What Is Painfully Obvious To Many
Readers suggested this topic. “A topic about jobs in general would be very appropriate for labor Day weekend.”
One posted this link, “Recovery talk seems to be gradually giving way to Federal Reserve easing talk.. MarketWatch, ‘The U.S. economy did not add any jobs in August, a weak performance that casts a cloud over the sputtering recovery, economic data showed Friday. ‘Yesterday’s data [on ISM manufacturing] failed to point to a sharp slowdown in the U.S. economy. Today’s don’t point to any kind of self-sustained virtuous circle, though. Is zero growth in employment the kind of signal Ben Bernanke was waiting for to announce QE3? Maybe,’ said Alexandra Estiot, an economist at BNP Paribas.”
“What’s it going to be: High unemployment or high inflation? Tough choice ahead for the Fed…And if pundits say ‘Quantitative Easing’ often enough, will the Fed be forced to enact QE3?”
Another added, “Or high unemployment AND high inflation? That seems to be the status quo.”
The Daily Tidings. “Fred Dickson, chief market strategist for Northwest financial firm D.A. Davidson & Co., said the Fed’s quest is to provide a floor for the housing market, where a 30 percent drop nationwide in real estate prices coupled with low interest rates makes for the best time to buy in 50 years. But there has been no rush to buy.”
“‘There seems to be reluctance by potential buyers because there might be lower prices six months from now. The problem isn’t cash, but in some cases the question is whether someone will still have their job a year from now,’ Dickson said.”
“Dickson argues against the idea that the country is slipping back into a recession. ‘Few people realize the economy is operating at an all-time high by the broadest measure — the gross domestic product (the sum of all goods and services produced in the U.S.),’ Dickson said. ‘What people don’t realize is that we’ve moved above the goods and services at the peak in 2007.’”
“The bad news, and what is painfully obvious to many Southern Oregonians, is that double-digit unemployment remains static.”
“‘What’s happened is that GDP has improved without any help from the housing sector, which is important here,’ he said. ‘What’s happened in all areas of business, nonprofits and government organizations is that they continue to find more productivity per worker than two or three years ago. That’s why only 1 million of the 7 million people who lost jobs have been rehired.’”
From Virginia Business. “Now is a good time to build. With business in the construction industry down about 40 percent over the last two years — both nationally and in Virginia—general contractors are willing to negotiate on price, and manpower is readily available. That was one of the themes under discussion at the Virginia Beach Convention Center where more than 1,000 people gathered for the Megavention, one of the largest design, construction, real estate conferences in the mid-Atlantic.”
“Steven C. Vermillion, CEO of the Associated General Contractors of Virginia, said construction employment in Va. is down about 30 percent from two years ago, dropping from 265,000 to 180,000 workers. ‘It’s tough now. The federal government is ending stimulus programs, and the work for BRAC is winding down. We keep telling the feds and the state that this is a great time to build in terms of pricing and manpower,’ he said.”
“One thing that would help put the construction industry back to work is a focus on rebuilding infrastructure, said Vermillion. ‘I’m not just talking roads. This includes water treatment plants, schools. Drive around elementary schools and see how many trailers are parked outside.’”
The Associated Press. “The president of the Federal Reserve bank in Kansas City, Mo., said Monday that the United States must make significant reforms, including reviving the manufacturing sector, to restore confidence in the economy. Thomas Hoenig said decades of lost manufacturing jobs, rising debt and long-term obligations have put the nation’s economy and future at risk. He said the United States needs to create a climate to promote manufacturing more goods that the world demands.”
“‘You don’t create jobs, you create an environment to create jobs,’ Hoenig said.”
“He said the United States had become too dependent on consumer spending to drive growth, but that has slowed as consumer debt increases and savings rates decline to near zero, eliminating any ability to invest capital. Hoenig said Washington policies alone would not revive the economy, such as providing short-term stimulus packages or adjusting monetary policies with increased regulations.”
“‘Congress can’t solve this problem. This is a societal problem,’ he said. ‘If we continue to borrow more than we can afford, then all the wealth is paid in interest.’”
A post from July 26, 2008, “I suggest a topic on what the collapse of the housing bubble means for the future global financial order. The US mortgage securitization model has failed, and faith in the titans of Wall Street and government has been shaken. What does this mean for macro trends like globalism? What can we learn from past real estate busts, and will the price decline continue to steamroll everything in its path?”
“From The Star. “The world economy has seen globalization collapse once already. The gold standard era - with its free capital mobility and open trade - came to an abrupt end in 1914 and could not be resuscitated after World War I. Are we about to witness a similar global economic breakdown? The subprime mortgage crisis has shown how lack of international co-ordination and regulation can exacerbate the inherent fragility of financial markets. Even those who have not lost heart often disagree vehemently about the direction in which they would like to see globalization go.”
“The Nation. “The US Congress on Wednesday passed a wide-ranging housing rescue plan to help ease the downward spiral in the property market that is weighing heavily on the US economy. It is a bit odd that the bill aims to help homeowners keep their homes. The question is if people can’t afford to pay for their homes, why bother? US mortgage lenders have been committing a grave financial sin by offering loans to Americans, who have poor credit and couldn’t afford to pay for their homes in the first place.”
“This reckless lending spree went on with the illusion that the prices of the US housing market would climb forever. It is an American dream to own a home. But the American dream can’t be realised by irregular wage or salary earners with poor credit records.”
“The Dallas Morning News. “The economy collapsed after years of growth. Can’t-miss investments turned to dust. And banks, gorged on years of aggressive lending, careened toward the breach. A portrait of today’s U.S. economy? Time will tell. Texans will recall another banking crash. In the state’s 1980s collapse, an energy bust and a subsequent real-estate wreck leveled hundreds of Texas banks, including longtime pillars of the economy.”
“Gerard Cassidy recalls living through the 1980s Texas bust as a ‘young and naïve’ bank analyst with an insurance company that had a large exposure to Texas banks. ‘I believed them hook, line and sinker, everything the banks told me,’ says Mr. Cassidy. ‘And we went down with the ship.’”
“Throughout much of the 1970s and early ’80s, the state thrived on rising energy prices and served as a beacon to opportunity-seekers nationwide. ‘The entire country was looking at Dallas in awe,’ recalls Jeff Chapman, a lawyer in Dallas with Vinson & Elkins LLP who started his career here in 1983. ‘There was no city like it.’”
“The state’s banks competed to finance energy and real-estate projects. Hundreds of new banks were chartered in Texas in the first half of the ’80s. It all came crashing down amid a sustained decline in oil prices, a real-estate glut, and changes to U.S. tax law that made investing in real estate less attractive.”
