So do Republicans in Congress get to take the credit?
Unemployment Drops To 7.5%, Lowest Since December 2008
|by Anonymous||reply 101||12/11/2014|
|by Anonymous||reply 1||05/04/2013|
I finally found a job, but I didn't add to the drop in statistics because my unemployment had already run out four months ago.
|by Anonymous||reply 2||05/04/2013|
The Republicans get to take credit for stalling the economy, for crippling government, for making the straw man arguments about the debt ceiling, the national debt and the budget deficit. Fuck them and the billions they rode in on.
They have done everything to hobble this president and STILL Obama prevails. They are going to shit themselves with another President Clinton.
|by Anonymous||reply 3||05/04/2013|
That's not accurate...
Many people have given up looking for work or their UI ran out. This is just an excuse for Congress to continue to not do anything about the job crisis.
|by Anonymous||reply 4||05/04/2013|
No, actual employment is up overall, although especially in lower-paid jobs. But most economists agree that the Republican sequestration is a big drag on the economy right now. I.e., without it we could be doing substantially better.
|by Anonymous||reply 5||05/04/2013|
Is the drop in unemployment somehow related to the spike in suicides?
|by Anonymous||reply 6||05/04/2013|
Isn't the argument that the unemployment figures are cyclical and that the economy has recovered at a much slower rate than it could have? Also, how accurate is this figure when so many have dropped out of the workforce or have delayed entering it.
|by Anonymous||reply 7||05/04/2013|
Congress needs to do something about outsourcing like offer tax break incentives for those who hire domestically and offer tax breaks for those who hire people who are considered "long term unemployed". I know Obama tried to push through a "jobs bill" last year that was rejected by the Repugs but he's done nothing since then.
The job market is hell right now.
|by Anonymous||reply 8||05/04/2013|
Where it not for the Repugs it would be 6.5%.
|by Anonymous||reply 9||05/04/2013|
The Repugs control the House. They have had control over all of this, thus they get the award bringing down unemployment, and they will tout it sadly. They'll also say that they stopped Obama's deadly economic policy which led to the bad economy during his first term. I'd love to know though how this all actually happened in the first place. The stock market is soaring.
|by Anonymous||reply 10||05/04/2013|
Why isn't my company hiring more people despite exceeding their annual profit expectations? They put it out there in the annual report bragging about the amount of cash they have. How dare they??!! My department is swamped with work.
|by Anonymous||reply 11||05/04/2013|
Corporations are money hoarders...especially now. They know they have the upper hand in this job market and that people will work for less if they're desperate enough. This is how they will get domestic workers to work for outsourcing wages.
Corporations have no soul.
|by Anonymous||reply 12||05/04/2013|
Remember, there were a lot of rethug asshat employers who swore they would not hire another person until there was a rethug in the white house. They hoped to scare people into voting for Mittens. I think many of them realize that they can't wait another four years and still not be sure of a rethug prez.
|by Anonymous||reply 13||05/04/2013|
I'm in the same position that r11 is in It sucks but at least I have a job. The top 4-6 ppl in the company are getting really really rich
|by Anonymous||reply 14||05/04/2013|
The Republicans deserve no credit. They fought against every thing good that Obama or the Fed has done.
|by Anonymous||reply 15||05/04/2013|
r10, the Republicans control the House and because there are more than 40 of them, they control the Senate as well.
|by Anonymous||reply 16||05/04/2013|
Has that turd Jack Welch commented on the new numbers?
Does he still think Obama is cooking the numbers to get re-elected? Or has he come up with a new conspiracy theory?
|by Anonymous||reply 17||05/04/2013|
Don't believe the hype, OP. Unemployment rate is a nearly meaningless statistic.
From yesterday's NY Times:
[quote] The share of working age American adults with jobs was 58.6 percent in April. In other words, the United States economy is not getting any closer to recreating the roughly 10 million jobs lost during the recession. The share of adults with jobs did not change. What grew instead is the share of adults no longer counted as part of the labor force. The federal government counts 11.7 million Americans as unemployed. The real number is more like 17 million.
|by Anonymous||reply 18||05/04/2013|
Take your logic elsewhere. We don't care about facts!!!
|by Anonymous||reply 19||05/04/2013|
The economy added 165,000 jobs last month & previous months were revised upward. That's good news.
|by Anonymous||reply 20||05/04/2013|
They will give credit to the sequester, which they brought about.
|by Anonymous||reply 21||05/04/2013|
Per Nate Silver, that's barely the break even number needed to match population growth, R20. Good in the sense that it's not zero? Sure. Good in the sense that the job picture is improving? No.
Nate Silver in NY Times:
[quote] To create jobs at a rate that exceeds the rate of population growth, I’ll spare you the math (although it is straightforward), but this works out to a break-even number of 166,000 jobs per month. To clarify, this reflects the growth rate in the adult population and not what the government defines as the labor force. I am not a fan of using calculations like the unemployment rate that rely on the definition of the labor force because entry and exit into the labor force can be counter-cyclical: more people exit the labor force when they perceive the economy to be weak, which “helps” the unemployment rate, and vice versa. However, the growth in the adult population is relatively exogenous from economic performance and is probably worth considering.
|by Anonymous||reply 22||05/04/2013|
Nate is a brilliant statistician and halfway decent political analyst. But he's no economist.
