WTF Is A Jobless Recovery?????

[Polk]

The multiplier isn't less than one. You keep claiming that, but it just isn't true. For someone who claims to have a background in economics, you really exhibit a lack of basic knowledge.

Every dollar used to cut taxes as a multiplier effect of 1.02. The policy proposed in the article you posted (a payroll tax holiday) has a multiplier effect of 1.29. Both of those are lower than the impact of direct spending, which has a multiplier ranging from 1.36 (aid to state governments) to 1.73 (temporary increase in food stamps).

That's not my take on it. That's from Congressional testimony given by Mark Zandi, who was one of McCain's economic advisers during the campaign.

http://www.economy.com/mark-zandi/documents/Small Business_7_24_08.pdf

 

[Polk]

You deal in party hackism. I already told you why your argument is bogus: Claiming an increase in GDP due to government spending, where GDP measures government spending is a tautology.

Being called a hack by the high priest of the church of "Bush good, Obama bad" is pretty funny.

Please cite anyplace where I wrote "Bush good, Obama bad."
Another lie from the left.

That's the mentality exhibited in your posts. The economy falls off a cliff under Bush and is starting to stabilize now, but according to you all the problems if the economy are Obama's fault.

 

[The Rabbi]

The multiplier isn't less than one. You keep claiming that, but it just isn't true. For someone who claims to have a background in economics, you really exhibit a lack of basic knowledge.

Every dollar used to cut taxes as a multiplier effect of 1.02. The policy proposed in the article you posted (a payroll tax holiday) has a multiplier effect of 1.29. Both of those are lower than the impact of direct spending, which has a multiplier ranging from 1.36 (aid to state governments) to 1.73 (temporary increase in food stamps).

That's not my take on it. That's from Congressional testimony given by Mark Zandi, who was one of McCain's economic advisers during the campaign.

http://www.economy.com/mark-zandi/documents/Small Business_7_24_08.pdf

Except your information is wrong. And now we know why McCain lost.
Robert J. Barro: Government Spending Is No Free Lunch - WSJ.com
And if food stamps were the highest multiplier we should just be issuing food stamps to everyone.

 

[The Rabbi]

Being called a hack by the high priest of the church of "Bush good, Obama bad" is pretty funny.

Please cite anyplace where I wrote "Bush good, Obama bad."
Another lie from the left.

That's the mentality exhibited in your posts. The economy falls off a cliff under Bush and is starting to stabilize now, but according to you all the problems if the economy are Obama's fault.

Please point out where I said all the problems in the economy are Obama's fault.
This is now the second time I have challenged you to support a statement you have made, and it will be the second time you will have failed to do so.
Really, your lying is getting out of hand.

 

[Neubarth]

Please cite anyplace where I wrote "Bush good, Obama bad."
Another lie from the left.

That's the mentality exhibited in your posts. The economy falls off a cliff under Bush and is starting to stabilize now, but according to you all the problems if the economy are Obama's fault.

Please point out where I said all the problems in the economy are Obama's fault.
This is now the second time I have challenged you to support a statement you have made, and it will be the second time you will have failed to do so.
Really, your lying is getting out of hand.

All of the present problems with the economy ARE Obama's fault. All his administration has done is go out of its way to get into bed with the Big Banks and the future money they can bring to future Democratic Party campaigns. Obama has not done one damn thing to solve the problems associated with a Service Sector Economy breakdown.

That is the reason for all the lies from Washington about the Unemployment Numbers, the lies about the size of the Work Force, the outrageous lies about the Unemployment Insurance Claims. In over forty communities in California the unemployment rate is actually over fifty percent. In Oakland it is believed to be over forty percent. In Detroit it is estimated to be over fifty percent. This country is going to hell and this president is doing nothing viable about it.

I posted half a year ago that we needed to impeach him and we still do. The sooner the better.

Luckily riots in the cities seldom break out in winter. They need the heat of summer to get them going. I doubt that we will make it through the Spring before we see the first of them. Detroit will be a good candidate for the first riot. The other Big Cities will follow.

 

[Polk]

The multiplier isn't less than one. You keep claiming that, but it just isn't true. For someone who claims to have a background in economics, you really exhibit a lack of basic knowledge.

Every dollar used to cut taxes as a multiplier effect of 1.02. The policy proposed in the article you posted (a payroll tax holiday) has a multiplier effect of 1.29. Both of those are lower than the impact of direct spending, which has a multiplier ranging from 1.36 (aid to state governments) to 1.73 (temporary increase in food stamps).

