Economic REALITY thread

[william the wie]

Speaking for myself as a libertarian what I see is that is that in terms of tangible benefits the unemployed are getting shortchanged on their costly and extorted bennies packages that mainly aid bureaucrats.

If you are going to take my taxes for it then I want all citizens to get food stamps and have a federal tax on groceries and maybe restaurant meals paid by people not buying on food stamps.

If you are homeless and the mobile homes and condos are not selling anyhow then make them into temporary section 8 housing and get that inventory off the market.

The US government can buy used clothing that would otherwise be sold in the 3rd world and make it available cheap or free to those in need.

I'm already paying for legal services for the poor so why not streamline and broaden bankruptcy proceedings for those out of work?

Why am I paying high for services that deliver little or nothing to those who need those services? The administrative costs of all those services in cash means that the poor get stiffed, the taxpayers get stiffed and only the politicians profit. Why not deliver those services in kind so we can avoid as much of that mess as possible?

 

[Zander]

More REALITY...Unemployment fell to 9.7% -not 9.5% as some USMB cheerleaders reported - but was still UGLY. The main reason for the decline is 325,000 workers simply gave up and stopped looking. Also the bulk of the "jobs" (sic) created were census jobs. The private sector only added 41,000 jobs....

jobless recovery stocks tumble on "punk" private sector hiring: Tech Ticker, Yahoo! Finance

Jobless Recovery: Stocks Tumble on "Punk" Private Sector Hiring

On the surface, Friday's jobs report doesn't look so bad: Non-farm payrolls rose by 430,000 in May, the second straight month of solid gains, the unemployment rate fell to 9.7%, and the averages for hours worked and hourly earnings beat expectations.
But it's hard to put lipstick on this pig, which helped send stocks sharply lower Friday morning:

* The payroll gain was about 100,000 jobs below consensus, far below the "whisper numbers" of as high as 800,000, and the tally for March and April was revised down.
* A big reason the unemployment rate came down is the labor force shrank by 325,000, a sign of Americans discouraged by their prospects for finding work.
* Over 45% of unemployed Americans have been out of work 6 months or longer and the average duration of unemployment hit a new record of 34.4 weeks.
* At 411,000, temporary hiring of census workers accounted for the vast majority of jobs created last month while private sector payrolls rose by a paltry 41,000.
"The only part that mattered within the May payroll number was the 41,000 job add (sic) in the private sector," writes Miller Tabak equity strategist Peter Boockvar. "Bottom line, private sector hiring remains punk."

Sorry, REALITY can be harsh.

Maybe this will help the Keynesians, since they still don't understand that they are wrong...

 

[Neubarth]

Taxes and inflation, my man. I don't see how either one is avoidable at this point, absent some kind of miraculous epiphany in congress.

Fears of inflation are way, way overblown.

The gold market doesn't seem to think so, and the gold market is usually right.

But this being said, I'm curious to know your reasoning.

As the dollar continues to deflate, Gold will come to a point where everybody will start selling like they have always done in the past.

 

[Toro]

More REALITY...Unemployment fell to 9.7% -not 9.5% as some USMB cheerleaders reported - but was still UGLY. The main reason for the decline is 325,000 workers simply gave up and stopped looking. Also the bulk of the "jobs" (sic) created were census jobs. The private sector only added 41,000 jobs....

jobless recovery stocks tumble on "punk" private sector hiring: Tech Ticker, Yahoo! Finance

Jobless Recovery: Stocks Tumble on "Punk" Private Sector Hiring

On the surface, Friday's jobs report doesn't look so bad: Non-farm payrolls rose by 430,000 in May, the second straight month of solid gains, the unemployment rate fell to 9.7%, and the averages for hours worked and hourly earnings beat expectations.
But it's hard to put lipstick on this pig, which helped send stocks sharply lower Friday morning:

* The payroll gain was about 100,000 jobs below consensus, far below the "whisper numbers" of as high as 800,000, and the tally for March and April was revised down.
* A big reason the unemployment rate came down is the labor force shrank by 325,000, a sign of Americans discouraged by their prospects for finding work.
* Over 45% of unemployed Americans have been out of work 6 months or longer and the average duration of unemployment hit a new record of 34.4 weeks.
* At 411,000, temporary hiring of census workers accounted for the vast majority of jobs created last month while private sector payrolls rose by a paltry 41,000.
"The only part that mattered within the May payroll number was the 41,000 job add (sic) in the private sector," writes Miller Tabak equity strategist Peter Boockvar. "Bottom line, private sector hiring remains punk."

