OK, let me start out stating I don't pretend to know all the answers or even most but I have had years of management as an officer in the military as well as working lately in the retail sector. I watch the economic news and it appalls me. To spoil the suspense, the simple answer is CORPORATE GREED. Some examples:
1) Heinz 4th quarter profits climbs, will cut 800 to 1,000 jobs ( ~ May 27th, 2011) http://www.wral.com/business/story/9646974/
Their world wide expansion has given them approximately 16% profit for the 4th quarter but to "continue its profitable path" it will cut raise prices and cut jobs! Five factories will be closed worldwide. HEY, WAKE UP, the employees you lay off are your customers and your on the ground marketing reps. Do they know there is a world wide recession going on. Laying off workers and raising prices for the sake of profits and shareholders is counter productive to long term recovery and health for all companies.
2) Banks - Banks received a lot of government rescue funding to enable them to continue operating and prevent an economic meltdown. Now that the government (of the people) rescued the banks, you would think they would go along with the efforts to help the people that rescued them as so many face foreclosure of their homes. Nope! The government did it function of providing for the welfare of the people and developed a plan to help so many people caught in the housing collapse a they watched their homes rapidly become worth less than they owed. (Whether you like the govt plan is besides the point right now, this is focused on the corporations and banks)
So what are the banks doing? Are they helping out? You got to be kidding! http://www.wral.com/business/story/9706065/ (~ June 9, 2011)
Three big banks - ( Wells Fargo, Bank of America, and JP Morgan Chase) have failed to do their part adequately. Of the anticipated 3 -4 million homeowners that were anticipated to receive help, the figure runs at about 607,000! quite a contrast (disappointment is abetter word). To many try to make the a political debate between the Democrats and the Republican ( I don't like either for what its worth). But no this is about Corporate GREED.
What is the government doing? About the only thing they can do, withhold money from the banks for not doing their job. Apparently the banks incorrectly determined people as ineligible when they really were! Hey you don't think the banks want to give up profits for the sake of people who will be their future customers?
BTW - It is a fact that the biggest factor in the housing market's problems is the huge number of foreclosures.
3) Corporations won't spend money to create jobs and thereby improve the economy. In an article about the decline of American's equity in their homes. http://www.wral.com/business/story/9709005/ (down from 61% in 2001 to 38% in the first quarter of 2011, approximately the lowest level since WWII) a comment was made that " ... Corporations are still hoarding cash." When companies don't spend money, money isn't spent and jobs aren't created. The government had anticipated almost 1/4 million jobs would be created in May 2011 (the average for the last three months and in a recovering economy, a valid projection). Instead only 54,000 jobs were created.
4) Corporations keep shipping our jobs overseas. I have long said that "When we export our jobs overseas, we import their poverty." This isn't meant as a slam against any particular country or ethnic groups but a simple matter that when we ship our jobs overseas, we import their poverty. corporations keep sending jobs to other countries where labor is cheap and wonder why people here don't have jobs or money to spend on their products.
So let's summarize - Corporate profits are up but to maintain those profits, they are laying off people (their customers). Banks don't want to give up or reduce their profits. And corporations have a more than adequate surplus of cash but they don't want to spend (invest) it. When they do spend money, they spend it in other countries instead of our own.
So instead of a recovering economy we have rising unemployment up to 9.1% College graduates are working at supermarkets and gas stations if at all. I know of a Teaching Fellow ( a program that provides four years of education in exchange for four years of teaching). These folks aren't slouches but I know one that can't find a teaching job at all! The news a while back discussed how many teaching fellows are shocked at the difficulty they are having finding a job, they felt they were almost guaranteed a job, and in the past they virtually were. But local governments have had reduce spending.
Did you notice that the common theme is business won't spend or invest in America? In the past, consumer spending pulled the country out of recession but this time the money is in the hands of business that won't let do.
The problem isn't the partisan politics in Washington but the corporate world's inability to let go of the money and spend. In short - CORPORATE GREED.
