After 1 Year, Obama Vs. Reagan
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.
Pre-employment Background Checks 5 Reasons Why Smbs Should Conduct Them
Labor experts tell us that 8 out of 10 hiring professionals do some form of pre-employment background screening. Yet many medium and small businesses and are still dependent on traditional methods of pre-employment background screening, such as checking up on references. This article explores why many SMBs avoid professional employment background checks, and the risks and dangers of doing so.
Why Many SMBs Don’t Do Pre-Employment Background Screening
Lack of concern. Some SMB managers believe that only cops, teachers, and doctors should be subject to employment background checks. That point of view is outdated. Nowadays, many private companies are consistently performing pre-employment background screening, for the reasons listed in the second half of this article.
Lack of Internal Support and Expert Knowledge. Many SMB leaders assume that any pre-employment background screening they do must be done in-house. The prospect of training an employee to carry out background checks is intimidating to most managers, especially since it could very well take a person months to research the best background check procedures. However, partnering with pre-employment background screening outsourcing firms allows all companies quick, convenient access to employment background checks.
Overestimation of Cost. Many SMB leaders hold a misconception about pre-employment background screening, namely that it’s exorbitantly expensive. If you’re open to the possibility of outsourcing your employment background checks, you can typically conduct pre-employment background screening for no more than $50 per job candidate.
Top 5 Reasons Why SMBs should Conduct Employment Background Checks
1. Decreased Costs. You’ll find better job candidates if you conduct pre-employment background screening. Improved hiring means that you’ll spend less money counteracting negative PR, lose less money to negligent hiring lawsuits, and see fewer employee-generated losses, such as embezzlement. Finally, it’s typically much less expensive to outsource employment background checks, rather than doing them in-house.
2. Fewer legal trip-ups. Each state has its own law in place regarding negligent hiring. These laws are intended to protect the public by preventing dangerous individuals from being hired for delicate positions. As an example, many states’ alcohol laws require that employees have three years of felony-free history before they can be hired for a job that involves serving alcohol. Failing to check out candidates backgrounds through pre-employment background screening opens you to the risk of being sued or fined for failing to do your due diligence on new hires.
3. Safer Employees. Human Resource gurus estimate that 1 out of 10 job applicants have a criminal history. If you don’t carry do employment background checks, it’s more likely that you’ll hire a dangerous individual who could hurt your employees, your customers, and your business’ reputation.
4. Accelerated hiring. The majority of pre-employment background screening companies offer results in 48 hours. In this sense, outsourcing employee background checks can mean speedier hiring. In just a day or two, you can get the information you need to determine if that seemingly perfect candidate has any skeletons lurking in his or her closet.
5. Discover dishonesty in applications. Here’s another scary HR statistic for you: researchers calculate that approximately 4 out of 10 resumes feature deceitful omissions, if not total lies. Employment background checks reveal such dishonesty so that you can avoid hiring mendacious individuals.
As we’ve seen, there are many reasons why owners of small and medium-sized businesses should arrange employee background checks.
[Top]Using FMLA law as an Weapon against Employment Discrimination Charge
It has been a long time describing such a typical case of FMLA laws in Ohio. It is an employment issue with an employee who had been out of the office for the treatment of cancer. After the person gets well and wiling to be back on job, the employer is not in a position to take back the employee to his company. There can be a serious allegation against Ohio employee rights violation.
So, how to tackle the situation? Will it be termed as employment discrimination under the law of FMLA act? Is it the employer who seems to be guilty for not retaining the employee after his/her recovery?
Know the employers view point:
Before we start analyzing the way outs let’s view the genuine constraints for the employer. Yes, it is a deliberate confession. The employer is running a small company with the strength of only 15 employees. While the employee was out on leave, the economy was shattering leaving out lots of lay offs and salary cuts on work. Under such circumstances of slow business the employer can’t afford the employee now.
Apprehension for legal penalties:
But again there is always a possibility of legal intervention that may sue the employer for not allowing the employee to continue with the job. Of course, it’s a true confession by the employer that he would retake the employee once the things get fine. But how certain and safe is the position of the employer against law? The concern finally ended up with the petition to an Ohio FMLA lawyer.
What best can be done to protect the employer?
Fortunately being a small company, the employer can take advantage of the loopholes of FMLA law. Employment discrimination rules under FMLA act apply for the companies having 50-75 workers only. So it seems the employer is too small to be covered under the federal law. Moreover Ohio does not have any family law at the state level.
Employer’s job:
However there is the rapidity required for the employer’s point of view also. During last salary cuts or lay offs the employer should have eliminated the employee position and informed him/her about the decision at that time only. By doing this it would be easier to avoid being appeared that the employer is not illegally discriminating the employee by using FMLA laws.