“‘Individuals’ spirits were broken, their confidence was shattered, and they sank into despair and depression,’ wrote Texas banker Joseph Grant, in his book The Great Texas Banking Crash: An Insider’s Account. ‘It was not uncommon for the borrower, facing financial ruin, to break down in tears in the lender’s office,’ wrote Mr. Grant, who headed Fort Worth-based Texas American Bancshares Inc. when it failed in 1989.”
“Last year, Richard W. Fisher, president of the Dallas Fed, reflected on some of the lessons from 1980s Texas in a speech to mortgage bankers in Austin. ‘The assumption of permanently high - or permanently rising - prices in an asset class, in this case oil, invariably leads to regrettable decisions,’ he said.”
“Today, the asset class that people once assumed to be ‘permanently rising’ is residential real estate.”
“US mortgage lenders have been committing a grave financial sin by offering loans to Americans, who have poor credit and couldn’t afford to pay for their homes in the first place.”
That chicken has come back to its roost.
Still ‘too big to fail’?
A federal lawsuit filed Friday could kill chances of a comprehensive foreclosure fraud settlement.
By Jim J. Jubak on Fri, Sep 2, 2011 5:55 PM
The driver here isn’t simply the prospect of slower economic growth represented by the lack of any job growth in August data released today — although that certainly doesn’t help.
Bank stocks are reeling because the big U.S. mortgage lenders and mortgage packagers were anticipating a suit be filed by the Federal Housing Finance Agency, which represents Fannie Mae and Freddie Mac, seeking to force these financial companies to repurchase bad mortgages.
The agency did file a lawsuit late Friday, saying the banks sold bonds backed by mortgages that should not have been packaged into securities.
The amounts at stake — and it’s extremely hard to put a dollar figure on this suit — could dwarf the $20 billion sought in a suit brought by the states’ attorneys general.
…
“The problem isn’t cash, but in some cases the question is whether someone will have their job a year from now.”
Then that means the problem is cash, maybe not cash now but cash a year from now.
A job means steady cash flow. Take away the job and you take away the steady cash flow. Threatening to take the job away will have the same results.
Q. So, after boiling it all down, what’s on the bottom line?
A. That’s simple, it’s cash.
Alright, but here’s what you might hear on any talk show today; “we’ve got to get cash in the hands of the US consumer, and banks aren’t lending”. Or, “consumer confidence is low because people have lost so much equity in their house and are afraid to spend. Consumption is 70% of our economy.”
Look at the big government programs of recent years; rescue banks. Encourage house buying. Keep people in default in their house. Allow lenders to hoard houses so prices don’t fall.
Let’s just keep moving the sandbags back, that’ll fix things!
IMO, the failure is not recognizing what we are dealing with. We’ve had a stock and housing bubble. The challenge is what the post-bubble economy will be. But the powers that be have focused a lot of energy and money on keeping these bubbles alive.
I would hope by now that the idea that housing is going to lead us out of this recession has been discredited!
Enough of that, what will be the drivers of the future economy? It’s not gonna be selling each other houses or smart phones. It’s time we start to question these people in power about trade. Decisions that have been made that lead us down this reliance on consumption. We can’t shop our way to prosperity folks!
We need to reinvent ourselves in an economic sense. We need to be the world leaders in the green sector, electric autos and all the offsets of it. We need to get off the feel good sectors (entertainment, art, psychology driven crap) and start being fearless again.
USA credited inventions:
light bulb
phonograph
telephone
radio
television
airplanes
computer
telegraph
sewing machine
artificial heart
bifocals
cotton gin
refridgerator
coffee pot
revolver
safety pin
oil well,
water tower
repeating rifle
roller skates
typewritter
vacuum
Coca-cola
camera
and blue jeans
My husband is on patents as an EE. Invention and creativity has been his life. There is a lot of underutilized talent is in this country.
You are ABSOLUTELY right! We have lost our way in terms of being innovators, inventors and creators. I am not sure where to even start pointing my blame finger, but I suspect the negative economy will actually help in this.
I’ll point mine at the airhead chicky poo the boss is probably doing behind the wifes back as the main stumbling block to get to an adult to read your resume and make a human contact.
I had one a few months back ask if you were a pencil what kind of paper would you write on? Why do employers pull this crap on people?
————-
I am not sure where to even start pointing my blame finger
“We have lost our way in terms of being innovators, inventors and creators.”
Let’s keep some perspective here. When I was a teenager it costs hundreds of thousands of dollars of professional equipment to produce professional quality recordings.
Today the software and hardware can be had for $1,000.
Because all bosses are “adult” men and all hr people are “airhead chicky poos”, right? Yes, your problem clearly is that no “adults” are reading your resume and that it is at all times being blocked by idiot females. Damn! Why do they let women work anyway!
Yes, point your blame finger at all the “airhead chicky poos” who block your resume from adults, yet still take the time to interview you about what kind of pencil you would be. That is DEFINITELY the cause of all your job woes.
That is GREAT analysis! Thanks for sharing.
If you were a pencil, you wouldn’t be making any decisions.
Next!
If I were a pencil the kind of paper I would write on would be Wax paper. You can’t erase it!
Aren’t we all really pencils?
And the paper we write our life story on is kept in a roll by the toilet.
Alpha, you have exceeded yourself!
“We need to be the world leaders in the green sector, ”
Umm… we tried that w/ solar panels.
Even though Europe was light years ahead of us on this.. the BO administration insisted that the US will be a leader in solar technology… which has a nice feeling.
Meanwhile… China ate our lunch.
China is now the world’s low-cost solar panel manufacturer.. with improving technologies daily. Chinese gov’t heavily subsidizes solar manufacturing to enable itself to capture critical worldwide market share.
So much for that idea.
Pffft…
We can’t shop our way to prosperity folks! ??
Agreed Ben…Turn are attention to and all our resources inward….
“It’s time we start to question these people in power about trade.”
David Ricardo’s theory of comparative advantage explains how the wealth of nations can be increased through specializing in production of commodities which are relatively cheaper for them to produce compared to what it costs their trade partners to produce them. So far as I am aware, the theory does not suggest that nations will be able to indefinitely run trade deficits without ultimately paying the piper.
Yes, and herein lies the problem, summarized by the moron in the above post:
“Dickson argues against the idea that the country is slipping back into a recession. ‘Few people realize the economy is operating at an all-time high by the broadest measure — the gross domestic product (the sum of all goods and services produced in the U.S.),’ Dickson said. ‘What people don’t realize is that we’ve moved above the goods and services at the peak in 2007.’”
GDP, as a measure of economic prosperity, is a FLAWED method of analysis because it is used for Keynesian manipulation of the state of economy. By SPENDING Trillions of dollars by the Government, GDP is increased. Simple. So, you get the stupid, myopic view of the Mr. Dickson………GDP is increasing.
What this fails to recognize it the DEBT has increased by TRILLIONS of dollars, which will either be inflated away or defaulted.
