Posted on 08/08/2009 11:39:56 AM PDT by spyone
For the first time since the Depression, the American economy has added virtually no jobs in the private sector over a 10-year period. The total number of jobs has grown a bit, but that is only because of government hiring.
(Excerpt) Read more at ritholtz.com ...
Also, I suspect this is another one of those lying with statistics the economic chicken littles are so found of manufacturing. If this were actually the case, where did all those employees at all those new businesses I drive past every day on my way to and from work come from?
Common sense will tell anyone in America we cannot grow because we have become a consumer nation and now government is running the wealthy over to foreign countries because of the tax burden.NAFTA already has sucked the life out of the manufacturing base only for Americans to be at the mercy of foreign countries for goods and services or at the mercy of the weak dollar.I don’t see a very bright future in the US at all especially with the current administrations lack of economic logic.
I am afraid we are going to be seeing this sentence starter a lot now
Not enough background data to make a conclusion.
They make mention of the “Dot Com” bubble height being the 10 point of reference. They admit it is not a good point of reference.
The category data showing losses in mfg, etc is sketchy. A 3.8% drop in machinery looks bad, but how much of the overall drop is this? I’d like to see the raw numbers.
NAFTA didn’t suck anything out of our manufacturing base. Trial lawyers, envirowacko regulations and unions did manufacturing in. We can, and should, change tort laws, cut regulation and remove political advantages given unions if we want to bring manufacturing back. That and fix our tax laws, which tax companies at a high rate relative to other countries, and prohibit the repatriation of profits earned outside the US without tax consequences.
I just glanced at the website, but I'd wager the writer is a Democrat.
Ritholz is nominally democrat, but excoriates them as well. He goes where the data leads him.
And the truth is, he’s exploded several cherished economic nostrums, such as:
1. “buy and hold” as a viable investing methodology. Busted. Completely busted. And the boomers are feeling the effects of this now.
2. The idea that the US economy can create jobs through “innovation” and so on. Truth is, the US economy has recovered job creation more and more slowly since the 1991 recession, and in each recession (’91, ‘02 and now), the time to restarting job growth, much less wage growth, keeps getting longer.
Measuring job creation from 1999 to today is valid - because the endpoint is today. And I’ve got a newsflash for you - measuring 10-year job creation as we go into next year isn’t going to look any better. And probably not the year after that, either. The point really is this: If you look at any 10 year period post-WWII, there is no decade wherein not only is the job creation as dismal as this past decade has been, but there is no decade wherein the wage growth has been negative in real terms, either.
This, conservatives must face up to: the last decade was one of completely ephemeral growth, fueled by crazy excesses in lending from the Fed on down. In hindsight, the Fed should have allowed the debt bubble to collapse more gracefully coming out of the dot-com bubble, but they didn’t. After 9/11, Greenspan injected so much excess liquidity into the system that what we saw as economic “growth” was really little more than the final stages of a bubble expansion. It was not sustainable. The single best clue that it was not sustainable was in late 2005, when the US savings rate went negative.
3. Wage growth. The recovery from the ‘02 recession until now shows no wage growth. Consumers expanded their spending by strip-mining equity out of their houses by use of HELOC’s and flips. Adjusted for inflation and costs of living, the US consumer has been been marching in place for the last 10 years.
Barry was one of the guys who saw this mess coming - based on structural analysis of the increase of consumer spending without attending increases in consumer wages. As some point, the credit-fueled expansion was going to run off the rails.
Yes, and you’re going to keep on seeing it for awhile.
That’s because this is the first debt deflation since the Great Depression.
Part of it is productivity, ie, using machines to get more production out of every employee. For example, where we used to have shops full of machinists, we now have a few people pushing buttons and mounting workpieces into CNC machines.
The employees and jobs you drive by could be merely regional. I continue to pound on FR people to look AT THE GUTS OF THE GOVERNMENT STATS. Don’t merely read the headline numbers, get down into the guts of the reports from the BLS, BEA, Census, etc. This is how I spotted the downturn coming in late 2007, when so many Bush supporters were calling be a “troll” and “plant” here on FR. When you dig down into the guts of the reports, you see things like the tremendous unemployment rates in the midwest manufacturing belt - 15% in Michigan, 10%+ in Ohio and so on. Much higher U6 unemployment. And streams of people leaving those states for better economic neighborhoods.
There is another little stat that most people here on FR won’t know and won’t want to own up to: Since the late 90’s, it takes 2% GDP growth before the US economy starts generating jobs. The sorry fact is that the US economy has become so efficient/productive thanks to technology, that hiring doesn’t begin until well after economic growth has resumed, and with every passing recession, US business becomes ever more efficient and productive, and is able to forestall hiring (or re-hiring) longer and longer.
The worst thing about the “Bush recovery” is that the job creation was almost entirely due to the housing and finance industries. They’re both crushed, and they won’t be regaining their former levels of staffing for at least a decade, maybe more - and this is especially true of finance and home financing. When the real estate market tanked, it took most of the jobs created during the Bush administration down the hole with it.
A couple of well done’s to you. An addition in the Bush jobs era would be the government spending on the Iraq war and nation building. But all in all, producing more of what we are consuming would put some wind behind job creation.
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