Results 1 to 6 of 6

Thread: weekend commentary - Altered State of the Union

  1. #1
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default weekend commentary - Altered State of the Union

    (snip)"But for all the money spent, America’s commerce actually loses market share (the trade deficit hit a new record in 2005; experts expect it to top $800 billion in 2006). And Americans themselves grow poorer.

    Don’t hold your breath; neither party will say so. But the typical U.S. worker is losing ground. Not only are fewer new jobs being created, wages are falling for those who have jobs. Stephen Roach reports that the U.S. economy is about 11 million jobs short of what should be expected at this stage of an expansion. Currently, only about a third as many new jobs as usual are being created. And wage growth in private industry is at the lowest level ever recorded in the 25 years of measuring it. Roach estimates that workers earned $335 billion less last year than they should have...leaving them with less real spending power than the year before. In fact, by some measures, the typical workingman earns less now per hour than he would have earned during the Carter administration.

    How is it possible? Why would people living in the homeland of the greatest, most entrepreneurial empire the world has ever seen lose purchasing power at the very peak of the empire’s power?

    We have an answer. As the empire brought more and more of the world into its protective embrace, people in far-off places entered the global workforce in greater and greater numbers. First, they built things out of steel and plastic - forcing down assembly-line wages in the U.S. Then, they began doing accounting, architectural design, legal work, marketing and many other things. That is why real wages rise in Asia; they are stagnant in America.

    But the American workingman cannot believe it. He put his wife to work years ago. Then, under the easy money/big spending policies of the Bush/Greenspan team, he sold off his house...a room at a time. Roach estimates that U.S. householders “took out” as much as $600 billion from their houses in mortgage debt last year. It was more than enough to offset the $335 billion they should have earned. But it was a different kind of money; they have to pay it back. With falling incomes, how will the U.S. wage earner be able? And how will the nation squeeze enough money out of these poor working stiffs to pay its trillion dollar debts overseas, let alone make good on its promises to its own people?

    It’s not the same nation...or the same empire...we used to know. It owes more money to more people and is less able to pay.

    Bill Bonner
    The Daily Reckoning"

  2. #2
    God/dess montythegeek's Avatar
    Joined
    Oct 2003
    Posts
    2,103
    Thanks
    0
    Thanked 9 Times in 5 Posts

    Default Re: weekend commentary - Altered State of the Union

    There is only one problem with the concept that employment should be 11 million higher--there aint enough people to do it. The fourth quarter household employment was 142.7 million people, while the labor force was 150.1, or 7.4 million less--that is less than 11 million.
    http://stats.bls.gov/news.release/empsit.nr0.htm
    First 2 lines of table A.

    But you say there were 77 million not in the labor force, what about them. The absolute highest the labor force participation rate ever got in the last 25 years was 65.5% for a full quarter average-currently it is about 64.5%. If you add up labor force and non labor force and multiply by 65.5% you get a labor force of 148.8 million. The only way to get 11 million jobs is to make granny and granpa go to back to work at age 75-80, or everyone not holding 2 jobs to moonlight.

    Mr. Roach's comment is blindly extrapolating a trend and assuming it can continue forever. From the 1960s to the 1990s, the participation rate was rising as moms went to work--that ended as the female labor force participation rate approached males. Now if you want to drag my 83 year old mother into the workforce, you can get 11 million jobs, otherwise ignore stupid comments from a known blowhard whose job it is to get his comapny's name in the paper.

    Note addendum: some comments are based on a different definition of population. The BLS uses noninstitutional, and I figured based on total number of persons (both in and out of jail)
    Last edited by montythegeek; 01-15-2006 at 11:50 AM.

  3. #3
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: weekend commentary - Altered State of the Union

    The only way to get 11 million jobs is to make granny and granpa go to back to work at age 75-80, or everyone not holding 2 jobs to moonlight
    I was thinking more along the lines of chronic long term unemployed, social welfare program recipients, etc. who could easily fill the 11 million gap you claim exists from the states of NY and CA alone. However, I'm not sure that the BLS even includes chronic long term unemployed and 'career' social welfare recipients in their official 'labor force' determination. In order to publish a 4.9% unemployment rate statistic, it's not much of a reach to realize that lots of 'technically employable' bodies without jobs are being dropped from the list.
    ~
    Last edited by Melonie; 01-15-2006 at 02:46 PM.

  4. #4
    God/dess montythegeek's Avatar
    Joined
    Oct 2003
    Posts
    2,103
    Thanks
    0
    Thanked 9 Times in 5 Posts

    Default Re: weekend commentary - Altered State of the Union

    Melonie,
    As I have repeated before, you are in the labor force if you have a job or Looked for work in the past 6 months. Although the data is from 2002, at http://stats.bls.gov/lau/table14full04.pdf
    if you look, over half of those over 16 who are in the population, but not in the labor force are over 65. Half again as many folks are between 16 and 21 and are not in the labor force because of school. Together these groups make up 2/3rds of those not in the labor force. That leaves not much rooms for pregnant women, women with infants who do not want to work (some do some do not), and those who are not officially disabled but DO want to stay home to raise their children, or persons married to those over 65 who retire at 62.