The solution to economic excess is recession. The solution to extreme economic excess (credit and borrowing) is depression.
The BANKS should have been LIQUIDATED, and the bad debts cast off to the losers on the long bet of credit expansion. Bank of America, Goldman Suchs, Wells Fars-co, JP Mortgage fraudsters, et, al. should have been systematically shut down and sold off to the more responsible smaller banks.
Instead, the Whores in CONgress, chose to “bail them out” with our money.
The DEBTS still exist. The BAD loans are growing and have not been liquidated.
We have an EEOC appointee in the Whitehouse, who has no understanding of economics, but believes the GOVERNMENT is the source of all wealth. His solution this coming week will be simple.
WE NEED TO SPEND MORE MONEY. WE need MORE DEBT.
IF we don’t spend more, then GDP will fall and we will begin the Liquidations once again. That’s what we need.
He will point the finger at Congress and say: “IF you don’t spend 2 Trillion dollars (more debt), then GDP will fall and the country will fall into recession( we never left recession). It’s ALL the fault of the Republicans for not spending enough.
The Democrats propped up Fannie and FReddie and let Franklin Raines and his cronies pillage the agency. It was all a big fraud.
It should be liquidated and out of business.
There is no “easy fix”. But the speed of recovery could be hastened by LIQUIDATION of bad assets. Put the Banks out of business, liquidate their holdings, CLAW-Back all the “bonuses”, repossess their houses and Yachts, and start new Federally Insured Banks, or sell them off.
That’s how you start to FIX this fiasco.
Then, eliminate most FEDERAL government agencies, like the Dept of Education, Dept of Housing and URban development, Kill “ObamaCare, Energy dept., etc, etc. and let the States keep all the money that is quandered in Washington for political cronyism.
This would be a start. Then re-write the TAX code. FLAT TAX. PERIOD. EVERYBODY PAYS.
This would be a good start. But it won’t happen. Why?
Too many people on the “RECEIVING SIDE” of the Federal Ledger.
They want their government Cheese and will put in parasites like Barney Frank, Maxine Waters, Dianne Feinstein, Barbara Boxer, etc., Who love to create more government programs and pass out more government cheese.
America is broken from ENTITLEMENT programs. I don’t think it can be fixed until the collapse. Obama may lead us their with endless spending and lack of any real law enforcement. Or perhaps we just have grid-lock for a couple more years as the country stagnates. Let’s see the public reaction to the proposals to spend countless trillions of dollars in more “stimulus”.
Agree. What people fail to realize is that if the government stops borrowing like crazy, the so-called GDP will drop like a rock. I suppose this could panic the population.
It’s worse than that as it happens.
GDP is measured from price data. Prices are measured in money, and the US’s money supply approximately doubled in the 2000-2010 period.
If you normalise GDP over that period for the growth in the money supply it is negative.
hmm….
Tentative conclusion: Running the printing press technology on high blast for an extended period of time doesn’t necessarily do much to boost real production.
Yeah, the money supply doubled, but salaries fell. The excess money went right into the top .5% er’s pockets.
+1, Grizzly
So if the Federal Reserve were to hand out free cash to J6P, would our problems be solved?
If you are Paul Krugman, Ben Bernanke, or Barack Osama, then, YES.
They already tried this, once a couple of years ago, to the tune of a $2000 helicopter drop, used by our household to purchase the nice bow in my wife’s viola case, then again this year in the form of a payroll tax deduction, which is worth $2000 or so to high earners and proportionally less for lower earners.
Of course, $2K per U.S. household is chump change (actually something like $2K * 114m = $228bn in total) compared to trillions the Fed loaned out at rock-bottom rates to banks of all stripes following the Fall 2008 financial collapse.
Ben:
My idea of paying down peoples credit cards to get cash in the hands of consumers, seems better each day.
And making ALL jobs subject to EEOC including intern no pay ones would put pressure on employers to hire across the board not just recent college graduates.
Yeah and the big OHjeez could have made a labor speech on jobs…..instead of ruining j6p football night out with da boyz.
“A topic about jobs in general would be very appropriate for labor Day weekend.”
Aren’t those kind of stimulus measures supposed to be short term though? When this economy started to unravel, didn’t the govt send out $600 checks?
Look at what gets proposed; cut taxes. Raise govt spending. What I don’t understand is why we aren’t asking this question; where did all the jobs go, and how do we get them back?
all true but run the numbers QE2 was what 600 billion, yet $3000 times 100 million credit cards is $300 billion..
people will buy needed items tires pants shavers laptop, sure a lot will go overseas but local people will benifit too…
If the gubmint wants to hand me 3 grand, I’ll stimulate the economy by buying a Les Baer Semi Auto Match .308, manufactured here in the good ol’ USA. Oh, and I’d get the wife an iPad also, unfortunately manufactured in the not so good ol’ China.
What I don’t understand is why we aren’t asking this question; where did all the jobs go, and how do we get them back?
Bingo!
“My idea of paying down people credit cards to get cash in the hands of consumers, seems better each day.”
But cash in the hands of consumers immediately leaks out of this country and flows to another country where the products are made. Until this leakage is fixed we,as a country, will always be short of cash.
People talk of the underlying problem with our consumer-based economy is a shortage of cash. But the real underlying problem is that our economy is a consumer-based economy. Until we fix this problem we will always be broke.
====“My idea of paying down people credit cards to get cash in the hands of consumers, seems better each day.”====
And those without credit card debt? Those who budget properly? Suck up the moral hazard? Repent for our stupidity in living within our means?
Howzabout then we give an equal bonus to whatever is given to the paydowns? Or, should I just start spending aggressively now, rack up that old CC bill, before the next “bailout” occurs?
Just wondering…
“Until this leakage is fixed we,as a country, will always be short of cash.”
I have two Japanese automobiles sitting in my garage which suggests the leakage works both ways. Come to think of it, I would prefer to have those automobiles than the electronic equivalent of cash sitting in a bank account somewhere.
If the leakage worked both ways then we wouldn’t be having this conversation.
Your two Japanese automobles sitting in your garage implies much of the money you paid for these two cars leaked out of this country and ended up in Japan.
They reinvested it in U.S. debt (Treasurys).
But reinvesting money into U.S. Treasuries doesn’t get it back into the pockets of Joe Consumer, only buying what Joe Consumer produces will do that.
But Joe doesn’t produce much anymore - he consumes but he doesn’t produce. Producing is something that somebody who lives Somewhere Else does.
It could also be said that the Fed buying treasuries doesn’t accomplish anything. Supposedly it lowers rates and pushes the stock market up. But the 10 year closed under 2% yesterday.
Back to the stocks going up; we’re told people will “feel better” and spend more, thus creating jobs and profits. If you believe these guys, a nationwide group hug can fix anything.