That's not my take on it. That's from Congressional testimony given by Mark Zandi, who was one of McCain's economic advisers during the campaign.

http://www.economy.com/mark-zandi/documents/Small Business_7_24_08.pdf

Except your information is wrong. And now we know why McCain lost.
Robert J. Barro: Government Spending Is No Free Lunch - WSJ.com
And if food stamps were the highest multiplier we should just be issuing food stamps to everyone.

No, what's wrong is the article you just posted. It's packed to the brim with bullcrap and someone with Barro's pedigree should feel ashamed to have signed his name to that. Saying that a dollar spend by the government is assumed to somehow be "better", as he claims in the article, is not at all necessary to see how government spending increases output. If a company sells steel, they don't care who is buying it. A dollar of purchase coming from the government is no different to them than a dollar in purchase coming from another firm. Also notice that he doesn't source anything he says. It's a lot like your posts actually, he assumes that people should take his statements at face value.

 

[Polk]

Please cite anyplace where I wrote "Bush good, Obama bad."
Another lie from the left.

That's the mentality exhibited in your posts. The economy falls off a cliff under Bush and is starting to stabilize now, but according to you all the problems if the economy are Obama's fault.

Please point out where I said all the problems in the economy are Obama's fault.
This is now the second time I have challenged you to support a statement you have made, and it will be the second time you will have failed to do so.
Really, your lying is getting out of hand.

I swear, you morons think your posts exist in a vacuum.

He has made the recession worse and weakened the US economy through his actions. He has made us less able to wage war ("unlimited funds are the sinews of war," Cicero). He has increased control over the economy while limiting its ability to provide jobs and wealth.

 

[The Rabbi]

That's the mentality exhibited in your posts. The economy falls off a cliff under Bush and is starting to stabilize now, but according to you all the problems if the economy are Obama's fault.

Please point out where I said all the problems in the economy are Obama's fault.
This is now the second time I have challenged you to support a statement you have made, and it will be the second time you will have failed to do so.
Really, your lying is getting out of hand.

I swear, you morons think your posts exist in a vacuum.

He has made the recession worse and weakened the US economy through his actions. He has made us less able to wage war ("unlimited funds are the sinews of war," Cicero). He has increased control over the economy while limiting its ability to provide jobs and wealth.

I see you failed reading comprehension 101.
Note my use of the term "worse" in the post you quoted. Not only does your citation of my post invalidate your argument, it makes you look like the fool you are.

 

[The Rabbi]

The multiplier isn't less than one. You keep claiming that, but it just isn't true. For someone who claims to have a background in economics, you really exhibit a lack of basic knowledge.

Every dollar used to cut taxes as a multiplier effect of 1.02. The policy proposed in the article you posted (a payroll tax holiday) has a multiplier effect of 1.29. Both of those are lower than the impact of direct spending, which has a multiplier ranging from 1.36 (aid to state governments) to 1.73 (temporary increase in food stamps).

That's not my take on it. That's from Congressional testimony given by Mark Zandi, who was one of McCain's economic advisers during the campaign.

http://www.economy.com/mark-zandi/documents/Small Business_7_24_08.pdf

Except your information is wrong. And now we know why McCain lost.
Robert J. Barro: Government Spending Is No Free Lunch - WSJ.com
And if food stamps were the highest multiplier we should just be issuing food stamps to everyone.

No, what's wrong is the article you just posted. It's packed to the brim with bullcrap and someone with Barro's pedigree should feel ashamed to have signed his name to that. Saying that a dollar spend by the government is assumed to somehow be "better", as he claims in the article, is not at all necessary to see how government spending increases output. If a company sells steel, they don't care who is buying it. A dollar of purchase coming from the government is no different to them than a dollar in purchase coming from another firm. Also notice that he doesn't source anything he says. It's a lot like your posts actually, he assumes that people should take his statements at face value.

When confrotned with facts you resort to ad hominem. Typical.
In fact there is a huge difference whether the buyer of the steel is the government or GM. When government buys something, they can only get the money by taking it from someone else. That someone else now has reduced spending power, thanks to the money appropriated by the government. And since the transaction is not cost free (toll for the troll) it results in less money spent than is taken.
Really, a quick read of Hazlett's Economics in One lesson would set all this straight for you. Your "theories" have been disproven among serious economists for the last 50 years.

 

[Toro]

When confrotned with facts you resort to ad hominem. Typical.
In fact there is a huge difference whether the buyer of the steel is the government or GM. When government buys something, they can only get the money by taking it from someone else. That someone else now has reduced spending power, thanks to the money appropriated by the government. And since the transaction is not cost free (toll for the troll) it results in less money spent than is taken.
Really, a quick read of Hazlett's Economics in One lesson would set all this straight for you. Your "theories" have been disproven among serious economists for the last 50 years.

