Hiring does require risk taking

[MaggieMae]

John Boehner made the argument yesterday that companies weren't hiring because of the uncertain future. Paraphrasing, he put it this way:

--How will new regulations on businesses affect the cost of doing business?

--How will the cost of a new health care initiative affect the cost of doing business?

--How will a new energy plan (particularly cap & trade) affect the cost of doing business?

But doesn't business always take into consideration risk factors? Nothing ever stays the same. Can anyone predict, ever, that every business in America will survive even under the best of circumstances? Profits are needed to sustain a profit margain AND to cushion the blow if there are future downturns. When did the private sector ever hold back from taking risks in order to generate profit?

Boehner is just blowing smoke, as usual, to score political points. The PROBLEM with the rising unemployment TODAY, the reason businesses aren't hiring, is because they are unable to enew their myriad methods for maintaining cash flow, part of which, in addition to profits, is available credit to buy the products they need to keep their businesses afloat.

And that problem can still be laid directly at the feet of the giant investment "banks" like Goldman Sachs and Bank of America who continue to be tight fisted with their lending practices to the smaller community banks which the private sector relies upon for credit. The Big Banks like BofA are rushing to pay off their TARP loans because they don't want re-regulation of their operations. That tells me that they're still trying to hide something,

Let's also be realistic about what the future job market will look like.

--Many of those who are now jobless will never get those same jobs back. Layoffs that have occurred by small businesses and factories barely holding on by continuing to produce soon-to-be obsolete products have gone out of business for good. Retraining of those employees will be required directed toward the jobs of the future.

--There are only so many technical and management opportunities available, and new and recent grads will continue to be looking for work until a new work environment begins to take place. And that can only happen by large investments in the future of those entrepreneuring ventures and joint ventures who TAKE THE RISKS involved in establishing new, modern, upgraded businesses adaptable to the needs of the 21st Century.

 

[Maple]

John Boehner made the argument yesterday that companies weren't hiring because of the uncertain future. Paraphrasing, he put it this way:

--How will new regulations on businesses affect the cost of doing business?

--How will the cost of a new health care initiative affect the cost of doing business?

--How will a new energy plan (particularly cap & trade) affect the cost of doing business?

But doesn't business always take into consideration risk factors? Nothing ever stays the same. Can anyone predict, ever, that every business in America will survive even under the best of circumstances? Profits are needed to sustain a profit margain AND to cushion the blow if there are future downturns. When did the private sector ever hold back from taking risks in order to generate profit?

Boehner is just blowing smoke, as usual, to score political points. The PROBLEM with the rising unemployment TODAY, the reason businesses aren't hiring, is because they are unable to enew their myriad methods for maintaining cash flow, part of which, in addition to profits, is available credit to buy the products they need to keep their businesses afloat.

And that problem can still be laid directly at the feet of the giant investment "banks" like Goldman Sachs and Bank of America who continue to be tight fisted with their lending practices to the smaller community banks which the private sector relies upon for credit. The Big Banks like BofA are rushing to pay off their TARP loans because they don't want re-regulation of their operations. That tells me that they're still trying to hide something,

Let's also be realistic about what the future job market will look like.

--Many of those who are now jobless will never get those same jobs back. Layoffs that have occurred by small businesses and factories barely holding on by continuing to produce soon-to-be obsolete products have gone out of business for good. Retraining of those employees will be required directed toward the jobs of the future.

--There are only so many technical and management opportunities available, and new and recent grads will continue to be looking for work until a new work environment begins to take place. And that can only happen by large investments in the future of those entrepreneuring ventures and joint ventures who TAKE THE RISKS involved in establishing new, modern, upgraded businesses adaptable to the needs of the 21st Century.

Yes, Business take risks but they are also able to manage those risks, with the health care proposal and the Cap and Trade they are uncertain about the risks. With uncertainty comes fear, and fear slams the breaks on expansion and job growth.

 

[Truthmatters]

There needs to be regulations put in place to replace Glass Steagal and to force the banks to lend again.

If they refuse to act as banks and start lending money then they need to be chopped up and regulated into intities that will loan money.

 

[MaggieMae]

John Boehner made the argument yesterday that companies weren't hiring because of the uncertain future. Paraphrasing, he put it this way:

--How will new regulations on businesses affect the cost of doing business?

--How will the cost of a new health care initiative affect the cost of doing business?

--How will a new energy plan (particularly cap & trade) affect the cost of doing business?

But doesn't business always take into consideration risk factors? Nothing ever stays the same. Can anyone predict, ever, that every business in America will survive even under the best of circumstances? Profits are needed to sustain a profit margain AND to cushion the blow if there are future downturns. When did the private sector ever hold back from taking risks in order to generate profit?

Boehner is just blowing smoke, as usual, to score political points. The PROBLEM with the rising unemployment TODAY, the reason businesses aren't hiring, is because they are unable to enew their myriad methods for maintaining cash flow, part of which, in addition to profits, is available credit to buy the products they need to keep their businesses afloat.

And that problem can still be laid directly at the feet of the giant investment "banks" like Goldman Sachs and Bank of America who continue to be tight fisted with their lending practices to the smaller community banks which the private sector relies upon for credit. The Big Banks like BofA are rushing to pay off their TARP loans because they don't want re-regulation of their operations. That tells me that they're still trying to hide something,

Let's also be realistic about what the future job market will look like.

--Many of those who are now jobless will never get those same jobs back. Layoffs that have occurred by small businesses and factories barely holding on by continuing to produce soon-to-be obsolete products have gone out of business for good. Retraining of those employees will be required directed toward the jobs of the future.

--There are only so many technical and management opportunities available, and new and recent grads will continue to be looking for work until a new work environment begins to take place. And that can only happen by large investments in the future of those entrepreneuring ventures and joint ventures who TAKE THE RISKS involved in establishing new, modern, upgraded businesses adaptable to the needs of the 21st Century.

Yes, Business take risks but they are also able to manage those risks, with the health care proposal and the Cap and Trade they are uncertain about the risks. With uncertainty comes fear, and fear slams the breaks on expansion and job growth.

How do you "manage" a risk unless you've got the resources to accommodate those risks?

 

[uscitizen]

Why hire more people to make things no one will be buying?

 

[MaggieMae]

There needs to be regulations put in place to replace Glass Steagal and to force the banks to lend again.

If they refuse to act as banks and start lending money then they need to be chopped up and regulated into intities that will loan money.

Exactly. There needs to be a clear set of rules between investment banks (which take risks with Wall Street investors money) and community banks that serve the public interest. The problem was that when the investment houses suddenly realized their assets were worthless, they then passed the memo to real banks that, sorry, we thought we had that much money to re-invest in you, but turns out we didn't, so good luck with that on your end. And the ripple effect has of course been disastrous.

 

[MaggieMae]

Why hire more people to make things no one will be buying?

That's why ultimately there will be a clean slate. Out with the old, in with the new.

 

[code1211]

There needs to be regulations put in place to replace Glass Steagal and to force the banks to lend again.

If they refuse to act as banks and start lending money then they need to be chopped up and regulated into intities that will loan money.

Don't want to be a downer here, but, if we assume that the credit business and their lending practices had allot to do with this, it would seem logical that if we wish to avoid a relapse into the days when we were at the

{{{{{{{{{{{{JARRING CHORD}}}}}}}}}}}}}}}}}

Brink of the Abyss,

lending practices should be tightened up so that people who can actually repay the loans are the ones that are getting the loans.

"Sub prime" did not refer to the rate of interest, it refered to the nature of the burrower.

Now, since politicians must have a "them" for them to act as if they are protecting "us", the credit industry was bad when it gave loans to destroy the economy and now they are bad when they don't give loans. The important thing to have when constructing an "us vs. them" mentality is an available "them".