‘Back to the stocks going up; we’re told people will “feel better” and spend more, thus creating jobs and profits.’
It probably would help their ‘feel good’ theory if ownership of said stocks were far more broadly distributed beyond the top 1% of the U.S. wealth distribution, as then household budget limits could adjust upwards to facilitate a lot more of that ‘feel good’ spending the Fed is hoping is going to happen.
“But the 10 year closed under 2% yesterday.”
Look ma — no (QE3) hands!
Ben
Some of the things that the Fed is trying to do. Please note none of the below is for J6P.
1. It keeps the banks liquid and reduces the chance of a run.
2. It reduces loan risks and increases spreads as a percentage of cost
3. It is a lever that helps in keeping interest rates low which helps the government with it’s deficit and borrowing requirements
4. It is a perverse method of assisting the M1(velocity) factor which can slow yet still maintain it’s absolute relevance
5. Housing losses being experienced by REOs are not under control and banks (who own the Fed) are desparate to avoid catching the knife before it bounces off the bottom thus ensuring a greater length to the fall. They simply do not know what to do about it and are just trying to survive and at the same time have identified that the 800 pounder has now entered the room. The Fed is a little dutch boy with his finger in the dike.
6. The Fed can pontificate all they want about holding interest rates down - but they cannot do so mathematically. The more they print the higher the cost of a toy from Chindia in USF. Europe needs USD and will offer higher prices for them (ie Greek - 46%)
Etc Etc
Someone earlier said that the GDP is not correct. I agree. Should be a measure of Goods only, ie farming, fishing, mining, mfg, energy, and other products. Not services which can be counted many times over within one transaction. GDP is useful only to determine tax volumes.
“Not services which can be counted many times over within one transaction.”
So that fish I ate for dinner last night after thawing it out in its plastic packaging should only be counted for its contribution to GDP as one fish inside one plastic wrapper, as though I had to first go down to the lake, catch it, skin it, fillet it, package it, freeze it, resell it to myself, get it out of the refrigerator (a legitimate capital good in your GDP model), cook it along with tomatoes, mushrooms, black pepper, salt, red pepper, and green onions, all of which magically came from the farm to my refrigerator for free (remember, services don’t count in GDP)?
I hadn’t realized that cooking a meal involved exactly the same amount of (unpaid) household labor nowadays as it did in my grandparents’ time, but now I stand corrected, since services don’t count in GDP.
Cantankerous
All of your costs except for service are covered in my model. Your model includes preparation and transportation labour (micro) that mine does not. Although my thinking does not include transporation costs in reality all gross profit calculations include raw material assembly costs whereas shipment of finished goods does not.
A value added system would be more accurate for what you are talking about.
ps as a realist I know that GDP will continue the same way. It is great for layering taxes on.
How does this all relate to Housing ? We had better learn about unnecessay stacking if we want to improve jobs and create the demand for more housing. Our global competitors have.
Remove all stacking and I bet we could compete on cost for anything. (Macro).
Stacking seems like a separate issue from whether services belong in GDP; i.e. I take the impression you want to eliminate services due to a double (or more-than-double) counting problem. But completely eliminating them would ignore a huge component of real wealth, which is the time we don’t spend doing things that are provided through the services of others — a luxury my small-town grandparents largely did not enjoy.
“But cash in the hands of consumers immediately leaks out of this country and flows to another country where the products are made. ”
If you repeat an untruth often enough, does it become a truth?
I think that is how propaganda is supposed to work, no?
Ding! Ding! Ding!
Free chicken dinner for the guy with the bombs.
Comment by combotechie
2011-09-03 07:31:17
“My idea of paying down people credit cards to get cash in the hands of consumers, seems better each day.”
But cash in the hands of consumers immediately leaks out of this country and flows to another country where the products are made. Until this leakage is fixed we,as a country, will always be short of cash.
People talk of the underlying problem with our consumer-based economy is a shortage of cash. But the real underlying problem is that our economy is a consumer-based economy. Until we fix this problem we will always be broke.
————
Very well said, Combo.
I think rewarding debtors of any kind is absolutely foolish and unfair. They charged it, make them pay for it!
Then make all the home loaners pay back any deficiency on their short sale or modification or file BK…
fair is fair
‘Nearly half of H-1B work visa holders in the US were from India, who were mostly hired for technology-related positions, according to an official report. The Government Accountability Office (GAO) said that between 2000 and 2009, 46.9 per cent of the total approved H-1B visa holders had India as their country of birth. Although information on the total H-1B workforce is lacking, data on approved petitions show that, since 2000, most people that were approved to be H-1B workers were born in China or India, were hired for technology positions and increasingly held advanced degrees, it said.’
‘Using publicly available data on H-1B-hiring employers we learnt that at least 10 of the top 85 H-1B-hiring employers in fiscal year 2009 participate in staffing arrangements, of which at least 6 have headquarters or operations located in India,” the report said. “Together, in fiscal year 2009, these 10 employers garnered nearly 11,456 approvals, or about 6 per cent of all H-1B approvals. Further, 3 of these employers were among the top 5 H-1B-hiring companies, receiving 8,431 approvals among them,” it said.’
‘The H1B cap for 2011 quota is 65,000 for general category.’
‘Elements of the H-1B programme that could serve as worker protections, such as the requirement to pay prevailing wages, the visa’s temporary status and the cap itself, are weakened by several factors, the report said. First, programme oversight is fragmented and restricted. Second, the H-1B programme lacks a legal provision for holding employers accountable to programme requirements when they obtain H-1B workers through a staffing company. Third, statutory changes made to the H-1B programme have, in combination and in effect, increased the pool of H-1B workers beyond the cap and lowered the bar for eligibility, it said.’
“Taken together, the multifaceted challenges identified in this report show that the H-1B programme, as currently structured, may not be used to its full potential and may be detrimental in some cases,” the GAO report said.’
In addition to H- visas, there also L1 and L2 visas which apply to companies like Microsoft who hire employees in India and then after a year or two transfer them to the US. I do not believe there is any limit to numbers on these visas nor does there appear to be any stats. It is my suspicion there are a lot more in this category then the H1 category.
Obviously if we are to support “global” commerce, then companies can and should seek the cheapest workers wherever they may be found. The first thing that comes to mind when it comes to workers in Western nations is that most have labor laws (unemployment insurance, disability, OSHA rules, minimum wages) which effectively legislate the fact these employees cannot compete since prevailing wages are usually well under our minimum wage and work conditions do not offer the same protections. Are we willing to give up these protections to allow our employees to be competitive in the global market? Are senior citizens, government workers and pensioners ready to understand that will falling wages we can not support them at the level they believed they would be accustomed to or promised?