Sorry, REALITY can be harsh.

Maybe this will help the Keynesians, since they still don't understand that they are wrong...

I have said it over and over and I will repeat it again. This recovery is going to be choppy because it is unlike any recovery we have seen since the Depression. This is not a demand/inventory correction. This is a balance sheet/excessive credit recession. We had an excessive build-up of credit, inflating asset values, and it has collapsed. This looks very new to Americans but has occurred something like 70 times in other countries over the past half century or so. And when it happens, the playbook is pretty much the same. There are several years of substandard growth and unemployment stays high. If anything else were to happen in this recovery, I would be shocked.

And financial markets are going to go a whole lot of nowhere for some time IMHO.

The last recession was a milder form of this one because it was induced by the collapse of the technology bubble. Job recovery after the last recession was the weakest since the Depression. Here are the NFPs for 2002 and 2003.

2002 -132 -147 -24 -85 -7 45 -97 -16 -55 126 8 -156
2003 83 -158 -212 -49 -6 -2 25 -42 103 203 18 124

Bureau of Labor Statistics Data

See how they bounce up and down? That is what is going to happen this time as well.

As for dissing Keynes, there is no doubt that had the government not stepped in to backstop the financial markets, then we would have had a repeat of the Great Depression. Oh, and there have been more tax cuts than spending on government programs in the stimulus to date. I guess tax cuts don't work!

 

[Zander]

More REALITY...Unemployment fell to 9.7% -not 9.5% as some USMB cheerleaders reported - but was still UGLY. The main reason for the decline is 325,000 workers simply gave up and stopped looking. Also the bulk of the "jobs" (sic) created were census jobs. The private sector only added 41,000 jobs....

jobless recovery stocks tumble on "punk" private sector hiring: Tech Ticker, Yahoo! Finance

Jobless Recovery: Stocks Tumble on "Punk" Private Sector Hiring

On the surface, Friday's jobs report doesn't look so bad: Non-farm payrolls rose by 430,000 in May, the second straight month of solid gains, the unemployment rate fell to 9.7%, and the averages for hours worked and hourly earnings beat expectations.
But it's hard to put lipstick on this pig, which helped send stocks sharply lower Friday morning:

* The payroll gain was about 100,000 jobs below consensus, far below the "whisper numbers" of as high as 800,000, and the tally for March and April was revised down.
* A big reason the unemployment rate came down is the labor force shrank by 325,000, a sign of Americans discouraged by their prospects for finding work.
* Over 45% of unemployed Americans have been out of work 6 months or longer and the average duration of unemployment hit a new record of 34.4 weeks.
* At 411,000, temporary hiring of census workers accounted for the vast majority of jobs created last month while private sector payrolls rose by a paltry 41,000.
"The only part that mattered within the May payroll number was the 41,000 job add (sic) in the private sector," writes Miller Tabak equity strategist Peter Boockvar. "Bottom line, private sector hiring remains punk."

Sorry, REALITY can be harsh.

Maybe this will help the Keynesians, since they still don't understand that they are wrong...

I have said it over and over and I will repeat it again. This recovery is going to be choppy because it is unlike any recovery we have seen since the Depression. This is not a demand/inventory correction. This is a balance sheet/excessive credit recession. We had an excessive build-up of credit, inflating asset values, and it has collapsed. This looks very new to Americans but has occurred something like 70 times in other countries over the past half century or so. And when it happens, the playbook is pretty much the same. There are several years of substandard growth and unemployment stays high. If anything else were to happen in this recovery, I would be shocked.

And financial markets are going to go a whole lot of nowhere for some time IMHO.

The last recession was a milder form of this one because it was induced by the collapse of the technology bubble. Job recovery after the last recession was the weakest since the Depression. Here are the NFPs for 2002 and 2003.