People like Charlie Rangle, Owner of 4 mansion residences around the world presumably financed on the income of a public servant, rails against the lending industry whenever he gets the chance as either being irresponsible or unfairly restrictive. Either way, he is on the side of US against THEM. Always he is a disingenuous thief trying to figure out how to get the next pay off to buy another mansion.

Who is the real villain in this?

 

[MaggieMae]

There needs to be regulations put in place to replace Glass Steagal and to force the banks to lend again.

If they refuse to act as banks and start lending money then they need to be chopped up and regulated into intities that will loan money.

Don't want to be a downer here, but, if we assume that the credit business and their lending practices had allot to do with this, it would seem logical that if we wish to avoid a relapse into the days when we were at the

{{{{{{{{{{{{JARRING CHORD}}}}}}}}}}}}}}}}}

Brink of the Abyss,

lending practices should be tightened up so that people who can actually repay the loans are the ones that are getting the loans.

"Sub prime" did not refer to the rate of interest, it refered to the nature of the burrower.

Now, since politicians must have a "them" for them to act as if they are protecting "us", the credit industry was bad when it gave loans to destroy the economy and now they are bad when they don't give loans. The important thing to have when constructing an "us vs. them" mentality is an available "them".

People like Charlie Rangle, Owner of 4 mansion residences around the world presumably financed on the income of a public servant, rails against the lending industry whenever he gets the chance as either being irresponsible or unfairly restrictive. Either way, he is on the side of US against THEM. Always he is a disingenuous thief trying to figure out how to get the next pay off to buy another mansion.

Who is the real villain in this?

The "villians" are all over the place. We became a greedy society, believing we could have it all and never have to pay it back. Maybe the question should be "Who are the vultures who knew this all along and decided to play old-fashioned bait and switch on an ignorant public?"

 

[code1211]

There needs to be regulations put in place to replace Glass Steagal and to force the banks to lend again.

If they refuse to act as banks and start lending money then they need to be chopped up and regulated into intities that will loan money.

Don't want to be a downer here, but, if we assume that the credit business and their lending practices had allot to do with this, it would seem logical that if we wish to avoid a relapse into the days when we were at the

{{{{{{{{{{{{JARRING CHORD}}}}}}}}}}}}}}}}}

Brink of the Abyss,

lending practices should be tightened up so that people who can actually repay the loans are the ones that are getting the loans.

"Sub prime" did not refer to the rate of interest, it refered to the nature of the burrower.

Now, since politicians must have a "them" for them to act as if they are protecting "us", the credit industry was bad when it gave loans to destroy the economy and now they are bad when they don't give loans. The important thing to have when constructing an "us vs. them" mentality is an available "them".

People like Charlie Rangle, Owner of 4 mansion residences around the world presumably financed on the income of a public servant, rails against the lending industry whenever he gets the chance as either being irresponsible or unfairly restrictive. Either way, he is on the side of US against THEM. Always he is a disingenuous thief trying to figure out how to get the next pay off to buy another mansion.

Who is the real villain in this?

The "villians" are all over the place. We became a greedy society, believing we could have it all and never have to pay it back. Maybe the question should be "Who are the vultures who knew this all along and decided to play old-fashioned bait and switch on an ignorant public?"

Whoa there, big fellow!

When I was growing up, my parents constantly were preaching responsibility and the belief that if something seemed to good to be true, then it was probably not true.

WC Fields made a movie called "You Can't Cheat an Honest Man". People were gaming the system and were trying to get something for nothing. The lenders were working within the law and the laws were made by our legislators who got sweetheart deals from the lenders. The holier than thou Chris Dodd chief among these.

"The ignorant public" truly is ignorant, but even the most dense had to know that they could not afford a loan that they could not repay. The ignorant public was the not the "Honest Man" from the Fields movie. They were gaming the system as much as the lenders were. As such, it was easy to cheat them.

The loan originators were employed to rob the banks and the folks getting the loans were at least as guilty as the getaway car driver. They didn't plan the heist, but they knowingly intended to profit from it.

