We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
Our Recent Essays Behind the Front Page
Tuesday, October 2. 2012
Related: We Live Under a Media Coup d’État. Also related (h/t Vanderleun): Chris Matthews Can’t Seem To Remove Obama’s Penis From His Mouth
No kidding. They are refusing to do their job.
What is JK Rowling's new book about?
The evil of website pagination
Especially when they don't have a "view full article" button
A friend offers high praise for this course: Money and Banking: What Everyone Should Know
We're all nuts!
Will France be the next domino to fall in Euroland?
Let 'em die in the hospital parking lot
Occupy Unmasked Vindicated: Leaders Concede Goal Is Revolution, Support Violence
There's gotta be a Psychiatric diagnosis for these deluded loonies
Obama Administration Met With Mexican Officials 30 Times to Push US Food Stamps For Immigrants
Via Ace, the non-recovery:
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"What is J K Rowling's new book about?"
I checked the link. (I wont' read the book.) I see she has struck out in boldly original novel that examines the parlous state of the British people and isles, filled with fresh insight in human nature. Oh, wait. Nope.
Reply to Ace. Dems took over House and Senate in Jan 2007. That's when things started to go south. So Barry O took over two years after Nancy got the checkbook.
Bird Dog: Via Ace, the non-recovery:
Employment recovery often lags economic recovery, and because of the severity of the financial meltdown, it will probably take years before the U.S. economy fully recovers. It certainly isn't necessary to cherry-pick the data though.
Notice that the area of the graph labeled "Bush Years" only includes 2004 on, which tends to hide the longer trend. Here's the same graph starting in 2001:
Also, it was obvious the U.S. was shedding jobs very rapidly when Obama took office, and it took some time for this trend to turn around.
Now, here's the graph from the post-WWII period:
Labor force participation increased dramatically as women and the baby boomers entered the workforce. Since 2000, the population has been aging, so there is a downward trend as increasing numbers retire from the workforce. This trend has been exacerbated by the financial meltdown and ensuing recession; some due to unemployment, but also some due to early retirement. Also, the jobs bill was blocked in Congress.
Nevertheless, despite the obvious cherry-picking, labor is still experiencing the after effects of the recession.
Since you love Keynes, even you realize that the trend hasn't "turned around", since we have merely hit that point Keynes described as equilibrium at less than full employment.
Which Keynes thought his policies could help overcome. You're correct that employment often lags recovery, but there are two key points to this 'recovery':
1. It's a recovery in name only, not in truly quantifiable terms. I have yet to see any statistics which indicate a true recovery in production, which is what leads to jobs. The 'recovery' has been purely driven by increased profits and stock prices. Which means it's not real.
Saving GM, which we didn't really do but rather put it in hospice care, hasn't increased production. Production is still at lows. We're muddling along.
2. Even the worst lag times are better than this one.
You can blame that on the financial devastation. I blame it on the cure being worse than the disease.
Bulldog: Even the worst lag times are better than this one.
Since the Great Depression, which is why this is considered the worst economic collapse since the Great Depression.
Bulldog: I have yet to see any statistics which indicate a true recovery in production, which is what leads to jobs.
ISM Manufacturing Index
Bulldog: You can blame that on the financial devastation. I blame it on the cure being worse than the disease.
Look at it again. The economy was shedding 800,000 jobs per month.
That's an enormous amount of damage well before Obama took office. It's clear that there has been a tentative recovery. And as you mention, the economy has reached a equilibrium below full employment just as Keynes would suggest.
Ok, so on the first point you agreed with me. Which is an astounding feat in itself. But then you took the interesting step to define the issue, as if telling us something we already know gives you some insight we all lack. It's fascinating wordplay, but doesn't help your point at all.
Then you follow up with a single data point, which is typical of Keynesians. Find the ONE thing that supports your POV and hammer it all day long. It works because so many people are simple-minded eventually the idiocy of this approach works. However, if you were in my economics class, I'd likely do to you as I did to my roommate in college and smack you upside the head for not paying attention. After all, that single data point is up this month, after being down the previous month, and in the midst of a mid-term trend that is overall DOWN. So let's not get giddy.
After all, the fact remains that while production has picked up since the DEPTHS of the recession, the growth remains tenuous and inconsistent. Proof? Try capacity utilization, which has also recovered from the depths of the recession, but not completely when you factor in shuttered factories. See, in a REAL recovery, new factories are being built EVEN AS utilization rises. Not surprisingly, in a FAKE recovery, utilization rises as factories are shuttered. But it tells an interesting story if you focus only on the parts that matter to you.
Manufacturing being up since the depth of the recession, to an Austrian, would not be surprising. After all, the dollar has strengthened and exports have grown. Basically, we're benefiting (mildly) from the rest of the world's problems. Hardly a Keynesian result, given all the stimulus.
More importantly, the concept of equilibrium at less than full employment isn't new or different to Austrians. We simply define the problem and frame it differently than Keynes did. He found some nice language to explain it - but that doesn't make his ideas, or the application of them, correct.
In fact, if his ideas WERE correct, we should be well out of the recession by now. After all, his SOLUTION was designed SPECIFICALLY for this situation. So, why the long return? It has nothing to do with "this was an especially deep recession" or anything of that nature.
The stimulus applied was FAR GREATER than any before applied to this situation. Yet its results are....underwhelming, to say the least.
Keynes hated savers and savings. He chose to alienate them. But his solutions were not applicable in situations where the problem was a direct result of too little savings and too much debt. If only one, or the other, were an issue, his concepts could have an impact (though with unintended consequences, as we have frequently seen over the years - like having a political class so enamored of this man they continually apply his concepts to keep growth going forever and ever without ever taking a break, or having the debt misapplied and leading to misallocation of resources or malinvestment - like bridges and roads to nowhere).
So, the answer is NO. Production has NOT improved yet. You can pick a data point here and there and say "but from where it was....." and you'll get points for originality and effort. But reality kicks in and has a powerful kick at that.
BTW, didn't you love the recent study of the Fed which basically stated hyperinflation is the most likely outcome of ZIRP? Yeah, I'll bet you did.
Bulldog: Ok, so on the first point you agreed with me.
Sort of. Your statement had to be qualified.
Bulldog: Then you follow up with a single data point,
Um, you brought up production.
Bulldog: After all, the fact remains that while production has picked up since the DEPTHS of the recession, the growth remains tenuous and inconsistent.
Bulldog: The stimulus applied was FAR GREATER than any before applied to this situation.
Well, no. The stimulus of WWII was far greater.
Bulldog: Keynes hated savers and savings.
That's just silly. He simply pointed out that when everyone suddenly withdraws from the economy, it can exacerbate a downturn.
Bulldog: didn't you love the recent study of the Fed which basically stated hyperinflation is the most likely outcome of ZIRP?
That's not the conclusion of the paper.
However, it is important that the U.S. address its deficits once the economy has regained its footing.
I'd like to see Romney take the opportunity in the debate to say: "There are a lot of questions that at least half the country would like you to ask that you're never going to ask, so I'm going to address them anyway. I would like to see my opponent address them as well, but that's up to him, and viewers can judge accordingly."
Pagination has always been a problem. It's true some publishers utilized it to increase ad revenues (I worked for one of them), but the downside is that you see overall pages begin to fall off over time if you have too many articles which are paginated.
It's a blessing and a curse, if cliches are your thing. Most publishers are inching away from pagination, recognizing it for what it really is - a pain in the ass.