2002 -132 -147 -24 -85 -7 45 -97 -16 -55 126 8 -156
2003 83 -158 -212 -49 -6 -2 25 -42 103 203 18 124

Bureau of Labor Statistics Data

See how they bounce up and down? That is what is going to happen this time as well.

As for dissing Keynes, there is no doubt that had the government not stepped in to backstop the financial markets, then we would have had a repeat of the Great Depression. Oh, and there have been more tax cuts than spending on government programs in the stimulus to date. I guess tax cuts don't work!

Are you in sales? You have the same answer for every scenario:

Market was up - It was because of the stimulus. It worked. The feds "backstopped" the markets.
Market goes down - it was because of normal gyrations of the market. If the feds didn't "backstop" the markets it would have been far worse.

Unemployment goes down - the stimulus worked. Thankfully the Feds backstopped the markets or we'd be in a Depression now.
Unemployment goes up - that's just normal gyrations. Imagine how bad it would have been if the Feds hadn't "backstopped" the markets.

Wash, Rinse, and Repeat for every situation.......

You do stick to the script, I will give you that.

 

[Toro]

Are you in sales? You have the same answer for every scenario:

Market was up - It was because of the stimulus. It worked. The feds "backstopped" the markets.
Market goes down - it was because of normal gyrations of the market. If the feds didn't "backstop" the markets it would have been far worse.

Unemployment goes down - the stimulus worked. Thankfully the Feds backstopped the markets or we'd be in a Depression now.
Unemployment goes up - that's just normal gyrations. Imagine how bad it would have been if the Feds hadn't "backstopped" the markets.

Wash, Rinse, and Repeat for every situation.......

You do stick to the script, I will give you that.

Am I in sales? No, I manage several billion dollars in assets. But hey, you believe whatever you think I said. Whatever helps you sleep at night is fine with me.

As for "Keynesianism", perhaps you should understand what happened first before commenting on whether "Keynesianism" worked or not. Hint: $160 billion in tax cuts is not "Keynesianism."

 

[Zander]

Are you in sales? You have the same answer for every scenario:

Market was up - It was because of the stimulus. It worked. The feds "backstopped" the markets.
Market goes down - it was because of normal gyrations of the market. If the feds didn't "backstop" the markets it would have been far worse.

Unemployment goes down - the stimulus worked. Thankfully the Feds backstopped the markets or we'd be in a Depression now.
Unemployment goes up - that's just normal gyrations. Imagine how bad it would have been if the Feds hadn't "backstopped" the markets.

Wash, Rinse, and Repeat for every situation.......

You do stick to the script, I will give you that.

Am I in sales? No, I manage several billion dollars in assets. But hey, you believe whatever you think I said. Whatever helps you sleep at night is fine with me.

As for "Keynesianism", perhaps you should understand what happened first before commenting on whether "Keynesianism" worked or not. Hint: $160 billion in tax cuts is not "Keynesianism."

Sorry, but $13 Trillion in debt and adding another $ Trillion+ so every year for the foreseeable future is Keynesian.

PS - I sleep very well at night regardless of what you say or don't say. Thanks though!

Good luck !!

 

[Toro]

Are you in sales? You have the same answer for every scenario:

Market was up - It was because of the stimulus. It worked. The feds "backstopped" the markets.
Market goes down - it was because of normal gyrations of the market. If the feds didn't "backstop" the markets it would have been far worse.

Unemployment goes down - the stimulus worked. Thankfully the Feds backstopped the markets or we'd be in a Depression now.
Unemployment goes up - that's just normal gyrations. Imagine how bad it would have been if the Feds hadn't "backstopped" the markets.

Wash, Rinse, and Repeat for every situation.......

You do stick to the script, I will give you that.

Am I in sales? No, I manage several billion dollars in assets. But hey, you believe whatever you think I said. Whatever helps you sleep at night is fine with me.

As for "Keynesianism", perhaps you should understand what happened first before commenting on whether "Keynesianism" worked or not. Hint: $160 billion in tax cuts is not "Keynesianism."

Sorry, but $13 Trillion in debt and adding another $ Trillion+ so every year for the foreseeable future is Keynesian.

PS - I sleep very well at night regardless of what you say or don't say. Thanks though!

Good luck !!

Ah, so Reagan was a Keynesian. That's good to know.