Economics in One Lesson was the first book I ever read in economics, and I still have a copy on my shelf. However, it makes certain assumptions about human economic behavior that are not necessarily correct. Hazlitt assumes that the economy is always in equilibrium and aggregate demand is never deficient. But that is not always the case. Here is an economic example how Hazlitt's logic is flawed.

Oh boy. John Cochrane does not know something that David Hume did--that the velocity of monetary circulation is an economic variable rather than a technological constant. Cochrane:

Fiscal Fallacies: First, if money is not going to be printed, it has to come from somewhere. If the government borrows a dollar from you, that is a dollar that you do not spend, or that you do not lend to a company to spend on new investment. Every dollar of increased government spending must correspond to one less dollar of private spending. Jobs created by stimulus spending are offset by jobs lost from the decline in private spending. We can build roads instead of factories, but fiscal stimulus can’t help us to build more of both. This is just accounting, and does not need a complex argument about “crowding out”...​

Suppose that we have four agents: Alice, Beverly, Carol, and Deborah.

Suppose that Beverly has $500 in cash that she owes Carol, due in two months. Suppose that Alice and Carol are both unemployed and idle.

In one scenario in two months Beverly goes to Carol and pays her the $500. End of story.

In a second scenario Beverly says to Alice: "I have a house. Why don't you build a deck--I will pay you $500 after the work is done. Here is the contract." Alice takes the contract and goes to Carol. She shows the contract to Carol and says: "See. I will be good for the debt. Cook me meals so I will have the strength to build the deck--here's another contract in which I promise to pay you $500 within 90 days if you cook for me." Carol agrees.

Two months pass. Carol cooks and feeds Alice. Alice goes and builds the deck.

Alice then asks Beverly for payment. Beverly says: "Wait a minute." She goes to Carol and says: "Here is the the $500 cash I owe you." Beverly pays the money to Carol. Beverly then says: "But now could I borrow the cash back by offering you a long-term mortgage at an attractive interest rate secured with an interest in my newly more-valuable house?" Carol says: "Sure." Beverly files an amended deed showing Carol's mortgage lien with the town office. Carol gives Beverly back the $500. Beverly then goes to Alice and pays her the $500. Alice then goes to Carol and pays her the $500.

The net result? (a) Alice who would otherwise have been idle has been employed--has traded her labor for meals. (b) Carol who would otherwise have been idle has been employed--has traded her labor for a secured lien on Beverly's house. (c) Beverly has taken out a mortgage on her house and in exchange has gotten a deck built. (d) Carol has the $500 cash that Beverly owed her in the first place.

Alice has more income and consumption expenditure than if she hadn't taken Beverly's job offer. Carol has more income and saving than if she hadn't cooked for Alice and then invested her earnings with Beverly. Beverly has an extra capital asset (the deck) and an extra financial liability (the mortgage) than if she had never offered to hire Alice.

A deck has gotten built. Meals have been cooked and eaten. Two women have been employed. And all this has happened without printing any extra money.

John Cochrane would say that this is impossible. John Cochrane would say:

f money is not going to be printed, it has to come from somewhere. If Beverly borrows a dollar from Carol, that is a dollar that Carol does not spend, or does not lend to Deborah to spend on new investment. Every dollar of increased Beverly spending must correspond to one less dollar of Carol or Deborah spending. Alice's job created by Beverly spending is offset by a job lost from the decline in Carol or Deborah spending. We can build decks instead of fountains, but Beverly stimulus can’t help us to build more of both. This is just accounting, and does not need a complex argument about “crowding out”...​

John Cochrane is wrong.

You sometimes see this mistake in freshmen students in Economics 1, students who do not fully understand either the circular flow of economic activity or what a credit economy is. They think--like Cochrane--that the flow of spending must be constant unless somebody "prints money" because, you see, you need "money" in order to buy things.

The premise is true--you do need "money" to buy things--but the conclusion is false: the flow of spending is not necessarily constant. In the world in which Beverly does not hire Alice but instead pays the $500 directly to Carol, that $500 turns over only once--its velocity of circulation is equal to one. In the world in which Beverly does hire Alice, the velocity of circulation of the $500 is four--it goes from Beverly to Carol, from Carol to Beverly, from Beverly to Alice, and from Alice to Carol.

Cochrane's mistake--an elementary, freshman mistake--is because he has not thought enough about how a credit economy works to recognize that the velocity of circulation can be an economic variable and is not necessarily a technological constant. And as the velocity of circulation varies, the amount of the flow of spending varies as well: it is now longer the case that if Beverly borrows a dollar from Carol that is a dollar that Carol does not spend.

