Bust 2.0

There's a whole buncha phony prosperity pent up, including $4T or so of Q.E. All sorts of perverse incentives wound in (e.g. stock buybacks on cheap borrowed money to boost earnings per share).

If partying on the credit card is 'stimulus,' what are the monthly payments?

"If something cannot go on forever, it will stop." --Stein's Law

Cheers, James Arthur

10K puts on LNKD - +$1M in one day.

--sp

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Best regards,  
Spehro Pefhany 
Amazon link for AoE 3rd Edition:            http://tinyurl.com/ntrpwu8

Obama, like Clinton, will sneak out of office just as the bust gets going hard, and will take credit for the good times, and his Republican successor will be stuck with cleaning up the mess.

Interesting dynamics.

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John Larkin         Highland Technology, Inc 

lunatic fringe electronics

Q.E.

nts?

John-out-of-touch-with-reality-Larkin hasn't noticed the recent thread that provided a link to a study that definitively demonstrated that the US econ omy grows faster under Democratic than under Republican presidents.

Obama came into office just when Dubbya's bust got going hard, and Obama ha s spent both his terms cleaning up the mess created by the GFC, not helped by the fact that the stimulus spending - which has prevented a re-run of th e Great Depression - has been directed by a Republican Congress into rich R epublican pockets, who can't be relied on to spend it in the way that the D emocrat-voting poor would have done.

The current collection of potential Republican presidential candidates coul dn't be relied on to clean up any kind of economic mess. So far they've all demonstrated the kind of lunatic right-wing delusions that are acceptable to the Tea Party. One of them might be underlyingly sane, and merely lying to the Republican electorate for as long as it takes to get to become an ac tual Republican candidate, but it's not a particularly plausible hypothesis .

The world must look really interesting - but depressingly unpredictable - t o the remarkably under-informed John Larkin. Since he doesn't know much, Ja mes Arthur's ideological eccentricities won't be as terrifying as they are to anyone with a better grasp of reality.

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Bill Sloman, Sydney

Amazing that you drag Clinton into this while ignoring the monumental mess that happened while Bush was in office.

Indeed! Interesting brain functions.

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Rick

What good times? The economy has not had a typical recovery. The recovery has been very slow and drawn out under Obama.

Dan

ry has been very slow and drawn out under Obama.

Be grateful. Under Hoover the economy went backwards for three years (from

1929 to 1933) and had shrunk to to 75% of it's 1929 capacity before Rooseve lt turned it around.

The GFC wasn't a "typical" financial disaster and you should be grateful th at the Democrats were in power and prepared to borrow enough to stop the wh eels from falling off.

Not that you will be. You probably share James Arthur's opinion that Hoover got it right, and that the the least efficient 25% of the economy needed t o go to the wall (not that efficiency actually has much to do with which co mpanies have to go into Chapter 11).

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Bill Sloman, Sydney

...and shallow.

There's been no employment recovery at all. We lost a bunch of employed in the crash, then only ever got back to a slightly lower-than-usual population-driven employment growth.

Losing jobs, then resuming growth at the population-increase rate, never recovers the lost jobs.

We've got between 10 and 16 million fewer people working than we should. In a land of 150 million workers, that makes a huge difference. A huge difference to GDP, to inequality, etc., etc.

Cheers, James Arthur

very has been very slow and drawn out under Obama.

m 1929 to 1933) and had shrunk to to 75% of it's 1929 capacity before Roose velt turned it around.

that the Democrats were in power and prepared to borrow enough to stop the wheels from falling off.

er got it right, and that the the least efficient 25% of the economy needed to go to the wall (not that efficiency actually has much to do with which companies have to go into Chapter 11).

Hoover massively raised taxes and started massive stimulus spending, GWB's TARP to Obama's shovel-ready ARRA-spree.

We've discussed it before and I said the same, apparently to no end.

Cheers, James Arthur

Unemployment is down! Millions of former workers have given up looking for jobs, or taked disability pensions, so are no longer unemployed. Happy days.

What's going to happen when millions of CS grads who can only program apps in C# hit the street?

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John Larkin         Highland Technology, Inc 

lunatic fringe electronics

The St. Louis Fed graph I linked below shows that in spades. It plots potential workers (labor force population) on the same graph as the number of people who actually work.

(The graph ignores job hours and quality, both of which have also fallen.)

Productivity has made this level of passive load feasible. Less productive settings can't support it.

A run on hot cocoa & pajamas? Cache now while you can!

(Cache as cache can?)

Cheers, James

Where is this data from? The US population grew only 8% from 2006 to the present. Your graph shows a greater than 16% increase in some population that is not clear from the labels. If this is intended to be the working age population of the US, why would it rise twice as fast as the total population?

