0 Gallup Poll Suggests Private Sector Hiring Down Since April

Gallup reports U.S. Job Creation Steady in December, but hiring in the nongovernment job sector stalls.

The following charts (trendlines added by me) reflect answers to Gallup's question: Based on what you know or have seen, would you say that, in general, your company or employer is 1) hiring new people and expanding the size of its workforce, 2) not changing the size of its workforce, 3) letting people go and reducing the size of its workforce.

Percentage of Employers Hiring Minus Those Letting Go



click on any chart for sharper image

The hiring momentum that began in early 2009 slowed in mid-2011. Momentum vanished (at best) in March or April of 2012.

Slowdown in Hiring Since Mid-2011



There appears to be even less momentum from this perspective. However, the first chart is simply a subtraction of the numbers in the second chart.

Factor in Government Employment and Things Look Worse



From this perspective, private hiring peaked in April of 2012 and has since been in a very slow decline.

Meanwhile, states and local governments have been adding workers since the beginning of the year although it is highly doubtful they can afford such actions with private sector running at stall speed at best.

Bear in mind, two things: First, the survey represents what people perceive to be happening at their employer. Actual hiring or firing may be different.

Second, these charts only show direction not size. Thus, a small-sized company laying off a single person counts as much as a larger company that is hiring 40. Of course, the opposite is true as well  (a small-sized company hiring a single person counts as much as a large company firing 40).

However, based on the randomness of the samples, there will be more calls to those working for large-sized companies than those working for small or medium-sized companies and most people are probably aware of what their company is doing.

Mike "Mish" Shedlock
http://economic-trends.blogspot.com

0 Crowd of Fools Cheers Obama; Tweet Irony

Caroline Baum, one of my favorite Bloomberg columnists has an interesting article today that's worth a read.

Please consider Wanted: Middle-Class Tweeters for White House Event.

Who were these people, gathered on the afternoon of New Year's Eve to fete the president as a deal to avert the fiscal cliff was hanging in the balance?

They were "middle-class Americans" who had tweeted their way to a staged White House event, according to Politico.

The crowd gathered at the Eisenhower Executive Office Building on Monday looked fairly young, which makes their cheering even more disconcerting. Don't they understand that the president has done nothing to protect future generations from a crushing debt burden? Nothing about deficit reduction other than to talk about it? Nothing about preserving Medicare other than to demagogue any changes to the program?

A president truly interested in the issues he claims to be would have used this opportunity to educate younger Americans. Explain to them that the government has made promises to the elderly that it can't keep. Tell them they have choices to make on the benefits they want and the price they'll have to pay.

You won, Mr. President. You won re-election. You got your promised tax increases on the rich. But we lost. And if we lose, then ultimately you lose.

Tweet This

Politico notes Obama's staged event, jokes draw McCain rebuke

The crowd was nothing if not adoring. ("Thank you for having us!" Two standing ovations.) And the president did seem in a good mood. (Cracking jokes about showing up at an audience member's house to ring in the new year.)

Sen. John McCain (R-Ariz.), for one, took to the Senate floor and slammed the president for "antagonizing" Republicans during a White House event "with that group of people that he was talking to who were laughing and cheering and applauding as we are on the brink of this, of this collapse."

The audience members, billed by the White House as "middle-class Americans," were drawn from Obama supporters who responded to the White House's #my2k hashtag campaign and tweeted what a $2,000 tax hike would mean to them. Being invited to the White House based on a tweet, it would seem, doesn't make for a dour audience.

Tweet Irony

1. Young Americans like Obama because he gives them student loans making them debt-slaves for life
2. Young Americans like Obama because of a promise for "free" health-care for everyone. Little do they realize, nothing is "free", and they are the ones overpaying.

The fact of the matter is youth overpay for health-care as the benefits primarily go to the elderly. Obama needed a pool of fresh suckers to overpay for health-care costs to keep the system solvent for a bit longer.

Since nothing was done to contain costs, Obama will be asking for more and more money in the future.

Baum asked "Don't they understand that the president has done nothing to protect future generations from a crushing debt burden? Nothing about deficit reduction other than to talk about it?"

Obviously not.

The crowd [of fools] was adoring.

Young Americans tweeted Obama and they got an invite to bow down to the person making them debt-slaves to union educators as well as debt-slaves to the ungrateful elderly.

