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After 1 Year, Obama Vs. Reagan

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As we approach the end of the year, we are also approaching the end of President Obamas first year in office. You might be wondering how he is doing, based on actual numbers (rather than political spin).

Obama clearly inherited a difficult situation economically. Only two others in the modern era came even remotely close. One, of course, was FDR, but unfortunately the data from then is rather sparse, and mostly available on just an annual basis, or at best quarterly (good economic data was one of the by-products of the New Deal).

The other who inherited a difficult economic situation was President Reagan. Granted, the type of difficulty was very different under Reagan, and presidents — like quarterbacks — get too much of both the praise for a good economy and the blame for a bad economy.

Still, I think comparing the numbers for the two during their first “year in office could be instructive. The data I used for the comparison are all available monthly (at least, and if more frequently, I used the monthly data). The source of all data is the St. Louis Fed (except for the S&P 500).

The two presidents offered very different prescriptions for the economy. Reagan was all about cutting taxes and less government involvement in the economy. While most of the really big moves of government into the economy in response to the recent economic crisis actually took place under President George W. Bush, Candidate Obama saw them as needed. The Bush Administration was the one that bought the stakes in American International Group (AIG – Snapshot Report), Fannie Mae (FNM – Snapshot Report), Freddie Mac (FRE – Analyst Report) and the banks, while Obamas support for a prepackaged bankruptcy resulted in large government stakes in the Auto industry.

There were no comparable big investments by the government into the private sector late in the Carter Administration, and certainly Reagan did not initiate any. Reagan did not have to deal with a financial meltdown when he took office, but on the other hand, Obama did not have to deal with runaway inflation. Both are serious diseases, but think of it this way: both cancer and heart disease can kill you, but you would not want to give chemotherapy drugs to a heart attack patient. Thus, perhaps it is appropriate that the prescriptions be different.

If one only looks at the unemployment rate (U-3), both did a poor job in their first year, and Obama was significantly worse. The unemployment rate in January 2009 was 7.6% and by November it had climbed to 10.0%. In January 1981, when Reagan took office, the unemployment rate was almost identical at 7.5%, and by November of 1981 it had climbed to only 8.3%.

Private employment actually rose during the first 11 months of 1981 by 0.55%, from 74.671 million to 75.084 million. Under Obamas tenure so far, private payrolls have dropped by 2.95% to 108.495 million from 111.793 million.

So on the employment front, Reagan is the clear winner so far. However, over the course of 1982 and 1983 the employment situation deteriorated significantly. We do not know what unemployment will do in 2010 and 2011, and thus can only judge based on what we have seen so far and in the comparable period under Reagan.

Advantage: Reagan

Reagan also wins when it comes to real disposable personal income, which expanded by 2.3% in the first 11 months Reagan was in office, while it has only increased by 1.0% so far under Obama.

Advantage: Reagan

The dollar was also much stronger during the first 11 months of Reagan, although I am not sure if that is a positive or a negative. During the first 11 months of Reagan, the dollar relative to an index of major currencies gained 9.88%, while under Obama, the dollar has lost 9.70% relative to the same index.

Given that we are running chronic trade deficits now, but really were not back then, I would argue that today a weak dollar is good for the economy today since it will help out on the net export side of things. Inflation is not a big problem today, but was the number one problem with the economy when Reagan took office. The downside of a weak dollar is that it contributes to inflation, so back then having the dollar strengthening was a good thing.

No Advantage to Either

On the inflation front, however, things are far better under Obama. On a headline basis, prices have gone up by 2.39% so far under Obama, while they rose 7.57% during the first 11 months that Reagan was in office. On a core basis (ex-food and energy) the difference is even more stark, rising 8.31% under Reagan and up just 1.51% under Obama so far. Later in the Reagan Administration, inflation fell much more, but even when he left office in 1989 inflation was far higher than it is today.

Advantage: Obama

Industrial production fell slightly more during the first 11 months of Reagan (1.07%) than it has under the first 11 months of Obama (0.68%). Capacity Utilization started out at a much lower level when Obama took the oath than the Reagan did, at 71.1% (an all-time record low at the time) vs. 80.7% when Reagan took office. However, by November of 1981, the total capacity utilization rate had fallen to 77.9%. Under Obama, capacity utilization has actually risen to 71.3%, although it remains at a historically low level.

