Does anyone care about the economy?

[Bob Loblaw]

Must-read for the layperson: http://hussmanfunds.com/wmc/wmc131104.htm

[malice]

Must-read for the layperson: http://hussmanfunds.com/wmc/wmc131104.htm

I keep opening this link and start reading it, then get side tracked and have to start all over again - hugely frustrating, that.

[malice]

just in case you were wondering, rafa.

[Bob Loblaw]

just in case you were wondering, rafa.

I had you in mind when I posted that, girl.

[malice]

just in case you were wondering, rafa.

I had you in mind when I posted that, girl.

just for that i'm really reading it this time

[shinkdew]

Turns out the shutdown was a boon for employment.

Payrolls in the U.S. increased more than forecast in October, a sign that employers were optimistic the world’s biggest economy would weather the effects of the federal government shutdown.

The addition of 204,000 workers followed a revised 163,000 gain in September that was larger than initially estimated, Labor Department figures showed today in Washington. The median forecast of 91 economists surveyed by Bloomberg called for a 120,000 advance. The jobless rate rose to 7.3 percent from an almost five-year low.

[broken iris]

Turns out the shutdown was a boon for employment.

Payrolls in the U.S. increased more than forecast in October, a sign that employers were optimistic the world’s biggest economy would weather the effects of the federal government shutdown.

The addition of 204,000 workers followed a revised 163,000 gain in September that was larger than initially estimated, Labor Department figures showed today in Washington. The median forecast of 91 economists surveyed by Bloomberg called for a 120,000 advance. The jobless rate rose to 7.3 percent from an almost five-year low.

Kinda:

Whopping 932,000 Americans Drop Out Of Labor Force In October; Participation Rate Drops To Fresh 35 Year Low

[stip]

I wish those statistics differentiated between people who retired and people who give up.

[stip]

Also, most of the jobs created seem to be service jobs. So hooray?!


Economics reporting in this country is so terrible

[Rob]

Also, most of the jobs created seem to be service jobs. So hooray?!

I heard somewhere once (I think it was R.D. Wolffe on his economic update program) that half the jobs lost to the recession were $35k or more jobs, while only 2% or so of the jobs recovered so far pay that much. If that's true, then this is no recovery.

So my question to you smarter folk is this - In a global capitalist economy, where many regions have labor costs far cheaper than ours, wouldn't America have to lower its standard of living to compete? If the government isn't going to regulate wages, then wouldn't we need to wait until the cheaper labor markets reached wage parity with ours to see an end to the declining wages here? Is there a third option?

[doug rr]

Also, most of the jobs created seem to be service jobs. So hooray?!

I heard somewhere once (I think it was R.D. Wolffe on his economic update program) that half the jobs lost to the recession were $35k or more jobs, while only 2% or so of the jobs recovered so far pay that much. If that's true, then this is no recovery.

So my question to you smarter folk is this - In a global capitalist economy, where many regions have labor costs far cheaper than ours, wouldn't America have to lower its standard of living to compete? If the government isn't going to regulate wages, then wouldn't we need to wait until the cheaper labor markets reached wage parity with ours to see an end to the declining wages here? Is there a third option?

Hi Rob

Our two in house economists, Kris and Matt, have been on hiatus for awhile now. At some point they will check in and answer your questions. In the meantime, stay away from buying twitter until its in the high 20s

Doug

[stip]

Also, most of the jobs created seem to be service jobs. So hooray?!

I heard somewhere once (I think it was R.D. Wolffe on his economic update program) that half the jobs lost to the recession were $35k or more jobs, while only 2% or so of the jobs recovered so far pay that much. If that's true, then this is no recovery.

So my question to you smarter folk is this - In a global capitalist economy, where many regions have labor costs far cheaper than ours, wouldn't America have to lower its standard of living to compete? If the government isn't going to regulate wages, then wouldn't we need to wait until the cheaper labor markets reached wage parity with ours to see an end to the declining wages here? Is there a third option?

Well besides the wage option being a good one, there are other things that can be done.

Pass laws making it more difficult to move capital/businesses out of the country (Germany has some laws like this, for instance. I have an article on it at work that I can't find in my files at home)

Take steps to help raise wage, labor, and environmental standards elsewhere and try to reduce the race to the bottom

Focus public resources on developing local economies

Expand the welfare state and other redistribution programs to help maintain a decent standard of living.

There are lots of things that can be done if the political will is there and we conceptualize what an economy is differently than we do

[stip]

Gar Alperovitz has some really good books on this stuff.

[stip]

as an aside:

http://www.nbcnews.com/business/frances ... 8C11562018

Bracketing whether or not there are serious issues with the french safety net, why does anyone, anywhere, listen to S+P or any of those other credit ratings agencies after the credit default debacle. How are any of those companies still in business?

[simple schoolboy]

as an aside:

http://www.nbcnews.com/business/frances ... 8C11562018

Bracketing whether or not there are serious issues with the french safety net, why does anyone, anywhere, listen to S+P or any of those other credit ratings agencies after the credit default debacle. How are any of those companies still in business?

Undoubtedly their performance was terrible, but to answer your question: aren't banks required to be in business with them, no matter how flawed they are? The nature of capital requirements suggests that banks cannot comply without the credit ratings seal of approval.

[stip]

yeah, I think you're correct. I am just surprised (well not surprised, but disappointed) that no new agencies rose in their place, or that the process behind how rating are assigned was not dramatically changed (you still pay the agency to assign the rating, I believe). I'm not sure there was even any real upper level turnover at these places.

[Human Bass]

http://www.zerohedge.com/news/2013-11-1 ... -standards


One of the least discussed, but potentially most significant, provisions in President Obama’s budget is the use of the “chained consumer price index” (chained CPI), to measure the effect of inflation on people’s standard of living. Chained CPI is an effort to alter the perceived impact of inflation via the gimmick of “full substitution." This is the assumption that when the price of one consumer product increases, consumers will simply substitute a similar, lower-cost product with no adverse effect. Thus, the government decides your standard of living is not affected if you can no longer afford to eat steak, as long as you can afford to eat hamburger.


So if the Federal Reserve’s policies create inflation that forces you to purchase hamburger instead of steak, your standard of living is lowered. CPI already uses this sort of substitution to mask the costs of inflation, but chained CPI uses those substitutions more frequently, thereby lowering the reported rate of inflation.


The goal of chained CPI is to decrease the government's obligation to meet its promise to keep up with the cost of living in programs like Social Security.


________________________________________

But, but, but the inflation rate is reported honestly.

[stip]

that actually gets a fair amount of discussion, at least in lefty circles. The mechanism for a backdoor attack on SS.

[broken iris]

that actually gets a fair amount of discussion, at least in lefty circles. The mechanism for a backdoor attack on SS.

It's not an "attack" on SS specifically, but I'm a bit surprised we don't see more liberal anger at this given the disproportionate impact on low income Americans.

[Green Habit]

that actually gets a fair amount of discussion, at least in lefty circles. The mechanism for a backdoor attack on SS.

It's not an "attack" on SS specifically, but I'm a bit surprised we don't see more liberal anger at this given the disproportionate impact on low income Americans.

The lefty blogs I read have been in uproar on this for quite some time--and it's my understanding that the outrage got Obama to back off on it, at least for now.