Time to Bang My Head Against the Wall Some More (Pre-Elementary Monetary Economics Department) - J. Bradford DeLong's Grasping Reality with a Prehensile Tail

 

[The Rabbi]

John Cochrane is right. So was Hazlett. It is Hazlett's "Broken Window" all over again. The fallacy is in comparing any individual with the government. The government has no money of its own. Everything must be either taxed or borrowed, which is simply a deferred tax. Unlike the individuals in the story government seldom produces anything of economic value (you could count the exceptions on one hand).

 

[Toro]

John Cochrane is right. So was Hazlett. It is Hazlett's "Broken Window" all over again. The fallacy is in comparing any individual with the government. The government has no money of its own. Everything must be either taxed or borrowed, which is simply a deferred tax. Unlike the individuals in the story government seldom produces anything of economic value (you could count the exceptions on one hand).

Again, the broken window fallacy applies to when there is general equilibrium. If monetary velocity collapses to zero, then the broken window no longer becomes a fallacy.

Hazlitt's argument about governments have no money of its own is tantamount to saying "The corporation has no money of its own." After all, a corporation does not produce anything. A corporation is merely a legal intermediary through which supply and demand passes. It is individuals that supply and demand things, not corporations.

But nobody would argue that corporations do not create value.

The government is a legal entity that has its own supply/demand dynamics. You can make a pretty cogent argument that the private sector usually is more efficient at allocating resources than the public sector. But to say that the government is never a better allocator makes assumptions about human behavior that simply are not true.

 

[The Rabbi]

John Cochrane is right. So was Hazlett. It is Hazlett's "Broken Window" all over again. The fallacy is in comparing any individual with the government. The government has no money of its own. Everything must be either taxed or borrowed, which is simply a deferred tax. Unlike the individuals in the story government seldom produces anything of economic value (you could count the exceptions on one hand).

Again, the broken window fallacy applies to when there is general equilibrium. If monetary velocity collapses to zero, then the broken window no longer becomes a fallacy.

Hazlitt's argument about governments have no money of its own is tantamount to saying "The corporation has no money of its own." After all, a corporation does not produce anything. A corporation is merely a legal intermediary through which supply and demand passes. It is individuals that supply and demand things, not corporations.

But nobody would argue that corporations do not create value.

The government is a legal entity that has its own supply/demand dynamics. You can make a pretty cogent argument that the private sector usually is more efficient at allocating resources than the public sector. But to say that the government is never a better allocator makes assumptions about human behavior that simply are not true.

Corporations own assets and means of production. Therefore they create value.
The private sector is ALWAYS more efficient at allocating resources because the private sector represents the market, which is the clearinghouse for this information. Gov't can only get that information piecemeal and late.

An interesting story: Gorby was visiting England and asked Thatcher, how do you make sure your people all get the food they need?
The answer is, she didnt. She didnt need to. The market did the work for her.

 

[Toro]

Corporations own assets and means of production. Therefore they create value.

Governments also own assets and means of production.

The private sector is ALWAYS more efficient at allocating resources because the private sector represents the market, which is the clearinghouse for this information. Gov't can only get that information piecemeal and late.

If this were true, then there would be no public education, even though public financing of education through high school is the overwhelming source of financing around the world. There is a reason for this, and it is because we cannot internalize all the information we need to assess the costs of education. If the market was the best allocator of resources, then parents would discount the life's earnings of their children, discount it back to the future, and pay that amount over time for the child's education. The problem, of course, is that parents have no idea what their children will earn, so they cannot correctly assess the cost of education. Perfectly efficient markets require perfect information, but often times, we don't have perfect information. Markets fail when this happens.

Likewise, almost all roads are publicly funded. Why? Because of what is known as the free-rider problem.

http://en.wikipedia.org/wiki/Free_rider_problem

In perfectly efficient markets, this would not happen. But people are not perfectly rational and have imperfect information.

An interesting story: Gorby was visiting England and asked Thatcher, how do you make sure your people all get the food they need?
The answer is, she didnt. She didnt need to. The market did the work for her.

Another interesting story - I was standing outside Westminster when Maggie resigned! I saw her drive by after she stepped down. Margaret Thatcher is my political hero. Having said that, I am not arguing that communism is a better allocator of resources than the western mixed economic models. Instead, what I am arguing is that the western mixed economic models are better than unfettered free markets, though one can argue about the degree of interference in the market.