That benchmark figure is high.
The ones I see are on the order of 100-150 K.
The economy gained 176,000 last month, and has gained well over 600,000 in the last three months. That's more than enough to keep up with population growth.
|by Anonymous||reply 23||05/04/2013|
I have two jobs that equal over 40 hours a week, no benefits and gross about $19,000 a year.
According to the government, I'm a fucking success story! Have no idea what I'm going to do to pay for health insurance when that requirement kicks in. Oh, I know, I'll get those lovely subsidies to pay for my $10,000 deductible catastrophic plan. Excellent. Now, where do I get the $10,000 when I drop from exhaustion or go insane and they have to cart me away?
Kill the rich!
|by Anonymous||reply 24||05/04/2013|
Since the media and we on the DL have rightly blamed President Obama for the high unemployment during his first term, it is only right that he gets the well-deserved credit for ending it.
The Repugs have had no effect either way. They aren't here.
|by Anonymous||reply 25||05/04/2013|
I have roughly $700,000 in bonds, stocks and cash at 57. Am I in a good place or not? Should I have more? I own the house and have no debts.
|by Anonymous||reply 26||05/04/2013|
Do you have a 401k? Even without one, I would say that you are in a very good situation.
|by Anonymous||reply 27||05/04/2013|
You are doing well. You are one of the few without a mortgage or debts and have substantial savings.
If you can live on 3 to 4% of your savings per year, you should be OK. If you can hold off getting Social Security until you are 70, you will be in a even better place.
At your age, you should have about 60% of your savings in bonds. A rough estimate for bond/savings holding is equal to one's age. As one gets older, one cannot weather stock's volatility.
|by Anonymous||reply 28||05/04/2013|
I wouldn't put that much money in bonds. Bond yields are very low and prices have more downside potential than upside potential.
I'd split between stocks that pay dividends and money market funds. MM funds won't give much, if any, interest, but they are a secure place to park your investment.
|by Anonymous||reply 29||05/05/2013|
OP got his stats from the white house press agent right?
|by Anonymous||reply 30||05/05/2013|
That sucks, R24
The main problem with sick care in the US (and the rest of the western world) is that it is so heavily regulated, requiring forms and paperwork in triplicate signed off by a half dozen bureaucratic drones that it ends up costing 10x more than it should.
Many people are starting to realize they can fly to Mexico, or Costa Rica, or even Singapore and spend a week and get excellent treatment at a lower cost than they can in the USA.
The ACA is just going to make this worse.
|by Anonymous||reply 31||05/05/2013|
The ACA is not going to make things worse.
|by Anonymous||reply 32||05/05/2013|
1. a lot of people stopped looking for jobs
2. they are now on SSI
3. they are homeless
|by Anonymous||reply 33||05/05/2013|
Where do you live, what do you do, and do you have benefits?
Unless you are a salary worker for a company that employees fewer than the equivalent of 50 people your costs are going to skyrocket. God help you if you are self-employed!
My company is trying to find a workaround but it is looking bleak. If it weren't for the people that I employ who will lose their jobs I would just say "Fuck It" and retire to Costa Rica or Uruguay.
|by Anonymous||reply 34||05/05/2013|
Ezekiel Emanuel, a former health-care adviser to President Obama and brother of Chicago Mayor RahmEmanuel, spills the beans in WSJ (my highlights):
In less than five months, on Oct. 1, the Affordable Care Act's insurance exchanges will go live online. Millions of Americans will suddenly be able to log on to a website and choose their own heath-care coverage from a menu of subsidized options for prices and coverage levels. As the opening day gets closer, anxiety is increasing over how well these online exchanges will function.
Seventeen states and the District of Columbia are operating their own exchanges, seven states are operating exchanges in partnership with the federal government, and the federal government is running exchanges for the remaining 26 states that opted not to create their own. All are rushing to ensure that their systems get up and running on time, and nobody is forecasting a glitch-free rollout, not even the president. Transforming the U.S. health-care system—which is larger than the economy of France—is one of the most daunting administrative tasks government has ever confronted. There will be bumps in the road; this is inevitable.
Setting up the exchanges will pose a host of technological challenges, such as digitally linking an individual's IRS information (which determines a subsidy level) to the insurance offerings in the individual's home area and to employment data—while simultaneously factoring in Medicaid eligibility.
Bugs in the computer software are bound to pop up, and the quality of the user experience will undoubtedly need improvement[...] glitches will be ironed out within a few years, and certainly by 2016 browsing your health-insurance exchange will be very much like browsing Amazon and other online shopping sites.
