It Is basically a second stimulus, though no one wants to call it that. On December 8th President Barack Obama announced a set of proposals to address unemployment and made it clear that he wanted to use some of the unspent TARP funds (money set aside to support failing banks) to help pay for them. No precise figure was given. Some $50 billion will be spent on infrastructure projects; there will also be new rebates for home insulation and other energy-saving incentives. But the linchpin of the administration’s effort is a broad push to support small businesses.

That sounds reasonable. Small businesses (firms employing 500 workers or fewer) have accounted for 64% of net new job creation over the past 15 years, according to the Small Business Administration (SBA), an independent government agency. And a recent economic study found that cities with more small firms have done better at creating jobs over the past 20 years. But America’s most recent recession has hit small businesses hard. The very small, with fewer than 50 workers””employing almost one-third of working Americans””have suffered around 45% of the job losses of the downturn.

Unfortunately, helping small businesses has not proved easy.

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MR. GREGORY: Governor Romney, why is it that companies are not investing, that they’re not hiring?

FMR. GOV. MITT ROMNEY (R-MA): Well, companies are going to hire if there’s additional purchases that require them to, to staff up and to beef up and to start their production lines. People have to be buying things. And unfortunately, what the president created with this $780-plus billion stimulus plan was something which grew government but did not grow the private economy. In fact, in some respects, the, the work that’s been done by The Washington Post recently points that out. It shows that there’s, there’s 10 times as much spending per person in the Washington, D.C., area as there is in the nation at large. This is not going to be a jobless recovery. The economy will come back, the private sector will grow again. But it has been a jobless stimulus. And, and that’s unfortunate, because the president had an opportunity to focus on the economy, to create jobs; but instead, Nancy Pelosi and Harry Reid created something that, that stimulated government.

MR. GREGORY: You know, it’s interesting. I mean, some people would, would hear that and say that’s a partisan view, Jim Cramer. But the reality is that there are people who say, “Well, what if you got this stimulus to take effect sooner, you got more than 20 percent of the money actually paid out?” The president this week said that Republicans seem to be rooting for failure; and yet, it was Republicans who, at the outset of the stimulus debate, said, “What about a payroll tax holiday? Let’s do something to prime the economy faster.”

MR. JIM CRAMER: I don’t think that–when I talk to CEOs, and I talk to dozens of them for my show, no one has seen it. I keep asking, “Where’s the money? Have you seen any money coming from Washington?” Even companies that are involved with road building, the most elementary aspect of any sort of stimulus, are saying, “No, this is the first quarter that we may have seen a trickle.” So I agree with you, David, this–the stimulus is not helping create jobs. And that’s not Republican or Democrat. I just don’t see anything beyond municipal and state worker compensation.

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Farmers and ranchers use futures contracts as a hedge against price fluctuations, as do elevators that buy and sell grain.

Bethany Shively, spokeswoman for the National Cattlemen’s Beef Association, said such a tax would impact a producer’s effort to stay in business by buying and selling futures.

“Any additional taxes or fees on these instruments would be a tax on ag producers, and that is unacceptable,” Shively said. “This type of proposal would put jobs at risk, not help offset their creation.”

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The American model remains an impressive growth engine, even allowing for the debt-fueled bubble. The U.S. economy grew by 63 percent between 1991 and 2009, compared with 35 percent for France, 22 percent for Germany and 16 percent for Japan over the same period. In 1975, the U.S. accounted for 26.3 percent of world G.D.P. Today, after the rise of the Asian tigers, the U.S. actually accounts for a slightly higher share of world output: 26.7 percent.

The U.S. has its problems, but Americans would be crazy to trade their problems with those of any other large nation.

Moreover, there’s a straightforward way to revive innovation. In an unfairly neglected white paper on the subject, President Obama’s National Economic Council argued that the U.S. should not be in the industrial policy business. Governments that try to pick winners “too often end up wasting resources and stifling rather than promoting innovation.” But there are several things the government can do to improve the economic ecology. If you begin with that framework, you can quickly come up with a bipartisan innovation agenda.

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U.S. job losses in November posted the smallest drop since the start of the recession and the unemployment rate unexpectedly declined, a sign the labor market is finally healing as the economy recovers.

Nonfarm payrolls fell by just 11,000 last month, slowing down from a downwardly revised 111,000 drop seen in October, as the recovery encouraged some companies to retain workers, the Labor Department said Friday.

It was the best showing since December 2007, when the recession began and payrolls had risen by 120,000. Economists surveyed by Dow Jones Newswires had expected a payroll decrease of 125,000.