Advantage: Obama

Interest rates can tell a lot about the state of the economy. For example, the spread between the rate that gilt-edged companies have to pay on their bonds and what normal companies have to pay on their bonds tells a lot about how much bond investors fear companies going belly up. The former is measured by the Moodys (MCO – Analyst Report) Aaa rate and the later by the Baa rate (not to be confused with “junk bond” rates; Baa is still investment grade).

In January of 1981, the best credits in America had to pay 12.81% on their bonds, while normal companies had to pay 15.03%, for a spread of 2.22% (or as a ratio, normal companies had to pay 17.3% more than the gilt-edged ones). By November of 1981, both the best and the ordinary had to pay more — the Aaa rate had surged to 14.22% while the Baa rate had risen to 16.39%, so the spread had fallen ever-so-slightly to 2.17. The ratio had come down a bit more, and the ordinary firms were paying 15.3% more than the best firms.

When Obama took office, the Baa rate was 8.14% while the Aaa rate was 5.05%, for a spread of 3.09. In other words, ordinary firms had to pay 61.2% more for money than the best firms did. Investors were very afraid that companies would go bankrupt, and so demanded a higher rate from normal companies than from firms that seemed to have very little risk of writing a new chapter (the eleventh) in their corporate histories.

Since then, the rate the highest-rated firms have to pay has actually increased slightly to 5.19% while the rate that normal firms have to pay has plunged to 6.32%, bringing the spread down to 1.13% and the ratio down to the point where normal companies are paying 21.8% more for their money than the Aaa firms.

(Given the huge difference in the overall level of interest rates between the two eras, it is important to look at both the spreads and the ratios. Clearly a spread of 2% has a very different meaning and significance if it is between 1% and 3% than if it is between 13% and 15%).

Advantage: Obama

Another important signal that comes from interest rates is the yield curve, or the difference between long-term and short-term interest rates. The curve is measured using Treasury notes or bills, since you only want to be looking at the differences due to maturity, not due to quality (the opposite of the Aaa-Baa spread, which is only looking at quality differences, not maturity differences).

While there are many different measures of the curve, the one that is used the most is the difference between the 2-year note and the 10-year note. Generally speaking, the steeper the yield curve, the better. An inverted yield curve is very bad news, and is probably the best single indicator that the economy is about to go into a recession.

When Reagan entered office, the 10-2 curve was inverted, with the yield on a 2-year note at 13.26% and the yield on the 10-year at 12.57%, for a spread of -0.69. On a ratio basis, the 10-year was providing only 0.95 of the 2-year. By the time November of 1981 rolled around, the curve had returned to normal but was still pretty flat. The yield on the 2-year had fallen to 12.88%, while the yield on the 10-year had increased to 13.39, resulting in a positive curve of 0.51. On a ratio basis, the 10-year was 1.08 of the 2-year.

When Obama entered office, the 2-year was at a very low 0.81% while the 10-year was 2.52%, for a positive spread of 1.71%. On a ratio basis, the 10-year was yielding over three times as much as the 2-year (3.11x to be exact). By the end of November, the curve had expanded even further, with the 2-year virtually unchanged at 0.80%, while the yield on the 10-year had risen to 3.40%, for a spread of 2.60% and a ratio of 4.25x. Again, given the vastly different overall levels of rates, it is important to consider both the spreads and the ratios when making the comparisons.

Advantage: Obama

Mortgage rates were both far higher and moving in the wrong direction early in the Reagan presidency. When he took office they were at 14.90%, and by November they had risen to 17.83%. When Obama took office, the rate on a 30-year fixed mortgage was 5.06% and has since fallen to 4.88%.

Not surprisingly, then, the housing market was far worse under Reagan than it has been under Obama (at least if measured by direction, not levels). In January of 1981, housing starts were running at a seasonally adjusted annual rate of 1.547 million, and by November of that year they had plunged to 837,000, a decline of 45.9%. Since January of 2009, housing starts have risen from an annualized rate of 488,000 to a rate of 574,000 in November, an increase of 17.6%.

