The Economy, stupid

[kapkomet]

So...last year's nobel prize winning economist yesterday gave us this figure from the bad BLS numbers, showing that not only is the job market shrinking, but wages are stagnating and could soon start trending downwards. That's how one gets in to a deflation spiral. Wages go down, forces prices down, forces wages down.

Yea... this is becoming a big problem.

[Balta1701]

Yea... this is becoming a big problem.

Was that Kaperbole? Were you actually agreeing with me and Krugman? I can't tell.

[kapkomet]

Was that Kaperbole? Were you actually agreeing with me and Krugman? I can't tell.

I'm agreeing with you.

[Texsox]

Was that Kaperbole? Were you actually agreeing with me and Krugman? I can't tell.

 

 

I'm agreeing with you.

 

/faint

[southsider2k5]

I forgot what thread it was in where someone mentioned 10% unemployment, but it sounds like the only reason it isn't there officially is because so many people have dropped out of even looking for work that the statistics have skewed down. The effective rate is just astronomical right now. So wages are crashing, and the amount of people out of work are still skyrocketing, but things are getting better? That is the kind of stuff that McCain got laughed at for during the election cycle. Its too bad we didn't do the stimulus plan correctly so we still had some bullets left, and not have to wait until 2010 for the majority of the money to be spent.

 

http://www.chicagotribune.com/business/sns...0,7733390.story

 

WASHINGTON (AP) — Americans lucky enough to still have a job are noticing something unpleasant in their paychecks: They're making less money.

 

Employers cut 467,000 jobs in June, far more than expected, and the jobless rate hit a 26-year high of 9.5 percent. Just as worrisome, wages shrank to their lowest in nearly a year.

 

The bleak news Thursday from the Labor Department underscored one of the big threats to an economic turnaround: Rising joblessness and falling wages for those still working could send Americans back into spending hibernation and short-circuit any recovery.

 

President Barack Obama acknowledged concern. "What we're still seeing is too many jobs lost, too many families who are worried about whether they're going to be next in terms of job loss, or whether they can find another," he told The Associated Press.

 

The falling wages come from furloughs, pay freezes and pay cuts imposed by employers across the country. Many also have cut hours: The average work week in June fell to 33 hours, the lowest on records dating to 1964.

 

Nathan Bieber, 26, who works at Einstein Bros. Bagels in Phoenix, works 28 to 30 hours a week now, down from his previous 37 — a loss of up to $100 weekly. He's canceled his Internet service and deferred payments on student loans six times.

 

His wife, who is legally blind and works at another Einstein Bros. location, has had her hours slashed from 30 to 15. They rely on her disability pay for rent and the electric bill.

 

"If it weren't for that," he said, "we'd be homeless."

 

The bleak jobs news sent stocks sinking. All the major stock indexes finished down more than 2.5 percent, including a 223-point drop for the Dow Jones industrials, its worst performance in more than two months.

 

Job losses had decreased every month since January, but they rose in June. The 467,000 job losses were up from 322,000 in May and far worse than the 363,000 economists were expecting.

 

By comparison, the rise in the unemployment rate for June was small, up just a tenth of a percentage point to 9.5 percent. Many economists predict it will hit 10 percent this year and keep rising into next year before falling back.

 

Including laid-off workers who have given up looking for jobs or have settled for part-time work, the so-called underemployment rate was 16.5 percent in June — the highest on records dating to 1994.

 

The recession has taken out 6.5 million jobs in about a year and a half. All told, nearly 15 million people were considered unemployed in June.

 

"Whatever is available, you kind of have to take it," said Shirley Walker, 58, who lost her job running a nonprofit in Orlando, Fla. "If you've been out there working, and you have a career, now it's like starting a career all over again."

 

Illustrating how hard it is to land a job, 29 percent of the unemployed have been out of work six months or longer. That's the most on records dating to just after World War II. The unemployment rate for teenagers is 24 percent, the highest since 1983.

 

Average weekly earnings fell about $2 in June to $611.49, the lowest in nearly a year and the first month-to-month drop since March.

 

Federal Reserve Chairman Ben Bernanke has predicted the recession, the longest since World War II, will end later this year. And most economists still think that will happen.

 

But the strength of any recovery will depend heavily on Americans' willingness to borrow and spend. And they have been using more of their income to save or pay down debt.

 

"The job market will become the Achilles' heel of the coming recovery," said Sung Won Sohn, an economist at California State University, Channel Islands.

 

Last month's job losses were widespread. Professional and business services slashed 118,000 jobs. Manufacturers cut 136,000, construction companies 79,000, retailers 21,000. Education and health services were among the few industries hiring.

 

Economists said a chunk of the job losses probably came from plant shutdowns at General Motors Corp. and by other auto industry troubles that may ease later this summer.