Then Emanuel gets to an even bigger part of the nightmare:
There is, however, one key aspect of the exchange rollout that needs more attention: enrollment. Government exchanges on a national scale have never been tried before. There is no history—except in Massachusetts—to suggest how many Americans will enroll and who they will be. This uncertainty could set off a negative reinforcing cycle that undermines the entire exchange system.
Here is the specific problem: Insurance companies worry that young people, especially young men, already think they are invincible, and they are bewildered about the health-care reform in general and exchanges in particular. They may tune out, forego purchasing health insurance and opt to pay a penalty instead when their taxes come due.
The consequence would be a disproportionate number of older and sicker people purchasing insurance, which will raise insurance premiums and, in turn, discourage more people from enrolling. This reluctance to enroll would damage a key aspect of reform.
Insurance companies are spooked by this possibility, so they are already raising premiums to protect themselves from potential losses. Yet this step can help create the very problem that they are trying to avoid. If premiums are high—or even just perceived to be high—young people will be more likely to avoid buying insurance, which could start the negative, downward spiral of exchanges full of the sick and elderly with not enough healthy people paying premiums.
What's really going on here is a program that attempts to suck in the youth to pay for the healthcare of the elderly. It's insane. On top of that, the first year penalty for not buying insurance is small ($95), so most young will opt out, meaning the revenue to support the structure will have to come from massive premium hikes paid by those older who opt to stay in the system. There is no other way out if Obamacare goes into affect. Well, there is one way out. According to Emanuel:
Fortunately, there are solutions. First, young people believe in President Obama. They overwhelmingly voted for him. He won by a 23% margin among voters 18-29—just the people who need to enroll. The president connects with young people, too, so he needs to use that bond and get out there to convince them to sign up for health insurance to help this central part of his legacy. Every commencement address by an administration official should encourage young graduates to get health insurance.
Oh yeah, youth who are now working at second tier jobs are going to fork over a part of their tiny pay to Obama to pay for his socialistic healthcare plan. Where do I buy a ticket to watch this happen?
But do get ready for a barrage of propaganda. Emanuel, again:
Finally, and most important, we should adopt some of Massachusetts' practices. When state officials in 2006-2007 were rolling out their exchange—called the Massachusetts Connector—they mounted a sustained campaign to encourage enrollment by young people. One aspect of the campaign focused in particular on young men, even heavily promoting the new exchange on TV during Red Sox games and hosting an annual "Health Connector Day" at Fenway Park.
Not only did the Massachusetts campaign help establish the norm—that everyone needs to have health insurance—it also promoted awareness around the subsidies and the affordable policies available. Within one year of implementation, the rate of uninsurance dropped by nearly two-thirds among 19-26 year olds, to 8.2% from 21%. Now it is crunchtime for health-insurance exchanges. The Obama administration and state governments must have a robust plan to reach Americans—especially young people—through every media available, including but not limited to baseball games.
During the last election, President Obama showed that he could use data to identify and mobilize young people. Come the fall, he and his administration need to turn these skills to motivate young Americans to do more than vote—and get insurance. There is no time to lose. We need to educate Americans about what is coming.
Clearly, the Obamacare designers are scared, as they should be, from bugs in computer programs to a cash flow model that won't work, these are going to be problems right out of the gate, only to be followed by problems with a socialistic structure that will distort allocation of healthcare and suffocate innovation and effort in the sector. Who needs Halloween, when we will have an early October Obamacare horror show?
|by Anonymous||reply 35||05/07/2013|
The Unemployment stats are worthless.
When compared to the "Workforce Participation Rate" the US employment levels are lower than 1979- and in 1979 most women didn't work outside the home!
When you factor out all the bullshit and noise, the current economy is worse than the height of the first "Great Depression" in the 30s.
I'm not blaming Obama, or Bush, but the fact that our system is sclerotic and hampered by 28 million pages of regulatory bullshit passed by congress to help the "Big Corporations", "Big Banks" and "Top 0.1%" get richer at the expense of the bottom 99.9%!!!
|by Anonymous||reply 36||05/08/2013|
The economy is and has been adding jobs.
|by Anonymous||reply 37||05/08/2013|
When Republicans bitch about the recovery being "slower than it should be!" or "slower than it's every been!" they are, of course, being completely fuckwitted and deliberately misleading.
The current recovery cannot be measured against any economic downturn in the US economy other than the Great Depression. We escaped a second Great Depression by the skin of our teeth.
Compared with our recovery from the Great Depression, we're doing just fine, thanks. It's lucky we've had President Obama and not some shitstain Republican austerity idiot. Austerity measures are the surest way to stop any recovery and make everything worse.
|by Anonymous||reply 38||05/08/2013|
How did we exit the first Great Depression? By bombing Europe and Japan? Did that magically make it better, because I thought an expanding economy was based on producing things, not destroying them.
Could the current Greater Depression be the result of the Federal Reserve printing shit-tons of cash that went to the DotCom bubble, and when that crashed they doubled down and printed even MORE money that ended up making houses expensive, and when THAT crashed they just printed it to go the stock market?
