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(Wall Street Journal)   The unemployment rate should be 7.1%   (blogs.wsj.com) divider line 183
    More: Sad, Government Cut, unemployment, labor force  
•       •       •

4598 clicks; posted to Politics » on 08 May 2012 at 5:50 PM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-05-08 03:40:38 PM  

cameroncrazy1984: Ricardo Klement: So if I "save" it in a bank account instead of investing it in the US government, that money is being lent out to people and businesses (except for reserve requirements and so on).

And how is this not true if the government is spending it on roads, infrastructure, police, etc? Do you think government spending goes out into the aether, never to be seen again?


cameroncrazy1984: Ricardo Klement: So if I "save" it in a bank account instead of investing it in the US government, that money is being lent out to people and businesses (except for reserve requirements and so on).

And how is this not true if the government is spending it on roads, infrastructure, police, etc? Do you think government spending goes out into the aether, never to be seen again?


Actually, much of it does. Most of the contractor here never hired anyone, but we got nice signs. It didn't put anyone to work, it just made the roads nicer.
 
2012-05-08 03:40:58 PM  

Fear_and_Loathing: Ricardo Klement: Fear_and_Loathing: Oh and the people who stopped looking, just means they just aren't in the system anymore. Trust me they are looking.

When an economist talks about people who aren't looking, they MEAN people who aren't looking. For example: the 67 year old who wouldn't have retired this year but got laid off so decided to go ahead and retire. He's out of the job market. Not looking. Another example: a guy who got laid off but decided to go back to school to finish his degree rather than look for a job. He's out of the job market. Not looking.

Okay, I am 51 and looking. When I got laid off the grey hair looked at me and said "You're screwed."


I never said there weren't people like you. I'm saying no economist you talk to would say you're out of the job market.
 
2012-05-08 03:42:08 PM  

Fear_and_Loathing: Actually, much of it does. Most of the contractor here never hired anyone, but we got nice signs. It didn't put anyone to work, it just made the roads nicer.


Yeah, the roads just got nicer all by themselves. Nobody worked on them.
 
2012-05-08 03:44:02 PM  

cameroncrazy1984: Ricardo Klement: So if I "save" it in a bank account instead of investing it in the US government, that money is being lent out to people and businesses (except for reserve requirements and so on).

And how is this not true if the government is spending it on roads, infrastructure, police, etc? Do you think government spending goes out into the aether, never to be seen again?


That's consumption, not lending. Raising G with a commensurate drop in C and I doesn't change GDP.
 
2012-05-08 03:45:20 PM  

mrshowrules: Sybarite: Ricardo Klement: Fear_and_Loathing: Oh and the people who stopped looking, just means they just aren't in the system anymore. Trust me they are looking.

When an economist talks about people who aren't looking, they MEAN people who aren't looking. For example: the 67 year old who wouldn't have retired this year but got laid off so decided to go ahead and retire. He's out of the job market. Not looking. Another example: a guy who got laid off but decided to go back to school to finish his degree rather than look for a job. He's out of the job market. Not looking.


Yeah, but the BLS stats on the percent of the working-age population that is employed has remain virtually unchanged from the bottom-out point in late 2009. It was 58.2% then and it's 58.4% now.

[data.bls.gov image 600x300]

So the U3 only indicates when Obama is doing a bad job. When the U3 is dropping, you shift to another measurement. Got it. What happens when you run out of metrics showing that things are getting worse?


I've said it before and I feel I have to say it again here, but this economy is not Obama's fault.
 
2012-05-08 03:46:34 PM  

Ricardo Klement: That's consumption, not lending. Raising G with a commensurate drop in C and I doesn't change GDP.


No, you're right. Spending has nothing to do with GDP.
 
2012-05-08 03:50:11 PM  
I don't understand how T-bills are truly "safe" investment when they yield less than inflation. Sure, you might not lose the principle, but you aren't any richer.