By the time they are old enough to collect benefits, the system will be bankrupt, with no benefits to be had. In the meantime, Republicans Prepare to Wave White Flag Again, This Time On Debt Ceiling, proving that neither party is capable of a remotely honest discussion.

The sad irony in this mess is youth have gotten nothing out of Obama but a big screw job. And for that screw job, they offer adoring praise.

Mike "Mish" Shedlock
http://economic-trends.blogspot.com

0 Republicans Prepare to Wave White Flag Again, This Time On Debt Ceiling; "Temporary, Partial, Non-Threats"

Having totally collapsed on deficit reductions in fiscal cliff non-negotiations (agreeing to a mere $12 billion in cuts down from an Obama offer of $600 billion), Republicans are already offering signs they will once again wave the white flag when it comes to the alleged battle over the debt ceiling.

Reuters reports Bigger fights loom after "fiscal cliff" deal.

President Barack Obama and congressional Republicans looked ahead on Wednesday toward the next round of even bigger budget fights after reaching a hard-fought "fiscal cliff" deal that narrowly averted potentially devastating tax hikes and spending cuts.

Retreat, Retreat, Then Surrender

Let's stop right there for a second. What "hard fight" was there?

It certainly took a lot of time to reach a deal, but there never was much of a fight. Every day Republicans offered more and more concessions until deficit reductions were whittled down to a mere $12 billion or so from a starting point of $600 billion.

Senate Republicans immediately waved the white flag of surrender as only 5 Republicans voted against the deal. Please see Obama Deal Adds $3.97 Trillion to Deficit Over 10 Years; Only 5 Republicans Voted Against; White-Flag Surrender for details.

This was a pathetic case of retreat, retreat, then surrender, with every retreat making the president more confident he would get his way.

Reuters continues ...

[The fiscal cliff agreement] set up political showdowns over the next two months on spending cuts and on raising the nation's limit on borrowing. Republicans, angry the deal did little to curb the federal deficit, promised to use the debt ceiling debate to win deep spending cuts next time.

"Our opportunity here is on the debt ceiling," Republican Senator Pat Toomey of Pennsylvania said on MSNBC, adding Republicans would have the political leverage against Obama in that debate. "We Republicans need to be willing to tolerate a temporary, partial government shutdown, which is what that could mean."

Opportunity to Surrender Again

There is no opportunity here. Read the paragraph carefully to see if you can spot the crucial words.

In case you missed it, the crucial word is "temporary". More specifically the crucial phrase is "willing to tolerate a temporary, partial government shutdown, which is what that could mean".

The word "temporary" is pathetic enough. But Toomey goes even further, adding the word "partial".

Temporary, Partial, Non-Threats

Who is supposed to fear a "partial, temporary" shutdown? Anyone?

Sadly, Republicans are already signaling they are prepared for more temporary threats coupled with more permanent can-kicking exercises.

The wimpy language bantered about by Republicans before debt ceiling debate even begins suggests the safe thing to do is prepare for more retreats and more white flags.

Mike "Mish" Shedlock
http://economic-trends.blogspot.com

"Wine Country" Economic Conference Hosted By Mish
Click on Image to Learn More

0 Mutual Guarantee Society: Spain Proposes State Guarantee of Bank Loans to Small and Medium Businesses

Lending in Spain has all but dried up. Banks don't want to (or cannot) lend because they are capital impaired and there are too few creditworthy risks.

In such an environment, lending is not wise. It will lead to more losses. But that is not how government bureaucrats think. Prime minister, Mariano Rajoy is preparing measures to 'desbancarizar' save the economy and SMEs

He acknowledged President Mariano Rajoy in balance the first year of government: the main problem of the economy to start recovery is the lack of financing for SMEs [Small and Medium Enterprises]. With that goal-getting liquidity regrease economic system, the government last a number of measures to facilitate the financing of small and medium enterprises. Or what is the same, it is 'desbancarizar' the Spanish economy far too dependent on credit institutions in granting loans or other financing of productive activity.

The Government is considering the creation of new instruments for SMEs operate with the State guarantee, which is considered key to boost economic activity. At the same time, they want to boost mutual guarantee societies, an instrument in the hands of the regions that did not just start with all its potential. In parallel, the Ministry of Economy is betting big on the credits of the ICO for SMEs, about 22,000 million euros in 2013 for self-employed and SMEs.