Can you explain your moronic assessment, in detail?
Both parties are in the pockets of the "Big Banks", "Big Corps" and the "Top 0.1%" and could care less about you.
|by Anonymous||reply 39||05/08/2013|
[quote]They'll (Rethuglicans) also say that they stopped Obama's deadly economic policy which led to the bad economy during his first term.
No, both parties are sucking the cocks of the banks and big corps. None of them can understand that when companies and people get super low interest rates and cheap mortgages (which is what the Federal Reserve was doing for the last 20+ years) the capital structures become dependent on "hot new" money and falter when that "hot new" money doesn't appear.
[quote]I'd love to know though how this all actually happened in the first place. The stock market is soaring.
The money the Federal Reserve creates out of thin air (well, actually they by USTreasury bonds that you and your children and grandkids will be paying for.
The reason the market is soaring is because lots of newly printed money is going to the Primary Dealers who use it to by stocks and bonds, and the FED is GIVING them $85B (yes, BILLION!) PER MONTH!!! No wonder it is getting bigger!
The scary part- once the FED decides to end that $85B/mo junkie fix the market will collapse.
That is one of the central insights of Austrian economists like Mises and Rothbard. Until bad debt is destroyed, and interest rates normalize in a free market, the "BOOM/BUST" cycle will repeat until the whole system is destroyed.
Here is Mises-
If the credit expansion is not stopped in time, the boom turns into the crack-up boom; the flight into real values begins, and the whole monetary system founders.
|by Anonymous||reply 40||05/08/2013|
Hey Republicans, how's that BENGAAAZIIIIIIE thing going for ya now that the economy is in solid recovery?
|by Anonymous||reply 41||05/26/2013|
[quote]Could the current Greater Depression be the result of the Federal Reserve printing shit-tons of cash that went to the DotCom bubble, and when that crashed they doubled down and printed even MORE money that ended up making houses expensive, and when THAT crashed they just printed it to go the stock market?
No, but thanks for playing. We have some lovely consolation prizes for you.
[quote]The money the Federal Reserve creates out of thin air (well, actually they by USTreasury bonds that you and your children and grandkids will be paying for.
And again, no. None of what the Fed is doing is new or unusual.
[quote]The scary part- once the FED decides to end that $85B/mo junkie fix the market will collapse.
Nope, because the private sector will have picked up the slack by then. Again, none of this is new. Your predictions have never come true in the past; there is no reason to believe they will come true this time.
[quote]That is one of the central insights of Austrian economists like Mises and Rothbard.
Too bad it is an "insight" that has no connection to the real world.
[quote]Until bad debt is destroyed, and interest rates normalize in a free market, the "BOOM/BUST" cycle will repeat until the whole system is destroyed.
You don't know much about history, do you? Free clue: check out the "BOOM/BUST" cycles of the late 1800s, prior to the creation of the Federal Reserve.
|by Anonymous||reply 42||05/26/2013|
After reading R42s nonsense, maybe this parable will make more sense-
Imagine that you are a bus driver at the edge of a desert, about to take a busload of passengers across it. You have left all gas stations behind, and are now faced with a decision. There are a number of towns on the other side of the wasteland before you, each a different distance away. The farthest away of these towns also happens to be the closest to your final destination. You can try to reach any of them, but there is a trade-off: the farther away the town, the less the passengers can use the air-conditioning to alleviate the desert heat, as running the AC will use up the gas more quickly.
In order to make your decision, you look at your fuel gauge and determine how much gas you have. You tell the passengers that they must now make a trade off between comfort on the way and distance traveled, as the more air conditioning they choose to use, the faster the bus will consume fuel. Then you collect votes from the passengers on what temperature to keep the bus. You perform some calculations on mileage, speed, and fuel consumption, and pick the farthest city you can reach given the amount of gas you have and the passengers' vote on the use of air conditioning.
The passengers had to decide whether to cross the desert in greater comfort but arrive farther from their final destination, or in less comfort but with a closer arrival. The science of economics has nothing to say about the combination that they picked, other than that it seemed preferable to them at that moment.
However, also imagine that, before you began your calculations, someone had sneaked up to the bus and replaced the passengers' real votes with a fake set that choose a higher temperature, in other words, less fuel consumption. You made your choice as if the passengers would tolerate a temperature of, say, 80 degrees, whereas in reality they will demand to have the bus cooled to 70. Obviously, your calculations will prove to have been incorrect, and the trip will not come out as you had planned. Your plans will be overly ambitious. You will begin by driving as if you had available more resources than you really do, and end by phoning for help when the deception is revealed by the sputtering of your engine.
|by Anonymous||reply 43||05/27/2013|
I offer the above as a metaphor for the Austrian theory of the trade cycle, which offers an explanation of why the economy swings through boom times and recessions. You, the driver, represent the entrepreneurs. The gas is the stock of capital goods. The trip across the desert is the next "round" of production. The passengers represent the consumers, and their choice on how much to use the air conditioning is analogous to how much consumers are willing to put off consumption today in order to save for the future -- their time preference for current consumption over future consumption. The ultimate destination is the satisfaction of as many wants as possible. And it is the central bank -- in America, the Federal Reserve -- that has sneaked up and tampered with the consumers' votes.