 

[The Rabbi]

Am I in sales? No, I manage several billion dollars in assets. But hey, you believe whatever you think I said. Whatever helps you sleep at night is fine with me.

As for "Keynesianism", perhaps you should understand what happened first before commenting on whether "Keynesianism" worked or not. Hint: $160 billion in tax cuts is not "Keynesianism."

Sorry, but $13 Trillion in debt and adding another $ Trillion+ so every year for the foreseeable future is Keynesian.

PS - I sleep very well at night regardless of what you say or don't say. Thanks though!

Good luck !!

Ah, so Reagan was a Keynesian. That's good to know.

People think "tax cut=conservative=non-keynsian."
It isn't true.
Tax cuts are an amorphous thng. What Conservatives want, and what Kennedy, Reagan,and Bush showed, was that targeted tax cuts make the difference.
If you cut taxes on cigarettes, that isn't stimulative to the economy. A few more packs will be sold is all.
If you cut taxes at the margin (adn that's important) then you increase the incentive to work harder and produce. It is the next dollar of income that we are worried about.
Handing out cash for clunkers, cash for first time home buyers, cash for calkers etc etc is not a tax cut. It is a giveaway and bribe with our own money.

 

[Paulie]

Am I in sales? No, I manage several billion dollars in assets. But hey, you believe whatever you think I said. Whatever helps you sleep at night is fine with me.

As for "Keynesianism", perhaps you should understand what happened first before commenting on whether "Keynesianism" worked or not. Hint: $160 billion in tax cuts is not "Keynesianism."

Sorry, but $13 Trillion in debt and adding another $ Trillion+ so every year for the foreseeable future is Keynesian.

PS - I sleep very well at night regardless of what you say or don't say. Thanks though!

Good luck !!

Ah, so Reagan was a Keynesian. That's good to know.

Yes, Reagan was a Keynesian.

In that he most certainly did utilize Keynesian methods.

 

[Zander]

Am I in sales? No, I manage several billion dollars in assets. But hey, you believe whatever you think I said. Whatever helps you sleep at night is fine with me.

As for "Keynesianism", perhaps you should understand what happened first before commenting on whether "Keynesianism" worked or not. Hint: $160 billion in tax cuts is not "Keynesianism."

Sorry, but $13 Trillion in debt and adding another $ Trillion+ so every year for the foreseeable future is Keynesian.

PS - I sleep very well at night regardless of what you say or don't say. Thanks though!

Good luck !!

Ah, so Reagan was a Keynesian. That's good to know.

Nice attempt to deflect.

Obama and his Keynesian Economic team have presided over the largest expansion of government in history. They are spending over $5 BILLON per day that we do not have. Do you deny that Geithner is a Keynesian? Summers? Paulson? Romer? Barnes? Higgenbottom? KEYNESIANS ALL!!!

Now, are these clowns doing it the way Keynes would have? That is another discussion. Personally, I think they are screwing the pooch and making a mockery of Keynes. Keynes would never advocated redistributing income away from the people and companies who do the investing. I think Keynes would be rolling over in his grave if he knew what was being done in his name.

 

[antagon]

Are you in sales? You have the same answer for every scenario:

Market was up - It was because of the stimulus. It worked. The feds "backstopped" the markets.
Market goes down - it was because of normal gyrations of the market. If the feds didn't "backstop" the markets it would have been far worse.

Unemployment goes down - the stimulus worked. Thankfully the Feds backstopped the markets or we'd be in a Depression now.
Unemployment goes up - that's just normal gyrations. Imagine how bad it would have been if the Feds hadn't "backstopped" the markets.

Wash, Rinse, and Repeat for every situation.......

You do stick to the script, I will give you that.

Am I in sales? No, I manage several billion dollars in assets. But hey, you believe whatever you think I said. Whatever helps you sleep at night is fine with me.

As for "Keynesianism", perhaps you should understand what happened first before commenting on whether "Keynesianism" worked or not. Hint: $160 billion in tax cuts is not "Keynesianism."

Sorry, but $13 Trillion in debt and adding another $ Trillion+ so every year for the foreseeable future is Keynesian.

PS - I sleep very well at night regardless of what you say or don't say. Thanks though!

