Major Job layoffs become a non stop story
Here’s a list of Monday’s horror show.
Sprint Nextel Cuts 8,000 jobs
Texas Instruments 3,400 jobs
Caterpillar 20,000 jobs
Corus 3,500 jobs
Philips Electronic 6,000 jobs
Home Depot 7,000 jobs
ING 7,000 jobs
Pfizer 8,300 jobs
GM 2,000 jobs
A total of 65,200 job losses in one day that will in turn result in further job losses as the jobless drastically cut back spending on all but essential items.
Points to consider about the ever increasing job losses:
1. Only the large layoffs by national firms make the headlines. Small businesses that employ over half of all private sector employees probably laid off a comparable number of people as demand and spending evaporate throughout the economy.
2. Given the high unemployment rate, very few of the recently laid off will be finding new jobs.
3. The stimulus plan is unlikely to re-employ the armies of workers now unemployed. The government simply cannot manufacture enough make work jobs to replace those lost in the free enterprise productive sector of the economy. The cost of every non productive job “created” will put a further burden on the private sector that creates the majority of jobs.
4. The downward spiral of home prices and increased foreclosures will continue as many of the unemployed will be unable to make their mortgage payments.
5. Car loans, credit cards, student loans and personal loan default rates will continue to rise based on the inability to pay.
6. Asset values backing the defaulting debt will decline, causing further defaults.
7. Destruction of confidence will cause major spending reductions even by those still employed and contribute to further job losses.
8. Huge job losses and credit defaults will cause further massive losses for lenders of every type. Lenders with exploding delinquency rates will drastically cut back their lending. The current situation is unprecedented and the lending models based on income, credit, job stability etc. no longer work; every potential borrower will be viewed as a future default.
9. The demands on the Treasury will be of such extremes, that economic triage will be necessary. Rescuing the system will take precedence over millions of individual cases of economic ruin.
10. Ultimately, it is always about jobs.
Despite all the optimism about the “stimulus” program, it will not work. The amount of spending proposed is insignificant compared to the amount of asset and job destruction taking place. The government will vastly increase its spending throughout 2009, but ultimately it will be time and price that bring the over leveraged system back into equilibrium. A majority of Americans will see much of their wealth destroyed before we reach the end of this national tragedy.
Bill, while I agree that this is an unprecedented time in recent history, I think you are being a little too histrionic. It is not as if these 65,200 people had jobs yesterday, and now have no place to go today. These job losses will come about over the next 12 to 18 months. Many of them will be through attrition, many of the employees will be re-assigned, and many will find new jobs before they are actually laid off. It is the media’s job to be over the top, not an analyst. I do feel you are one of the few who seem to realize this is not just an economic cycle, and that economy will recover in a few months. We need to inform people that it is not the lack of regulation that was in place 10 years ago, but the government’s reckless deregulation that accounts for a lot of the problem. This is not an economic cycle, this is a governmental cycle and will take much longer to correct.