 

[MaggieMae]

Don't want to be a downer here, but, if we assume that the credit business and their lending practices had allot to do with this, it would seem logical that if we wish to avoid a relapse into the days when we were at the

{{{{{{{{{{{{JARRING CHORD}}}}}}}}}}}}}}}}}

Brink of the Abyss,

lending practices should be tightened up so that people who can actually repay the loans are the ones that are getting the loans.

"Sub prime" did not refer to the rate of interest, it refered to the nature of the burrower.

Now, since politicians must have a "them" for them to act as if they are protecting "us", the credit industry was bad when it gave loans to destroy the economy and now they are bad when they don't give loans. The important thing to have when constructing an "us vs. them" mentality is an available "them".

People like Charlie Rangle, Owner of 4 mansion residences around the world presumably financed on the income of a public servant, rails against the lending industry whenever he gets the chance as either being irresponsible or unfairly restrictive. Either way, he is on the side of US against THEM. Always he is a disingenuous thief trying to figure out how to get the next pay off to buy another mansion.

Who is the real villain in this?

The "villians" are all over the place. We became a greedy society, believing we could have it all and never have to pay it back. Maybe the question should be "Who are the vultures who knew this all along and decided to play old-fashioned bait and switch on an ignorant public?"

Whoa there, big fellow!

When I was growing up, my parents constantly were preaching responsibility and the belief that if something seemed to good to be true, then it was probably not true.

WC Fields made a movie called "You Can't Cheat an Honest Man". People were gaming the system and were trying to get something for nothing. The lenders were working within the law and the laws were made by our legislators who got sweetheart deals from the lenders. The holier than thou Chris Dodd chief among these.

"The ignorant public" truly is ignorant, but even the most dense had to know that they could not afford a loan that they could not repay. The ignorant public was the not the "Honest Man" from the Fields movie. They were gaming the system as much as the lenders were. As such, it was easy to cheat them.

The loan originators were employed to rob the banks and the folks getting the loans were at least as guilty as the getaway car driver. They didn't plan the heist, but they knowingly intended to profit from it.

When personal credit practically came begging at our doorsteps, even given to those with BAD credit histories, people got swept up in this faux feeling of wealth. Don't deny it. Maybe YOU didn't, but you were the exception. I had the same lessons as you when I was growing up, but that didn't stop me from thinking it was "such a deal" when I could use a new credit card with zero interest for a year to pay off two credit cards carrying 11%. Of course always thinking during that year, I'd just pay off the zero-interest card. Sure sure. The whole constant process became almost hypnotic.

 

[eagleseven]

And that can only happen by large investments in the future of those entrepreneuring ventures and joint ventures who TAKE THE RISKS involved in establishing new, modern, upgraded businesses adaptable to the needs of the 21st Century.

John Boehner is right.

There aren't a lack of people willing to take risks in America, and we're still the richest country in the world. The problem is, nobody can accurately judge risk right now. With government changing all the rules, for relatively arbitrary reasons, how can I judge risk? How do I know, 6 months from now, that I won't need to pay extra taxes, or that I'll pass all the new environmental regulations? I cannot, until those regulations are passed. Obama's indecisiveness is hurting us all.

*****

I'll give you an example. Say I'm a young biomedical engineer, and I have an idea for a device that cheaply diagnoses breast cancer. Before I can even ask for a loan to develop and manufacture my device, I need to demonstrate that there will be a market for my device.

Problem: Who will I be selling my revolutionary device to? Will I be selling it to Obama's new healthcare administration? Will I be selling it to private HMOs? Individual clinics? What organization will have the money to afford this device? Will I need the approval of some government review board in Obama's healthcare plan?

What if I spend $10 million developing my device, only to discover in 12 months, that my device breaks the newly-passed regulations? I'd be ruined! I need to be reasonably confident that I can legally bring this product to market.

To figure this out, I'll have to start reading the 2000+ pages of the House healthcare bill. Thing is, there are three different bills, and they are all being modified in the Senate. Who knows what, if any bill, will finally be passed? Since I have no idea who will be buying my device in six months, I cannot demonstrate a market, so no banks or venture capitalists would give me money.

As a result of the healthcare legislative mess, rather than starting a new Biotechnology company and hiring 10-15 engineers plus support staff, I'm stuck doing minimum-wage work, waiting for Obama and his Congress to make up their goddamn minds. I'm stuck, despite the fact that America has the largest venture capitalist industry in the world!


Understand, Maggie?

 

[MaggieMae]

In five years from now, I sincerely believe three things will have taken place:
1. Private sector businesses in America will be stronger and healthier, as outdated and stodgy business practices, and habitual over-leveraging, will no longer be standard fare. Like a forest fire, this will clear the old dead brush, and leave the soil fertile for new growth.
2. The federal government will be even more bloated and indebted, and will have learned the only lesson it's capable of learning: regulate and spend your way out of it.
3. The average citizen will be living closer to within their means, with less debt and more savings.

All I know for certain, however, is that I intend to pay off my mortgages and live off of rental income, and paying as few taxes as humanly possible to pay for wars and economic initiatives I didn't support in the first place.

Best of luck dropping your own debts, and getting hired, if you're looking.

Cheers,

Since we'll never live in a perfect world, I always like to see someone who offers a healthy dose of optimism (1 and 3), along with the inevitable pessimism (2).

 

[Soggy in NOLA]

Hiring also assume a propensity for growth. Nothing coming out of this black hole created by this administration in any way is pro-growth. It is intensly anti-growth and makes one wonder is it intentinally anti-capitalism?

 

[MaggieMae]

And that can only happen by large investments in the future of those entrepreneuring ventures and joint ventures who TAKE THE RISKS involved in establishing new, modern, upgraded businesses adaptable to the needs of the 21st Century.

John Boehner is right.

There aren't a lack of people willing to take risks in America, and we're still the richest country in the world. The problem is, nobody can accurately judge risk right now. With government changing all the rules, for relatively arbitrary reasons, how can I judge risk? How do I know, 6 months from now, that I won't need to pay extra taxes, or that I'll pass all the new environmental regulations? I cannot, until those regulations are passed. Obama's indecisiveness is hurting us all.

*****

I'll give you an example. Say I'm a young biomedical engineer, and I have an idea for a device that cheaply diagnoses breast cancer. Before I can even ask for a loan to develop and manufacture my device, I need to demonstrate that there will be a market for my device.

Problem: Who will I be selling my revolutionary device to? Will I be selling it to Obama's new healthcare administration? Will I be selling it to private HMOs? Individual clinics? What organization will have the money to afford this device? Will I need the approval of some government review board in Obama's healthcare plan?

What if I spend $10 million developing my device, only to discover in 12 months, that my device breaks the newly-passed regulations? I'd be ruined! I need to be reasonably confident that I can legally bring this product to market.

To figure this out, I'll have to start reading the 2000+ pages of the House healthcare bill. Thing is, there are three different bills, and they are all being modified in the Senate. Who knows what, if any bill, will finally be passed? Since I have no idea who will be buying my device in six months, I cannot demonstrate a market, so no banks or venture capitalists would give me money.

As a result of the healthcare legislative mess, rather than starting a new Biotechnology company and hiring 10-15 engineers plus support staff, I'm stuck doing minimum-wage work, waiting for Obama and his Congress to make up their goddamn minds. I'm stuck, despite the fact that America has the largest venture capitalist industry in the world!


Understand, Maggie?

I do, but your scenario isn't any different now than it's ever been. You're understandably more nervous in today's economy, as greater minds than ours try to figure out the best way to save it, but as I said risk is risk. If someone has a new invention, there are all sorts of financial and regulatory hoops that need to be considered. It isn't often that folks like the Google Boys can start up an enormously profitable business in garages with just an idea and a few hundred bucks. There is NEVER any guarantee that any new business will succeed and remain successful down the road.