Concluding the whole discussion the final solution could be like this- First allow the employee to join the office and let him/her work for 2 weeks. Then eliminate the employee position. The reason is that while making the internal changes the employer didn’t lay off the employee. But now in this current situation the employer can do it and it wouldn’t be regarded as discrimination too.
In this context one shouldn’t forget that companies with strong employee strength can’t escape the loopholes as discussed. In such case personal attention from an attorney on employer-employee rights is the priority all the times. Consulting resourceful online legal directories for attorney search can also be an apt solution in most of the cases.
[Top]Singapore Employment Pass How To Get Approved
The Ministry of Manpower grants Singapore Employment Pass that is usually valid for one to two years to eligible applicants. Employment Pass provides comfort to foreigners in terms of travelling in and out of the country. The work visa is renewable as long as the pass holder remains employed in a Singapore company. It also provides chance to pass holder to apply for a permanent residence status.
Employment Pass is required for any entrepreneur who has just incorporated a Singapore company and desires to move to Singapore. Moreover, the work visa is also required for corporation looking to relocate their staff such as managing directors and management staff of the company.
We have provided basic considerations on how to be qualified, eligible and how to get approved for a Singapore Employment Pass. Please read on and take note of these details:
Eligibility Requirements:
Recognized educational diploma/degree
Professional qualifications
Specialist skills
Basic Considerations Assessed by The Ministry of Manpower:
Salary
Age
Roles & responsibility
Related work experience
Companys background
Companys paid up capital
Current citizenship
Basic Documents to Furnish:
The above qualifications should be satisfied first before securing the following documents: resume or CV stating your educational and employment history, copies of educational certificates and past employment testimonials, and a copy of your passport details. However, any documents that are not in English must be translated into English by an official translation service. In addition, there are three Employment Pass groups, P! for applicants earning a salary of more than S$7,000, P2 for salary of more than S$3,500 up to S$7,000 and Q1 for salary of more than S$2,500.
Service of a Professional Firm:
For processing of your application, you need to hire the services of a professional firm who will apply in your account for your Employment Pass. They will be the one to apply online to The Ministry of Manpower, as the application method is shorter. It normally takes 1 to 15 days to issue an approval. Once approved, the Ministry of Manpower will issue an In-Principle Approval (IPA) letter via email. The IPA letter must be produced upon collection of the EP at the Work Pass Division at Ministry of Manpower. An IPA letter is valid for Six months from the date of notification of approval.
[Top]Things to know for Legal Assistant Employment Application Questions
Corporations and law groups which offer legal services to their buyers hire paralegal associates and trainees who assist them in their legal activity. Every business requirements a good and knowledgeable worker for itself and it’s the same in situation of legal groups, they need intelligent paralegals that have thorough knowledge about legal proceedings. Prior to the official hiring and recruitment in the paralegals, the businesses or groups eat a testing test and an job interview to scan the candidates. This method helps to identify the correct person inside group who has to become selected. A general legal questionnaire is prepared by staff which includes queries inside the respective field. Sometimes paralegal job interview queries are incredibly tricky and fact oriented where an individual has to give appropriate references for his answers. Paralegal job interview is not as easy as the popular task interviews are because it requires the base of info and their appropriate legal things in their support.
Generally, most of the legal corporations research an excellent legal assistant so they don’t ask about legal procedures and related laws like “what is your knowledge about formal legal proceedings? This a weird kind of question if asked from a legal assistant inside a paralegal interview. The principal focus is towards the candidate’s easy skill and research abilities, regardless of whether a candidate can probe out detailed analysis about a legal scenario. Some legal businesses ask for strengths and weaknesses of an individual who is trying to find a task for your paralegal assistant. These sorts of questions are irrelevant to the career but they supply an initiating point in your formal session or sometime it may possibly begin with asking a person’s name. Generally, candidates who have completed their paralegal training make it through since they’ve rich knowledge about several legal aspects. And after the paralegal job interview questions arrive to civil matters, they typically ask questions related to intellectual property rights and real estate laws.
Paralegal job interview queries like “why ought to we take you as a paralegal? These kinds of questions are really confusing and put a candidate inside a quandary case mainly because a single wrong word can make the situation worse. In this respect an appropriate resolution based answer is needed which can justify the question. Sometimes the paralegal job interview questions may be from employer employee relation; just the straightforward rules practically nothing in depth is required. If someone has already got some experience as a paralegal then question may be asked about his jobs like his branch of working, documentation program is really important. If any question is related to past jobs experience then the answer needs to be stated inside a professional way due to the fact this will help an individual in elevating his profile. There are lots of open shut queries which are asked like “Describe a single of the worst experiences”. Another person has to react professionally and need to respond with a precise answer rather than indulging in details. In a paralegal interview, they may possibly ask about a person’s confidence level or his motivation techniques. Mainly the questions asked are from professional background of an individual including his past experiences.
Boone Gomez administers legal assistant.biz. For more information on paralegal interview questions and answers, visit http://www.legal-assistant.biz
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