What the central bank tampers with is the outcome of the consumers' "votes" on time preference, which is the natural (originary) rate of interest. Consumers' time preferences tell us how much capital will become available through consumers' saving, or, in our metaphor, cutting back on the AC. When the central bank artificially lowers the rate of interest, entrepreneurs make their plans believing that consumers are willing to delay consumption and save more than they really are. As the bus driver, you think that the passengers are willing to endure the heat enough to reach Phoenix, but, in reality, they will force the bus to consume gas so rapidly that you should have planned only to reach Albuquerque instead. Your attempt to reach Phoenix will fail, leaving you "out of gas" in the middle of the desert.
The natural rate of interest, or that rate that would exist on the unhampered market, measures consumers' time preference because it reflects what borrowers must pay lenders to persuade the lenders to delay their own consumption. If I have $100, I could spend it today on a nice dinner with my wife. Or, I could lend it out for a year, at the end of which I could spend it on a somewhat nicer dinner. Exactly how much nicer a dinner I must expect to receive before I will lend the money is an expression of my preference for current consumption over future consumption. If I demand a rate of interest of at least 5%, this means that a $105 dinner next year is marginally more valuable to me than a $100 dinner this year. On the other hand, if my friend Rob demands 10% interest, he is demanding a $110 dinner. He values current consumption compared to future consumption more highly than I do.
|by Anonymous||reply 44||05/27/2013|
At any particular rate of interest, the borrowers are those whose time preference is the opposite of lenders -- the higher a rate of interest I'm willing to pay on a loan, the more I prefer current consumption to future consumption. If I will pay 10%, then I prefer $100 for consumption today to $110 available for consumption a year from now. The net result of all lenders and borrowers expressing their time preference by offering and bidding on loans is the natural rate of interest.
This natural rate of interest tells entrepreneurs whether a particular investment is worth making or not. In an unhampered market, the natural rate of interest would be equivalent to what is termed, in finance, the risk-free rate of interest. Since entrepreneurs can earn this return on their money simply by lending it out, they will only undertake capital projects if they estimate that their return will be higher than the natural rate of interest. In terms of our analogy, it makes no sense to plan our trip with Phoenix as the destination if the consumers are only willing to turn off the AC (put off current consumption) enough to reach Albuquerque. For any project that returns less than the natural rate of interest, the consumers are indicating that they would, in fact, prefer that these resources be used for current consumption rather than being invested in this project.
Now, let us see how the activities of the central bank affect this relationship. We will use the Federal Reserve, the most powerful central bank in the world, and the recent Internet boom to illustrate what occurs.
As Dr. Frank Shostak points out, the Fed began a three-year long expansion in 1996: "After falling to a yearly growth of 1.6% in May 1996 the yearly rate of growth in the money base climbed to 15.2% by December last year." Meanwhile, the interest on the 30-year Treasury bond dropped from a high of over 7% to a low of 5%. The stock markets soared, especially the stocks of Internet startups. The "tech heavy" NASDAQ composite went from just over 1000 to 5132 during this period, rising over 80% in 1999 alone.
Buoyed by the stellar stock market returns, consumers built massive additions to their houses, and took trips they otherwise would not have taken. Real estate, especially in the "dot-com areas" such as Silicon Valley and New York City, soared in price.
|by Anonymous||reply 45||05/27/2013|
However, the Fed knows that such a boom cannot be sustained indefinitely without leading to ever-increasing rates of inflation. Last year, the Fed began raising interest rates to check the progress of the boom. As the Fed's actions began to take effect, the malinvestments of the boom period began to be revealed. Internet startups shut down for lack of funds. The stocks of other high tech companies crashed -- Amazon.com from a high of 113 to a current 30, Qualcomm from a high of 200 to 62, Red Hat from a high of 151 to a low of 18. Peter Eavis of TheStreet.com reports: "In the past month, Chicago’s Bank One and Charlotte’s First Union, among the nation’s largest banks, have reported billions of dollars in losses as they repair missteps, all committed in this boom." Meanwhile, all around my town I see large construction projects abandoned after being only 10 or 20% completed.
James Cramer, writing in the June 26th New York Magazine, hit the nail on the head with his diagnosis of the downturn:
The Federal Reserve, in its desire to stomp inflation, has raised rates to the point where business is faltering throughout the country… That means that many companies that had been thinking we were in for boom times have simply gotten it wrong.