There was a short-lived series on NBC, I think, a couple of months ago called "Shark Tank" where four now-wealthy once-entrepreneurs had cash to invest in new innovations and that point was strongly brought home as they debated among themselves which projects presented by new entrepreneurs were worth THEIR risk. I hope that program returns once all the Christmas stories are finished on all the networks. I learned a lot from it.

 

[The Rabbi]

The OP assumes that since there is always some risk then all levels of risk are equal.
That is obviously untrue. Business can control certain risks, like employee expenses. In this environment risks are unlimited because there is no predicting what this government will do. Anyone involved in manufacturing who produces carbon (that's like everyone) is now at risk for being regulated by government,not as a result of any law passed but by gov't fiat. Who can function in that kind of environment? Who will want to invest capital like that? Better to take it somewhere where risks are controllable, like Singapore.

 

[uscitizen]

The OP assumes that since there is always some risk then all levels of risk are equal.
That is obviously untrue. Business can control certain risks, like employee expenses. In this environment risks are unlimited because there is no predicting what this government will do. Anyone involved in manufacturing who produces carbon (that's like everyone) is now at risk for being regulated by government,not as a result of any law passed but by gov't fiat. Who can function in that kind of environment? Who will want to invest capital like that? Better to take it somewhere where risks are controllable, like Singapore.

America, Love it or leave it.

Just do not expect any help from us after you leave.

 

[MaggieMae]

The OP assumes that since there is always some risk then all levels of risk are equal.
That is obviously untrue. Business can control certain risks, like employee expenses. In this environment risks are unlimited because there is no predicting what this government will do. Anyone involved in manufacturing who produces carbon (that's like everyone) is now at risk for being regulated by government,not as a result of any law passed but by gov't fiat. Who can function in that kind of environment? Who will want to invest capital like that? Better to take it somewhere where risks are controllable, like Singapore.

America, Love it or leave it.

Just do not expect any help from us after you leave.

While China remains politically a Communist country, it is fast becoming capitalistic as well. Signs are everywhere that the Chinese too may more quickly than predicted enter into periods of bubbles and suffer economically as well when they burst. China is gearing up for hosting the massive Expo 2010, the World's Fair which will be held in Shanghai. It has already built a huge new cathedral-esque international airport and the world's fastest train, all ready to whisk tens of thousands of visitors into town, all eager to spend money. If you think the Bejing Olympics were spectacular, apparently we ain't seen nuthin' yet. The Chinese people (at least the upper middle and wealthy) are just now experiencing the greed that overtook America over the last 20 years.

 

[manu1959]

There needs to be regulations put in place to replace Glass Steagal and to force the banks to lend again.

If they refuse to act as banks and start lending money then they need to be chopped up and regulated into intities that will loan money.

i know that worked so well last time when we made banks lend and people bought all those houses.....

 

[eagleseven]

I do, but your scenario isn't any different now than it's ever been. You're understandably more nervous in today's economy, as greater minds than ours try to figure out the best way to save it, but as I said risk is risk.

Would you play Russian Roulette for $$$, if you didn't know how many bullets were in the chamber?

If someone has a new invention, there are all sorts of financial and regulatory hoops that need to be considered. It isn't often that folks like the Google Boys can start up an enormously profitable business in garages with just an idea and a few hundred bucks. There is NEVER any guarantee that any new business will succeed and remain successful down the road.

I am part of my city's Kauffman Center for Entrepreneurship, so I know.

There was a short-lived series on NBC, I think, a couple of months ago called "Shark Tank" where four now-wealthy once-entrepreneurs had cash to invest in new innovations and that point was strongly brought home as they debated among themselves which projects presented by new entrepreneurs were worth THEIR risk. I hope that program returns once all the Christmas stories are finished on all the networks. I learned a lot from it.

As they say, "A mediocre idea well-executed will beat a poorly-executed brilliant idea every time."