Good luck !!

you will find that debt crises are post-keynesian phenomenon. we had a decidedly keynesian era in the US, as did several other world economies. this is not it. it was not characterized by the sort of debt we've been encumbered with since reaganomics, for better or worse.

our debt has little or nothing to do with keynesianism. perhaps about $2 trillion or so in stimulus could be so attributed, but given other aspects of our policies now, and for the last 30 years, i'd chalk the stimulus up to common sense. a policy shift to back to keynesian or neo-keynesian practices would take more than a recovery phase to diagnose.

your attribution only indicates you've got no clue what you're talking about.

 

[Paulie]

Sorry, but $13 Trillion in debt and adding another $ Trillion+ so every year for the foreseeable future is Keynesian.

PS - I sleep very well at night regardless of what you say or don't say. Thanks though!

Good luck !!

Ah, so Reagan was a Keynesian. That's good to know.

Nice attempt to deflect.

Obama and his Keynesian Economic team have presided over the largest expansion of government in history. They are spending over $5 BILLON per day that we do not have. Do you deny that Geithner is a Keynesian? Summers? Paulson? Romer? Barnes? Higgenbottom? KEYNESIANS ALL!!!

Now, are these clowns doing it the way Keynes would have? That is another discussion. Personally, I think they are screwing the pooch and making a mockery of Keynes. Keynes would never advocated redistributing income away from the people and companies who do the investing. I think Keynes would be rolling over in his grave if he knew what was being done in his name.

It's like most other crap in politics. Pin a label on it, list a few points for reference so the sheep follow along, and viola! It is what they say it is.

Government spent money during a recession, so of course it's 'keynesianism'.

I agree with you. It's WORSE than Keynesianism.

 

[antagon]

zander, you have monetarists and keynesians twisted.

edit: you too, paulie.

 

[Zander]

Am I in sales? No, I manage several billion dollars in assets. But hey, you believe whatever you think I said. Whatever helps you sleep at night is fine with me.

As for "Keynesianism", perhaps you should understand what happened first before commenting on whether "Keynesianism" worked or not. Hint: $160 billion in tax cuts is not "Keynesianism."

Sorry, but $13 Trillion in debt and adding another $ Trillion+ so every year for the foreseeable future is Keynesian.

PS - I sleep very well at night regardless of what you say or don't say. Thanks though!

Good luck !!

you will find that debt crises are post-keynesian phenomenon. we had a decidedly keynesian era in the US, as did several other world economies. this is not it. it was not characterized by the sort of debt we've been encumbered with since reaganomics, for better or worse.

our debt has little or nothing to do with keynesianism. perhaps about $2 trillion or so in stimulus could be so attributed, but given other aspects of our policies now, and for the last 30 years, i'd chalk the stimulus up to common sense. a policy shift to back to keynesian or neo-keynesian practices would take more than a recovery phase to diagnose.

your attribution only indicates you've got no clue what you're talking about.

I am using the term in its colloquial (and political) form and am parroting the term that Obama's economic team uses when describing themselves. (Neo-Keynesian is really more accurate.) so your criticism is misdirected. You should give the Obama regime a call or drop them a line.

Keynes would be rolling over in his grave if he knew what was being done in his name by the Obama regime.

 

[Paulie]

zander, you have monetarists and keynesians twisted.

edit: you too, paulie.

No I do not.

Trust me.

 

[Zander]

zander, you have monetarists and keynesians twisted.

edit: you too, paulie.

No I am not.

Give the Obama regime a call though - they are self described "Keynesians".

 

[Toro]

Sorry, but $13 Trillion in debt and adding another $ Trillion+ so every year for the foreseeable future is Keynesian.

PS - I sleep very well at night regardless of what you say or don't say. Thanks though!

Good luck !!

Ah, so Reagan was a Keynesian. That's good to know.

Nice attempt to deflect.

Obama and his Keynesian Economic team have presided over the largest expansion of government in history. They are spending over $5 BILLON per day that we do not have. Do you deny that Geithner is a Keynesian? Summers? Paulson? Romer? Barnes? Higgenbottom? KEYNESIANS ALL!!!

Now, are these clowns doing it the way Keynes would have? That is another discussion. Personally, I think they are screwing the pooch and making a mockery of Keynes. Keynes would never advocated redistributing income away from the people and companies who do the investing. I think Keynes would be rolling over in his grave if he knew what was being done in his name.