My brother in law lost his job on the California Parks service where he had worked as a ranger for a bit over 10 years. He still does not understand that it was in-fact I who paid a third of his wage while working through tax I used to pay, and that it only took two more software jobs to be off-shored and he no longer had his.
Sooo. What do we do? I suggest protectionist policy and everyone is up in arms about the terrible harm it will do. Perhaps this is true. Perhaps it is not. If it is true then why would the Treasury minting a handful of 5 trillion dollar coins and using the money to pay off all outstanding debt not be a bad thing? Our currency would devalue massively and our employees would be competitive again in the global market.
What does not work is a world in which an engineer costs $130k a year in the US and $10k a year in India.
On a related note, just found out my old company (the division got bought by another company and I was one of the casualties) has now ended their use of Indian contract labor as part of the new company. It never actually saved them any money…I’m encouraged that the new company seems to recognize that. You weren’t really allowed to say it loudly enough for anyone to hear before.
Excellent news!
I know of several persons who started work as H1B. About 50% (4 persons) are extremely talented and incredible engineers. One (Indian) works 6 hours a day and does twice the work! On the flip side, I came across another group in a sister company - lazy ass people (4 guys & 1 gal) thoroughly useless. I don’t blame these guys but I blame their American bosses, who are ill-equipped to be managers, who don’t take these latter guys & gal to task. I would have fired 3 of these straight. It is the fault of companies that don’t do a good job of hiring the right candidate regardless of whether it is a H1B or an american. Companies that just need bodies will go the H1B route because it is cheaper. The dumb American will cost more than a dumb Indian.
Anyways, one of the guys in former group will be the head of engineering section - on par with a VP and deserves it. It is a pleasure working with the guy.
Ben
An absolutely fantastic post. Do you have access to the other side of this post - ie - how many of the advanced degree applicants returned to Chindia - taking with them our intellectual properties and manufacturing processes.
Even better, how many global corps paid them to go back to Chindia to set up their manufacturing plants - and then shutting down their North American operations?
I didn’t even know their was such a program ! Explains a lot more.
and then shutting down their North American operations ??
Boeing gets a lot from the fed’s…If it was not for that, they would even be farther behind Airbus…Big reductions in military expenditures are coming, further hitting Boeing’s balance sheet…Look for your future Boeing planes to be manufactured in China…Hell, they may even try and buy the company…
‘how many of the advanced degree applicants returned to Chindia’
No I don’t but I’ve had conversations with scientist/engineers about this visa stuff that would make your head spin with the inequity of it all.
I heard on the radio recently that one visa office in Shanghai used to process 1500 visas a year, and now they do 1500 a day (I have no idea which countries they are going to). But I don’t understand why we would allow one single visa with unemployment the way it is.
Ben
I have actually witnessed company operations in more than one plant receiving an engineer (occasionally a PhD type !) who worked in R&D for a couple of years then the company invested in a new plant in China (owning 30%) and then the production equipment for about 70% of the North American production would be shipped to China. Of course the engineer accompanied it back to China too. Unbelieveable behaviour by a NA company - but hundreds have done it.
Now Chindia is investing in public NA resource companies buying some shares, selling them off to seriously depress the price of the non producing mine, making an offer for the whole thing and then financing the implementation of the mining operation. Valuable NA reserves bought for next to nothing ! To pave their easy access they are having their expatriates become elected officials in those burbs nearby mining opportunities !
Try doing something like that in Chindia.
“…taking with them our intellectual properties and manufacturing processes.”
It’s just a matter of time before those American graduate students who are lucky enough to qualify travel to Chindia for advanced studies, as the process of outsourcing America’s manufacturing base over the past four decades is presently followed by the escapement of our human capital stock.
I normally try to stay out of these conversations because in my line of business it’s incredibly difficult to find qualified “IT” staff, but we aren’t allowed to hire foreign workers.. so it’s no solution for us anyways.
Anyways, here’s an interesting article from the Washington Post about the issue:
http://www.washingtonpost.com/national/on-innovations/president-obama-there-is-no-engineer-shortage/2011/09/01/gIQADpmpuJ_story.html
Qualified IT staff or cheap qualified IT staff?
My experience with the Indian guys is that they were as mixed a bag as the local guys. Some were good, most were not. Had the price been the same or even close not one of them would have been hired.
I put “IT” in quotes because what I do is security related. It’s not really normally considered part of the IT department.
Of course, if we had unlimited funds we could hire as many people as we needed. But what I meant when I said it was incredibly difficult is that it’s hard to find someone to work for what our clients will pay us. We can make offers of well over six figures but the people with the experience we need are making well above that already. There are only so many people with the right qualifications in this country.
In an ideal world our clients would see more value in our services and we’d be able to charge more. But in reality they know they can’t hire anyone with the expertise they need for themselves because they can’t justify that salary in the budget. It’s easier to justify hiring us as a one-time expense (even if it’s every year). Yet, they can only justify so much.
Having a security clearance is one of the highest paying things you can have if you are in software. Basically it states your job cannot be off-shored so you have to be paid what you are worth.
Personally I got out of software 3 years ago. My last rate was $60 which had not moved since 2001. Thereafter I could not get companies to entertain over $50 and I decided the stress was not worth it. Today I repair things of great value which few others can or do, which puts me in a nice niche. I am still writing software, but now it is the innovative type along the lines of MY projects… I don’t make as much, but given 2/3 my previous income and less than 20 hours a week to earn it I now have time to do some things I had always wanted to do.
I stuggle with that everyday……the dj biz is way down hs reunions 50th birthday aniversairies my bread and butter great side money gigs are pretty much gone..
People dont answer emails they get ANGRY if you call or walk in asking for a job
Green jobs were supposed to be an alternative job for the barely functional, but that isnt working out well.
Look at our rail system here in the NE becuase of a Minor hurricane,shameful
But new trade barriers are necessary, but we dont have the educational skills necessary for the new economy. I know reading writing and speaking English.
Its should be embarassing to OH that 1/2 of the people even applying to Target or Koles fail the simple math test.
But then that means being politically incorrect and putting a serious halt to the gangsta rap crap…..trust me if black people spoke english rap music would die………and maybe crime would go down too?
Aned we should be honest why we are in afgahanny…Rare Earth minerals….we let china control 97% of some critical metals while we have enough of it on our own soil but those dammm enviromentalists are in the way…and the next biggest source is near Kabul.
————–
Enough of that, what will be the drivers of the future economy?
‘I struggle with that everyday’
I see it around me all the time. I’d bet everyone who posts or reads here knows someone who is unemployed or under-employed. I’ve been through this before. Read the 2008 link I put up above, and what Texans went through. That’s why I try so hard to get these points across. This isn’t just a “double dip” we are facing.
‘Individuals’ spirits were broken, their confidence was shattered, and they sank into despair and depression,’ wrote Texas banker Joseph Grant, in his book The Great Texas Banking Crash: An Insider’s Account. ‘It was not uncommon for the borrower, facing financial ruin, to break down in tears in the lender’s office’
I’m not trying to be negative! I’m just pointing out how serious this could be, and these people in charge are making things worse!
I’m not saying I have the answers, but we better put our thinking caps on and make some changes, or we could be in for a buncha hurt.
Ben.
The economic model the world operates under today, ie. fractional reserve banking, synthetic derivatives and fiat money seems to be mathematically flawed because it assumes infinite growth and does not account for biological feedback. I would venture to say we maybe running against the natural laws of nature and population dynamics. Nature’s solutions are pretty effective really. Look back to what happened to western civilization after the Black Plague, a 60% reduction in European population. Before the BP wealth and power was grossly concentrated in the hands of a few religious clerics and monarchs. It was also known as the Dark Ages because western civilization was largely absent in the advancements of science and the arts. After the last Black Plague in the 1600’s what followed was The Renaissance and the Age of Enlightenment. Using the past as a predictor of the future where humans are involved is a bit unpredictable but if natural laws have not been repealed then sometime in the next 50-100 years there will be another mass extinction event like full scale nuclear war or biological catastrophe to the food supply that will restore equilibrium. I would guess that the total sustainable world population is around 2 billion so I expect a 50%-60% reduction.
“seems to be systematically flawed” What do you mean?
It is OBVIOUSLY flawed. It allows a bunch of Wallstreet Bankster criminals access to continuous free money at our expense.
The CREDIT expansion which the “model” financed, has lead to excess consumption and BAD investments like “flipping houses” as an economic model. All promoted by Fed Chairmen Greenspasm and Bernappy.
The bad investments need to be liquidated, but the Banksters would be revealed to be BROKE, which they are, without the continual feeding of TReasury money via the FED.
My usual rant ” END THE FED! END THE FED!”
Won’t happen.
There is no such thing as a “consumer economy”. That’s the most ridiculous Juxtaposition of 2 words I have ever heard.
It implies the that government can pass out money and people can just Consume their way to prosperity. Parasites make America wealthy, by spending government money. Really?
SOMEONE needs to MAKE all the things the Parasites are consuming. But if you are the Producer, your work is siphoned away by government taxes and FED produced inflation.
Why bother?
We are at the breaking point and the government solution is to provide more free money. IT will fail. It will lead to $10 gas and a slowing economy when people decide not to pay the inflated prices. A stalled economy.
Stop the FED. Stop Obama. Stop the spending.
We are at the breaking point and the government solution is to provide more free money. IT will fail. It will lead to $10 gas and a slowing economy when people decide not to pay the inflated prices. A stalled economy.
This is true but the time to act on these words was in 1980 before ALL the debt. Issuance of this debt most of which will not be repaid is inflationary. We are now in a deflationary spiral. Gas (a necessity) will be kept in short supply and will still cost $10 a gallon. People will be unable to pay inflated prices. A stalled economy.
We cannot exist on a debt driven economy forever. It is as mathematically impossible.
The creation of the Social Security and pension programs pits one group who wants inflation stomped at all cost against the younger people who tend to benefit from moderate inflation. Without inflation all the cash has been earned and stuffed away leaving none for the next guy that comes along. The KEY is the correct amount of inflation which it turns out we have not had for many years.
I believe it is the efforts of the FED to stomp out inflation over the past 30 years which has led to our pressure cooker economy which blows giant bubbles left right and center before finally rupturing the container leaving us in the mess we are in.
“fractional reserve banking, synthetic derivatives and fiat money seems to be mathematically flawed because it assumes infinite growth and does not account for biological feedback.”
BlueStar, over the years I’ve seen a few of my really smart buds try to tie science, math, history, economics, religion, etc. together the way you have here in the last few days.
Most of these ruminating benders ended in drug addiction, alcoholism, weight gain, job loss, destroyed relationships, etc.
Just sayin’…
Muggy, just ignore me as I tend to go into the Twilight Zone a lot.
I laughed at the mention of drug addicts. The vast majority of Americans ARE addicted to drugs already, both legal and otherwise. I was hooked on a pain killer back in the 90s due to surgery. I was in my peak productivity phase too and it fracked up my work as a programer. Anyway, to my point… At one time there were these officials in Japan that said it was unreasonable to worry about nuclear accidents as they had taken all reasonable precautions to prevent disaster. Now that we have proof otherwise. As a result there are several hundred square miles of land and ocean that will be lethal for decades or longer. This is a world-wide phenomena and it’s the time factor here that needs to be considered as it will take a few decades for this cycle to play out. To me, I pretty much buy into the theory of civilization as postulated in Jared Diamond’s books “Guns, Germs, and Steel” & Richard Dawkins “The Selfish Gene”. I see every indication we are approaching a similar event. By some measures I think the introduction of nuclear technology, both for weapons and energy production is one of those milestones that Jared would point to and warn us that history echos of the dangers ahead.
FWIW, the dude that REALLY lost his mind referenced the Selfish Gene A LOT.
I’m with Blue (the other HBB Blue): TEOTWAWKI never happens.
I’m a fan of parallax billiards. “The end” will be when we get bumped by another rock.
Really? That’s a very strange crowd you hang with Muggy, are there any other documented cases of people going crazy from reading Dawkins or Jared? As to TEOTWAWKI,(had to look that one up) I think you mean end-of-the-world survivalist types and I don’t buy it either. These guys see tipping points everywhere and they have been doing so for thousands of years. I see a continuum of events that take decades to unfold. You won’t be surprised to know I’m with the global warming crowd so I see long term cause and effects relationships. Did you notice Exxon cut a deal with the Russians to develop oil fields in the arctic last week? WUWT?
Thats why i keep reading and posting here Ben……this place keeps my spirits up and keeps me informed and realize i could have taken the easy way out and have us move in with my mom,(she has plenty of room) but at what cost to my health and sanity?
“to break down in tears”
That’s a portal that most have not gone through, yet. When we give up on the past, then we can be creative about hope for the future.
DJ, you need to wrap your mind around the DJ industry as being mostly dead. My friend, whose wedding was at the Botannical Gardens with filet for all guests, plugged his ipod into he buddies home stereo system. That was 2008.
I’d love to be paid for writing spots like I used to, but it’s gone. Dead. Not coming back.
In fact, if I owned a party house I would advertise in -house sound with “any connection you need for your personal MP3 player. Just plug and play!”
yes muggy, its just a shame for all this equipment to sit idle when just a few years ago u was out almost every weekend year rounf.
but its all paid for! oh well maybe in my next abode i will have a 3000 watt stereo with lighting to watch concerts on my 100″ tv in my man cave….
i have 4 of these plus the subs…
http://www.hollywooddj.com/fbtmaxx4a.html
So, instead of advertising yourself as a DJ, offer up your system for rental and set/tear down.
I do ocassionally…..so it is some income…….but its mostly the rap reggae hip hoppers who will rent for the HUGE club sound( double 18″s) which i cant give them……. and i do post on CL.
‘Ten occupations accounted for more than 1 out of every 5 U.S. jobs in May 2010. Retail salespersons and cashiers were the two largest occupations, with employment of 4.2 and 3.4 million, respectively. The largest occupations also included registered nurses; janitors; and laborers and hand freight, stock, and material movers. The majority of these occupations had low wages: of the 10 largest occupations, only registered nurses, with an annual mean wage of $67,720, had an average wage above the U.S. all-occupations mean of $44,410. Annual mean wages for the remaining largest occupations ranged from $18,610 for combined food preparation and serving workers to $32,780 for customer service representatives.’
‘Three of the 10 largest occupations were office and administrative support jobs: general office clerks, with employment of 2.8 million; customer service representatives (2.1 million); and secretaries and administrative assistants, except legal, medical, and executive (1.8 million). Together with other office and administrative support occupations, this was the largest occupational group, making up about 1 out of every 6 U.S. jobs. Other large occupations in this group included stock clerks and order fillers and bookkeeping,accounting, and auditing clerks.’
‘Sales and related occupations and food preparation and serving related occupations were the second and third largest occupational groups, making up about 11 and 9 percent of U.S. employment, respectively. In addition to retail salespersons and cashiers, the largest sales occupations included first-line supervisors of retail sales workers and sales representatives, wholesale and manufacturing, except technical and scientific products. The largest food preparation and serving related occupations were combined food preparation and serving workers and waiters and waitresses—both among the 10 largest occupations—as well as restaurant cooks and food preparation workers.’
‘The U.S. mean wage across all occupations was $21.35 per hour or $44,410 per year in May 2010, but wages for individual occupations and occupational groups varied greatly around that average. The highest paying occupational groups—management and legal occupations—had annual mean wages more than double the all-occupations average, while annual mean wages for computer and mathematical occupations and architecture and engineering occupations were more than $30,000 above the U.S. average. Healthcare practitioners and technical occupations paid an average of $71,280 per year; although this group contained many of the highest-paying individual occupations, including specialist physicians and dentists, it also contained occupations with more moderate wages, such as medical and clinical laboratory technicians ($38,190) and recreational therapists ($41,440). The lowest paying occupational groups—food preparation and serving related; farming, fishing, and forestry; and personal care and service—had annual mean wages of less than $25,000.’
http://www.bls.gov/oes/highlight_2010.htm
Google:
‘Ending Permanent Headcount 2009: 19,835
2010: 24,400′
http://investor.google.com/financial/tables.html
‘The answer to the question “How Many People work at Walmart” is a bit difficult to ascertain given the company’s traditional close-lipped approach to its public relations, but recent counts put the figure as high as 1.8 million, with a continued economic recovery looking to push that figure over 2 million sometime after 2012.’
‘How many people work at Walmart on any given day fluctuates from month to month according to variable like seasonality, consumer demand, and even the price of gasoline. Walmart jobs and work are plentiful in the U.S., but not plentiful enough for the 9-10% of the country’s workforce still looking for jobs.’
http://www.workatwalmartjobs.com/how-many-people-work-at-walmart
—‘Ten occupations accounted for more than 1 out of every 5 U.S. jobs in May 2010. Retail salespersons and cashiers were the two largest occupations, with employment of 4.2 and 3.4 million, respectively.—
No surprise really. We comment at the hospital (no hard data review, just gut feeling) that 80% of our admissions comprise 10 diagnoses.
Common is common. And, with various bell curves, it does not surprise that common jobs with low barrier to entry (low demand for skill sets) would be highly represented.
I might’ve missed it in list above, but I didn’t notice manufacturing mentioned. Could it be that all our economic problems stem from that?
Could it be that all our economic problems stem from that ??
A lot of them do that’s for sure….
Could it be that all our economic problems stem from that?
Yes, absolutely.
“Or high unemployment AND high inflation? That seems to be the status quo.”
I submit there was much higher inflation and lower unemployment in the 1975-1979 period. Unfortunately, this was followed by the double-dip recession of 1980-1982, when unemployment skyrocketed and interest rates soared; I doubt the Fed is really interested in a repeat of that period.
I submit there was much higher inflation and lower unemployment in the 1975-1979 period ?
Yep….
‘What’s happened in all areas of business, nonprofits and government organizations is that they continue to find more productivity per worker than two or three years ago. That’s why only 1 million of the 7 million people who lost jobs have been rehired.’
There is definitely a chicken-or-the-egg-first question here, as it seems safe to presume the average productivity of the 7m folks who lost their jobs was lower than for those who remained employed. Throwing 7 million U.S. workers under the bus also tends to force and frighten those who are lucky enough to stay employed into working a lot harder (”more productively”) than before.
I noticed that statistic. Could it be that 6 million of the jobs lost weren’t producing anything, like construction workers building houses we don’t need, mortgage brokers or used house salespeople?
There is also technology whose adoption always favors the owners of capital.
And by technology, I don’t mean the iPod. I mean simple things like the tractor and vacuum cleaners.
They actually were producing something. The problem was the FED’s manipulation of interest rates suggested that there was a shortage of housing. When the money is free, this suggests there is huge demand. IF the conventional standards used for lending were in force, i.e. 20% down and minimum 6% loan (no teaser rates), then there would never been a housing “boom”. Credit expansion led to bad investments.
The fact that money was a mal-investment does not mean people weren’t making things of value. they were just grossly over-valued.
There is no driver, in the current economy, for job formation.
Green jobs are a fantasy, as seen by the bankruptcies of Obama’s industry leaders in the area, even with $500 million in government loans…………all down a rathole.
Jobs are created by DEMAND. If there are things people are willing to part with their money for, someone will be there to supply them. Few people want electric cars given the current cost/benefit analysis. GET government “planners” out of the picture and stop wasting our money on these schemes.
Fannie and FReddie contributed largely to the housing bubble as the repository of crappy loans papers. IF they weren’t there, they fraud would have ended a lot sooner.
Most everyone I know who has a job is doing the work of 2-3 people, and it’s not because there used to be so much slacking off, they really are doing the work of 2-3 people, every day, not just in a pinch. We can all work sprints and all nighters every so often, but not day in and day out. This recent rush of productivity is artificial. My sister is so stressed out at her job because they’re short handed that she’s getting sick, and she’s normally very healthy. Her employer could easily afford to hire more people but they’re using the economy as an excuse to press more out of their staff. THey’re literally dropping like flies…2 already died from cancer this past year. Not like the job gave them cancer, but unmitigated stress definitely doesn’t help.
“Most everyone I know who has a job is doing the work of 2-3 people, and it’s not because there used to be so much slacking off, they really are doing the work of 2-3 people, every day, not just in a pinch.”
Being one of the lucky ones who get to keep their jobs during a brutal recession has its downside, to be sure.
“My sister is so stressed out at her job because they’re short handed that she’s getting sick, and she’s normally very healthy.”
I’m stressed, but luckily not to the point of illness, at least so far. Can you persuade your sister to calm down? My three sisters all work too much for their own good, as well, but none of them so much that I am worried about any of them literally working themselves to death. And on the positive side, all three of them have positive net worths and little or no debt.
“‘Congress can’t solve this problem. This is a societal problem,’ he said. ‘If we continue to borrow more than we can afford, then all the wealth is paid in interest.’”
I sure hope Hoenig stays engaged in the policy process after he retires from the KC Fed, as he seems to have one of the few independent voices at a time when most other economists are content to ride the Group Think bandwagon.
I’m just going to say it real simple .
First ,you can’t decouple wages from the price of things ,especially by using un-payable debt to do it ,especially if it’s backed by fake real estate prices .
American Corporations want to keep prices high and profit margin high ,
yet use the pay scale of foreign Countries to decrease USA wages ,in spite of what the cost of living is here .
Since when can you have a economy that proposes to be a capitalist
country ,yet base prices on Monopolies and price fixing .
We have to go back to the past to get a effective economic system that
actually works . Look at what works ,not what the Fat Cats want you to believe . They will rob you blind and laugh all the way to the bank .
“They will rob you blind and laugh all the way to the bank .”
Come to think of it, they ARE the bank!
Lol!
I’m laughing all the way to the… wait a minute, I am the bank!
This erroneous position seems to be common: “But cash in the hands of consumers immediately leaks out of this country and flows to another country where the products are made. Until this leakage is fixed we,as a country, will always be short of cash… Producing is something that somebody who lives Somewhere Else does.”
Consider this:
“…36% of the price U.S. consumers pay for imported goods actually goes to U.S. companies and workers.
This U.S. fraction is much higher for imports from China. Whereas goods labeled “Made in China” make up 2.7% of U.S. consumer spending, only 1.2% actually reflects the cost of the imported goods. Thus, on average, of every dollar spent on an item labeled “Made in China,” 55 cents go for services produced in the United States. In other words, the U.S. content of “Made in China” is about 55%…”
http://www.frbsf.org/publications/economics/letter/2011/el2011-25.html
That is why protectionist policies will hurt Americans.
The idea that America losing its manufacturing base leads to our economic ills is simply ridiculous:
http://mises.org/daily/5296/The-Good-Krugman
Look at the chart comparing Manufacturing Share of GDP:
World vs. United States
1970 to 2009
“That is why protectionist policies will hurt Americans.”
Let’s see …
Who has all the jobs and a rising standard of living? China.
Who is hemoraghing jobs abd a falling standard of living? The USA
Who is protectionist? China.
Who has “open markets”? The USA
Thus, on average, of every dollar spent on an item labeled “Made in China,” 55 cents go for services produced in the United States. In other words, the U.S. content of “Made in China” is about 55%…”
—————
But how much of this money goes to workers, as opposed to capitalists/investors/executives? If $100,000 is put into the hands of 100 people, most of it will be recirculated locally. If you put $100,000 into the hands of one person, it will likely be used to “invest” in assets — increasing prices (of housing, agricultural commodities, etc.) for those who do not get 1/100 of that $100K.
An economy is sustainable for as long as money continues to flow through as many hands as possible. You need a critical mass in order for the economy to remain stable or grow.
As it stands, the richest are trading amongst themselves, trying to outwit one another and get in front of each other’s trades. They are speculating on the prices of assets, as opposed to REAL investing — where they invest in PRODUCTION. They are not investing in companies/production because there is no demand. There is no demand because those at the bottom of the pyramid (who comprise the majority of the population) *are out of money* because they are out of jobs.
CA renter wrote, “those at the bottom of the pyramid (who comprise the majority of the population) *are out of money* because they are out of jobs.”
At most we have 22% unemployment, where do you get the “majority of the population” idea from?
Look at this chart of August employment, the recent decline in jobs is generally limited to state and local governments.
http://www.economicpolicyjournal.com/2011/09/chart-august-employment.html
“Despite all the talk you will hear about a double dip recession etc., the unemployment picture (a lagging indicator) in the private sector is stabilized.”
“This is a societal problem”
Keeping rates at 0%, shows that Helicopter Ben has 0% understanding of the societal problem.
and NONE of that zero percent ever gets passed on to credit card holders….nope they still want 19.99% + got 2 offers yesterday…and my credits is No way close to being bad enough to accept that.
Associated General Contractors of America=CLOWNS. Never forget. First Class Clowns.
In Colorado, it seems you didn’t look at the world manufacturing chart?… Or read the other link.
If you didn’t, you should.
You ask, Who has all the jobs and a rising standard of living? China.
From the link, “Chinese gains have come, in large part, at the expense of other exporting nations.” Not the U.S.
It also seems as though you didn’t notice the other chart showing 81.9% of U.S.goods are made in the U.S. from U.S. parts.
Americans will be harmed if protectionist trade policies are followed: “Obviously, if a pair of sneakers made in China costs $70 in the United States, not all of that retail price goes to the Chinese manufacturer. In fact, the bulk of the retail price pays for transportation of the sneakers in the United States, rent for the store where they are sold, profits for shareholders of the U.S. retailer, and the cost of marketing the sneakers. These costs include the salaries, wages, and benefits paid to the U.S. workers and managers who staff these operations.”
You ask, Who is hemoraghing jobs abd a falling standard of living? The USA
The reason for this, “high unemployment is caused by government regulators. It can last a very long time, but with almost a snap of the fingers, it could be ended.” - from, Why We Are Not in a Period of Permanent New High Unemployment
http://www.economicpolicyjournal.com/2011/09/why-we-are-not-in-period-of-permanent.html
You ask, Who has “open markets”? The USA
Gibson Guitar might not think so.
Many other companies and People don’t agree with you either.
The U.S. will never solve its problems if People refuse to look at the facts and address the true underlying problems instead of leaning on unproven jaw-jaw.
I think you would benefit from reading the rest of this article:
“Do you care what percentage of goods people in your state sell to people in some other state, vs. how much they buy from people in your state? Of course not. Then why should you care about China? What difference does an invisible judicial line make regarding the profitability of your trade with someone else?…
The problem is not China. It is not India. It is not imports. The problem is the endless call from each special-interest group for the government to Do Something to Save America. The problem is that the government has done way to much for too long, all in the name of Doing Something to Save America.”
http://www.lewrockwell.com/north/north1025.html