Advantage: Obama

Similarly, single family new home sales plunged by 25.2% early in the Reagan years to a rate of 382,000. Since Obama came into office, new single family home sales have risen by 22.2% to an annualized rate of 402,000. Existing home sales are not particularly important to the economy (just like used car sales are not very important).

Auto sales also fared worse under the early part of the Reagan Administration than they have so far under Obama (at least as measured point-to-point). When Reagan took office, auto and light truck sales were running at an annualized rate of 11.03 million and had fallen to 9.21 million, a decline of 16.5%. Under Obama, auto and light truck sales have risen from an annualized rate of 9.59 million in January to a rate of 10.89 million in November, an increase of 13.6%.

Advantage: Obama

Finally, while people sometimes make too much of the day-to-day fluctuations in the stock market, it is a good reflection of the overall health of the economy when you look at longer time periods — and almost a year is long enough to qualify there. On that metric, there is simply no contest. Between inauguration day and Christmas Eve in 1981, the S&P 500 lost 7.65%. Since Obama took office, the S&P 500 has gained 39.9%.

Advantage: Obama

Weighing these different economic indicators is inherently subjective, and thus I am not sure that one can come to a clear-cut case that one has done a better job than the other — at least so far. This is also far from a complete list of economic indicators and I focused on only those that were available at least monthly, and many of the most important economic numbers come out quarterly.

Arguably, the economic mess that Obama inherited was worse than the one that Reagan inherited, although both were pretty nasty — yet very different. The U.S. economy is more of an oil tanker than a speedboat, and does not turn around on a dime, so it really is too early to tell how Obama is doing.

However, the indicators that are most forward-looking and leading for the economy (stock market, yield curve and quality spreads, housing starts) are the ones that favor Obama over Reagan. Overall, 11 months in, one must conclude that Obama is doing at least as good a job on the economy as Reagan did in his first 11 months.

Instant High Paying Jobs For Teens

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So you have a teen on the hunt for a half decent job but what are their options these days. Everyone is telling them to baby sit or get a paper delivery job but both are time consuming and pay third world country rates when it comes to money in their pocket. It is even harder trying to land a job position that has been advertised somewhere as employers receive hundreds and hundreds of applications when advertising in the current job market. A recent study showed that it is now taking the average person 4 7 months to find employment and they expect that figure to lengthen.

So what can I do you say, well thanks to modern technology all this is about to change. The days of searching endlessly for employment are fast coming to an end as the internet slowly takes over and starts filling this increasing need in the teen job market. When it comes to jobs for teens it is now possible for them to land their dream job in under ten minutes no matter who they are. When they take a job online there are no lengthy, intimidating interviews to go through and their application is always accepted no matter where you live or what qualifications they may or may not have. When you compare this to the difficulty of applying for and getting a normal advertised job it is no wonder that thousands of teens are switching to paid online jobs.

Paid online work beats traditional jobs hands down every time. Online jobs these days mostly consist of completing online surveys as these are generally higher paying when it comes to the types of work you can do online and they make fantastic jobs for teens. Most of these places are free to join and once they have signed up they can then start taking surveys and get very well paid for it. Most teens that are doing these surveys are earning at least $10 for a twelve minute survey with the money getting transferred to their account on completion.

The surveys themselves are extremely easy to complete and there is an unlimited number of different types of surveys that can be taken. There are no set times that they have to work, teens can quickly and easily work at their own pace as often or as little as they like each week, its up to them. By just taking 3 surveys per day, 5 days per week, a teen is capable of earning $150.00 per week. Just try finding a job anywhere else that pays as well as this that will hire them instantly.

Which survey companies they end up joining makes a huge difference to how much money they make. Pick the wrong ones and they could end up working for $2 – $5 per hour and getting very frustrated. Out of all the Free To Join paid survey sites online today there are only a small list of survey companies that have the genuine higher paying surveys available on a daily basis. Joining all of these top 7 companies ensures that they have and endless supply of high paying surveys to take every day when they log in.

So the choice is up to them, with the state of the current job market are they going to keep slogging it out looking for a position like everyone else or get hired instantly today and earn more money than they ever thought possible as a teenager.

