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Economic News

It’s the unemployment, stupid – economist proposes eight point plan



Seven reasons business owners aren’t hiring

Dr. Mark Dotzour, Chief Economist for the Texas Real Estate Center is often the voice of reason in a sea of monotonous (and often wrong) economists as he opines even when controversial. Dr. Dotzour is one of the few economists who has for years noted unemployment as one of the most destructive factors in housing, even at times when others (like associations) touted real estate circa 2003 as recession-proof. We have long been in agreement that without healthy employment, housing is uncertain at best.

“When business owners are unsure about their future, what do they do? Nothing,” said Dr. Dotzour. “They just try to survive until the storm is over.”

The top seven reasons business owners aren’t hiring, according to Dr. Dotzour:

  1. Complete uncertainty regarding the future cost of health care for business owners
  2. Two thousand pages of bank regulation that has yet to be enacted
  3. Regulation of health care and health insurance
  4. Regulation of off-shore oil drilling
  5. Regulation of oil-shale deposits
  6. Complete uncertainty about future income tax rates
  7. Complete uncertainty about future capital gains tax rates

“They also hoard cash, like almost $2 trillion at this point. Our economy is not going to recover until businessmen and women regain confidence in the future opportunities in our country,” he said.

Eight point bi-partisan repair plan

Dr. Dotzour notes that “we are creating such a hostile environment for businesses that we could be in for a long period of economic stagnation in America.” That’s scary.

But what would a non-hostile business environment even look like in today’s economy under today’s political conditions? Dr. Dotzour proposes that the current administration and Congress devise a bi-partisan plan to:

  1. Repeal the health-care nightmare.
  2. Repeal Dodd-Frank, and come up with 15 pages of meaningful bank reforms.
  3. Tell China to stop manipulating their currency and buy something produced by Americans.
  4. Roll back EPA regulations to 1999 levels.
  5. Roll back all other business regulations to 1999 levels.
  6. Announce an airtight plan to reduce the deficit to zero in seven years.
  7. Lower corporate tax rates to stop companies from fleeing America.
  8. Foreclose on four million homes and sell them to private sector investors.

Dr. Dotzour acknowledges that this view may sound like “Alice in Wonderland” but notes that the above issues “are the issues that are killing economic opportunity in our great country.” He warns that as a nation, we address these problems that plague unemployment and de-incentivizes business in America. “Either we address [these issues], or we look more and more like Japan every day. Let’s do it! Now.”

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  1. BawldGuy

    August 26, 2011 at 8:12 pm

    Couldn't agree more. Simple, to the point, and brutally honest.

  2. LandonSmith

    October 9, 2012 at 10:54 am

    we need more that just a brutally honest analysis on the economy and unemployment. Bring solutions to the table people! <a href=””>tubular services</a> and oil production in the united states will fix all! It’s as simple as that.

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?



NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<


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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.



young executives

job openings

Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.


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Economic News

Gas prices are down, so are gas taxes about to go up?

Do low gas prices mean higher gas taxes are on the way? Budgeting for 2015 just got a bit more complicated, if some politicians have their way.



gas tax


Gas taxes and your bottom line

Many industries rely heavily on time in their vehicle, not just truck drivers and delivery trucks. Sales professionals hop in their vehicles throughout the day, as do many other types of professionals (service providers like plumbers, and so forth). For that reason, gas prices and taxes are a relevant line item that must be budgeted for 2015, but with politicians making the rounds to push for higher gas taxes, budgeting becomes more complicated.

Gas prices are down roughly 50 cents per gallon compared to a year ago, which some analysts say have contributed to more money in consumers’ pockets. Some believe that this will improve holiday sales, but others believe the timing is just right to increase federal taxes on gas. The current tax on gas is 18.40 cents per gallon, and on diesel are 24.40 cents per gallon.


Supporters and opponents are polar opposites

Supporters argue as follows: gas prices are low, so it won’t hurt to increase federal gas taxes, in fact, those funds must go toward improving our infrastructure, which in the long run, saves Americans money because smoother roads mean better gas mileage and less congestion.

Gas taxes have long been a polarizing concept, and despite lowered gas prices, the controversial nature of the taxes have not diminished.

While some are pushing for complete abolition of federal gas taxes, others, like former Pennsylvania Governor, Ed Rendell (D) tell CNBC, “Say that cost the average driver $130 a year. They would get a return on that investment” in safer roads and increased quality of life, he added.

The Washington Post‘s Chris Mooney points out that federal gas taxes have been “stuck” at 18 cents for over 20 years, last raised when gas was barely a dollar a gallon and that the tax must increase not only to improve the infrastructure, but to “green” our behavior, and help our nation find tax reform compromise.

Is a gas tax politically plausible?

Mooney writes, “So, this is not an argument that a gas tax raise is politically plausible — any more than a economically efficient tax on carbon would be. It’s merely a suggestion that — ignoring politics — it might be a pretty good idea.”

Rendell noted, “The World Economic Forum, 10 years ago, rated us the best infrastructure in the world,” adding that we “need to do something for our infrastructure, not in a one or two year period, but over a decade.”

Others would note that this rating has not crumbled in just a few years, that despite many bridges and roads in need of repair, our infrastructure is still superior to even the most civilized nations.

Regardless of the reasons, most believe that Congress won’t touch this issue with a ten-foot pole, especially leading up to another Presidential campaign season starting next year.

“I think it’s too toxic and continues to be too toxic,” Steve LaTourette (the former Republican congressman best known for his close friendship with his fellow Ohioan, Speaker John Boehner) tells The Atlantic. “I see no political will to get this done.”

Whether the time is fortuitous or not, and regardless of the positive side effects, many point to a fear of voters’ retaliation against any politician siding with a gas hike, so this matter going any further than the proposal stage is unlikely.

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