Why are we still at 9.1% unemployment (U3)?

[Balt]

Being that the government is funded by the public, I would think that the government should be as dynamic as the private sector. If the private sector is doing well, then the government will reflect this with being able to accomplish more in shorter spans of time, because it can provide more jobs. When the private sector shrinks, the government should contract as well, being dependent on its source.

The problem with that is that demand for private sector goods decreases with a bad economy, but demand for public sector goods increases dramatically. More people want to send their kids to public schools, more people will request unemployment benefits, etc.

Bad economies are when government services are in the highest demand. It's just the very nature of things.

 

[Jhhnn]

You wouldn't have much of an argument w/o false attribution & exaggeration, Glenn1. Standard for Righties.

Funny how the idea of misallocation occurs to Righties only in lean times, which are really the result of misallocation in the boom phase. construction & finance? please. We're over built and over leveraged, which is a big part of why we're where we are today. America is awash in investment capital, except it's not actually being invested in anything other than financial instruments, and there's not much need for capital equipment because we're only operating at a fraction of capacity. Yet corporate profits are at near record levels while employment languishes.

Innovators and entrepreneurs thrive in much higher tax environments than the US, obviously- we have no monopoly in that respect.

As unemployment benefits expire & Republican sponsored austerity takes hold, the economy will tend to fold in on itself more than it already has, because people need jobs & income to participate in the economy. Deflation sets in, where those who have excess liquidity hoard it, because it grows in value at no risk whatsoever. Which further reduces money circulation & the ability of debtors to meet obligations. It can easily become self reinforcing, a la 1931.

Your insights offer no solutions, just more of the same problems, more of the feigned helplessness proffered by the financial elite, who seek only to protect their own advantage.

http://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/7364/

 

[Jhhnn]

What Krugman fails to realize, or doesn't want to say, is that the negative exuberance from no stimulus would have lasted maybe 6 months at most. If there had been no stimulus, we'd be at full employment now.

You really are a looney tune. That's what happened in 1930 & 1931, right? No stimulus, no QE, and, why the economy took off immediately!

Only in the fevered dreams of Austrian fantasists.

 

[Acanthus]

U3 unemployment is not really the measure to go by. U6 tells you a lot more about our economic situation.

The reason that both figures are so high are that the fundamental problems with trade and the action the government and fed have taken to improve the economy.

It shifted the damage from the rich population and the retired population (investors) to the working and poor populations via inflationary actions.

Had the large banks failed, you would have had an angry top 1%, and a giant FDIC bailout. People under the now defunct loans would have had free houses, dead credit cards, and LITTLE TO NO CONSUMER DEBT. The irresponsible lenders would have burned instead of the irresponsible borrowers... It is all about where you think the risk should lie ideologically i guess. I would think a big red reset button on consumer debt would be nice kindling for a consumer driven economy; and it would be the real free market solution anyway as the regional banks and other survivors that take over would be a lot more careful about who they lend to.

Instead the banks got bailed out, the investors saved, and now we have cheap money all over the place in the finance sector keeping them afloat despite their horrid books. The consumers are buried in debt and unable to consume, because they were lent to or even beyond their ability to pay. In a consumer economy, when consumption stops, things come to a grinding halt.

I don't think anyone can make a sound argument that says our financial sector should be 40% of the economy. There needs to be a massive restructuring at some point, and it WILL happen. We are just kicking the can down the road with our current action.

 

[Jhhnn]

Had the large banks failed, you would have had an angry top 1%, and a giant FDIC bailout. People under the now defunct loans would have had free houses, dead credit cards, and LITTLE TO NO CONSUMER DEBT.

Utterly incorrect. Anybody who owed money to Lehman Bros still owed the same amount after Lehman bankruptcy as before, just to the buyers of Lehman's distressed assets rather than Lehman.

Consumers would still owe the balances on their credit cards even if the card accounts were no longer functional.

It's not like the legal structure of debt & lending would have been swept away, at all.

I'll agree that the size of the financial sector is dangerously large, but that's a function of 30 years of concentration of wealth & income spawned by Reaganomics & outrageous leverage.

 

[Acanthus]

Utterly incorrect. Anybody who owed money to Lehman Bros still owed the same amount after Lehman bankruptcy as before, just to the buyers of Lehman's distressed assets rather than Lehman.

Consumers would still owe the balances on their credit cards even if the card accounts were no longer functional.

