Posted on 02/18/2010 4:12:56 PM PST by blam
David Goldman: Here's Why Unemployment Will Remain In Nosebleed Territory FOREVER
Joe Weisenthal
Feb. 18, 2010, 4:16 PM
Credit market specialist and overall brilliant writer David Goldman has an excellent essay at First Things.
In it he takes a long-term look at various economic boom and bust cycles -- what jobs were destroyed in each recession, and which industries took their place.
He writes:
In previous recoveries, virtually all net new job creation came from new businesses. Most new businesses, to be sure, are small businesses, although the ones that created the most jobs were startups that grew very quickly. The most common estimate is that new business accounts for about two-thirds of net job creation.
During the 1980s, cellular phones, cable television, and other new technologies were an important source of new job growth. During the 1990s, the tech boom funded tens of thousands of startups, and, during the 2000s, the real-estate boom. Every deadbeat could get a job in the 1980s installing cable televisions, and every starving artist became a real-estate agent during the 2000s.
[snip]
(Excerpt) Read more at businessinsider.com ...
The graph is misleading. The reduced number of jobs has more to do with productivity and technology advances than it does reduced manufacturing.
LLS
This is the sort of stuff that REALLY makes me fear for my country.
—fire the EPA and the Energy Department while you’re at it , too-—
Oh hell... education while we are at it!
LLS
What’s forever changed is that, because of advances in manufacturing and so on, the main and permanent driver of the real economy from here on out will always be discretionary consumer spending.
Because of technology and efficiencies, particularly in distribution, it just will not ever again take as much economic activity (i.e., jobs) to produce the amount of goods *necessary* to provide the *minimum base* for the real economy. To get more economic activity, more people have to have more money to spend on more stuff. Period.
But while the economic need for / dependence upon increased and sustained consumer spending (not just on goods, but on services as well) has gone up, the level at which the government sucks money out of the consumer’s pocket has gone up even more. Exponentially more in many cases.
Essentially, most jobs today depend much more on *discretionary consumer spending* than they ever did in the past. And this will NEVER change. First thing is, we have to get over that.
Example: if it took 500 workers to create 10,000 widgets to sell 20 years ago, maybe now it only takes 50 workers to make those 10,000 widgets. So widget-making jobs will just never be in the cards again. The only potential for economic growth /activity is having enough people with enough money to buy widgets (assuming they want widgets).
But when gubmint jawbones about creating fantasy widget-making jobs, while at the same time robbing the people of their money for buying the plenteous widgets already being produced, that’s the disaster we are facing.
We need to make widgets that wear out faster or become obsolete sooner. Also, we need more kinds of widgets so people will be driven to collect the whole set. The widgets need to sell for less money, and the people that make them need to be paid more.
There needs to be far fewer people in banking, investment, insurance, legal, political, governmental, and sales industries...and the ones left in those fields need to make a whole hell of a lot less personal income. There’s too many people taking money out of the revenue stream from natural resource to finished consumer goods that are not assisting in productivity. They are merely leaches skimming off the blood sweat and tears of the proletariat. Cash has nothing to do with wealth. Wealth is the flow of goods from the earth to the end users. Cash is merely the accounting system for determining how those goods get divided up and which goods get produced and how much is to be produced. Our accounting system is eating us alive and it needs to be killed...or maybe its the scum that are running(ruining) our accounting system that need kilt.
We need to quit paying for human excrement to sit home on their asses with nothing to do but procreate more human excrement. There’s too many people in the criminal system and too many people paid to keep an eye on them.
The widgets that may save the day real soon just might be robots and their associated software and upgrades. The flying car could be a good one but it doesn’t seem to be taking off(pun intended) any time soon even though people have been working on it for a very long time. Renewable energy and electric/hydrogen/nuclear economies might have the potential too be a saving widget, but the technology just isn’t there yet. Maybe in another hundred years. Maybe in fifty. but not likely in my lifetime. Space travel has potential too...just not at this time.
This and Islam will do this country in. Sadly enough, we ourselves are to blame for our demise. Nobody conquered us from without.
Not forever, just until after January 20, 2013. Then jobs will come back because we will believe that we can keep our share of the wealth we generate by taking risks. Until then, everyone with the right stuff is hunkered down and waiting for the socialist to be voted out.
THis is stupid. The only reason unemployment would stay high forever is if we keep paying people not to work.
Otherwise, eventually people will run out of money and starve and die, and therefore lower unemployment, or they will get tired of starving and decide to find a way to make money, which means creating their own jobs, knocking on doors, whatever it takes.
But that’s his point. There will be no manufacturing jobs to pull us out of this recession.
I guess you could say that people DO less for themselves..cook less,bake less, sew less,don’t grow their own food, nor fix their own cars,nor fix their own plumbing, etc, etc...so SOMEBODY’s got to be hired to do this......
oh, geesh.....its not over til the fat lady sings....have hope....good people who know how to work and have proper values will survive...
bad people, who know how to work, and don’t have proper values know how to survive too.
LLS
I don’t disagree with a thing you said, but I don’t see exactly how it refutes (if that was your intention) my point that the old job paradigm is gone forever.
The size of the workforce required to meet demand for widgets is not affected by whether the workers are Chinese or American. It’s only affected by productivity of the workers and efficiency of the manufacturing process.
The latter has forever shrunk the number of workers -— of any nationality -— it takes to provide the *necessary* level of goods and services. Any jobs beyond that -— whether those jobs are filled in China or in American -— are created *only* by discretionary consumer spending. So the more government sucks up consumers’ discretionary spending money, the more it directly decreases the only avenue for *creating jobs* beyond those that are absolutely necessary to provide necessary goods and services.
Hear, Hear! And if you need any help bring them on as part time contractors. Let them worry about their own benefits and taxes.
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