 

The White House last week said federal stimulus money was being shoveled out of Washington quickly but states aren't steering the cash to counties that need jobs the most. Much of the benefit of Obama's increased government spending on big public works projects won't kick in until 2010, analysts say.

 

"We are in some very hard and severe economic times," Labor Secretary Hilda Solis said in an interview Thursday. "The president and I are both not happy."

 

Still, Solis said it was too early to consider a second government stimulus, saying more time is needed for the first one to take hold. "I do think the public needs to be patient," she said. "We know they are hurting."

 

___

 

AP Writers Mike Schneider in Orlando, Fla., and Terry Tang in Phoenix contributed to this report.

[Balta1701]

I forgot what thread it was in where someone mentioned 10% unemployment, but it sounds like the only reason it isn't there officially is because so many people have dropped out of even looking for work that the statistics have skewed down. The effective rate is just astronomical right now. So wages are crashing, and the amount of people out of work are still skyrocketing, but things are getting better? That is the kind of stuff that McCain got laughed at for during the election cycle. Its too bad we didn't do the stimulus plan correctly so we still had some bullets left, and not have to wait until 2010 for the majority of the money to be spent.

So let's see...we shrink the stimulus because we need to get the Republicans on board, weaken it by switching a good chunk of it to poorly stimulative tax cuts, cut out the aid to the states (which is among the most effective parts), and it's too bad we didn't do it correctly so that we had some bullets left? The only reason we don't have any bullets left and that we cut out the effective part is that we tried to get a couple of the "Hoover was right!" crowd on board...and we'd have a good number of bullets left if we didn't have to listen to that crowd too. Bond yields are still very low, the Fed interest rate is still at zero and the Fed is still attempting its "Quantitative Easing" policy of trying to push us back the other way by buying up those bonds.

 

And I've been screaming for years that the unemployment rates as presented are garbage and have been for years. Y'all didn't listen to me when it was just the media trying to make Bush look bad by saying the wonderful economy was worse than it really was (look at the increase in people's total wealth thanks to real estate appreciation! The economy is great!) The number of people not counted by U3 has been going up steadily since the early 1980's as the government finds more reasons to exclude people from the numbers to make them look better. U6, the measure counting unemployed, out of the labor force, and underemployed is closing in on 17%.

[kapkomet]

So let's see...we shrink the stimulus because we need to get the Republicans on board, weaken it by switching a good chunk of it to poorly stimulative tax cuts, cut out the aid to the states (which is among the most effective parts), and it's too bad we didn't do it correctly so that we had some bullets left? The only reason we don't have any bullets left and that we cut out the effective part is that we tried to get a couple of the "Hoover was right!" crowd on board...and we'd have a good number of bullets left if we didn't have to listen to that crowd too. Bond yields are still very low, the Fed interest rate is still at zero and the Fed is still attempting its "Quantitative Easing" policy of trying to push us back the other way by buying up those bonds.

 

And I've been screaming for years that the unemployment rates as presented are garbage and have been for years. Y'all didn't listen to me when it was just the media trying to make Bush look bad by saying the wonderful economy was worse than it really was (look at the increase in people's total wealth thanks to real estate appreciation! The economy is great!) The number of people not counted by U3 has been going up steadily since the early 1980's as the government finds more reasons to exclude people from the numbers to make them look better. U6, the measure counting unemployed, out of the labor force, and underemployed is closing in on 17%.

Yet again, Republicans bad on all things. THEY MADE THE DEMS f*** UP THE STIMULUS!

 

The stimulus doesn't spend the money until next year, mainly. Why? Because that's election time.

[southsider2k5]

So let's see...we shrink the stimulus because we need to get the Republicans on board, weaken it by switching a good chunk of it to poorly stimulative tax cuts, cut out the aid to the states (which is among the most effective parts), and it's too bad we didn't do it correctly so that we had some bullets left? The only reason we don't have any bullets left and that we cut out the effective part is that we tried to get a couple of the "Hoover was right!" crowd on board...and we'd have a good number of bullets left if we didn't have to listen to that crowd too. Bond yields are still very low, the Fed interest rate is still at zero and the Fed is still attempting its "Quantitative Easing" policy of trying to push us back the other way by buying up those bonds.

 

And I've been screaming for years that the unemployment rates as presented are garbage and have been for years. Y'all didn't listen to me when it was just the media trying to make Bush look bad by saying the wonderful economy was worse than it really was (look at the increase in people's total wealth thanks to real estate appreciation! The economy is great!) The number of people not counted by U3 has been going up steadily since the early 1980's as the government finds more reasons to exclude people from the numbers to make them look better. U6, the measure counting unemployed, out of the labor force, and underemployed is closing in on 17%.