/Goes to buy some short term t-bills anyways.
//Sell in May then go away
 
2012-05-08 03:55:29 PM  

cameroncrazy1984: Fear_and_Loathing: Actually, much of it does. Most of the contractor here never hired anyone, but we got nice signs. It didn't put anyone to work, it just made the roads nicer.

Yeah, the roads just got nicer all by themselves. Nobody worked on them.


They din't hire anyone here, they just improved the roads. I am all for better roads.
 
2012-05-08 03:56:22 PM  

Fear_and_Loathing: cameroncrazy1984: Fear_and_Loathing: Actually, much of it does. Most of the contractor here never hired anyone, but we got nice signs. It didn't put anyone to work, it just made the roads nicer.

Yeah, the roads just got nicer all by themselves. Nobody worked on them.

They din't hire anyone here, they just improved the roads. I am all for better roads.


How do you improve the roads without hiring people to do the improving? Do you have some sort of self-improving roads? Robots?
 
2012-05-08 03:59:43 PM  
Cameron, big construction companies in a tiny state. They had enough staff and corruption.
 
2012-05-08 04:03:06 PM  

cameroncrazy1984: How do you improve the roads without hiring people to do the improving? Do you have some sort of self-improving roads? Robots?


You pay the people you mismanaged and keep them on the payroll.
 
2012-05-08 04:04:17 PM  

Fear_and_Loathing: cameroncrazy1984: How do you improve the roads without hiring people to do the improving? Do you have some sort of self-improving roads? Robots?

You pay the people you mismanaged and keep them on the payroll.


And yet no improvement was done? Man, that's some good corruption.
 
2012-05-08 04:06:44 PM  
I said the roads were improved, I also said it created no jobs.
 
2012-05-08 04:09:07 PM  
My employer fired 24 people, to hire 5, because they got stimulus money. Umm yeah.
 
2012-05-08 04:15:30 PM  

Fear_and_Loathing: My employer fired 24 people, to hire 5, because they got stimulus money. Umm yeah.


Are you suggesting they wouldn't have fired the 24 without the Stimulus?
 
2012-05-08 04:35:27 PM  
I handled the funding, that is exactly what they did. They never hired people, then the state showed up. Most of the people had worked there for 25-30 years and were successful.
 
2012-05-08 04:37:04 PM  
They wanted a bailout on retirements, vacation and sick time.
 
2012-05-08 04:55:31 PM  

Fear_and_Loathing: They wanted a bailout on retirements, vacation and sick time.


And they had to wait for the stimulus to do that...why?
 
2012-05-08 05:01:50 PM  
My God you people are boring. So here's a picture of girls kissing:
i.imgur.com

Here's a picture of my new kitten (that my 5-year-old neutered male cat talked into coming home with him):

i.imgur.com

Here's a picture of Orbitz, the drink with goop suspended in it:

i.imgur.com

And here's an airplane doing the Nyan cat thing:

i.imgur.com

There. That should help.
 
2012-05-08 05:13:29 PM  
Map of unemployment rates by county

Im moving from a bad dark brown area to a more desirable cream colored area.

/racist map is racist
 
2012-05-08 05:14:13 PM  

GAT_00: Fear_and_Loathing: They wanted a bailout on retirements, vacation and sick time.

And they had to wait for the stimulus to do that...why?


I've been wondering that as well.
 
MFL
2012-05-08 05:51:48 PM  
global.nationalreview.com
 
2012-05-08 05:53:37 PM  
I've been saying all along that the economy is in great shape and all this doom and gloom talk is a conspiracy.
 
2012-05-08 05:55:03 PM  

Fear_and_Loathing: They din't hire anyone here, they just improved the roads. I am all for better roads.


I THINKED THESE ROADS BEATTAR!! I CAN AM MAKE HAV OBAMA STIMULULUS MONEE????
 
2012-05-08 05:55:12 PM  
Hey everybody! News Corp doesn't want us to cut government spending!
 