It's not like the legal structure of debt & lending would have been swept away, at all.

I'll agree that the size of the financial sector is dangerously large, but that's a function of 30 years of concentration of wealth & income spawned by Reaganomics & outrageous leverage.

There wouldn't have been anyone large enough left to buy up the assets.

The big 10 would have been gone, along with roughly 400 regionals.

 

[Jhhnn]

There wouldn't have been anyone large enough left to buy up the assets.

The big 10 would have been gone, along with roughly 400 regionals.

In bankruptcy, the assets are sold by court order, even if they only fetch $.0001 on the dollar. Unfortunately, the way it's all structured, you can't just buy your own mortgage for a penny on the dollar, even if that's all it brings as part of a larger MBS.

China and KSA are awash in Yankee dollars, and they know a bargain when they see one. And they wouldn't be any more hesitant to beat the cash out of debtors than Citi. They'd have the legal system on their side, just like the original creditors.

 

[dmcowen674]

Why?

Republicans just love the smell of money, and of a looting spree in progress...

Mission Accomplished

 

[Acanthus]

In bankruptcy, the assets are sold by court order, even if they only fetch $.0001 on the dollar. Unfortunately, the way it's all structured, you can't just buy your own mortgage for a penny on the dollar, even if that's all it brings as part of a larger MBS.

China and KSA are awash in Yankee dollars, and they know a bargain when they see one. And they wouldn't be any more hesitant to beat the cash out of debtors than Citi. They'd have the legal system on their side, just like the original creditors.

I would think that in that situation, the government would have intervened once again, although they do have a history of selling us out to our enemies.

 

[First]

BS. I didn't even bring up westernization until after you made the following point:

You were in fact the first person to bring up westernization, here: http://forums.anandtech.com/showpost.php?p=31905334&postcount=22

Please read your own posts carefully as you get very easily confused.

Now you're trying to act like your original point included something I hadn't even brought up yet? WTF?

lmao. Read your own posts, psycho: http://forums.anandtech.com/showpost.php?p=31905334&postcount=22

India has the rule of law and a similar government.

lmao. No, they don't.

Both are building up their markets and infrastructure.

Their infrastructure is so many decades away from nearing American progress that saying they're "building them up" means nothing. They literally (literally) have millions of people living in empty spaces on airports because their infrastructure is so bad. And their social services are terrible partially because their form of gov't can't support them and because they're so damn many of them (1B).

If you hadn't noticed, businesses are going in droves to China because of their huge market.

No, because of their cheap labor, which is getting more expensive and why China is cooling down. And of course the fact that businesses are investing in the latest and greatest foreign power doesn't necessarily mean anything other than they're the hot new country to invest in. So was Japan in the 1980's.

So basically you're speculating? It is important. If it's not something racial or geographical, then it's something that China and India can have too. In fact, I would say they're already moving culturally towards the US.

No one can say for sure if it's culture or not. This isn't math or chemistry, there is no exact clearly correct answer. And while they may be moving culturally toward the U.S., that still doesn't mean anything I said was inaccurate.

I'm not asking you to quantify, I'm asking you to describe things qualitatively. You're still dancing avoiding a simple question I had for you. Do you think there's anything about America that would make it better than China at designing planes / design ipods / analyze financial markets? (I have already stated that I agree that it makes sense for certain jobs to be done by people that understand the same language as the consumers.)

I've already stated this is not something I have ever claimed I knew, but since you have gotten confused in yet another thread I'll answer it since it's an interesting question. Our far freer form of government lends itself to much more confident foreign investment considering there is essentially no chance gov't will arbitrarily kill industries without lots of public debate and discussion about why it would need to be killed (like say, drilling in rain forests or something).

This goes to your most arrogant claim, that the Chinese or Indians are less competent. I doubt that you were merely saying that they're less competent at jobs that require English or daily communications with Americans. Were you? Because again I specifically said that's not what I'm talking about. If that's all your saying I agree with you.

You need to read carefully, you have comprehension problems.

Obviously there will be some jobs in America (I used the example of waiters as example where you want someone who speaks the language and who is local). The question is how many compared to before. Given that there is little reason to open up shop in America in many industries, I say it's going to be less. (I hope I'm wrong but you haven't provided any reasons except "they speak a different language" for me to believe that.)

Except you said, and I quote, "Is there any reason for more jobs to be created in the US? Not really." A blatant generalization that you should quite obviously take back. Maybe you will.