Tag Archives | Economy

Is The New ‘Normal’ Unemployment Rate Above 5%?

Unemployed Man - Exhibitor at APExpo 2010 012The Federal Reserve Bank of San Francisco, in its Economic Letter entitled “What Is the New Normal Unemployment Rate?” states:

“Recent labor markets developments, including mismatches in the skills of workers and jobs, extended unemployment benefits, and very high rates of long-term joblessness, may be impeding the return to “normal” unemployment rates of around 5%. An examination of alternative measures of labor market conditions suggests that the “normal” unemployment rate may have risen as much as 1.7 percentage points to about 6.7%, although much of this increase is likely to prove temporary. Even with such an increase, sizable labor market slack is expected to persist for years.”

Their conclusion? “As the recovery proceeds, we should develop a clearer picture of the new normal rate of unemployment.”

The question becomes, what happens to that ‘extra’ 1.7% of US population? Are they unjustifiably unemployed, if we assume that 5% is truly normal for a super-rich society like our own?… Read the rest

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2010 Financial and Commodity Markets and Productivity: WTF?

I could go on and on about the way speculative finance is utterly divorced from the real economy, sapping 80 cents out of the economy for each dollar it touches*, etc., etc..  But why bother when the following chart says it all? Compiled from the latest Bureau of Labor Statistics release.
Financial and Commodity Markets in 2010 - WTF[1]
See underlying analysis, along with links to original source data, within this workbook.

P.S.  I would like to offer a ‘special’ TBA prize to the first Dystopia Diaries reader who detects the even more disturbing trend vis-a-vis crude oil prices and CPU within the workook data.  Hint:  Can you say “Peak Oil?”

Footnote
*Yeah, it’s true.  By giving yet another extraordinary tax cut to the finance-addled trust fund brats, Obama and the Republican’ts are throwing away 80% of those dollars’ productivity.  See the analytical graph and supporting details here.

Contributed from Dystopia Diaries

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The Real State Of The Union – From President Eisenhower

Dwight D. Eisenhower

Dwight D. Eisenhower

The columnists at MarketWatch must have misread the memo from Murdoch about being staunchly Republican and pro-business no matter the cost. Following Paul Farrell’s rant about the conspiracy of the super rich, now Brett Arends reminds us of Dwight Eisenhower’s warning of a military-industrial complex taking over the United States — and shows us that it’s already happened:

Forget the posturing you’re going to hear tonight. Do you want to hear the real state of the union? Just ask Ike: President Dwight Eisenhower.

As fund manager Jeremy Grantham notes, it was 50 years ago this month that the old general delivered his famous farewell address to the nation after a lifetime of service that few will ever match.

Less well-remembered: His warning against hocking ourselves up to the eyeballs as the easy way out of any problem.

“We… must avoid the impulse to live only for today, plundering, for our own ease and convenience, the precious resources of tomorrow,” he said.

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Still Think Financial Markets = Financial Investment?

For those STILL too gullible to believe that we will never recover until we stop the irresponsible hoarding and gambling behaviours of Wall Street through a property tax on large securities holdings, I present the following:

Dow vs. Employment Chart Our economy doesn’t need to print more money.  The economy must have had about $1.5 TRILLION more money at the end of 2010 than it started with.  What we need to do is make the banksters and uber-rich pay their fair share and stop glomming off old age pensioners.

Details available upon request.  Or check it out for yourself here.

If you liked this, or better yet, if you hated this, check out my ‘Policy Directions‘ page at Dystopia Diaries.

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2010 Was The Year Of ‘The Crumble’

Happy New Year 2011 banner 1The tenth year of the 21st Century has left us behind, and it can’t be too soon.

It was a year of the crumble.

The economy continued to crumble for ordinary people with little hope for a quick turnaround even as some markets surged. The hopes of the jobless for employment crumbled. The faith of the so many homeowners that they will find a way to stay in their homes facing foreclosure crumbled.

And so have the hopes of so many of us that our new Change Is Coming president would fight for us, would end the wars, would close Gitmo, would abandon torture, would make healthcare more affordable, would give us a government we could believe in; that, too, has crumbled.

