| Written by Ted Craig, on 09-02-2010 08:43 AM |
I've never seen so much attention paid to lobbying in general and the efforts of the National Automobile Dealers Association in particular, then I have in the past few months. The cause is the financial reform bill. The NADA spent more on lobbying for this bill than it has on any other legislation in years.
And why not? As Becky Quick points out in Fortune Magazine, the bill is 848 pages. The Founding Fathers wrote the Constitution using four pages.
But trying to influence this far-ranging bill is some how evil. Time ran a cover story called "The Best Laws Money Can Buy" that portrayed Elizabeth Warren and her fellow consumer advocates as Knights of the Holy Sepulchre and lobbyists as amoral agents of greed.
By the way, that piece was a special contribution by Steven Brill. Brill has been behind many journalism enterprises and Time tells us he is "currently a co-CEO of Journalism Online, which is enabling publishers to pursue strategies for charging for their online content." Brill normally doesn't write for Time. I wonder about the magazine's motivation for running this article, personally.
Conspiracy theories aside, the main issue is, Why do we consider people evil if they are motivated by commercial interests and good if they are motivated by idealism. Idealists ignore facts as often as mercenaries, if not more often. Much of what's in the so-called Dodd-Frank Law may turn out to be ill-conceived and even harmful. As William Blake wrote, "The road to hell is paved with good intentions."
Steven Brill and others tell us we should just let the enlightened write our laws. Fine. Just remember that these are idealists. And so are these.
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| Could the Unemployment Numbers Be Lower? |
| Written by Ted Craig, on 09-01-2010 08:10 AM |
"Blech." That was my reaction when I heard the ADP numbers on the way into work this morning. The number was supposed to be positive, not another 10,000 jobs lost. And ADP revised the June numbers down to 37,000 from 42,000. Not everybody puts a lot of stock in ADP's data, especially since it only covers private sector employment, but a bad number usually indicates bad news.
What's it going to take for hiring to begin again? The mantra on CNBC this morning was "The firing has ended. Now we need the hiring to begin." Has the firing really ended? Mass layoffs jumped twice in the past six months. Even if it has, there's a lag.
Economist Robert Barro pins some of the blame on unemployment insurance. Other economists doubt Barro's claim, including his own son.
I'm not sure which Barro is right, although personal experience makes me lean toward the senior. But let's say it's had a small effect, adding maybe 0.4 percentage points to the total. Another study claims 3 percentage points is due to a mismatch of skills needed and skills available. That puts unemployment close to 6 percent, still above the historical average, but manageable.
Maybe jobs will start coming out of the woodwork soon. But maybe CNBC economics report Steve Liesman was right when he said corporations will start adding jobs when the stock market rewards them for hiring. That has yet to happen.
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| Written by Ted Craig, on 08-27-2010 08:18 AM |
We're started again to get a lot of doom talk. Everybody's talking about a double-dip recession. There's even a song about it. There are comparisons to Japan's Lost Decade and even the Long Depression of the 19th Century. IHS Global Insights recently raised its odds of a double-dip recession, although it still remains low.
Most signs of growth are anemic. Manheim economist Tom Webb said wants to believe job growth will increase rapidly, but he has no numbers to support this belief.
Are we doomed? I'm enough of a contrarian to say, "No." But like Webb, that's based more on what I want to happen than any real numbers.
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| Written by Ted Craig, on 08-26-2010 07:25 AM |
Yesterday evening, my phone rang and the caller ID showed a local number with an unfamiliar name. I answered the call, thinking it may be a friend of one my children. I said, "Hello," but heard no reply. Then I heard a man say,
"Hello?" I answered and then he said, "We have a bad connection, let me call you right back." I still had no idea who this person was, so I continued to guess it was personal call.
The phone rang again and the man was talking to somebody else. Then he started talking to me. It turns out he was a real estate agent. A couple of years ago, my wife and I tried unsuccessfully to sell our home because a house we really wanted was on the market at a tremendous discount. The opportunity passed and we have no interest in moving now. But this agent had seen our named from the unsold listing and was calling to see if we were still interested in putting our house on the market. I told him, "No," and ended the call.
Afterward, I though to myself, "What a schmuck. Why would I want to deal with that guy if I was in the market?" Phone skills are so critical to sales, yet many people seem to lack them. Make sure your staff has them.
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| Written by Ted Craig, on 08-25-2010 06:50 AM |
Existing-home sales fell to their lowest level in decades last month, but National Association of Realtors economist Lawrence Yun tells us "All is well." He says mortgage rates are low, prices are up (a whole 0.7 percent) and distressed home sales are down.
Out here, in a place I like to call the real world, the worst is far from over. The biggest issue is what I call "the phantom menace." In 2008, a pair of houses on my street went up for sale. Neither was motivated by a job relocation, so neither owner had to sell. And they didn't. Both took their houses off the market. One of the owners put it back on the market earlier this year and again seems to have retreated. The other put up a "For Sale" sign last month, but I saw no cars other than his agent's at a recent open house. There are as many discouraged home owners out there as discouraged workers.
I'm also surprsed by so-called "experts" (like Felix "Fishhead" Salmon) who are surprised that low interest rates aren't causing people to buy. People in this real world place I'm talking about buy for two reasons - they get a new job in a new city (that ain't happening) or they have the confidence to move up (again, not happening). Mortgage rates are meaningless. Home sales peaked in 2005, when interest rates were climbing steadily.
Again, the key to everything is jobs.
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