The Perks Of Hiring A Store Employer Organization In New Orleans

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A professional employer organization is basically just a type of payroll service company that attends to the needs of understaffed and overburdened companies. But it is distinct to other categories within the industry so consumers have to be vigilant when it comes to orienting themselves to the differences. A PEO firm that actually takes on employee management tasks aside from payroll computation such as recruitment, risk/safety management, training and development as well as compensation distribution. As such, it comes off as an employer on record and of record as far as tax and insurance goes.

The services a professional employer organization New Orleans provides is also known as co-employment. And clients avail of their assistance because they relieve the company of having to worry about the obligations as well as consequences of controlling a significant number of manpower. Now, one may find PEOs willing to shoulder tax and insurance expenses in behalf of a big company when they are merely employed by it. But the fact of the matter is PEOs are usually able to acquire insurance coverage at lower costs. This is because they negotiate on their behalf but affect the employees of the conglomerates they serve. It is sneaky, yes. But it can be considered legal because as earlier said, their services are a form of co-employment. The same goes for taxation.

But essentially, companies dont just hire payroll service firms like these to escape the staggering expenses of employing people. They do so because these entities do a pretty good job when it comes to preparing and filing payroll, administering benefits and reducing liabilities as well as mistakes. Of course, given their valuable role in the business, professional employer organization New Orleans typically charge3% to 15% of the total payroll they handle, which could amount to thousands, even millions of dollars, depending on the size of their client company. But of course, their market is generally composed only of small and medium enterprises since these are the only ones who are open to the idea of co-employment.

There are currently 700 PEOs in the United States, operating in all 50 states and covering about 2 to 3 million workers. And they are also present in countries such as Sweden and Germany. If you have about 50 employees and are looking to save on benefits and taxation costs, you should start scouting quotes from PEOs in your area so you could determine whether or not it is the best solution you could pursue. It would be smart to ask for feedback from other companies who are also availing of the service so you do not make any rookie mistakes when it comes to hiring a professional employer organization in New Orleans or in any other city for that matter. And naturally, you should also run a background check on all your potential candidates so you could confirm whether or not their experience and claims are valid. If you are having second thoughts, take advantage of trial agreements these entities provide so you could have an actual basis for making your final decision.

Employment Twc

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Employment Twc

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Let An Employment Attorney Help Your Business Maintain Legitimate Practices

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When you are working to expand your small business, it is important to remember that you must always grant employees the rights they are supposed to be afforded under the guise of state and federal laws. In some cases, employers may not even know that they are violating laws or infringing on a person’s rights. Sometimes, they are just trying to be nice or make things easier for both the company and the employee. These mistakes or lapses in judgment can be quite costly.

If you are making a lot of changes or bringing a new group of people onto the team, it is a good idea to consult with an employment attorney. One of these legal professionals can review your new policies and ensure you are doing everything in exactly the right way. The following are a few policies that you should ensure are in place that your attorney will be able to explain to you.

State laws require that employees give their workers 30-minute lunch breaks and other short breaks during the day, depending upon how long a person works at any given time. You cannot deny your workers these breaks or encourage them to skip them. If you do, you could get sued over the matter. It is up to managers and human resource officers to make sure that all of your employees understand the break system. This ensures that everyone knows how to use their time appropriately.

It is also important to know when you should be providing overtime pay and to whom. It is unlawful to let workers put in a certain amount of hours per day or per week without giving them overtime pay. Consult with your company’s employment attorney if you are unsure of what the law states and how it pertains to your operation. If you continue to let someone work without adequate pay, you might eventually have to provide back-pay and deal with certain penalties.

The aforementioned policies are just a couple of the ones you should review with an employment attorney. Others that are important involve termination, confidentiality agreements, vacation time, and harassment. If an employee can show that you or one of your other employees has treated them unfairly with regards to one of these policies, you could have a lot of legal woes to deal with in the very near future. It’s better to get sound advice from your employment attorney before a problem ever arises, rather than trying to work through court proceedings.

For information on how to get help from an employment attorney, Portland, Oregon businesses can consult with a legal representative from Bullard Law. For more information, visit: http://bullardlaw.com.