs at reduced wages and benefits. Johnson’s pay fell 22 percent, he says, from $10.05 an hour to $7.88. Dismayed to see their old union contract torn up, the Marion workers negotiated with Ampad management for several months, then called a risky strike. In early 1995, Ampad called the union’s bluff, closed the plant, and laid off the remaining workers.
The strategy was ruthless. No one can deny that. Bain under Romney's direction purchased plants with similar product lines and consolidated them one after another after another, laying off workers, harvesting treasuries and ultimately bankrupting the company and selling off capital investments as part of the bankruptcy.

The primary investment made by Romney with Bain's equity provided elimination of their competition and pushed up the prices of the products. Literally, Bain used the one survivor of their strategy to finance the hostile take over and dissolution of the competition. Some would argue that is very smart and agile to management to eliminate the competition, however, one might want to ask the consumers of the closed plants if it assisted their profit margin. The answer, of course, will be no. As each plant was closed the cost to customers went up. 

What does that mean? 

It means the effect on the American economy was cumulative. It wasn't enough to simply shut down the competition and increase the movement of quantities of inventory while reducing warehousing, the income to the survivor factory was increasing their costs to customers.

When costs to customers went up it contracted the ability of those customers to expand their competitive edge in their businesses. When companies are not competitive they have to evaluate their ability to hire new employees, open new stores and add to the economic growth of the nation's and ultimately the world's economy.

Romney was more than an equity king, he was a draconian element to the USA economy. Add to that the fact he designed 'the outsourcing dynamic' which caused the loss of American jobs over the past decades since he was at Bain and what you have is Romney the Economy Destroyer, not simply a smart businessman. 

Romney thought nothing about the larger picture he was impacting and how it was impacted and how it was destroying lives in the USA. He never stopped to even value the idea the nation's sovereignty relies on a dynamic economy.

He has a lot of nerve coming forward now to actually expect to become President promising to grow the economy of the USA, he has no experience doing so. The quarter billion known to be the base of Romney's wealth, evidently Ann Romney has acted as a facade to more of Romney's wealth and that quantity is unknown, has come from the destruction of the USA economy. He has drained the economic wealth of the country into his own pockets for his own benefit and now he wants to use those monies to take a Presidency away from the Middle Class. 

It is mind boggling to realize the immoral content to his wealth. I take issue with the Republican value system which is expressed as "More power to him." That power of wealth wasn't his in the first place.

Anyone should realize, this dynamic of consolidating USA businesses for equity gains has forced the outsourcing. When Romney increased prices on products of sole survivors of his takeovers it provided a great deal of impetus to look elsewhere for low cost products. Romney literally was the impetus to the China Connection. He not only provided the 'idea' he provided the economic drive to the movement.

Job Growth is not a valid measure of how the future under a Republican would improve.

Many Americans (click here) are aware that George W. Bush has had the worst job creation record since the government began tracking these figures in 1939. But Bush's colossal failure to manage the economy overshadows a much larger story.

Regardless of how Republicans try to make the argument about Job Growth, they have no valid track record for their complaining. As a matter of fact, the current majority House had promised to make a difference and they haven't. That pattern is backed by long standing records in the nation's history of Republican administrations.

President Obama's job record is still impressive in the face of many obstacles to his success.

The Unemployment Rate remains at 8.2% (click title to entry - thank you).

To Note: Hourly earnings are up $0.06 during June.

The challenge to the American people when valuing job growth is to realize what is obstructing that growth. The Consumer Price Index is down in June and that should increase job growth. If people have more money to spend, the more likely they are to purchase new items or items that were unattainable before. So that is a move in the right direction.

If President Obama is not able to solicit benevolence from the Republicans for all his trying at Bipartisanship, it is up to the American people to seek the root of the problems to job growth and correct it. If federal legislators can't or won't get out of the way for their own reasons yet to be understood, political pressure into November can be effective.

There are obstructions and the Department of Labor have recognized some of them.

One of the areas the Department of Labor has been examining as an impact on the Producer Price Index are the Airline Fees. These fees effect Small Business people and tourism. The more a consumer has to spend on fees to fly the more inhibited growth in other areas of the economy.

One important way airlines have generated additional revenue (click here) is by adding surcharges and/or increasing ancillary fees for optional services or a la carte pricing. As an example, rather than airlines passing on higher fuel costs in the form of fare increases, fuel surcharges may be less noticeable. Passengers may be more likely to accept increases in 
fares if they know that fuel prices and fuel surcharges are rising in tandem. In addition, airlines have optimized capacity by eliminating and/or reducing the number of flights 
between some origins and destinations. These strategies have reduced the supply of available airline seats, giving airlines additional pricing power....

Chart 1 of this article shows exceptionally high increases in baggage and cancellation fees. In realizing the airline industry has dense costs in fuel, the idea the USA military could share its use of a combination fuel with their jets that is equivalent to E85 in automobiles might help the fuel costs to airlines. 

Additionally, the airlines should realize their increased fees are actually working against their advantage. Noted in this article highlighted by the Department of Labor is the fact the airlines are also reducing their number of flights into and out of certain areas of the country. I have to ask if this is due to reduced ridership on airlines due to higher prices charged for fees or is this simply a long term trend of ridership in these areas that dictate limiting the number of flights?

This is just one example of how private industry is increasing incomes, but, limiting their own capacity to grow and add jobs. 

These fees are particularly egregious because they are not only limiting ridership to airlines, they also limit tourism and local economic growth. So, what seems like a prudent increase in costs to bring higher cash reserves to airline treasuries there is also a larger picture to why jobs are not increasing in local economies. ACCESS to local economies is just as important as the local economy itself. 

Railways are still more fuel efficient to moving people. They have access to nearly any area of the country when it is matched with bus service. There are plenty of roads, arguably too many roads, but, unless a consumer can absorb the increased fuel costs 'road trips' could be prohibitive.

It is dynamics like this causing problems Americans can identify and seek input to their Congresswoman or Congressman to move them to act to improve the performance of the nation's economy.

I return to the fact the hourly rate for the employed has increased by $0.06 in June. That is an impetus to job growth. More money in the hands of the Middle Class dictates a greater potential to the USA economy.