Look back at the devastation of the year gone by its ugly election, bought and paid for by US Supreme Court sanctioned special interests, oil spilled by the Gulf-ful, wars escalated, climate change unabated, and Wall Street unchecked and we have to scratch our heads and wonder who is crazier, them or us.… Read the rest

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Can Heckling Change The World? Let’s Find Out

A big molte grazie goes out to the folks at Disinformation.  Their media aggregation board is always a real thought provoker.  As discussed below, I got a big kick out of their recent repost of a Reuters report about the “job surge.”

The nation owes a big debt of gratitude to wise ass m*f*’s like Jon Stewart who finally shamed the ra-ra, flag wavin’ hypocrites of the Republican party into finally voting to support 911 First Responders.  But while we correctly applaud the righteousness of Mr. Stewart and the Daily Show team who made this possible, we should perhaps be mindful of a broader principle:  The Truth shall not only set us free, it is also fucking hillarious.

However, we shouldn’t just passively rely on television comedians to do all the heavy lifting for us.  Indeed, although many contemporary comedians seem to have a firm grasp on this fact*, others do not.  Remember Dennis Miller**?  Time for you and me to step up to the plate.  Here’s a little training exercise to get you started.  And who knows?  With a little coordination and work, maybe you and I can engineer a grass-roots heckling movement to save American democracy.… Read the rest

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Job Surge Boosts Economic Outlook

Employment has a slight rise, lay-offs see a decrease, college grads smile? Reuters reports:

A surprise surge in private-sector employment last month to its highest level on record provided the most bullish signal in months that the U.S. economy is on the mend.

“Sometimes numbers come as bolts from the blue; this is one of them,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

Private employers added 297,000 jobs in December, triple the median estimate by economists and up from the gain of 92,000 in November, an ADP Employer Services report, whose data goes back to 2000, showed on Wednesday.

The report undercut the prices of the U.S. Treasury securities, and helped the U.S. dollar gain against the yen and the euro. U.S. stocks opened lower though they did pare losses after the jobs news.

[Continues at Reuters]

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The Economy of The Crow: Bird Brains Want to Throw Away $116 Billion A Year to Benefit The Richest 1.3% ‘Small’ Business Owners

There is an old folk saying that comes down from the Irish tradition:  “The economy of the crow”.  It’s uttered whenever some old wag wishes to describe, in a dryly pithy manner, a short-sighted and foolish resource management strategy.  It supposedly is derived from the habit of scavenger birds like crows who, upon noticing an unharvested bit of carrion ripe for the picking, tend to drop whatever goodies they may currently have in their clutches in order to go in pusuit.  Basically the saying is a ridicule, a chastisement of stupid waste.
Economy of The Crow
While that kind of bird-brained buffoonery may be understandable in a creature with the cranial capacity of a thimble, it’s not the type of responsible management practice we expect from our elected representatives.  Certainly not from the members of the party that claim in one breath to be both the party of fiscal responsibility and the party of deep business savvy.  Nonetheless that’s exactly what Republican’t douchebags like Paul Ryan (R-WI) and McConnell (R-KY) continue to parrot unashamedly when they urge for yet another tax cut for the wealthiest 2% of Americans.  We’ve already estimated at Chart 2 of this post that tax cuts for elite income individuals as proposed by Ryan will likely add $116 BILLION* per year to the deficit.… Read the rest

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Mort Zuckerman Slams United States

usnewsworldrMort Zuckerman, the Canadian-born American magazine editor, newspaper publisher, and real estate billionaire, uses his stuttering weekly news mag, U.S. News & World Report, to deliver an obituary for the U.S. economy. Generally speaking, when capitalist fanboys like Zuckerman say there’s something rotten in the state of Denmark, it’s wise to take them seriously:

The modern world has for centuries been dominated economically, intellectually, and physically by the civilization that arose in Western Europe in the wake of the Renaissance and Reformation and spread across the Atlantic.

Will that one day be seen as a passing phenomenon doomed to ascend ever upward and then slowly fizzle out like a firework?

It is nearly a century since that gloomy German mathematician and philosopher Oswald Spengler published his 1918 classic The Decline of the West. His arguments were complex, but basically he suggested that the future of the West was not as limitless as his peers imagined after the ghastly World War I.

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