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Treasury Secretary Timothy Geithner said any tax on financial transactions would have to be designed to ensure taxpayers don’t ultimately bear the burden, criteria he said no current plan meets.

“I have not seen the version of that that I think works,” Geithner said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend. “Otherwise people would have done this a long time ago.”

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Obama can’t be fairly blamed for most job losses, which stemmed from a crisis predating his election. But he has made a bad situation somewhat worse. His unwillingness to advance trade agreements (notably, with Colombia and South Korea) has hurt exports. The hostility to oil and gas drilling penalizes one source of domestic investment spending. More important, the decision to press controversial proposals (health care, climate change) was bound to increase uncertainty and undermine confidence. Some firms are postponing spending projects “until there is more clarity,” Zandi notes. Others are put off by anti-business rhetoric. The recovery’s vigor will determine whether unemployment declines rapidly or stays stubbornly high, and the recovery’s vigor depends heavily on private business. Obama declines to recognize conflicts among goals. Choices were made — and jobs weren’t always Job One.

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Americans need to know how the administration plans to reduce a 10.2 percent unemployment rate ”” a 26-year high and rising. They need to know how the government will foster hiring and help replace the eight million jobs eliminated so far in two years of recession. Economic growth alone cannot repair damage that severe.

First, President Obama must change the terms of the debate. When he announced the job meeting last month, Mr. Obama said he was determined to meet the “great challenge” of unemployment. In the next breath, he tried to dampen expectations, warning of the “limits to what government can do and should do.” He said he was open to “responsible” and “demonstrably good” ideas to create jobs. It would be tragic if that pre-empts bold ones.

Mr. Obama’s mixed message in the teeth of a crisis seems intended to appease Republicans and conservative Democrats who argue that federal budget deficits preclude more aid to combat rising unemployment. The argument is wrong, and giving it credence puts politics ahead of Americans’ needs.

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Push play–powerful and painful.

Three House Democrats are ripping a proposed tax on stock transactions, even as the idea gains traction among Democrats desperate to fund jobs creation….

“Proponents of a transaction tax argue that a small 0.25 percent tax on stocks would be paid for by the highly paid financial traders and would not affect most Americans. This is simply not true. A tax on stock transactions would affect every single person who owns and invests in stocks from small business owners to senior citizens,” the letter said.

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Roughly half a million adults in South Carolina are unemployed, underemployed or have given up looking.

That is nearly 1 in 4 eligible workers in the state. And the months ahead look grim to John Rainey, South Carolina’s chief economic forecaster.

“I don’t feel hopeless, but it’s hard to feel hopeful,” Rainey said. He is chairman of the state Board of Economic Advisors, which tracks tax collections and unemployment filings and sets revenue forecasts for government spending.

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For a political horror show, fast-forward to the summer of 2010: The unemployment rate is stubbornly high, hovering between 9.3 and 9.7 percent. Companies are wary about hiring more workers because the economy remains soft. Small businesses, which normally power a recovery, are caught in a credit squeeze.

In this scenario, the jobs outlook will remain bleak for another year. The unemployment rate will remain well above 8 percent in 2011. And the economy won’t bounce back completely for five years after that.

The Democrats, in our scary 2010 movie, will be heading toward the midterm elections hoping to preserve their 81-seat margin in the House. Vulnerable incumbents will be clamoring for more economic stimulus, but the Obama administration will be constrained by the huge budget deficits needed to bail out the economy after the 2008 financial crisis.

I wish that this economic forecast were just a bad dream after too much Thanksgiving turkey. But it’s drawn from the minutes of the Federal Reserve’s Nov. 3-4 meeting, released last week.

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A House bill still being drafted aims to raise $150 billion each year to pay for new jobs.

Under a bill being drafted by Democratic Reps. Peter DeFazio (Ore.) and Ed Perlmutter (Colo.), the sale and purchase of financial instruments such as stocks, options, derivatives and futures would face a 0.25 percent tax.

The bill, a copy of which was obtained by The Hill, is titled the “Let Wall Street Pay for the Restoration of Main Street Act of 2009.”

Read it all. My response to this horrible idea was posted in earlier comments below:

[The reason this is such a bad idea] has to do with behavioral economics. This kind of a tax changes the playing field as a result of which all sorts of people and participants will change their behavior. ALL of these behavioral changes have to be taken into consideration in order to show the overall tax revenue implications of such a proposal.

If you understand the way markets work, and especially what has happened with the technological and information revolutions since the 1980’s, and that an entire culture and its related multiple additional subcultures have arisen all around the markets as individuals have participated in many ways as never before, then you can see that the collateral damage will be MASSIVE. This MASSIVE change will have significant tax implications which almost all advocates do not even think of, much less mention. The question is the OVERALL tax revenue implications of the proposal given all of the subsequent changes it will cause.

The result will be much less corporate revenue, less individual revenue, job loss, small business loss, website and pay site implications, computer, phone and internet implications, and the list gets very long very quickly. All of those additional changes will result in more revenue loss for the government.

This has nothing to do with supply side economics, John, nor with taxes in general or people paying their fair share. What it does have to do with is the obliteration of the democratization of the markets which has come in new ways in the last few decades.

Samantha Green graduated from Indiana University in May with a $50,000 debt, a degree in journalism and a burning desire to start her career in Chicago.

So far, the only job offers she has gotten are temporary or minimum-wage sales jobs.

“It’s just not something that’s a good fit for me,” says Green, who is doing odd jobs to earn some money.

Her job prospects are so poor that her parents have been helping pay her rent, electric bills and groceries. Now they’re covering her $300 monthly student loan payments, too.

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The White House is lukewarm about proposals by congressional Democrats to introduce broad legislation to create jobs, instead favoring targeted measures that would be less likely to inflate the deficit, administration officials said.

There is as yet no agreement within the White House or in Congress on how to try to curb the U.S. jobless rate. But the differences in opinion suggest that rifts could emerge among Democrats as they wrestle with how to beat back the highest unemployment rate in a generation.

The jobless rate, which hit 10.2% in October, has continued to climb despite the implementation of a $787 billion stimulus package in February.

The subheader for the article is: White House Is Unenthusiastic on Legislation That Would Raise Government Debt. To which I respond–good for them. Read it all.

Human beings all begin their lives in a state of dependence. They need to learn how to speak, how to trust, how to negotiate a world that isn’t always friendly. They need an environment in which the background is secure enough for them to take the necessary risks of learning ”“ where they know that there are some relationships that don’t depend on getting things right, but are just unconditional. The human family as a personal not just a biological unit is the indispensable foundation for all this. And a culture, especially a working culture, that consistently undermines the family is going to be one that leaves everyone more vulnerable and thus more fearful and defensive ”“ potentially violent in some circumstances, or turning the violence inwards in depression in other circumstances. In the last couple of years alone, research has proliferated on the long-term damage done by the absence of emotional security in early childhood and the need for a child’s personal growth to be anchored in the presence of stable adult relationships. The Children’s Society Good Childhood document laid all this out with some force back in February and there is more material being published this autumn in the same area. An atmosphere of anxious and driven adult lives, a casual attitude to adult relationships, and the ways in which some employers continue to reward family-hostile patterns of working will all continue to create more confused, emotionally vulnerable or deprived young people. If we’re looking for new criteria for economic decisions, we might start here and ask about the impact of any such decision on family life and the welfare of the young.

I also mentioned people’s imaginative lives. We are not only dependent creatures, we are also beings who take in more than we can easily process from the world around; we know more than we realise, and that helps us to become self-questioning persons, who are always aware that things could be different. We learn this as children through fantasy and play, we keep it alive as adults through all sorts of ‘unproductive’ activity, from sport to poetry to cookery or dancing or mathematical physics. It is the extra things that make us human; simply meeting what we think are our material needs, making a living, is not uniquely human, just a more complicated version of ants in the anthill.

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Reformer and forefather of much Puritan theology, Martin Luther, in his doctrine of vocation, taught that God gave each individual an occupational “calling.” Man’s vocation was not seen as impersonal and random, but as from a loving and personal God who bestowed each individual with natural talents and desires for a particular occupation. This thought further deepened the Puritan’s sense of purposefulness, fortifying him in difficult times.

Much like modern work is separated into white and blue collar, 17th-century tradition held that sacred occupations (like priest or monk) trumped secular ones (like farming or blacksmithing). The Puritans, however, rejected such a distinction. Holding to “Whatever your hand finds to do, do it with your might” (Ecclesiastes 9:10), the Puritans sanctified the common, believing that all work, however lowly, if done for the glory of God, was good. Christ Himself “was not ashamed to labor; yea, and to use so simple an occupation,” said Puritan Hugh Latimer. The farmer’s plow became his altar, his tilling an act of service to God every bit as holy and valuable as the priest’s, reminding the unemployed that temporarily taking a step down in pay or status does not equate to failure.
Long before the days of therapists and career coaches, the Puritans learned how to cope with depression. They scorned idleness, believing it was indeed the devil’s workshop, bogging down the body in inertia, and leading to brooding. Luther had promoted the opposite, a life of diligence, saying “God . . . does not want me to sit at home, to loaf, to commit matters to God, and to wait till a fried chicken flies into my mouth.” Long before endorphins were discovered, the Puritans knew that moving and tiring the body in manual labor (even if that labor is the unpaid kind that paints the house and organizes the garage) proved a talisman against a host of mental ills.

Contrary to the misconstrued Victorian concept of ‘Puritanism,’ an idea C.S. Lewis calls “the haunting fear that someone, somewhere, may be happy,” the original Puritans, serious as they were, embraced not only hard work, but the pursuit of joy.

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The country’s spiraling unemployment rate is taking a particular toll on men as the recession continues to roil male-dominated industries, such as manufacturing and construction.

This “he-cession,” as it’s sometimes called, has hit African-American men especially hard, increasing their unemployment rate to more than 17 percent last month.

One of those unemployed black men searching for work is Randolph Smith. When Smith, 53, is working, he manages logistics, inventory and supplies for large companies. He’s been trying to find that type of work since he was laid off a year ago ”” but so far, he’s had no success.

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House Speaker Nancy Pelosi on Thursday played down the possibility of using a stock trade tax to fund jobs legislation, saying it should only be done in conjunction with other countries.

“It would have to be an international rule,” Pelosi (D-Calif.) said at her weekly news conference. She said that she did not want to see trading action move to other countries to avoid such a tax.

She noted, “Other nations have proposed this, and we have been the ones who resisted.” But global consensus would be difficult, if not impossible, to reach by Dec. 18, when House leaders want to finish their job-creation bill.

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Kimberly Martinez has a history of finding success in disaster. After she lost her job in 2002, she and her sister-in-law capitalized on the post-9/11 security craze to launch a business called Bonitas International, which sells ID badge jewelry. People snapped up the fancy BooJeeBeads lanyards, and revenue rose fast, hitting $2 million in 2008. Headcount reached 13 people.

Then the recent recession hit hard. In late 2008, Martinez realized that ”” amid widespread layoffs and reduced hours ”” she was providing the lone full-time paycheck in 70% of her Ohio-based employees’ homes. That would be OK if business were thriving, but in January 2009, orders sank 50% from the year before.

Faced with such a crisis, many people would have cut staff. But not Martinez. She doubled down. She hired someone to track cash flow. She hired a marketing team to find new outlets for her wares. Now, thanks to their efforts, business is on track to grow in 2010 and, thanks to her decision, five more Americans have jobs. “Creating a job feels like winning,” she says.

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Here is one:

To the Editor:

The American Small Business League is concerned that the Obama administration is doing nothing of major significance to aid our country’s 27 million small businesses, or to create jobs.

In August, we conducted an analysis of the government’s small-business contracting data for the fiscal year 2008. We found 60 large corporations in the top 100 recipients of small-business contracts. Also, scores of Fortune 500 firms were counted toward the government’s goal.

As a senator in February 2008, Barack Obama said it was time to end these abuses, yet he has not taken any action to honor his words.

President Obama should support H.R. 2568, the Fairness and Transparency in Contracting Act of 2009. It would redirect approximately $100 billion a year in federal infrastructure spending back to the middle-class economy, saving thousands of businesses and countless jobs.

Lloyd Chapman

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It was disheartening to hear the recent statistics showing payrolls fell by 190,000 workers last month and the U.S. unemployment rate climbed to 10.2 percent. These numbers have been creeping up for some time now, and families nationwide are hurting from lost jobs, lost benefits, and lost sense of self. There had to be something different – something better – that could be done.

Though we knew we weren’t the first to tackle this challenge, we decided to use the skills we had – researching. One program in particular stuck out – work sharing. Simply put, work sharing is mutually beneficial to both employers and employees – a win/win situation. Employers reduce workers’ weekly hours and pay, and the workers collect unemployment from the state in lieu of being laid off.

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Update: Mark Zandi’s piece on this important subject is here and includes the following:

Still, the recovery remains fragile. No doubt, there will be moments in the coming months when the economy appears liable to falter again. In order to ensure that today’s tentative recovery becomes a lasting expansion, the government must now make it a priority to deal with employment ”” particularly among small businesses.

Faith-at-work movements have been popular at least since the 1857 businessmen’s revival in New York City, in which noon-hour prayer meetings were so full of the city’s professionals that many businesses closed during the gatherings. But churches have typically kept business people at a distance, needing their money but questioning their spiritual depth. With the business as mission movement, that has changed. In 2004, the Lausanne Committee for World Evangelism, founded by Billy Graham, featured a track on business as mission. At a recent missionary conference in Hong Kong, Doug Seebeck says mission leaders apologized to the business people present. They had been guilty of asking for their money while keeping them in the foyer of the church, outside of the sanctuary.