2012-05-08 05:55:48 PM  
Money doesn't farking grow on trees. The recession reduced revenues so states and municipalities had to cut back on expenses because they overhired and spend when times were good.

You guys seem to think that overspending during a boom time should automatically become the baseline.

State and local govts cut signficiantly, but the federal government 's deficit expanded greatly, offsetting the local cuts pretty much. Now, thanks to cuts, states and municipalities are in much better shape than they would have been if they kept up boom time spending.
 
2012-05-08 05:56:50 PM  
OMG a WSJ article I actually believe!!
 
2012-05-08 05:57:05 PM  

MaudlinMutantMollusk: AND JOB CREATORS WHO GET MASSIVE TAX CUTS SHOULD CREATE F*CKING JOBS

/ahem... thank you


A job creator looks something like this

i1127.photobucket.com


Not this

i1127.photobucket.com
 
2012-05-08 05:58:42 PM  

Fear_and_Loathing: I said the roads were improved, I also said it created no jobs.


Who do you think work on roads? Magical fairies?

They PAY people to fix roads. It's called a job.
 
2012-05-08 05:58:55 PM  
This recession allowed for a great experiment to occur. The world was hit hard, the global economy collapsed. There are two theories on how to move forward:

1) Government should INCREASE spending. Government spending will prop up the economy to give the private sector a chance to recover.
2) Government should REDUCE spending and cut taxes. This will promote the private sector job growth and trickle down to occur.

Obama chose route 1. Europe chose route 2. The results:

static5.businessinsider.com

Guess what's happening in Europe right now?
 
2012-05-08 05:59:34 PM  

ceebeecates4: I don't understand how T-bills are truly "safe" investment when they yield less than inflation. Sure, you might not lose the principle, but you aren't any richer.


Suppose you administer a pension fund. You know that you could invest in equities or real estate or whatever and get a better return in the long run, but that won't necessarily help you next Tuesday when the market tanks and you have people retiring who have to be paid. What you're looking for is a safe, secure, and above all liquid investment. It's not an ideal situation to be lending dollar bills in return for 97 cents back later, but it beats the hell out of having to tell your beneficiaries that you can't pay their pension until Wal-Mart shares rebound.
 
2012-05-08 06:01:01 PM  

ShawnDoc: But I was told government employees never get laid off, and that Obama was growing the size of government faster than the waist of a teapartier trapped inside a Twinkie factory.


"The sharp cuts in state and local government spending" federal government is still full speed ahead.
 
2012-05-08 06:01:03 PM  

Corvus: Fear_and_Loathing: I said the roads were improved, I also said it created no jobs.

Who do you think work on roads? Magical fairies?

They PAY people to fix roads. It's called a job.


That's not a job. That's just the government paying people to do work.
 
2012-05-08 06:03:39 PM  

qorkfiend: Corvus: Fear_and_Loathing: I said the roads were improved, I also said it created no jobs.

Who do you think work on roads? Magical fairies?

They PAY people to fix roads. It's called a job.

That's not a job. That's just the government paying people to do work.


Does it count if the family the worker is supporting lives in Mexico?
 
2012-05-08 06:03:53 PM  
I should have $243,129,210,47 in my pocket, and all of you should be wiping my bloody stools, but you know WHAT???????

It won't be happening.

/Big Muthfrkkin' DrippinMCA!
 
2012-05-08 06:12:19 PM  

qorkfiend: Corvus: Fear_and_Loathing: I said the roads were improved, I also said it created no jobs.

Who do you think work on roads? Magical fairies?

They PAY people to fix roads. It's called a job.

That's not a job. That's just the government paying people to do work.


So. Dumb.
 
2012-05-08 06:12:34 PM  

Serious Black: Wow. How did this article get posted in a dirty pinko Commie socialist rag like the Wall Street Journal?


Even they see the light occasionally.
 
