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Tuesday, November 24, 2009

The President's Forthcoming Forum

President Obama has announced plans for a “Forum on Jobs and Economic Growth” to be held at the White House on Thursday, Dec. 3. The president will use the forum as an opportunity to " . . . hear from some of the best and brightest CEOs, small business owners, and financial experts about ideas for continuing to grow the economy and put Americans back to work."

The announcement continues: "During these difficult economic times, we have a responsibility to consider all good ideas to encourage and accelerate job creation in this country."

This is excellent in theory. It is hard to argue with the premise that one should consider "all good ideas."

I had the thought upon perusing this announcement that something was missing. The White House invitation list apparently does not include average Americans. The "bright CEOs" and financial experts on the list already have many forums through which they can make their opinions heard. Obama’s advisers need do nothing more than take notes on CNBC and Bloomberg broadcasts to get a good dose of their opinions. (Small business owners perhaps less so.)

It would be nice to expose the president and his team to some thinking from the legions of average Americans who are toiling in the trenches out there. The ones who are worrying about their jobs if not actually losing them.

But wait! Perhaps I was jumping the gun. Immediately after the Forum, we are told, Obama will be traveling to Allentown, Pa. There he will kick off a “White House to Main Street” tour. Through which the president can “take the temperature” of what Americans are experiencing.

This, too, is excellent in theory. However, it's unfortunately not likely that the "temperature" the president will be taking is going to be very representative. The good citizens of Allentown (lovely town though it is) do not constitute a random sample of all Americans. It's not likely to be a totally natural, unrestrained environment. It's also not likely that the Allentownians with whom the president comes in contact will be a random sample of the greater Allentown metropolitan area.

Hopefully Obama will still be able to pick up a few ideas. Particularly if he is able to exercise some control over the typical “politician’s disease” of seeking to be understood first, rather than to understand. It takes a disciplined politician indeed to listen rather than to explain.

The cynical among us might shockingly argue that it is not the sole, or even primary, purpose of these efforts to actually obtain new information. Much of what any elected official has to do in today's political environment is as much for show as it is for substance.

Regardless, the idea that the president is, in theory, opening his mind to new input on the economy and jobs is to be applauded.

The topic of focus for the Forum and the 'White House to Main Street' tour no doubt reflects Obama’s advisers cognizance of the fact that the economy and jobs remain the most important problem for Americans. We know also that only 8% of Americans believe that now is a good time to find a quality job, a new low.

We know that job creation in the country's businesses has inched back up a little from its nadir, but is nowhere near where it was in 2008. The percentage of employed workers who say their companies are hiring is just barely above the percentage who say their companies are firing.

Our latest USA Today/Gallup poll shows that Obama’s ratings on handling the economy have fallen to a new low. Obama’s advisers have certainly also noted that the public is not thrilled with the idea of turning to “more government money” as the way to fix the problem.

An interesting NBC News/Wall Street Journal poll last month found that just a little more than one-third of Americans believe the government has not done enough to improve economic conditions. The same poll also shows that given two choices, Americans say the president and Congress should “worry more about keeping the budget deficit down, even though it may mean it will take longer for the economy to recover” than “worry more about boosting the economy even though it may mean larger budget deficits now and in the future.” By a two-to-one ratio.

Tellingly, a Gallup headline in mid-August was “Many Americans See Stimulus’ Costs, Not Benefits.” Americans are not enamored with the idea of pouring government money into the economy to help stimulate it.

This past weekend we bypassed CEOs, pundits and financial experts and went right to the American people with this basic question: "In your opinion, what would be the best way to create more jobs in the United States?" The preliminary results suggest that average Americans have some very interesting suggestions. We’ll be releasing those results in detail next week, just before the Forum.

We learn things through casual conversation at parties and chatting around the water cooler. Similarly, the president may learn some things at his Forum and travels around the country. I would hope the president and his advisers would also attempt to gain insights using more systematic procedures. I.e., augmenting their temperature taking exposure to average Americans with a little more exposure to scientific summaries of where the public stands on issues. Which we, and many other survey researchers, have available in abundance.

6 comments:

Prof. Samuel D. Bornstein said...
November 25, 2009 at 12:16 PM  

It is said that Small Business is the Job Creation Engine of our economy.

Small businesses are facing many challenges in this economic downturn. Historically, small business has been a reliable source for job creation and played a major role in an economic recovery. After all, small business is the job creation engine of our economy. Providing better access to capital for small businesses was often sufficient to jumpstart many small businesses and stimulate job creation. But, this time it is different.

The economic health of small business is at-risk as a result of small business owner involvement in the toxic mortgage crisis and the resulting defaults, foreclosures, and job loss.

The toxic mortgages, such as Alt-A, Alt-A ARMs, Option ARMs, Interest-Only, and Subprime, etc, acquired by a significant number of small business owners to fund their businesses is the Game Changer. In fact, during the housing bubble 2204-2007 small business owners were targeted for these risky mortgages and fell prey by the ease in which they could access cash for their businesses with little or no proof of income.

As these mortgages reset in the next few years, there is great concern that these small business owners will default as their monthly mortgage payments become unsustainable. The survival of these small businesses will be challenged by financial distress and their employees may lose their jobs.

I presented my research in testimony to the US Senate and California Assembly. My Bornstein & Song Small Business Toxic Mortgage Surveys determined that during the subprime era, a significant number of small business owners fell prey to these toxic mortgages.

In order to confirm our research, we authored three Small Business Toxic Mortgage Surveys. The U.S. National survey was completed in November 2008, the California survey in April 2009 and the California Hispanic survey in June 2009.

These surveys provide compelling evidence that a significant number of California and especially California Hispanic small-business owners fell prey to the toxic mortgages, such as Alt-A, Alt-A ARMs, Option ARMs, Interest-Only, and Subprime.


Samuel D. Bornstein
Professor, Kean University, School of Business, Union, NJ
Partner, Bornstein & Song, CPAs & Consultants, Oakhurst, NJ
bornsteinsong@aol.com

Anonymous said...
November 26, 2009 at 2:11 AM  

you sure O's approval is 49%

Anonymous said...
November 26, 2009 at 2:12 AM  

Guys sorry if off topic but your presidential tracking numbers do not work you report 49% but the calculated percentage is 46% What gives? Michael Mann crunching your numbers?
2879 X 39% =1123 732 X 73% - 534
a/b X 100 (1123+534)/(2879+732) X 100 = 45.88
Whats UP? The only way to get to 49 is to Add the maximum margin of error to both sets of data and then round up better then 1/2 a point!!

Paul Marsolek said...
November 27, 2009 at 9:22 AM  

It is a great step that the president will be going to the streets to find out what American's think and how to stimulate the ecomony - perhaps he will discover down home ideas that will become policy. The Gallup tracking poll on what American's think, when it is released will be the real deal and the president should take it to heart.

Anonymous said...
December 2, 2009 at 10:17 AM  

My thought on this issue is if you multiply the gayness of people blogging by the amount of people who care, it is obvious that you are a nerd.

Anonymous said...
December 3, 2009 at 10:20 AM  

The approval is 49% and the calculations are incorrect due to the lack of reliability of the sources he used to obtain his information. Why would they possibly lie about he drop in obama's approval rate, the fact that it is simply dropping relates to the lack of approval.

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