U.S. job growth in August flat: Is this a prolonged recovery or a double-dip to come?

I don't see the evidence of fraud. I see other things, like poor judgement, excessive risk taking, incompetence, but not fraud. I also think everyone was in on it and should have known, especially the government agencies.

Here is one (in short-hand) Goldman Sachs invests heavily in AIG derivatives. AIG gets billions in bailout funds. Those funds go to pay Goldman. Goldman makes record profits. AIG basically goes out of business. Goldman goes to Washington to testify in front of a Congressional committee and is accused of taking advantage of the tax payer. The government basically helped Goldman and then tries to accuse them of in, a word, defrauding, the American people. If AIG had simply filed bankruptcy, Goldman would have gotten pennies on the dollar if anything.

I know when I go off on these little examples some details are missing, but in an effort to be brief I just want to get the main point on the table. the details are available from many sources to anyone interested in following up.
--- merged: Sep 6, 2011 9:39 PM ---

There is no contradiction. Perhaps you missed something I wrote or I wasn't clear enough. What is your question?

 

US GDP in Q2 2011 was $14.9T
Q2 2010 it was $14.4T
Q2 2009 it was $13.8T

The economy is fundamentally strong and is growing.

However it is not growing fast enough to absorb high unemployment and new entrants coming into the work force.

In the short-term government policy has a big impact on marginal economic activity, i.e. small business growth. Existing business in stable industries will continue to generate revenue and as is normal they continue to cut costs to maximize profits. Real economic growth does not come from this area - it comes from new business activities, companies and industries on the cutting edge of innovation and are growing. This part of the economy needs to be encouraged and "fed" (pardon the pun) in order to grow. This "feed" comes from many sources, one being commercial banks. If banks are in a "wait and see" mode they don't loan money. Another source of this "feed" is individuals willing to put their life savings on the line for their dream. if these individuals are in a "wait and see" mode they delay acting.

As it is clear to me, the economy is fundamentally strong, the economy is growing, and those who can stimulate the level of economic growth needed are in a "wait and see" pattern. this "wait and see" mode people are in is a direct result of Obama's failed leadership. Once people know he can do no further damage, they will act and the reaction will be swift and abrupt

 

Eight million private sector jobs were lost between 2007 and the first half of 2009 (Obama took office in Jan 09). More jobs lost than the four previous recessions combined. This was not just another recession. That is fact, ace.

Please explain how that is a result of Obama's failed leadership?

The job market started recovering in the second half of 2009, when the stimulus money and the stimulus small business tax relief reached the intended recipients. Two million private sector jobs were created from the second half of 2009 to the first quarter of 2011. Another fact; not all due to the stimulus, but the stimulus was a significant factor.

Please explain how that has done further damage?

 

a nice infographic that outlines the resurgence of class warfare under neo-liberal policy:

http://www.nytimes.com/imagepages/2011/09/04/opinion/04reich-graphic.html?ref=sunday

 

It is a normal cycle that as business matures it seeks major productivity gains through economies of scale. So, you have mergers/acquisitions/consolidations resulting in among other things less labor per output. On the other side you have innovation, new ideas, products, industries, that grow and as they grow the need for labor increases. When these cycles are in sync there is dynamic economic growth and low unemployment. When these cycles are not in sync as is the case now we get slow or no economic growth and high unemployment - or we get inflationary type growth.

We really disagree here.

The demand for mature goods and services can not double overnight or even grow faster than something like organic population growth. For example US households are saturated with TV's. You can not have a major shift in TV demand without some major innovation that motivates people to relace TV's they already have. Will 3D TV do that? I don't know. But if it does, you see it is the innovation of 3D and the creation (key word - creation) of 3D demand that will drive a spike in new TV sales.

In mature industries market share shifts. So if one doubles sales it has to be at the expense of another - not including organic growth.
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As example, Obama will give his jobs speech Thursday. Based on reports, what he is going to present will be trivial compared to the impact he could have as President. As presented in this thread the banking sector is under duress and it is directly affecting all phases of the economy. A strong banking sector is required for a strong economy. And to show how much I think about you I am going to share an IBD editorial from today's paper. the Obama government could be part of the solution:

http://www.investors.com/NewsAndAnalysis/Article/583958/201109061842/Dangerous-War-On-The-Banks.aspx
--- merged: Sep 7, 2011 6:52 PM ---

If only people were compensated the same then as now. First do you even know if they are using hourly wages net to the employee or gross to the employer, including taxes and benefit loading?