Mr. Seebeck is executive director of Partners Worldwide, a Michigan organization that provides mentoring relationships for business owners in the developing world by connecting them with business people in the U.S. Mr. Seebeck was a missionary in Bangladesh and Africa for nearly 20 years, but he saw the limitations of all the good work church people did. Now Mr. Seebeck says, “Business is the greatest hope for the world’s poor.” He sees business profits as consistent with God’s purpose for humans. Profits, unlike activities that are donor dependent, are sustainable. Making a profit, he argues, is a better stewardship of God’s resources than pleading for funds, spending them, and going back for more.

While advanced economies question capitalism, Christians who work in developing countries see how essential business is to provide jobs and health care, build communities and even minister to souls. For these business owners, a desk job overseas has become a full-time ministry.

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While Massachusetts recipients of federal stimulus money collectively report 12,374 jobs saved or created, a Globe review shows that number is wildly exaggerated. Organizations that received stimulus money miscounted jobs, filed erroneous figures, or claimed jobs for work that has not yet started.

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The unemployment rate last month soared above 10% for the first time since the early 1980s, a milestone likely to weigh on consumer confidence and stir new efforts in Washington to spur job creation.

Some 558,000 people joined the ranks of the jobless in October, sending the rate to 10.2% and the tally of officially unemployed Americans to 15.7 million, the Labor Department said. The 10% figure could overshadow last week’s news that the economy began growing again this summer after a long contraction.

“Ten percent is a terribly important number,” Democratic pollster Peter Hart said. “It is not only the 10.2% of the people who are unemployed, it is the number of people who are reliant on that 10%. It’s probably the other 20% who say, ‘I’m worried, I’m uncertain, I’m afraid about this, I worry about my job.'”

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The President and his economic team have claimed that the plan is working as intended, that they’re on track to save the original goal of 3.6 million jobs, but somehow, despite practically drowning in success, we’re going to have to live with high unemployment for years to come. Oh, and that everything is still Bush’s fault.

These claims have been debunked by a variety of sources, including the AP (and here), the Chicago Tribune, the Denver Post, USA Today, the Wall Street Journal, and blogs such as Political Math (H/T d3ft punk).

But forget the quantitative treatment for a moment and consider what the Obama team’s graph said on a qualitative level. The graph says that within a couple of quarters, the stimulus package will stop the increase in unemployment and reverse the employment trend. That was the real mission of the stimulus. Stop job loss. Get the private sector hiring again.

So no matter how convoluted and fanciful the “jobs created or saved” numbers get, we just have to remember what the point used to be, and realize how far short we’ve fallen. And whose fault that really is.

Read it all and look carefully at those graphs.

The American unemployment rate surged to 10.2 percent in October, its highest level in 26 years, as the economy lost another 190,000 jobs, the Labor Department reported Friday.

The jump into the realm of double-digit joblessness ”” from 9.8 percent in September ”” provided a sobering reminder that, despite the apparent end of the Great Recession, economic expansion has yet to translate into jobs, leaving tens of millions of people still struggling.

“The guy on the street is going to ask, ”˜What recovery?’ ” said Stuart G. Hoffman, chief economist at the PNC Financial Services Group in Pittsburgh. “The job market is still in reverse.”

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The Hypertherm factory sits hidden in the woods not far from Dartmouth College in Hanover, N.H….

…late last year, production of ships and cars pretty much ground to a halt. And sales of cutting systems at Hypertherm dropped 50 percent.

How many workers did the company lay off? None.

It put them to work doing other things. While layoffs remain a reality in this economy, a few firms ”” as a matter of policy ”” refuse to lay off a single employee.

Caught this one on the morning run via podcast. Inspiring outside the box thinking. Read or listen to it all–KSH.

What does all of this mean?

Populism is on the rise and conservatism is gaining steam, perhaps at its own expense. (If Hoffman loses in New York, it almost ensures that the Northeast will be almost exclusively Democrat-blue territory).

A sour mood exists among people, with close-to-10-percent unemployment, decreasing health-care benefits and rising taxes – and a view that the well-heeled get bailed-out but John and Joan Q. Citizen do not.

Because our political system was designed to be slow and laborious and to do little, that sour mood grows rather than dissipates.

These political conditions have made the difficult course of lawmaking become nearly impossible, and governing has become highly averse to coherent action.

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