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Thursday, December 16, 2010

Obama's Bizarre Meeting

In addition to the CEOs listed in the last post, these people also attended. The CEOs of................
Eli Lilly
And his pal, the billionaire hotel owner from Chicago, Penny Pritzker

The only person I can identify so far that would have even the remotest understanding of the needs of small businesses is John Doerr, the venture capitalist from the Silicon Valley.

The great difficulty we are facing is that our problem is only going to get worse until (or if)the administration discovers the fact that the way out of The Great Recession is to put money into the tills of small businesses. In the last two years, over 400,000 small businesses disappeared. Assume that each owner had nine employees so a total of ten jobs disappeared with each disappearing business and you understand that FOUR MILLION small company jobs have already disappeared. As each small business goes out of business, it creates new people on the unemployment benefit line AND removes more jobs from the economy.

And in April, 2011, over two million American families who escaped the chop this month will be out of unemployment benefits and even more dollars will be lost to the order books of small businesses.

So instead of putting people to work, Obama spends all of his time catering to millionaires and billionaires, and running up the deficit and the national debt. How can any of this be good?

No, wait a minute. There is some good news. In a couple of weeks, we will be seeing the back side of Larry Summers, who I think may well have been the most dangerous person in the world for the last two years.

Remember that Larry's mathematical models of the economy "prove" that if you are unemployed it is because you are lazy. Well, two smart people in the San Francisco Fed came up with a simple test of that idea. They compared the length of time two different groups of people were unemployed; one group had been laid off or lost their jobs in some way, and the other group of people had quit their jobs, or were new entrants in the labor force. The result of their work is that unemployment benefits may increase unemployment by 0.4% to 0.8%, a trivial amount.

Say good bye to Larry everybody, and good riddance.

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