It is important to note that the Austrian theory does not imply, as some have interpreted it, that we are witnessing the results of "overinvestment." Austrians do not contend that the Fed really has put more gas in our car! Since the Fed produces no capital goods, this obviously could not be the case. Rather, we suffer from malinvestment, as we have spent time and resources on projects that we cannot actually complete, and which we would not have undertaken if we had had an accurate reading on our gauge. As Mises put it, " A further expansion of production is possible only if the amount of capital goods is increased by additional saving, i.e., by surpluses produced and not consumed. The characteristic mark of the credit-expansion boom is that such additional capital goods have not been made available." (Human Action, XX.6)
|by Anonymous||reply 46||05/27/2013|
Differentiating overinvestment from malinvestment is only possible because of the key Austrian insight that capital has structure, and it is this structure, much more than the neoclassical concept of the "amount" of capital, that is important to the economy's smooth functioning. The Austrian concept of complex orders of capital goods interlocked in complementary structures stands in stark contrast to, for instance, the neoclassical Cobb-Douglas function, where a single variable, Kt, stands for the "capital stock at the beginning of the year." (This definition is from Miller and Upton's Macroeconomics: A Neoclassical Introduction.) If you have any doubt about which model better reflects economic reality, consider whether you would prefer to live in an economy like America's, with a rich variety of complementary capital goods, or another economy with the same "amount" of capital goods in its "Kt variable," but with the capital consisting entirely of machines for kneading pizza dough.
The distinction between the amount of capital and the structure of capital explains why (besides simple lying) the Soviet Union was able to report impressive macroeconomic statistics for capital goods production while still being an economic disaster. The Soviet planners were able to direct the economy to produce large amounts of capital goods without being able, in the absence of any basis for economic calculation, to achieve a sensible capital structure.
Another analogy for the process by which the Fed "manages" the economy would be that of a hyper-active pediatrician, who never feels that the children under his care are growing at the "right" rate.
The body grows by a process we do not consciously control, based, in ways we only partly comprehend, on genetic makeup, nutrition, rest, exercise, and so on. Each cell responds to its own local conditions, and the net result of all of these responses is the body's overall rate of growth. Similarly, each individual in the economy makes local decisions based on his unique circumstances, the net of which is the overall state of the economy. By using this analogy I do not mean to contend that the economy is "really" some sort of organism, only that the process of economic growth is in some ways similar to that of organic growth.
|by Anonymous||reply 47||05/27/2013|
The Fed, the pediatrician of our analogy, feels it can improve on this natural state. It doesn't alter any of the real inputs to this process, such as capital currently available or the willingness to save. Instead, it fidgets with the economy's "hormonal levels" by adjusting the interest rate. When it makes credit easy, the economy's apparent growth speeds up. In fact, what has occurred is that certain visible manifestations of growth have accelerated, while other, equally necessary but less visible growth processes have suffered as a result. Without the necessary "nutrients" being present, this sort of "growth" is built on a foundation of sand. The "bones" weaken and cannot support the body. The central bank, fearing a collapse, then tries to reduce the rate of growth through tightening credit. This in no way undoes the damage done during the period of credit expansion, but, rather, adds a new set of distortions to those already present. Of course, once the central bank has engaged in credit expansion, it is foolish to blame it for reining in the boom. The only alternative is eventual economic collapse in what Mises called "the crack-up boom," or hyperinflation and the breakdown of the exchange economy.
Hopefully, this piece has given those unfamiliar with the Austrian theory an understanding of how it explains the trade cycle. With these basics at hand, in the next piece in this series we will proceed to examine the challenge to Austrian theory presented by the "rational expectations" school of economics.
Now, anyone who reads these posts can understand why giving the .gov power to print money to bail out the banks and wage wars without end will result in misery, whereas reducing the powers of .gov to spend YOUR money will make things better.
|by Anonymous||reply 48||05/27/2013|
Tl;dr, Lew Rockwell nut.
|by Anonymous||reply 49||05/27/2013|
Thank you, R48. It's amazing how many people fail to see the bigger picture and the systemic forces at play. Economics, like physics, is ultimately a zero sum game.
Each administration has its own ways to punt the ball further down the field, but one day (in most of our lifetimes) this bloated, broken system is going to fall apart.
In the meantime, keep spreading the word. Be prepared to be derided as Chicken Little by the chattering classes who are long on opinions and short on actual clear insight - but keep spreading the word.
|by Anonymous||reply 50||05/27/2013|
It is NOT A ZERO SUM GAME!
If it was, we would still be living in trees!
Peaceful, cooperative, mutually beneficial exchange is the heart and soul of human nature!!!
|by Anonymous||reply 51||05/27/2013|
R50, I didn't mean to "yell", I just cannot stand it when people say economics is "Zero Sum".
If there were only 100 people on the planet, in a small area, then the fact that each person SPECIALIZED in one area- woodwork, leatherwork, gardening, fishing, etc.- it would make the whole society much better off than each person trying to live alone.
That is why Austrian economics is superior to Keynesianism- Keynes puts us all in boxes and plans our lives and talents and output, and just looks at "aggregates". If you pay half your society to do nothing or dig useless ditches or fill out paperwork...well, your society is going to fail.