 

"I'll be damned before I start hiring people now, just in time to send the unemployment rate plunging so it re-elects the president next year. In a second term, this guy'll kill my business."

http://www.americanthinker.com/2011/09/an_economics_lesson_even_a_liberal_can_grasp.html

 

I know mature industries use innovation, the nature of this board is to write in generalities. Overall demand is a huge factor in a fundamentally strong economy, I don't dispute that. However, real economic growth is another matter. If we think of a cake with icing. The fundamental cake can be excellent, however, it is the icing on the cake that makes it delicious. In economic terms it seems you talk about the cake and I talk about the icing.

Whom I disagree with is not important to me, or is it who or what? If what you call basic macroeconomics is wrong, it is wrong. However, given what I know about economics there are clearly defined schools of thought. You appear to be more in line with Maynard Keynes, I am not.

True.

True.

True, however, this is what I would call organic growth. If from a demographics point of view, using baby boomers as an example, they all do certain things at a certain age, you will get what I call "organic" change. For example, when baby boomers reach school age, the consumption of school books increases. When the turn 16, the consumption of used cars increases. When they get married, the consumption of starter homes increases. When they progress, the consumption of larger secondary purchased homes increases, etc., etc. We may be seeing increases in demand, but not increases in demand per person. However there are some circumstances where demand per person is growing, i.e. PC's. at first no one owned a PC, then the market became saturated and now the PC market is no longer "growing" per person or per household - outside of organic growth there is no growth. There is a difference, there are cycles.

No I don't assume this. There are different types of economic growth - organic growth does not lead to the creation of real wealth. I don't ignore the value of this growth but in context of people living better lives it is the growth from innovation that matters most.
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Isn't it a tragedy that a person would think this? It is consistent with what I have been saying about Obama creating an anti-business environment. Some make excuses for Obama's failed leadership and will label people who say what they really think with things like racist, tea baggers (in a negative context even if they are not part of the Tea party), folks who want to kill granny, obstructionist, or whatever they call us lately - I lost track.

 

if one wants for a minute to dispense with the swamp gas that is neo-liberal metaphysics and think about the history that underpins the unemployment problems in the united states, perhaps this will be of interest:

http://regulation.revues.org/index7729.html

note: the article is in english, but in that strange variant of it particular to regulation school-style analysis that seemingly originate in french. you'll get used to it. there are some problems with the speed with which the class situation in the united states is designated, but the underlying arguments are nonetheless useful.

sooner or later, if there is any hope of dealing with the actually existing problems that neo-liberalism has foisted onto the united states, it'll be necessary to stop taking the sources of that ideology seriously.

 

unemployment is in significant measure a function of the re-organization of capitalist geography, both in terms of the fragmentation of what once were single production flows and the transnationalization of these fragmented processes. One index of this is the simple fact that, under the bush administration, the united states lost a full third of its remaining manufacturing facilities. now, in ace's vapor-filled non-account, all of this is smooshed into some banality about the organic nature of pursuit of economies of scale by advanced industry. but this pursuit of economies of scale comes in a particular period, has particular characteristics and those characteristics have had specific effects. so to simply point to some transcendent tendency is, in fact, to say nothing.

second, there is the inability of the service sector to either absorb the older working class (if you like) or the newer generations that are still being produced in that image by an educational system that is too fragmented to adapt quickly to changing realities and which is run by people who operate in the same ideological context of pathological denial of what is happening (it can't happen here, like frank zappa once sang....to wit, a musical interlude:



third, there have been moves--the directedness of which i do not know--to expand the use of debt as a mechanism for buying social solidarity. in a credit crunch situation, this becomes a tenuous thing.

fourth, there is an ideological/cognitive Problem caused in significant measure by the actions of the bush people, but which built on the longer-term problems created by neo-liberalism's primary consequence in everyday terms, which has been a shift away from thinking economic activity in terms of production to thinking it in terms of the movements of capital. this point is where the article linked above comes in. the problem with thinking economic activity in terms of capital movements alone should by now be obvious--it is a screen for concentration of wealth, a justification for class warfare. and it is profoundly destructive of social solidarity, particularly once the ideological screens that have enabled people to live through these transformations without actually seeing them (which shows the frightening power of repetition on a mass scale, but i digress) comes apart.

all of a sudden people find themselves in a fucked up new-seeming place.

but it's been building for a long time.

how did so many miss it? isn't that missing a Problem on it's own?

 

The number one problem for small business is access to credit, loans, capital or invest-able cash. If his plan fails to address this, the impact of his plan will be small.