The result of this 'banking' of the Spanish economy is lethal. There are no corporate funding mechanisms that provide a continuous flow of resources, which is an additional difficulty facing Spanish companies in a recessionary environment. With the addition of that full financial restructuring-dunk entities to restore its solvency levels, can not allocate funds to finance productive activity. To this we must add that the public sector is eaten much of the credit to finance their high fiscal deficits, the so-called crowding out effect, which involves the removal of private economic agents in funding.

Spain Beyond Repair

"Spain hopes to boost small business access to finance outside of the banking world by encouraging the market to accept paper of smaller businesses, by guaranteeing debt, and via the official credit office", writes reader Bran who lives in span and forwarded the above link.

Regardless of the precise translation of "desbancarizar", I am certain it will fail. Quite literally Spain is beyond repair, at least within the eurozone.

Mike "Mish" Shedlock
http://economic-trends.blogspot.com 

0 Obama Deal Adds $3.97 Trillion to Deficit Over 10 Years; Only 5 Republicans Voted Against; White-Flag Surrender

For all the pissing and moaning over the fiscal cliff, there was never much of a "cliff" in the first place. Worse yet, every delay made matters increasing irresponsible in terms of addressing the deficit.

The final result, as passed by the Senate, watered down budget cuts from $600 billion to a mere $12 billion.

Moreover, the extension of the tax cuts will add almost $4 trillion to the deficit over 10 years according to CBO analysis of the American Taxpayer Relief Act.

Nonetheless, that was not enough for liberal democrats who thought they did not get enough out of the deal.

The "Fiscal cliff" moves to House, where a slim hope remains that Republicans will punt this bill a mile high.

In a rare late-night show of unity, the Senate voted 89 to 8 to raise some taxes on the wealthy while keeping income taxes low on more moderate earners.

Republicans, unhappy that the bill contained over $600 billion in tax increases but only around $12 billion in spending cuts, said they may change it more to their liking and send it back to the Senate. Party leaders planned to take the temperature of rank-and-file lawmakers over the afternoon before deciding on a course of action.

"My recommendation would be not to take a package put together by a bunch of sleep-deprived octogenarians on New Year's Eve," said Representative Steve LaTourette, a moderate Republican from Ohio who is a close ally of House Speaker John Boehner.

"My district cannot afford to wait a few days and have the stock market go down 300 points tomorrow if we don't get together and do something," Representative Steve Cohen, a Democrat from Tennessee, said on the House floor.

The White House has floated $600 billion worth of spending cuts in earlier negotiations, and Obama said he would be willing to tackle deficit reduction over the coming months.

"There's more work to do to reduce our deficits, and I'm willing to do it," he said in a statement urging the House to pass the current bill.

Republican Representative Tom Cole said his House colleagues should pass the Senate bill rather than try to change it.

"We ought to take this deal right now, and we'll live to fight another day," Cole said on MSNBC.

Only 5 Republicans Voted Against

The Tax Foundation has additional Details of the Fiscal Cliff Tax Deal

At 2AM this morning, the Senate passed H.R. 8, the American Taxpayer Relief Act of 2012, by a vote of 89-8. Voting no were Bennet (D-CO), Carper (D-DE), Grassley (R-IA), Harkin (D-IA), Lee (R-UT), Paul (R-KY), Rubio (R-FL), Shelby (R-AL). Not voting were DeMint (R-SC), Kirk (R-IL), and Lautenberg (D-NJ). TaxProfBlog has the text of Senate-passed bill  (157 pages). The Joint Committee on Taxation (JCT) has also produced a revenue estimate, as has the Congressional Budget Office (CBO).

White-Flag Surrender

Somehow, right before the election, budget cuts of 10-1 over tax hikes were not acceptable to Republicans. Now, they have settled for a package that essentially makes no budget cuts at all.

This is one of the biggest white-flag political surrenders in history.

Obama Tax Cut" To Add $4 Trillion To Deficit Over Next Decade

President Obama made the biggest understatement ever regarding the budget deficit: "There's more work to do to reduce our deficits".

More work? Pardon me for asking, when was "any" work done to reduce the deficit? Ill-fated attempts to reduce the budget deficit have only gone in reverse.

Finally, it's important to note that the bill that passed the Senate is technically a tax cut. ZeroHedge accurately sums up the situation as follows "Obama Tax Cut" To Add $4 Trillion To Deficit Over Next Decade

Mike "Mish" Shedlock
http://economic-trends.blogspot.com