Again, I apologize for my comment at R51- it was a reaction to the Zero Sum Game issue.
|by Anonymous||reply 52||05/27/2013|
In a market-based labor contract, there is no exploitation. People come to agreement based on their own perceptions of mutual benefit. A person who believes it is better to work for $1 an hour rather than sit at home doing nothing is free to make that contract. In fact, a person who works for a negative wage - who pays for an internship, for example - is free to make that deal too.
|by Anonymous||reply 53||05/27/2013|
Can't we PLEASE go back to talking about clothes and Janet Jackson???
|by Anonymous||reply 54||05/27/2013|
The Libertarian Idiot Troll(TM) clearly gets paid by the word.
|by Anonymous||reply 55||05/27/2013|
Obama is r25's hero.
|by Anonymous||reply 56||05/28/2013|
Things just keep getting worse for the American worker, and by implication US economy, where as we have shown many times before, it pays just as well to sit back and collect disability and various welfare and entitlement checks, than to work .The best manifestation of this: the number of people not in the labor force which in March soared by a massive 663,000 to a record 90 million Americans who are no longer even looking for work. This was the biggest monthly increase in people dropping out of the labor force since January 2012, when the BLS did its census recast of the labor numbers. And even worse, the labor force participation rate plunged from an already abysmal 63.5% to 63.3% - the lowest since 1979! But at least it helped with the now painfully grotesque propaganda that the US unemployment rate is "improving."
|by Anonymous||reply 57||05/29/2013|
And now that the economy is under control and Obama care is adding to the great deficit reduction we have Republitards blathering about the TRUE numbers?
It was Reagan who cooked the unemployment books to make his government expansion look good. Get used to it.
|by Anonymous||reply 58||05/31/2013|
There is no way I am reading all of those posts r43.
|by Anonymous||reply 59||05/31/2013|
Your loss, R59-
Teaching by parable has been a mainstay of education for thousands of years. Only fools refuse to be educated.
|by Anonymous||reply 60||05/31/2013|
really? I am job hunting and it seems harder than ever :-(
|by Anonymous||reply 61||05/31/2013|
It's going to get worse. Companies are moving any work that they can outsourced overseas. The tax and regulatory burden (IRS, OSHA, DHS, ACA, FICEN) are making employment of US workers unprofitable.
|by Anonymous||reply 62||05/31/2013|
[quote]After reading R42s nonsense, maybe this parable will make more sense-
No, dear, it doesn't, but thank you for playing. We have some lovely consolation prizes for you.
I do love the article, though, particularly with its ignorance of economics and history. The economic data from the 1800s seem to have completely escaped the author.
[quote]That is why Austrian economics is superior to Keynesianism
In your dreams, dear. The events of the past several years have made it quite clear that Keynes has won, hands down.
[quote]Keynes puts us all in boxes and plans our lives and talents and output, and just looks at "aggregates".
No, dear, he doesn't. You really shouldn't post on a topic you clearly know nothing about. Displaying your ignorance like this is simply embarrassing.
|by Anonymous||reply 63||05/31/2013|
[quote]Things just keep getting worse for the American worker, and by implication US economy
Of course, out here in the real world, the economy is recovering, albeit slowly. You should join us here someday.
|by Anonymous||reply 64||05/31/2013|
Another "GOOD" jobs number, another round of bullshit.
80% of the "new jobs" were in hospitality and service industries, and 90% of those jobs pay less than $10/hr.
|by Anonymous||reply 65||12/09/2014|
R62 has been proven wrong.
It is a whole lot better.
|by Anonymous||reply 66||12/09/2014|
You posted this 18 months ago, and the US economy is in WORSE shape today.
Do you worship government so much you can't see reality?
|by Anonymous||reply 67||12/09/2014|
Actually, in 18 months, average unemployment rate is down. Average rate of pay is up. Stocks are near record highs, again. The deficit is dropping again and again. Gas is averaging below $3 per gallon nationwide. It's below $1 some places. Inflation continus to be below the Fed's target of 2% yearly. Housing is recovering. Real estate in my city is booming. They give out free puppies at Starbucks. What could R67 possibly be reading that misses all of this?
|by Anonymous||reply 68||12/09/2014|
the government and media NEVER lie.
|by Anonymous||reply 69||12/09/2014|
R69, the more you write, the crazier you seem.
|by Anonymous||reply 70||12/09/2014|
You're the one who believes government number bullshit!
Do you REALLY think the economy is getting better? Are you that credulous, or just that stupid?
|by Anonymous||reply 71||12/09/2014|
It's not just the government that gives out employment statistics. Do you know what ADR is, R70?
|by Anonymous||reply 72||12/09/2014|
Yes, R72- that's why I KNOW these numbers are bullshit, just as they were under Bush.
Why do you think Obama and Bush are different?
|by Anonymous||reply 73||12/09/2014|
R73 - I meant ADP.