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Rick

As indicated by the URL, the data are from the Federal Reserve Bank at St. Louis.

This graphic cuts through all the spin and redefinitions of 'unemployment,' U-3, U-6, etc., and simply graphs the whole number of people, and the number of people with jobs.

'Population' figures are (U.S. population - 150 million). That's to fit both curves on the same graph.

The population series reminds us that population has risen as indicated.

The civilian employment series shows the total number of people with jobs of any kind (including brain surgeons waiting tables).

You can see that we are back to a similar absolute number of jobs as before the crash, but that number of jobs is now split between a much larger number of Americans.

If we'd recovered back to and resumed the earlier trend, that's about

12 million more workers than we actually have today.

I think you're getting 16% because you're dividing by 'n' rather than 'n' + 150 million.

Cheers, James Arthur

That distorts the data by making the population look like it has risen by over 16% while it has risen by only 8%.

But not military? Why aren't they counted as employed? Certainly that is where some people go when they can't get jobs in the civilian sector.

This reminds me of politicians who cried about the huge loss of real estate tax revenue when the crash came. They didn't bother to mention how the revenues boomed in the few years before. A more realistic comparison would be with figures before the artificial boom, say 2000.

When the economy takes a crap for half a decade and takes another half a decade to recover, do you really expect things to be back to where they were as if the crash had never happened? Try jumping off a cliff and tell me if you get back to where you were after a year recovery and all the bones are fully knitted.

I was doing the math according to a distorted graph. There is no reason to not use two axises. Regardless, that is not the only problem with this data.

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Rick

Only if someone does not read the axis-labels on the graph he is taking numbers from.

So you do not think it is realistic for people who lost their jobs to get them back, ever?

Normally they do. And then employment growth resumes at the rate of population increase multiplied by the labor participation rate. Except as the data make plain, that has not happened this time.

You made a mistake, which we all do. Why blame the graph? It's not distorted.

There actually is a reason. The St. Louis' FRED2 tool doesn't allow it.

The problems are not in the graph, they're in our economy, hurting our neighbors and friends.

Millions of people are now riding the cart rather than pulling it, which helps neither them nor us.

Cheers, James Arthur

This time? It took 30 years for the country to recover from the great depression. Why do you expect to recover 100% from a similar event in just 8?

Besides, you ignored my point that your comparison is a bit off. If the boom had never happened, the bust would not have happened either. So compare the curves from before the boom to the recovery, not the skewed data from during the boom.

I recall reading that unemployment in my area was in the 1% range at some point in the early 2000's. That seemed great to me at the time, but I didn't understand the unnatural nature of it.

Crappy tool, crappy graph.

So rather than look at useful data, you prefer to use meaningless data and come up with the wrong result?

If we use your data then we should strive for the same economic conditions as existed in 2006. Should we create another artificial boom so we can duplicate history?

In 2000 through 2002 I told some renting friends they should buy a house. By 2004 I was no longer telling anyone to do that. I couldn't make any sense of the market. Silly me for not recognizing it as a bubble. It's not like I hadn't seen them in the stock market. A friend advised me to sell one of my houses. I liked it so I didn't listen. Yeah, bring back the boom and I'll sell them all!

If you want to continue to discuss this with me, I'd like to see the data you've shown, but from 1990 to the present. Cherry picking a tiny portion of data is not at all illuminating.

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Rick

Are you telling us the real estate bubble is over? Not so in SF bay area. It's still blowing strong and up.

covery has been very slow and drawn out under Obama.

rom 1929 to 1933) and had shrunk to to 75% of it's 1929 capacity before Roo sevelt turned it around.

l that the Democrats were in power and prepared to borrow enough to stop th e wheels from falling off.

over got it right, and that the the least efficient 25% of the economy need ed to go to the wall (not that efficiency actually has much to do with whic h companies have to go into Chapter 11).

For rather small and largely ineffective values of "massive".

Roosevelt did it on a large enough scale to have a useful effect.

Sure. Because Hoover was a Republican - and could thus have done no wrong - and Roosevelt was Demoncrat and - by the same logic - incapable of doing a nything right.

You are both ideologically biassed to the point of practical imbecility, an d totally incapable of noticing when your fatuous nonsense gets shown up.

You did provide a link to a right-wing web-site that spelled out Hoover's " massive" stimulus spending, and it's "dramatic" consequences.

That web-site justified it's claims with graphs that didn't look anything l ike the ones that Wikipedia's "Great Depression" entry shows, and weren't t raceable.

Your efforts did have an end - or at least a consequence. Nobody in their r ight mind will ever take your claims seriously in the future.

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Bill Sloman, Sydney