2012-05-08 06:13:40 PM  

Debeo Summa Credo: Now, thanks to cuts, states and municipalities are in much better shape than they would have been if they kept up boom time spending.


Aside from the fact that you're positing an impossibility - virtually all states are prohibited from deficit spending - any claim that states and municipalities are in "better shape" marks you as an utter loon.
 
2012-05-08 06:13:50 PM  
The comments in the wsj are so hilariously derpy especially when juxtaposed with the supposed prestige and institutional history of the wsj.

I work on wall street and I've never heard of a single person who reads "the journal." People get their news from the NYT and Bloomberg. The WSJ is the New York Post of finance.
 
2012-05-08 06:14:41 PM  

lennavan: This recession allowed for a great experiment to occur. The world was hit hard, the global economy collapsed. There are two theories on how to move forward:

1) Government should INCREASE spending. Government spending will prop up the economy to give the private sector a chance to recover.
2) Government should REDUCE spending and cut taxes. This will promote the private sector job growth and trickle down to occur.

Obama chose route 1. Europe chose route 2. The results:

[static5.businessinsider.com image 590x443]

Guess what's happening in Europe right now?


Europe chose route 2 because they were forced into it by the impossible situation of the currency union. Greece and Italy and Spain spent irresponsibly, and they reached the point where nobody would lend to them and sustainable rates. They couldn't just print money because they're tied to the Euro. Germany doesn't want to bail out Greece and Spain, etc, because they believe (rightfully IMO) that their problems are self inflicted and there's no guarantee that they won't keep spending recklessly.

Obama did the right thing (in retrospect even agreeing to extend the Bush tax cuts was a good idea, even though I was opposed to it), but Europe didn't have the same option.
 
2012-05-08 06:16:47 PM  

lennavan: This recession allowed for a great experiment to occur. The world was hit hard, the global economy collapsed. There are two theories on how to move forward:

1) Government should INCREASE spending. Government spending will prop up the economy to give the private sector a chance to recover.
2) Government should REDUCE spending and cut taxes. This will promote the private sector job growth and trickle down to occur.

Obama chose route 1. Europe chose route 2. The results:

[static5.businessinsider.com image 590x443]

Guess what's happening in Europe right now?


They tossed out the austerity pushers and are gonna start spending?
 
2012-05-08 06:19:55 PM  

BMulligan: Debeo Summa Credo: Now, thanks to cuts, states and municipalities are in much better shape than they would have been if they kept up boom time spending.

Aside from the fact that you're positing an impossibility - virtually all states are prohibited from deficit spending - any claim that states and municipalities are in "better shape" marks you as an utter loon.


Do you not think that states are better off now that they would have been if they had kept spending what they had previously? They can't run operating deficits but they can fund capital projects. States could have borrowed heavily for unnecessary capital projects, offsetting cuts to operating budgets. This would have harmed their credit standing and debt load. If you can't see that states are better off now having saved relative to where they would have been if thy borrowed, well you are the loon.
 
2012-05-08 06:21:07 PM  

meat0918: lennavan: This recession allowed for a great experiment to occur. The world was hit hard, the global economy collapsed. There are two theories on how to move forward:

1) Government should INCREASE spending. Government spending will prop up the economy to give the private sector a chance to recover.
2) Government should REDUCE spending and cut taxes. This will promote the private sector job growth and trickle down to occur.

Obama chose route 1. Europe chose route 2. The results:

[static5.businessinsider.com image 590x443]

Guess what's happening in Europe right now?

They tossed out the austerity pushers and are gonna start spending?


And get kicked out of the euro and watch their economy go even further in the shiatter (Greece)?
 
2012-05-08 06:22:12 PM  

Ricardo Klement: If money isn't being lent, it's being spent. On goods and services.


I find fault with this statement.

There is a fairly well documented state of major banks and corporations currently sitting on huge supplies of capital. The government has tried to encourage private lending through a variety of programs and incentives, but the banks aren't rushing to lend. Similarly, corporations have long-since returned to profitability and have big cash reserves, but have not yet reinvested in infrastructure or workforce growth. The latter is likely a "lag condition" that will self rectify. The former is a bit more murky.
 