It's a private company that puts out payroll job survey data. It also shows an uptick.
|by Anonymous||reply 74||12/09/2014|
|by Anonymous||reply 75||12/09/2014|
Atta girl, R72. Give 'er Hell!
|by Anonymous||reply 76||12/09/2014|
The current unemployment rate is 5.9%, fulfilling yet ANOTHER of President Obama's promises to America when he ran for president, which was to have the unemployment rate BELOW 6% by the time he left office.
Look at this very, very impressive graph.
|by Anonymous||reply 77||12/09/2014|
You are the definition of "useful idiot".
Look at those numbers. Look below the surface- most are minwage jobs, not GOOD jobs.
Obama is just Bush V3.0
|by Anonymous||reply 78||12/09/2014|
R78, can you prove that claim? My son was just hired as Petroleum Engineer straight out of college with a starting salary of $88,000.
|by Anonymous||reply 79||12/09/2014|
Fake, made up numbers.
|by Anonymous||reply 80||12/09/2014|
Really, R80? Perhaps then you should look at the following table of "Careers That Pay-Off" before you are so quick to hit the typewriter.
It looks like my son didn't even get the average beginning salary of $100,000. But he was never the smartest tool in the shed and it DID take him 5 years to graduate.
You have no one to blame but yourself for not having a marketable education. You had the same chance my son had. The very, very same chance.
But at least you can console yourself by looking at the beauty of degree in art history hanging on your mother's basement wall.
|by Anonymous||reply 81||12/09/2014|
R81, I pity you, you believe a fucking chart. Typical brainless flyover cunt.
|by Anonymous||reply 82||12/10/2014|
R4 is correct. What's the actual rate of unemployment? Is it still around 17-18% the last such rate I remember reading? Isn't it like 75% among young black men?
Don't ask me; tell me. I stopped following unemployment stats about 4-5 years ago when it was apparent the government was cooking the numbers.
|by Anonymous||reply 83||12/10/2014|
R83 honey, don't BOTHER with educating yourself with those "numbers"! You probably didn't like "numbers" beginning in the 3rd grade. You just come here and sit a spell in the lounge and continue telling us how stupid you are.
|by Anonymous||reply 84||12/10/2014|
No, R83. Not even close on any of those numbers.
And Republicans don't get one bit of credit. Things are getting better IN SPITE of them, not because of them.
We'd be a LOT better off in virtually every way if they'd stop their petulant, childish, racist obstructionism of anything and everything Obama or Democrats try to get done. Back in the old days, parties cooperated and compromised to get things done.
|by Anonymous||reply 85||12/10/2014|
Americans will always side with Mommy and Daddy Republican when it comes to money.
|by Anonymous||reply 86||12/10/2014|
|by Anonymous||reply 87||12/10/2014|
Obama could drop an atom bomb on Detroit, and there'd be some Jew making an excuse for him.
|by Anonymous||reply 88||12/10/2014|
How do you tell if a person is Jewish? We don't have any here and I've never personally met one.
|by Anonymous||reply 89||12/10/2014|
R83 is wrong.
|by Anonymous||reply 90||12/10/2014|
r83 is right
|by Anonymous||reply 91||12/10/2014|
Government data show that since 2000 all of the net gain in the number of working-age (16 to 65) people holding a job has gone to immigrants (legal and illegal). This is remarkable given that native-born Americans accounted for two-thirds of the growth in the total working-age population. Though there has been some recovery from the Great Recession, there were still fewer working-age natives holding a job in the first quarter of 2014 than in 2000, while the number of immigrants with a job was 5.7 million above the 2000 level.
|by Anonymous||reply 92||12/10/2014|
Facts---The GOP has figured out how to stop even them...
"we added 400,000 new jobs"
"they are part time"
"no they are not"
"They are low paying"
"You control the minimum wage..."
"you guys are lying doodie faces.."
|by Anonymous||reply 93||12/10/2014|
R93 - you forgot "government lies" and Gruber.
|by Anonymous||reply 94||12/10/2014|
|by Anonymous||reply 95||12/10/2014|
Thanks for the data, R81! Thinks keep improving!
|by Anonymous||reply 96||12/10/2014|
Unemployment is down to 5.8% with the largest growth in jobs in a decade over the last quarter.
|by Anonymous||reply 97||12/10/2014|
And look! All the illegals who are getting those jobs can now drive their cars to work!
|by Anonymous||reply 98||12/11/2014|
r67 = Ted Cruz.
Now you can translate his other rantings.
|by Anonymous||reply 99||12/11/2014|
Most of the jobs are shit poor pay no benefit jobs.
|by Anonymous||reply 100||12/11/2014|
R100 typical con response. The sky is falling and every indicator that the GOP used to show the GWB Presidency was supposedly successful somehow means something completely different now that Obama is President.
The truth is the "great" jobs under GWB were caused by an economic bubble. I knew people without graduate degrees and with rather poor college performance getting jobs with 6 figures when Bush was President. They didn't deserve those jobs and when the jobs went away and don't seem to be coming back, people blame Obama.
They are NOT coming back..unless you want another economic meltdown to ensue.
|by Anonymous||reply 101||12/11/2014|