Its not a deflection. Your point of reference for "Keynesianism" was the deficit. Well, Reagan cut taxes and created a large deficit. The biggest part of the Obama stimulus thus far has been tax cuts. Ergo, by your logic, Reagan's a Keynsian. So was W.

When Obama took office, the cyclical fiscal balance was a $1.2 trillion deficit. During the remaining part of the fiscal year, he added another $100 billion, almost all of that was tax cuts and extensions of social programs. Most of the deficit and debt thus far has nothing to do with Obama. Going forward, Obama owns it. He wanted to be President, so he has to deal with it. But the fiscal structure of the federal government was well in place long before he came into office.

The most effective part of "Keynesianism" has been backstopping the financial system, which mainly occurred under Bush. And there is zero, zip, nada doubt in my mind that what Bush did prevented a repeat of the Great Depression. No doubt that this has created massive imbalances for which we will have to pay, but we were on the verge of a massive run on money markets that probably would have destroyed the financial markets and collapsed the economy.

As for Keynes rolling in his grave, Keynes did not advocate that governments run deficits year after year, which is what Reagan, Bush II and Obama are doing. (Clinton balanced the budget and Bush I gets credit for laying the groundwork.) But Keynes argued that the government should have backstopped the banking system during the Great Depression, so there is no doubt he would have supported what Bush and Obama did.

 

[antagon]

Sorry, but $13 Trillion in debt and adding another $ Trillion+ so every year for the foreseeable future is Keynesian.

PS - I sleep very well at night regardless of what you say or don't say. Thanks though!

Good luck !!

you will find that debt crises are post-keynesian phenomenon. we had a decidedly keynesian era in the US, as did several other world economies. this is not it. it was not characterized by the sort of debt we've been encumbered with since reaganomics, for better or worse.

our debt has little or nothing to do with keynesianism. perhaps about $2 trillion or so in stimulus could be so attributed, but given other aspects of our policies now, and for the last 30 years, i'd chalk the stimulus up to common sense. a policy shift to back to keynesian or neo-keynesian practices would take more than a recovery phase to diagnose.

your attribution only indicates you've got no clue what you're talking about.

I am using the term in its colloquial (and political) form and am parroting the term that Obama's economic team uses when describing themselves. (Neo-Keynesian is really more accurate.) so your criticism is misdirected. You should give the Obama regime a call or drop them a line.

Keynes would be rolling over in his grave if he knew what was being done in his name by the Obama regime.

i give you that, but keynes has been tumbling in his grave since he was put in it.

it is hard to associate economists with schools of thought, economists with jobs who act on what they think are even harder. you end up with 'geitnerist' after a tenure in government, some lecturing and a few books.

i would say that wanting to be keynesian wont make you so, granted the way the US is set up and the momentum behind the last guy's policies. we will take the best bits from these playbooks and put them to work, history has shown, and we should. this is not 'econ 340: perspectives of applied macroeconomics in distressed economies', this is the real deal.

there's some realities keynes hadn't accounted for in his time, however, i couldnt write off his resolutions to sick economies. compared to modern hayekian/chicago school, moneterist, austrian, or whatever proposals, keynesianism has a track-record for bringing jobs back online sooner, placing rebounds on firmer ground. i just dont think it held up to the stagflationary factors in the 70s, which stripped it from its acclaim.

there are such factors at play now, and which go after demand, rather than supply. what school of economic thought would you put up on the chopping block for this recovery?

you got obama's cell #?

 

[The Rabbi]

Whne you say "backstop the banking system" do you mean to include the bailouts of AIG, Goldman, GM, adn Chrysler (i'm forgetting some I know)? Because those were not helpful in stemming the Great Depression.
I was fine with "backstopping" the banks, meaning guaranteeing they would lend to each otehr, which had ceased. I was not fine with everyone piling on to get theirs.
That is where Obama comes in. Most of the increased spending has been on transfer payments. That isn't helpful.
Reagan's cuts were different in that they added to economic growth. If it had not been for the Democratic congress, the deficit would have all but disappeared, especially interms of GDP. But Congress pushed more and more money as revenues increased.