Thursday, July 09, 2009

"Do the Math" and "Where's the Beef?"

Remember Clara Peller from the Wendy’s commercials of thr 1980s. She coined the phrase “Where’s the Beef?” Well this is what we need to be asking our representatives in government. After $5 trillion in bailout money for banks and automotive company our economy remains in recession and unemployment rolls continue to grow. Where are the jobs? There has not been a turnaround. Today's unemployment figures showed the unemployment rolls at record levels highest since 1967. Currently there are 6.88 million Americans out of work and this is only those who are registered as out of work.

Now let's talk about what $5 trillion dollars can do. Five trillion should be able to create millions of jobs. I'll use two companies as an example:

1) Tom Rickett's family just arranged purchase of the Chicago Cubs franchise for $900 million from the Tribune company. From the Cubs MLB website the Front office, roster, coaches, medical staff number a total of about 200 employees. I expect for each of these there are probably at a minimum five other employees in support maybe more. I would estimate that the Cubs employ about 1000 people directly at various times and even higher if you count the down line jobs of concessions, parking attendants and merchandise suppliers and vendors. It's quite a business for $900 million. We can estimate that for every million dollars of investment there are 0.9 jobs created.

2) A small manufacturing firm recently sold for about 55 million and employed about 120 people direct and contract. In this case each million dollars of investment provided 2.18 jobs directly.

Granted this is only two data points but I think you could "do the math". Let's just take an average. For every million of investment we should expect to see about 1.5 jobs. Now if the US government would have invested $5 trillion dollars in the true interest of job creation we would see about 7.5 million jobs being added to the economy.

This is where Clara Peller comes in..."Where's the Jobs!" and "Who has the money?" I have yet to hear of one job added to our economy as a result of economic stimulus. People are continued to be laid off weekly by their employers. Where are our priorities as a nation? We are now focusing on Cap and Trade for carbon offsets and government sponsored health care. These items will provide additional tax revenue and inhibit the creation of new jobs. The timing for these initiatives is extremely bad when we have the highest unemployment rate since 1967!

Write to your representatives in the US Congress and Senate and ask them, "Where is the beef?"
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