2012-05-08 06:22:37 PM  
So yesterday we had the Obamabots trying to give him credit for a decrease in government spending that all took place on the state and local level while federal spending was still increasing. Now I suppose they are going to try to blame those same cuts for the unemployment rate not being lower? You can't have it both ways.
 
2012-05-08 06:25:16 PM  
Ceteris is rarely paribus, of course: If there were more government jobs now, for example, it's likely that not as many people would have left the labor force, and so the actual unemployment rate would be north of 7.1%

Did I read that wrong? Are they making the "actual unemployment" argument in reverse now?

You can't compare apples to oranges, but I can compare oranges to apples. Because I said so. Because liberals are wrong, always.
 
2012-05-08 06:25:38 PM  
I can't be the only one to be completely shocked to find TFA in the WSJ.

/dnrtft
//oh, and the Obvious tag must unemployed, so why didn't subby give him some temp work?
 
2012-05-08 06:26:15 PM  

Debeo Summa Credo: BMulligan: Debeo Summa Credo: Now, thanks to cuts, states and municipalities are in much better shape than they would have been if they kept up boom time spending.

Aside from the fact that you're positing an impossibility - virtually all states are prohibited from deficit spending - any claim that states and municipalities are in "better shape" marks you as an utter loon.

Do you not think that states are better off now that they would have been if they had kept spending what they had previously? They can't run operating deficits but they can fund capital projects. States could have borrowed heavily for unnecessary capital projects, offsetting cuts to operating budgets. This would have harmed their credit standing and debt load. If you can't see that states are better off now having saved relative to where they would have been if thy borrowed, well you are the loon.


You know what really would have helped the states? A little help from the Feds, sufficient to fund basic services and infrastructure maintenance. A lot of the spending wasn't really "cut" because it's the kind of stuff that can't really be cut - it can only be deferred. And deferred spending often leads to increased spending (remember the guy in the old Pennzoil commercials - "you can pay me now, or you can pay me later").

Of course, I can't put everything on the Feds' shoulders. In a lot of cases, the states had every opportunity to impose modest tax increases to cover necessary spending, but the Teabaggers would rather watch everything crumble around them than allow a level of taxation commensurate with the ability to pay for necessary services.
 
2012-05-08 06:26:22 PM  

Ricardo Klement: Ceteris Paribus is not license to pretend a change in one thing does not affect anything else. Not cutting government (and I am not ascribing cuts as good or bad here) means government would have to borrow more, and that affects the loanable funds market, and that affects businesses getting loans, and that affects their ability to keep of hire workers. Maybe in the short-run, the delay in feeling the effects might have made a difference. But we're 4 years into the recession, and odds are that the unemployment rate today would still be around 8.1%.


1. No business should be using loans to pay its employees. That's a sign of impending doom. Loans should be for major expansions and the like; operational expenses need to be covered by operational revenue or you're in deep shiat and sinking fast.

2. Companies AREN'T going to expand unless demand goes up. They aren't hurting for lack of loans, they're hurting from lack of purchases of their goods or services.

Debeo Summa Credo: You guys seem to think that overspending during a boom time should automatically become the baseline.


During a boom time, government should cut back drastically. During a poor economy, they should increase spending drastically; the goal is to smooth out the business cycle by acting as a force to oppose either extreme. That would stabilize the economy. On the other hand, high spending during a strong economy followed by cutbacks during a poor economy is exactly the wrong thing to do - it amplifies the peaks and valleys of a business cycle, reducing stability of the economy.

Government is about the only player large enough to make a meaningful opposition to the business cycle; they are the only ones that can act as a negative feedback loop to smooth out the economy.
 
2012-05-08 06:29:56 PM  

Brubold: Obamabots


Drink!
 
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