 

[Polk]

John Cochrane is right. So was Hazlett. It is Hazlett's "Broken Window" all over again. The fallacy is in comparing any individual with the government. The government has no money of its own. Everything must be either taxed or borrowed, which is simply a deferred tax. Unlike the individuals in the story government seldom produces anything of economic value (you could count the exceptions on one hand).

Again, the broken window fallacy applies to when there is general equilibrium. If monetary velocity collapses to zero, then the broken window no longer becomes a fallacy.

Hazlitt's argument about governments have no money of its own is tantamount to saying "The corporation has no money of its own." After all, a corporation does not produce anything. A corporation is merely a legal intermediary through which supply and demand passes. It is individuals that supply and demand things, not corporations.

But nobody would argue that corporations do not create value.

The government is a legal entity that has its own supply/demand dynamics. You can make a pretty cogent argument that the private sector usually is more efficient at allocating resources than the public sector. But to say that the government is never a better allocator makes assumptions about human behavior that simply are not true.

Ding ding ding. Winner.

 

[The Rabbi]

Corporations own assets and means of production. Therefore they create value.

Governments also own assets and means of production.

The private sector is ALWAYS more efficient at allocating resources because the private sector represents the market, which is the clearinghouse for this information. Gov't can only get that information piecemeal and late.

If this were true, then there would be no public education, even though public financing of education through high school is the overwhelming source of financing around the world. There is a reason for this, and it is because we cannot internalize all the information we need to assess the costs of education. If the market was the best allocator of resources, then parents would discount the life's earnings of their children, discount it back to the future, and pay that amount over time for the child's education. The problem, of course, is that parents have no idea what their children will earn, so they cannot correctly assess the cost of education. Perfectly efficient markets require perfect information, but often times, we don't have perfect information. Markets fail when this happens.

Likewise, almost all roads are publicly funded. Why? Because of what is known as the free-rider problem.

Free rider problem - Wikipedia, the free encyclopedia

In perfectly efficient markets, this would not happen. But people are not perfectly rational and have imperfect information.

An interesting story: Gorby was visiting England and asked Thatcher, how do you make sure your people all get the food they need?
The answer is, she didnt. She didnt need to. The market did the work for her.

Another interesting story - I was standing outside Westminster when Maggie resigned! I saw her drive by after she stepped down. Margaret Thatcher is my political hero. Having said that, I am not arguing that communism is a better allocator of resources than the western mixed economic models. Instead, what I am arguing is that the western mixed economic models are better than unfettered free markets, though one can argue about the degree of interference in the market.

Actually government does not own any meaningful means of production.
And your example of education is at best a red herring. There is no logical reason why education should be state run, and traditionally it was not. At worst the example is simply mystifying.
The fact that Polk thinks you're right should make you re-examine.

 

[Polk]

Before the rise of public education, most of the population was uneducated, which is Toro's point.

 

[The Rabbi]

Before the rise of public education, most of the population was uneducated, which is Toro's point.

That is simply untrue. Sorry.

 

[Neubarth]

Before the rise of public education, most of the population was uneducated, which is Toro's point.

That is simply untrue. Sorry.

Christianity, Judaism and Islam were all strong teachers of their children long before there was public education. In many countries to this day the religious schools are the best educational systems.

My wife and I home schooled our children. All were honor students when the were in college on their own. Public schools are a total disaster here in California and should be done away with.

 

[code1211]

And now this is where we dive into the dishonest. In every previous recession, the standard has been the return of GDP growth, but now you want to slide the scale and say that growth doesn't matter, only job creation does. Fair enough, but that would be an argument for all recessions, not just the current one. Ditto with your claim that unemployment is at 18 percent. That's just simply not true.

The loss or reduction of orders to individual businesses, which is the recession, resulted in a measured draw down of employment. Some cut-backs were sudden and dramatic and some were gradual. It really depended on the industry and the specific organization.

The re-hiring will be measured, also. Those still employed will see that their work weeks are gaining hours and days with mandatory OT and Mandatory Saturdays. Cycles within businesses will also be a factor, though, as retail outlets and the associated Distribution centers draw down after the holidays. These numbers will start to show in January and continue to present through February.

If you are unemployed, a jobless recovery is a meatless steak. If you are employed, a jobless recovery is a longer work week and overtime.

The tradgedy of this is that if the government had done nothing in terms of stimulus, the recession would have lasted 12 to 18 months. With the bumbling uncertainty of the People's Republic changing their collective minds every couple weeks and allocating another tenth of the GDP to social reform with each step, this thing will last forever.

At least we can be certain of one thing: It is the fault of George Bush.