    The percentage of the popluation in the workforce is more than 10 percentage points higher than when Eisenhower was president. While Ike was no Patton (a la battle fatigue), he did not support shirkers. Your premise is not supported by unsubstantiate fact, or politcal opinion. Furthermore a number of persons who collect disability, or SSI, ARE in the labor force, AND employed--just not full time (and fully legally).

    The fact of the matter is that the population would not support such an employment gain without making seniors work in large numbers. Besides the direct payments to SOcial security from workers, this labor force retention is a major component of the retirement age being raised to above 65, toward 60.

  5. #5
    God/dess VenusGoddess's Avatar
    Joined
    Oct 2003
    Location
    Home
    Posts
    13,598
    Thanks
    0
    Thanked 28 Times in 23 Posts

    Default Re: weekend commentary - Altered State of the Union

    How much of this has to do with people getting older and depending on the government to pay their living costs, along with medical, etc? Social Security may have been paid by the workers, but it's pretty much been spent by the politicians...and someone needs to pay for this stuff.

    I think, personally, all of the businesses that take their work over-seas should get a big whopping tax hike...and a tax "cut" or forgiveness if they bring their work back here. Wouldn't that help the economy?

  6. #6
    God/dess montythegeek's Avatar
    Joined
    Oct 2003
    Posts
    2,103
    Thanks
    0
    Thanked 9 Times in 5 Posts

    Default Re: weekend commentary - Altered State of the Union

    Quote Originally Posted by VenusGoddess
    How much of this has to do with people getting older and depending on the government to pay their living costs, along with medical, etc? Social Security may have been paid by the workers, but it's pretty much been spent by the politicians...and someone needs to pay for this stuff.

    I think, personally, all of the businesses that take their work over-seas should get a big whopping tax hike...and a tax "cut" or forgiveness if they bring their work back here. Wouldn't that help the economy?
    No it would not VG for several reasons. First, it would illegal and a violation of numerous treaties including the World Trade Organization on both the tax and subsidy sides. Each would produce damages by agrieved parties.
    Second it would be damn foolish. I for one do not want an additional 1,000,00 textile jobs paying $6-7 per hour, or underwear that costs $6.00 per pair. that is how many have gone avay since 1990, most since 1994. Remember Norma Rae (Sally Fields)?

    Third, the jobs would not really come back anyway. The companies owned by domestic companies would just go out of business and be replaced by foreign companies, selling the same products.

    Fourth you cannot separate industries along these lines. Take petroleum. Some jobs went overseas because that is where the oil is. It is impossible to separate wahe issues from other movements, since any oil company could produce 100,000 barrels per day in the US by spending $85/barrel in costs with most of it labor. You would end up with the total mess you have because of the Byrd amendment which awarded "damages" to companies for dumping by foreign competitors who they convinced a trade organization was playing unfair. Guess what--a few companies got all the marbles with one company (timken) taking in $81million or 36% of the money as this yahoo article reports. http://news.yahoo.com/s/afp/20051221...e_051221225510
    Google the words "Byrd Amendment" and read about it. this breeds a subsidy-seeking company--these folks do not make bearings anymore, they make damage-lawsuits andthe bucks go to lawyers, not workers.
    Finally, since 98% of those folks went on to other jobs, there either would be noone to do those other jobs (and prices would go up), or the unemployment rate would go so low that even more illegal aliens (now out of work) would come flocking across the border. Since millions of jobs could be claimed to have been damaged in one way or another. where are you going to get folks to make Nike's in the US for peanuts? Peanuts, we subsidize those too and make hundreds of thousand of foreigners in Africa starve.

    Trade restrictions always sound like an easy answer to cure all ills, but when you pay the costs, and others pay the cost, people suffer--not all of them rich. Let me see you go to a poor person and tell them why they cannot afford to by a tee-shirt for their kid, or why their undewear costs a week's money after food, medical and rent is paid.

Similar Threads

  1. Replies: 0
    Last Post: 06-25-2011, 07:17 AM
  2. weekend commentary - state budget deficits
    By Melonie in forum Member Boards
    Replies: 1
    Last Post: 04-25-2008, 11:52 AM
  3. Replies: 2
    Last Post: 12-29-2007, 04:17 AM
  4. weekend commentary - real state of the US economy
    By Melonie in forum Dollar Den
    Replies: 9
    Last Post: 05-03-2007, 02:56 PM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •