A Significant Ongoing Misallocation Of Resources
Readers suggested a topic on jobs and the economy. “The March jobs report looks bullish. Unemployment down to 8.2% baby.”
One asks. “Will paltry March 2012 employment numbers give the Fed the support to roll out a mortgage-bond version of QE3?”
One added, “88,000,000 people are riding the pine right now. That’s a lot of people not doing a whole lot! Accounting for the new entrants into the labor force as well as the 88 million sitting on the bench, how many months of creating only 120,000 jobs will it take to correct this?”
“158 million total unemployed, broken down as follows: 1. 88 Million functionally unemployed: No job & no longer looking. 2. 70 million children, disabled or retired. Now add U6 - Those who are marginally employed or receiving unemployment benefits to the 88 million who are functionally unemployed. Doesn’t paint a pretty picture does it? So, in essence, we create 120k jobs/month in order to account for those entering the work force. Yet we have 88 million sitting idle, plus those included under U-6 who are marginally employed (part-time but want full-time employment) or receiving unemployment benefits; yet somehow the unemployment rate is going down?”
And finally, “Nearly everything that I read says that you need somewhere between 100,000 and 125,000 jobs a month just to absorb new entrants. Now that may be a little inflated = I don’t know if, for example, that number reflects people flocking over the boarder at the times of bubble job growth. If so, we may need less. Also don’t know if enough people are staying in school to lower that number. And I think one person asserted that the real need was 150,000. In any event, 120,000 should keep us approximately even.”
“I don’t know why anyone is surprised about this. Some of the hiring that should have happened in March happened in January and February because of the mild winter. There was bound to be a slow down eventually. We aren’t in summer vacation hiring season yet.”
The New York Times. “The official statistics say that the national economy has been growing for almost three years, and that Maryland is growing faster than most states. But in Prince George’s County, where housing prices have fallen more than anywhere else in the state, there is scant evidence of renewed prosperity. ‘I don’t think you’ll find anyone in here who will tell you that it’s over,’ said the Fish Market’s owner, Rick Giovannoni, gesturing at the half-empty tables. He paused, then added: ‘Well, we are selling more drinks.’”
“Places like Gwinnett County near Atlanta, Lake County, north of Orlando, and San Joaquin County in California’s central valley, where housing booms were fueled by borrowed money, may now become long-term laggards under the weight of those debts.”
“Everett Allen, who owns a remodeling business in Prince George’s, used to have enough work for six employees. In recent years he has employed three. ‘If somebody used to call in October, I wouldn’t do the job,’ he said. ‘I wanted to be off over the holidays and I gave my guys time off. Now if somebody called in October, I probably would be doing it. But we don’t get those calls now.’”
The Diplomat. “Economist Nicholas Lardy has a new book out called Sustaining China’s Economic Growth After the Global Financial Crisis. In Lardy’s analysis, the Chinese economy is ‘unbalanced’; it relies too much on exports and residential property prices to fuel its economy, two distortions and dependencies that favor certain interests at the expense of the nation.”
“The urban real estate bubbles (are) fueled by what Lardy calls ‘financial repression’: low bank interest rates that tax depositors, and a scarcity of investment vehicles. To put in perspective the real estate bubble, consider this statistic: ‘After 2003, the urban population increased by an average of only 19 million annually, but average residential housing investment of 6.8 percent of GDP was two-thirds larger than in 2000-2003, and annual residential housing starts soared from 490 million square meters in 2004 to 1,290 million square meters in 2010.’”
“These economic trends have led Premier Wen Jiabao himself to call China’s growth ‘unsteady, imbalanced, uncoordinated, and unsustainable.’”
“Lardy frames the problem and solution more technically and diplomatically, while calling for a bold shake-up of China’s economy: ‘The central thesis of this study is that the evidence from the past seven or eight years shows that modest, marginal, incremental economic reforms will not lead to a fundamental rebalancing of China’s economy. Underlying financial distortions – including administrative controls that keep deposit interest rates low, an undervalued exchange rate, subsidized energy, and so forth – are contributing to a significant ongoing misallocation of resources throughout the Chinese economy.’”
“Currently, China’s economy is structured to benefit state-owned enterprise and real estate companies, creating a situation where China is helping the rich get richer at the cost of a vibrant society, a clean environment, and a healthy economy. So, if the solution is this straightforward and simple – and the consequences of the problem so dire and dangerous – then why hasn’t China acted already?”
“I have my own theory, which I explained in a previous post: Considering how poor and populated, chaotic and unmanageable China is, it’s in the long-term best interests of China’s elite to behave like parasites and predators. China’s elite are enriching themselves by bankrupting the state, and, already having shifted assets and family abroad, will continue to do so until the state itself collapses.”
“We’ve seen this behavior consistently throughout Chinese history, most recently with Chiang Kai-shek’s misrule that permitted the Communists to rise to power. And now, as the Chinese would say, history is about to complete yet another circle.”
The Melbourne Anglican. “Foreign investors are watching carefully Australia’s dependency on China, according to Professor Frank Milne, an Australian economist who is now a leading academic in Canada. It is causing some concern, he said, given the importance of China as a market for Australian commodities. ‘If China gets into trouble, then you’re in trouble,’ he said. ‘You don’t want to be a ‘one-trick pony.’”
“The co-existence of extreme wealth and extreme poverty in China, as in India, was ‘very disturbing’, he said, with possibilities of growing social unrest in those countries. A great deal of Chinese money was now pouring into Canada to avoid potential problems, he added.”
“Speaking on ‘Australia and the GFC’, Prof. Milne said that the financial crisis was far from over for Australia, as was the case with Canada. The size of the mining sectors in each country should not be exaggerated; in Australia it is 10 per cent of GDP. In the non-commodity sector, such as manufacturing – the huge bulk of the economy – the impact of the GFC was ongoing, and had been felt for some time. Observers were also concerned by slowing productivity growth. The mining boom had masked these deeper problems until recently, he said.”
“Since 2007, Australia had been ‘going sideways’ in terms of living standards. He referred to the ‘housing bubble’, with serious problems for housing affordability in some of Australia’s large cities. Australian financial institutions, especially the major banks, had growing exposure to housing mortgages, he said. Are there credit problems waiting to happen? ‘Serious economists have been sounding warnings in private for some time, but the media and Canberra have been tone-deaf,’ he added.”
“A return to GDP growth was ‘important for all the things that really matter for us’, he said. High quality education, training and re-training was vital for long-run productivity growth. ‘We have to think very carefully how we train people, not just fall for passing fads,’ he said.”
‘distortions and dependencies that favor certain interests at the expense of the nation’
‘The urban real estate bubbles (are) fueled by what Lardy calls ‘financial repression’: low bank interest rates that tax depositors, and a scarcity of investment vehicles’
‘Currently, China’s economy is structured to benefit state-owned enterprise and real estate companies, creating a situation where China is helping the rich get richer at the cost of a vibrant society, a clean environment, and a healthy economy.’
That all sound familiar.
Then connect these dots:
‘it’s in the long-term best interests of China’s elite to behave like parasites and predators. China’s elite are enriching themselves by bankrupting the state, and, already having shifted assets and family abroad’
‘The co-existence of extreme wealth and extreme poverty in China, as in India, was ‘very disturbing’, he said, with possibilities of growing social unrest in those countries. A great deal of Chinese money was now pouring into Canada to avoid potential problems, he added’
‘Currently, USA’s economy is structured to benefit crony-owned enterprise’
At least we do things differently here in the United States.
The absurdly greedy nature of most human beings in a position of power never fails to fill me with absolute revulsion. The fact that these Chinese scum may be funneling their spawn and their blood money into the USA is beyond troubling. I don’t honestly see much hope for this planet, long term.
Hence a stateless, “For a New Liberty” society as the libertarians have advocated for decades, is very appealing. Justice means small or even no government.
Justice means small or even no government ??
Give the states independence from the fed’s…
Justice means small or even no government.
Who enforces that justice?
Give the states independence from the fed’s…
Most states would have fewer civil liberties if given independence from the fed’s.
“Give the states independence from the fed’s…”
No need for that pesky Bill of Rights…let states’ governors dictate what is OK for its citizenry to say or do.
“88,000,000 people are riding the pine right now.”
A very disturbing picture emerges from that data if you calculate the year-on-year difference (or difference in logs) and plot it. After 1996, there appears to be a break in structure: Pre-1996, there were periods when NILF grew punctuated by periods when it shrink; post-1996, other than a couple of points when the year-on-year change was flat, NILF steadily increased, with the highest rates of increase from May-1999 through Nov-2004, then again from Nov-08 to the present. The two highest rates of increase roughly coincide with GWB’s and BO’s first terms in the WH.
Overheard recently in a restaurant.
Person #1: “She can’t get a job even with a masters degree.”
Person #2: “What’s her major?”
Person #1: “Women’s Studies. All the feedback she gets from potential employers is that they need accountants and social workers.”
“Women’s Studies.
I loved those.
My co-worker reminisced about his first accounting class. The professor told the class that if you had an accounting degree and a pulse you would never be unemployed.
“…you would never be unemployed.”
It’s a falsehood. My SIL’s CPA ex-husband has managed to find himself unemployed twice over the past decade (including presently).
A professor at Radcliffe said her grandmother told her to take stenography and she would never be unemployed.
Yeah I know two of ‘em not working. They couldn’t pass the CPA, but still…just sitting on their butts living off hubby.
SIL’s ex-hubby is not lazy. But I suspect the gigs he takes are of the high-risk, high-reward variety; seems like the one that eliminated his position in the early 2000s was a venture capital operation.
“Yet we have 88 million sitting idle, plus those included under U-6 who are marginally employed (part-time but want full-time employment) or receiving unemployment benefits; yet somehow the unemployment rate is going down?”
Just in case this was not meant as a rhetorical question, I believe the answer is that the 88 million (or whatever the NILF number is) are excluded from the denominator (and numerator) of the headline unemployment rate number. If another million workers lost their jobs over the next year and decided it wasn’t worth the effort to find another one, the unemployment rate would go down, as subtracting a million from the number currently counted as ‘unemployed’ would have a larger effect in percentage terms than subtracting a million from the number counted as currently ‘in the labor force.’
We have been through this discussion on the HBB at least once before, and I found it quite informative. Here is a link to an article that discusses the challenges of reflecting ‘discouraged workers’ (i.e. ‘not in the labor force’) in the unemployment rate calculation.
“Think of the press as a great keyboard on which the government can play.”
-Joseph Goebbels
“I have my own theory, which I explained in a previous post: Considering how poor and populated, chaotic and unmanageable China is, it’s in the long-term best interests of China’s elite to behave like parasites and predators. China’s elite are enriching themselves by bankrupting the state, and, already having shifted assets and family abroad, will continue to do so until the state itself collapses.”
This description stands in stark contrast to the popular conception of China as an economic powerhouse.
China’s elite are enriching themselves by bankrupting the state…
According to Austrian School economist Peter Schiff, and like-minded skeptics of democracy with totalitarian leanings, China has an advantage over us in that since they aren’t a democracy, they can and do engage in long-term, well-reasoned planning.
Who’s right?
“…they can and do engage in long-term, well-reasoned planning.”
Who knows? Maybe central planning will work better in China than it did in the defunct Soviet Union or California.
And by the way, thank you for raising this point, as it provides excellent fodder for an especially cantankerous post.
Five-Year Plans for the National Economy of the Soviet Union
The Five-Year Plans for the National Economy of the Soviet Union (USSR) (Russian: пятилетка, Pyatiletka) were a series of nation-wide centralized economic plans in the Soviet Union. The plans were developed by a state planning committee based on the Theory of Productive Forces that was part of the general guidelines of the Communist Party for economic development. Fulfilling the plan became the watchword of Soviet bureaucracy. (See Overview of the Soviet economic planning process) The same method of planning was also adopted by most other communist states, including the People’s Republic of China. In addition, several capitalist states have emulated the concept of central planning, though in the context of a market economy, by setting integrated economic goals for a finite period of time. Thus are found “Seven-year Plans” and “Twelve-Year Plans”. Nazi Germany emulated the practice in its Four Year Plan designed to bring Germany to war-readiness.
Several five-year plans did not take up the full period of time assigned to them: some were successfully completed earlier than expected, while others failed and were abandoned. Altogether, there were thirteen five-year plans. The initial five-year plans were created to serve in the rapid industrialization of the Soviet Union, and thus placed a major focus on heavy industry. The first one was accepted in 1928, for the period from 1929 to 1933, and completed one year early. The last Five-Year Plan was for the period from 1991 to 1995 and was not completed, as the Soviet Union was dissolved in 1991.
Read this if you wish to educate yourself on the folly of centrally planning a large modern industrial economy.
Library of Economics and Liberty
“The Use of Knowledge in Society”
A selected essay reprint
Hayek, Friedrich A.
(1899-1992)
Ya think Alpha Commie will read it?
Ya think Alpha Commie will read it?
Of course, I read everything. Everything.
Oh, would that be Hayek the Hypocrite?
Friedrich Hayek Joins Ayn Rand as a Hypocritical User of Medicare
Charles Koch has not merely promoted libertarian ideas generally but in particular founded the Cato Institute, which has done more than any other single organization to wage war on Social Security. Koch wanted Hayek to come to the US in 1973 to become a “distinguished senior scholar” at the Institute for Human Studies, which Koch quickly made into a libertarian citadel. Hayek initially turned the opportunity down, saying he had just had an operation, which made him particularly aware of the dangers of falling ill abroad. Austria had close to universal health care; Hayek’s comment strongly suggests he took advantage of it.
Per Yasha Levine and Ames in the Nation:
IHS vice president George Pearson (who later became a top Koch Industries executive) responded three weeks later, conceding that it was all but impossible to arrange affordable private medical insurance for Hayek in the United States. However, thanks to research by Yale Brozen, a libertarian economist at the University of Chicago, Pearson happily reported that “social security was passed at the University of Chicago while you [Hayek] were there in 1951. You had an option of being in the program. If you so elected at that time, you may be entitled to coverage now.”
A few weeks later, the institute reported the good news: Professor Hayek had indeed opted into Social Security while he was teaching at Chicago and had paid into the program for ten years. He was eligible for benefits. On August 10, 1973, Koch wrote a letter appealing to Hayek to accept a shorter stay at the IHS, hard-selling Hayek on Social Security’s retirement benefits, which Koch encouraged Hayek to draw on even outside America.
http://www.nakedcapitalism.com/2011/09/friedrich-hayek-joins-ayn-rand-as-a-hypocritical-user-of-medicare.html
Socialism makes parasites of everyone, even its critics.
Left out the best part. This is for you, Bill…BTW, are you off your meds again?
from the above linked article:
This should put Hayek in some sort of libertarian circle of hell, along with Ayn Rand, who took Medicare and Social Security payments when she was diagnosed with lung cancer.
“There can be no compromise on basic principles. There can be no compromise on moral issues. There can be no compromise on matters of knowledge, of truth, of rational conviction.”
-Ayn Rand, Hypocrite
“Austria had close to universal health care; Hayek’s comment strongly suggests he took advantage of it.”
This has absolutely nothing to do with the article by Hayek which I posted. Completely, 100% off topic…
Socialism makes parasites of everyone, even its critics.
Socialism makes hypocrites of its opponents, as they invariably resort to it when TSHTF.
Completely, 100% off topic…
Ok, here’s an on-topic criticism. From your Hayek essay:
“If we possess all the relevant information, if we can start out from a given system of preferences, and if we command complete knowledge of available means, the problem which remains is purely one of logic. That is, the answer to the question of what is the best use of the available means is implicit in our assumptions.”
—
Ah, but the insurers will use this perfect information to make you unable to practice your profession- as Hayek learned, when he sought to teach outside of a universal health care system.
Can you not perceive the irony? I think it punches quite a hole in his grand theories. A ‘real world’ hole.
“According to….China has an advantage over us in that since they aren’t a democracy, they can and do engage in long-term, well-reasoned planning.”
I think “can but don’t” is more accurate. The one-child policy was an example of success. Although that was before they became capitalists.
they can and do engage in long-term, well-reasoned planning…..
I find it simply amazing how people can disengage themselves emotionally and make an intellectual exercise of various forms of “government”. Gulags, Prisons, deathcamps, political prisoners, forced labor, sweatshops, torture and repression are simply just “vehicles” by which various government entities enforce their will on the people. It’s really all a matter of what seems to “work the best”, isn’t it?
It’s like the folks who compare “healthcare” in the United States with Cuba, or the USSR, now the “new Russia”. Having been in parts of the former Soviet “Union”, I can tell you, the medical facilities there are pitiful compared to here. I also have friends who have visited Cuba. The backwaters of Cuba are miserable, much worse than any Appalachian poverty you can claim exists here.
But, still, as an intellectual exercise, I guess its fun to make comparisons to things that you will never have to experience on your own, and provide commentary about how this “system” or ‘that system’ might be better.
Wait till some thugs in uniforms pick you up for not conforming to the latest State defined virtues. It won’t be so intellectually free then. You won’t be allowed to even comment or complain about your plight as some government bureaucrats take you to a place of “re-education”. Pol Pot knows how to achieve better ‘economic parity’. Kim Jung Il knows, too. Perhaps we should intellectually review their system of governance and get off Hitler’s back for a while.
Thank you, Dio.
Americans have this odd propensity to work themselves into a lather over the “repression” and “tyranny” we supposedly suffer under our “socialist/commie” government, without having the slightest clue what those words actually mean to people who DO live under repressive and tyrannical rule.
Poor dears. Gas for your SUV is nearly $5 a gallon. The horror!
You can hardly afford to take your family out for a fast food dinner anymore! The public schools won’t teach your children creationism! There’s a tax on your recreational ammunition! That terrible, terrible homeowner’s association won’t let you keep roosters in your back yard!
The repression we suffer in this country is simply unspeakable.
Try beaching about it to a mother who’s watching her baby starve to death in a refugee camp, or the kid living under the family tarp for whom a pair of shoes is a luxury.
Popular perceptions are rarely true IMO.
Real estate only goes up.
There is too much current discussion on the precarious Chinese economic picture to take it all in…
Weekend Edition April 6-8, 2012
The Frog and the Scorpion
China’s Economy
by CONN HALLINAN
Behind the political crisis that saw the recent fall of powerful Communist Party leader Bo Xiali is an internal battle over how to handle China’s slowing economy and growing income disparity, while shifting from a cheap labor export driven model to one built around internal consumption. Since China is the second largest economy on the planet—and likely to become the first in the next 20 to 30 years—getting it wrong could have serious consequences, from Beijing to Brasilia, and from Washington to Mumbai.
China’s current major economic challenges include a dangerous housing bubble, indebted local governments, and a widening wealth gap, problems replicated in most of the major economies in the world. Worldwide capitalism—despite China’s self-description as “socialism with Chinese characteristics”—is in the most severe crisis since the great crash of the 1930s.
The question is: can any country make a system with serious built in flaws function for all its people? While capitalism was the first economic system to effectively harness the productive capacity of humanity, it is also characterized by periodic crises, vast inequities, and a self-destructive profit motive that lays waste to everything from culture to the environment.
…
Capitalism was not the first economic system to effectively harness the productive capacity of humanity.
Ancient Egyptians had incredible accomplishments without capitalism.
Ancient Egyptians had incredible accomplishments without capitalism.
Who owned the means of production in ancient Egypt?
Pharaoh
Again, the intellectual “disengagement”.
Ancient Egyptians had incredible accomplishments without capitalism.
Massive rock tombs and statues for their “gods”. Living gods on the throne of Egypt.
I guess it’s great if you live in the Palace. I just sux to be one of the worker bees, spending your life in a rock quarry or shouldering heavy loads to move massive blocks of stone for some “greater purpose”…….the tomb of a dead pharo. (spelling deliberate).
Sweating your life away in the heat and the stench of a mass of slaves. Yes, that is a marvelous accomplishment.
And yet, the South, here in America, which has slaves, treated much more humanely, by and large, than ever was in these conclaves of despair is considered “evil”, because, well, slavery is evil. Unless it’s under a dictator, or central committee, or under the direction of a ruthless maniac like Stalin.
I just can’t comprehend the human brain. It’s amazing how we can disassociate ourselves for the travails of others while eating a pastrami sandwich in an air-conditioned office, imagining the glorious past of a dead civilization. I wonder how the Hebrews saw Egypt? Great accomplishments through slavery. Our strength is our diversity. Ha.
‘The Truth About Bo Xilai. He challenged China’s oligarchy – and lost. One of Bo’s big campaigns was trying to bridge the enormous gap between the rising urban bourgeois and the peasants in the countryside by giving the latter “land tickets,” i.e. equity in the land that was formerly “collectively owned” so as to give them a fighting chance to rise when they emigrate to the cities seeking work.’
‘This, in effect, introduced important market reforms into China’s booming – albeit state-controlled – real estate market, and let a bit of the wealth generated by that boom to “trickle down” to ordinary Chinese, the overwhelming majority of whom still live in agricultural regions.’
‘Bo went after the corrupt head of the local Communist party’s judicial branch, Wen Qiang, former deputy chief of the local police. Wen was found guilty of protecting the gangsters, taking bribes, and rape: he was duly executed. At the time, the Peoples’ Daily, the official voice of the Communist Party, praised these actions, but the central party leadership was not happy. ‘
‘When Bo put 800 mobsters on trial, and cleaned up Chongqing, he was literally putting the Communist party in the dock, as dozens of party officials who had taken bribes and worse were exposed to public view. Instead of supporting Bo, the generally pro-Western “liberal” intelligentsia denounced him for subverting “the rule of law” and what they saw as an attack on civil liberties. Yet there are no civil liberties in a one-party authoritarian state, and the rule of law is completely absent: there is only the iron law of oligarchy, which is essentially lawless.’
http://original.antiwar.com/justin/2012/04/01/the-truth-about-bo-xilai/
That summary paragraph says it all. Government by thugs.
Fascinating article, Ben. Thanks for posting this. Ideology is a lot more complicated than just labels– and populism, as demonstrated by our country’s own “grass-roots” umbrage, is not as cut-and-dried as the reportage would make it out to be.
A relative-by-marriage is one such PRC party functionary directly involved in this upheaval. Death by popular uprising is always on his mind as he tries to perform his conscientious public duties and tread the tightrope between the two factions.
The U.S. housing market must have fully recovered by now, as evidenced by all the “snapping up” going on in major urban real estate markets.
U.S. home market pulls in more Chinese buyers
By Kathy Chu and Julie Schmit, USA TODAY
Updated 3d 19h ago
China’s great wall of cash is pouring into the struggling U.S. property market, from multi-million-dollar mansions on the West Coast to venerable hotels on the East Coast.
By Jessica Brandi Lifland, for USA TODAY
Stanley Lo, right, a Realtor in Burlingame, Calif., shows a $4.4 million home to China native Lee Xiao Jun.
Buyers from mainland China and Hong Kong are snapping up luxury homes, often paying cash, in major U.S. cities such as New York, Los Angeles and San Francisco. They’re coming by the dozens to buy foreclosed properties in downtrodden cities in Florida and Nevada. Chinese buyers are even starting to snap up pricey commercial buildings and hotels in Manhattan.
Chinese interest in U.S. real estate began climbing during the U.S. housing meltdown, when plunging property prices made the U.S. a magnet for global buyers. Today, interest is growing as a rising yuan — up more than 8% since mid-2010 — gives the Chinese greater purchasing power, and the mainland’s restrictions on property purchases encourages them to look overseas. With U.S. single-family home prices a third lower since 2006, the U.S. also compares favorably with other top markets for Chinese investment, such as the United Kingdom, Australia and Canada.
“For China, the world is an emerging opportunity,” says Andrew Taylor, founder of Juwai.com, a real estate site based in Hong Kong that was launched in 2011 to match Chinese buyers with U.S. real estate. “We’re talking about a huge chunk of people with cash and the desire” to invest overseas.
In the U.S., the Chinese are now the second-largest foreign buyers of homes, behind Canadians, accounting for $7.4 billion of sales in the 12 months ended March 2011, up 24% from the previous 12 months, according to the National Association of Realtors. Buyers from China and Hong Kong also spent $1.71 billion on commercial property in the U.S. in 2011, more than quadruple their investment in 2008, says Real Capital Analytics.
…
snap up
- definition
1 to buy something as soon as it becomes available
By 10 o’clock most of the best bargains had been snapped up.
2 to immediately take advantage of an opportunity
I’d snap up his offer if I were you.
YessireeBob, the economy is improving! The unemployment rate for the county where I used to teach, last month increased 1.1% to 15.2%. That’s almost a Great Depression level.
Yeah, and it was only a few months ago that we were told the number of US citizens living in poverty was the highest since the great depression. Did those people suddenly jump out of poverty in 3 months because the stock market went up?
I don’t want people to be unemployed. I don’t wish for bad times. But I don’t want to be lied to either.
I agree. I want the truth to be out there.
The truth is out there. You just won’t find in the New York Times, the Washington post, or on CNN, or any of the other major networks. They are there to support the status quo of the entrenched monied interest. It is, after all, who owns them.
The truth is, the unemployment level is virtually unchanged from a year ago. The “government” i.e. Obama’s cronies, simply quit counting people like me who are ‘long-term unemployed’. That way they can say things are improving.
The real number to look at is the Total Number of Employed people and divide that by the Population growth. There are less net employed people, with a rising population. This is bad when you want to SPEND lots of government ‘taxes’ for do-gooder programs.
I’ve never heard of long-term unemployed people buying investment houses. Can you parse it out for me so I can understand why you should count? Because, IMO, you’d fall under the self-employed category.
Obama’s cronies, simply quit counting people like me who are ‘long-term unemployed’.
So the “Pull Yourself Up By Your Bootstraps” method isn’t working for you?
Serious question. Please answer.
Oh, Grizz. Nice.
“But I don’t want to be lied to either.”
I frankly can’t comprehend the mentality that suggests lying is the best way to run an economy. Why not try telling the truth and seeing whether better long-term financial decisions that make us collectively wealthier don’t result?
Hey, that’s way too dangerous. You run the risk of causing a panic on Wall St. which could result in the stock market not always going up anymore, you know?
It seems to me that nobody is really trying to run an economy. Everyone is just trying to get rich and get out before it crashes.
Take The Money And Run - The Steve Miller Band (Lyrics + HQ)
‘Howard Beale: So, you listen to me. Listen to me: Television is not the truth! Television is a God-damned amusement park! Television is a circus, a carnival, a traveling troupe of acrobats, storytellers, dancers, singers, jugglers, side-show freaks, lion tamers, and football players. We’re in the boredom-killing business!’
‘But, man, you’re never going to get any truth from us. We’ll tell you anything you want to hear; we lie like hell. We’ll tell you that, uh, Kojak always gets the killer, or that nobody ever gets cancer at Archie Bunker’s house, and no matter how much trouble the hero is in, don’t worry, just look at your watch; at the end of the hour he’s going to win. We’ll tell you any shit you want to hear. We deal in *illusions*, man! None of it is true! But you people sit there, day after day, night after night, all ages, colors, creeds… We’re all you know. You’re beginning to believe the illusions we’re spinning here. You’re beginning to think that the tube is reality, and that your own lives are unreal. You do whatever the tube tells you! You dress like the tube, you eat like the tube, you raise your children like the tube, you even *think* like the tube! This is mass madness, you maniacs! In God’s name, you people are the real thing! *WE* are the illusion!’
‘Right now, there is a whole, an entire generation that never knew anything that didn’t come out of this tube. This tube is the gospel, the ultimate revelation; this tube can make or break presidents, popes, prime ministers; this tube is the most awesome goddamn propaganda force in the whole godless world, and woe is us if it ever falls into the hands of the wrong people, and that’s why woe is us that Edward George Ruddy died. Because this company is now in the hands of CCA, the Communications Corporation of America; there’s a new chairman of the board…And when the 12th largest company in the world controls the most awesome goddamn propaganda force in the whole godless world, who knows what shit will be peddled for truth on this network?’
http://www.imdb.com/character/ch0013121/quotes
I’m As Mad As Hell And I’m Not Gonna Take This Anymore!
Donald Trump is mad as hell
The newscaster interviewing Trump in that video clip looks like she could do very well as a hooker.
Another “Network,” offering “fair and balanced” looks at current events:
Newsmax Media is a conservative American news media organization founded by Christopher W. Ruddy and based in West Palm Beach, Florida. It operates the news website Newsmax.com and publishes Newsmax magazine.
Christopher W. Ruddy started Newsmax.com on September 16, 1998, supported by a group of politically conservative investors, including the family of the late Central Intelligence Agency Director William J. Casey. Later, Richard Mellon Scaife, Ruddy’s former employer at the Pittsburgh Tribune-Review and a supporter of conservative causes, invested in the fledging company.[1] One of the initial board members was author James Dale Davidson who edited a financial newsletter, Davidson’s co-editor, Lord Rees-Mogg, former editor of The Times and Vice Chair of the BBC, later became chairman of Newsmax Media.[2]
Other news figures who later joined the Newsmax board included Arnaud de Borchgrave, the longtime Newsweek chief correspondent who also serves as editor at large of UPI and Jeff Cunningham, former publisher of Forbes. Admiral Thomas Moorer, the former chairman of the Joint Chiefs of Staff and Chief of Naval Operations during the Vietnam War, also served as one of the company’s founding board members. Former US Secretary of State and Nixon administration Chief of Staff Alexander M. Haig Jr. served as special adviser to NewsMax.[3]
Ruddy aimed at creating an Internet news company by building a team of reporters. In August 2001, talk radio host Michael Reagan merged his monthly newsletter The Reagan Monitor with Newsmax Magazine and began writing a regular column for the publication.[4]
In 2008, a profile in The Palm Beach Post on Newsmax and founder Ruddy indicated the company generated revenues of approximately $25 million per year, and, according to the company, has been profitable for the past five years. However, profiles of the website indicate an annual profit closer to $20 million.[5] In a 2009 Forbes.com interview, Internet guru Nathan Richardson was asked to identify the “smartest thing on the web” today. Richardson identified Newsmax, among several websites, citing its success “monetizing the web.”[6]
In March 2009, Forbes ran a feature on Newsmax describing it as a “media empire” and the “great right hope” of the Republican Party. Forbes noted that after just a decade of operations it had become a “media powerhouse” - and had surpassed such well known websites as the Drudgereport in web visitors. According to the magazine, Newsmax draws 3.8 million unique visitors monthly. Political analyst Dick Morris was quoted as saying that Newsmax had become the “most influential Republican-leaning media outlet” in the nation.[7]
In a January 2010 profile on the company, the Financial Times reported that the “Rise of Newsmax Defies the Media Trend” and said its website, Newsmax.com, is “one of the strongest conservative voices online.” The paper said Newsmax had witnessed 40 percent growth rates per annum over the past decade and closed 2009 with $35 million revenues, up from $24 million the year before.[8]
An April 2010 cover story for Talkers magazine featured Newsmax as a model of future media companies called “Media Stations” that offer their audience, audio, video, digital and even print content.[9]
A 2010 New York Post story reported that the paper’s long-time former editor, Kenneth Chandler, was tapped as Newsmax Magazine’s editor-in-chief. Ruddy also told the Post the company expected annual 2010 revenues to exceed $50 million.[10]
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Yeah, and I heard Rush Limbaugh say he was gods gift to women this past week.
And all this time, I was thinking it was me. I’m sure glad he cleared me of this grand illusion………
The newscaster interviewing Trump in that video clip looks like she could do very well as a hooker.
Or a Realtor.
***
No gray hair on The Donald either!
The old flood tide of real estate investors came from California. The new flood tide comes from China.
Breakingviews
Mainland Chinese eye global real estate
Wei Gu
Reuters Breakingviews
Published Tuesday, Mar. 27, 2012 6:00PM EDT
Last updated Sunday, Apr. 01, 2012 6:51PM EDT
Slower growth and doubts about accounting are leading international investors to rethink China. That’s precisely what the Chinese themselves are doing. As they diversify beyond the borders of the Middle Kingdom, the value of global property assets could benefit.
…
The deployment of China’s state-controlled funds has long buoyed the value of U.S Treasuries. Now the flow of private Chinese money could boost the value of a wide range of global assets. Energy companies have already benefited from rising Chinese demand, with the country’s top five foreign acquisitions in 2011 all focused on energy-related assets.
For China’s wealthy individuals, foreign passports top the most-wanted list. Next comes property. Among the 20,000 Chinese with at least $15-million in individual investment assets, 27 per cent have already emigrated, and 47 per cent are considering it, according to U.S. consultants Bain & Co. As home prices cool inside China, cash-rich mainland buyers have swarmed to Hong Kong. This has helped drive Hong Kong’s high-end property market to be the priciest in the world, according to U.K. property sales agent Savills.
Mainland Chinese buyers now account for more than 20 per cent of foreign buyers of new home sales in Vancouver, Toronto, London and Singapore, according to commercial brokerage Colliers International. Unlike Japanese investors who scooped up iconic buildings in London and New York in the 1980s, Chinese buyers are more interested in bargains. This could provide welcome relief to owners of distressed properties in the United States and certain parts of Europe.
…
“This could provide welcome relief to owners of distressed properties in the United States”
Yea, I am so glad that the Chinese can buy these properties instead of prices coming down to levels where Americans can afford them.
I am so glad the Chinese are able to capture the wealth effects of federal U.S. housing price supports.
Remember 1980’s Japan and Rockefeller Center.
Remember 1980’s Japan and vintage guitar market.
Remember 1980’s Japan and vintage car market.
All of them collapsed when Japan cratered.
I’m looking for similar collapse of what China currently buys within a year or two of when their real estate bubble craters.
Commentary
Haunted by a Chinese property bubble
James Laurenceson
Published 6:28 AM, 4 Apr 2012 Last update 6:28 AM, 4 Apr 2012
Five years on, the US economy remains sluggish after the bursting of a house price bubble. More recently, the focus has been on China, the world’s second largest economy, and whether it too might be overwhelmed by a similar event.
Reports of “ghost cities” and some property developers facing bankruptcy have become commonplace. Some commentators have asserted that the bubble may have already “popped”.
The stakes are high. The IMF notes that since 2007, China has contributed more – much more in fact – to world growth than any other country, and this is projected to remain the case into the foreseeable future. Given that China’s construction sector is a significant source of demand for our natural resources, Australia has more to lose than most if the economy there sours.
Before commenting on the Chinese case, it is worth briefly reviewing the chain of causality in the US. From 1997, house prices in the US began to appreciate. During the 2000s, the market became increasingly infected by debt-funded speculators betting on continued capital gains. In the process, banks lent money to borrowers of marginal credit worthiness requiring little or no collateral. When prices stalled and then went into sharp reverse in 2006, the banks were left holding the bag, ultimately requiring a bail out by taxpayers. Banks (and firms and households) then spent the next few years seeking to rebuild their balance sheets, as opposed to extending new loans, and this process continues today.
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China is an economic lie. I have been saying it for years now.
Agreed. I am skeptical. I too, think this rush for Chinese buying up properies in “free” nations will backfire. Either that or we will adopt the Confucian philosophy and reject religion. Wait, not a bad idea.
‘Serious economists have been sounding warnings in private for some time, but the media and Canberra have been tone-deaf,’
It was the same in the U.S.A. during our real estate bubble price runup.
Tone-deaf economists rule!
A closely-watched pot never boils over.
Asia Stocks to Watch Archives
April 5, 2012, 7:52 p.m. EDT
China doomsayer sees crash coming
By Chris Oliver, MarketWatch
HONG KONG (MarketWatch) — China’s consumption boom is drawing to a close, according to one economist’s contrarian view, which calls for no growth — or even a contraction — in the Chinese economy and the advent of an era of deflation and weaker spending.
Investments leveraged to the rise of the Chinese consumer, ranging from Australian miners to luxury-handbag makers and even iPhones are due for a reality check, according to Jim Walker, founder and managing director of the Hong Kong-based economic research company Asianomics.
While much of the analyst community has touted China’s growing domestic demand in recent years, Walker sees the Chinese consumer as unlikely to show much resilience, now that the economy is on a weakening trend and easy credit has run its course.
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By mid-century, the number of Chinese older than 65 will be in the hundreds of millions. The single child policy, of course, which is a government screwup (oxymoron that Alpha Commie does not get), resulted in a glut of males. 20 million more than females in the family-making age group. There is no difference between social engineering and socialist engineering. The result is failure. Wussies call it “unintended consequences.”
I call it “come uppance.”
How do you think things would be with another billion Chinese?
“..resulted in a glut of males. 20 million more than females in the family-making age group.”
Note to self: Open up web-based business selling inflatable sex dolls to Chinese men.
“…which is a government screwup (oxymoron that Alpha Commie does not get…”
Are you saying that governments don’t screw up? Because that’s what the term “oxymoron” implies.
Get it?
Peter Morici noted on DC news radio that if labor participation was today as it was four years ago, the current unemployment rate would be 11-some percent.
Sacramento-area homes are cheap. Interest rates are low. The inventory of new homes is tight.
But prices stubbornly refuse to rise.
“It’s a very strange time,” said Doug Covill, immediate past president of the Sacramento Association of Realtors. “I question if we’ve ever seen anything like it before – to see this low of an inventory where values aren’t going up.”
Read more here: http://www.sacbee.com/2012/04/08/4398318/sacramento-area-home-prices-remain.html#storylink=cpy
“But prices stubbornly refuse to rise.”
I know next to nothing about CA, except for what I read in the presstitute media. Is this a desirable place to live? There are some things in life that can’t even be given away.
Yesterday I read that LA, for example, is on the brink of bankruptcy. And that the current city manager is calling for a round of new or increased taxes. Yeah, that oughta fix it. Those that can, will flee, leaving an ever more dependent population and a shrinking pool of taxpayers. Indeed, pretty soon you run out of OPM. Next stop, Detroit!!!!!!
Sacramento-area homes are cheap. Interest rates are low. The inventory of new homes is tight.
But prices stubbornly refuse to rise.
I suspect their definition of cheap was created during a bubble.
—-Comment by Cantankerous Intellectual Bomb Thrower©
2012-04-07 22:46:28
Another “Network,” offering “fair and balanced” looks at current events:
Newsmax Media is a conservative American news —-
One more tiny balance to the overwhelming left wing MSM.
Easter brings out the persecution complex in people.
Have you ever stopped to consider that maybe the population of the US is overwhelmingly “left wing” so perhaps that’s what the news caters to?
Sorry, but Not-Fox does not equate to “overwhelming left wing MSM.”
… maybe the population of the US is overwhelmingly “
left wingcentrist”…There…fixed it.
When you think about it, the notion that a majority can be “left wing” or “right wing” makes absolutely no sense. Of course, that wouldn’t stop right-wing extremists from employing such logic…
Agreed. That’s why it was in “…”