L. Neil Smith's
THE LIBERTARIAN ENTERPRISE
Number 265, April 4, 2004
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My innaugural article for NetPlanetNets will be typical of my future columns: a focus on real-world economics and how it impacts your financial and personal security. There are lots of people out there who can teach you basic economics, and even more who will mislead you with plainly boneheaded thinking (often self-serving). This isn't that kind of newspaper, and I'm not that kind of author. I'm going to give you news, analysis, insights, and strategies on economics that will help you take charge of your career, your life, your business, and your economic futureor least give you ideas that you can put to good use.
I bring you this information as someone who has studied Economics, but has a degree in Business Administration. Having been a corporate employee, a small business owner (going on 6 years now of success), an employer, a member of a number of Board of Directors, and most importantly a family man and husband, I can bring a certain sense of "what's real" to the table. This doesn't mean I am always right, but I do promise to check my facts and premises before presenting information to you. There. What other author gives you that kind of warranty?
For example, there is this little tidbit: buried under the avalanche of news, half-truths, scandals, and miscellaneous side-show bread and circus items, you may have missed Paul Krugman's expose on the Bush Administration's wildly optimistic (read: "guesswork") forecasts for job growth. I'll cut right to the chase here: there is none. But I'll give you a bigger clue: so what?
Krugman points out that every forecast by the Bush Administration on jobs creation has been not only wrong, but wildy incorrect. The following table shows this clearly:
[I didn't get that tableMr. Ed]
Table courtesy of The New York Times, from data produced with your tax dollars. Sources: Bureau of Labor Statistics; Economic Reports of the President, 2002, 2003 and 2004.
Now here's the truth: so what? First of all, you didn't need a bigtime Economist like Paul Krugman to tell you what you already knew: this "recovery" is not creating jobs like previous recoveries have, and in fact its unlikely that major employers will be hiring Americans in droves in the near future. Why not? Because of four important factors:
1. Corporate America has outsourced a huge number of professional jobs. From Engineers to Accountants, the only positions not outsourced these days seem to be Executive Office positions. Its a world economy.
2. NAFTA. The giant sucking sound of H. Ross Perot has taken root, and manufacturing jobs are not being create in the USA. Its a world economy.
3. Taxes and regulations. American business has a large number of disincentives to hire Americans, including oppressive taxation, regulation, hiring and firing regulations. Its not only expensive to hire an American, that American often thinks they are entitled to all sorts of freebies and benefitsand often, Gooferment insists upon it. Its a world economy.
4. Now here's the big news: Corporate America hasn't been the engine of job creation for some time. "Small business" is a term that also includes, "people blown out of corporations who have decided to start their own business." Its a world economy, and the world includes small business.
There are signs that Corporate America is prepared to do more hiring. Are you prepared to get back on the treadmill? Are you ready to again buy into the idea that there is any security in working for a big company? No? Good.
The best thing you can possibly do is start a small business and focus on creating goods and/or services that people will exchange little green slips of paper for. Those Federal Reserve Notes (FRN's) aren't worth what they used to be, but until you can buy groceries at your local supermarket with e-gold, hard-gold, or indexed futures, its what is available right now as a medium of exchange. And that's the secret: finding out what someone is willing to buy, and providing it to them for less than it cost you to make or acquire it.
In my next column, I'll identify a few new businesses that I believe have "legs" (that is to say, have a real market, with real paying customers, and can provide you with real cash flow). In the meantime, check the want-ads, Usenet job postings, and the Web, but don't forget to ask your friends and neighbors, "hey, what do you do for a living?" You might be surprised at what you learn.
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