 

Was it the Republicans who wanted most of the stimulus to be spent years into the future, because I sure don't remember it like that. Was it the GOP who wanted most of the money to get into programs that required continued funding, or did they want something temporary and short term? No we would be able to do something if we didn't turn this into the second biggest expansion of government in our history (though working on being the biggest after some of these other programs get rammed through.) We have no bullets left because people insisted that "stimulus" package that had to be RUSHED THROUGH NOW, meant that most of the money was going to be spent in 2010 and 2011 instead of 2009 when things were going to be at their worst. As a matter of a fact I remember you arguing that we needed it to be done that way, so I know that was the official party line.

[Balta1701]

Was it the Republicans who wanted most of the stimulus to be spent years into the future, because I sure don't remember it like that. Was it the GOP who wanted most of the money to get into programs that required continued funding, or did they want something temporary and short term? No we would be able to do something if we didn't turn this into the second biggest expansion of government in our history (though working on being the biggest after some of these other programs get rammed through.) We have no bullets left because people insisted that "stimulus" package that had to be RUSHED THROUGH NOW, meant that most of the money was going to be spent in 2010 and 2011 instead of 2009 when things were going to be at their worst. As a matter of a fact I remember you arguing that we needed it to be done that way, so I know that was the official party line.

So wait, it's a bad thing that the stimulus wasn't fast enough, and it's a bad thing that the stimulus had to be rushed through?

[Balta1701]

Yet again, Republicans bad on all things. THEY MADE THE DEMS f*** UP THE STIMULUS!

 

The stimulus doesn't spend the money until next year, mainly. Why? Because that's election time.

And because the money that would have been spent this year, the aid to the states, was stripped out. Another $100 billion in aid to state governments would directly translate to jobs saved right now everywhere except Indiana.

[southsider2k5]

So wait, it's a bad thing that the stimulus wasn't fast enough, and it's a bad thing that the stimulus had to be rushed through?

 

Its two different things. They rushed the package through, even thought the majority of the spending wasn't for a long time. A true stimulus would have been geared towards now, not later. And it wouldn't have handicapped the government into having no ability to do anything again, because of a ginormous expansion of permanent spending, which by definition is not a stimulus plan, it is a spending plan.

[Cknolls]

Can any of the Obama apologists tell me how many jobs the Messiah has saved? I can't quite figure it out. Oh wait, that's the point, it is not quantitative. It is a load of bulls***, just like everything else that he or any other politician says.

[Cknolls]

Stimulus II anyone?

[Balta1701]

Its two different things. They rushed the package through, even thought the majority of the spending wasn't for a long time. A true stimulus would have been geared towards now, not later. And it wouldn't have handicapped the government into having no ability to do anything again, because of a ginormous expansion of permanent spending, which by definition is not a stimulus plan, it is a spending plan.

A long time? Most of it is out the door in the 2nd half of 2009 and 2010. Why might that be a good thing? You think job losses are going to stop before then?

 

The only things that could get out the door by now are: the tax cuts and aid to states. The tax cuts have already taken effect (the largest tax cut in history actually...would be several times the size of the Bush tax cuts if they lasted 10 years). The problem with tax cuts is; they're crappy stimulus. Which is why they're having only a limited impact. Exactly as predicted.

 

The part that could be out the door right now that would have been a more effective stimulus...significant aid to state governments, was hacked by the Senate in favor of this year's AMT reform, which would have been passed anyway...because we needed to get the stimulus in under the arbitrary $800 billion figure to get the 3 Republicans to vote for it.

 

The construction/rebuilding dollars are starting to hit right now. There should have been more of them, but clearly I'm not allowed to blame the people who wanted the stimulus shrunk for some reason. It'll make some difference later this year, but as a few of us said back then, there should have been a lot more of it.

 

And permanent spending increase? Seriously, by the CBO numbers, 80% is out the door by 2010. Virtually all of the rest is out the door by 2012, and that part is spent on upgrades to the electricity grid. Care to back up your point with something harder than a talking point?

[Balta1701]

Stimulus II anyone?

Another stimulus package adding in the stuff that was stripped out of the first one would be a solid idea.

[southsider2k5]

A long time? Most of it is out the door in the 2nd half of 2009 and 2010. Why might that be a good thing? You think job losses are going to stop before then?

 

The only things that could get out the door by now are: the tax cuts and aid to states. The tax cuts have already taken effect (the largest tax cut in history actually...would be several times the size of the Bush tax cuts if they lasted 10 years). The problem with tax cuts is; they're crappy stimulus. Which is why they're having only a limited impact. Exactly as predicted.

 

The part that could be out the door right now that would have been a more effective stimulus...significant aid to state governments, was hacked by the Senate in favor of this year's AMT reform, which would have been passed anyway...because we needed to get the stimulus in under the arbitrary $800 billion figure to get the 3 Republicans to vote for it.

 

The construction/rebuilding dollars are starting to hit right now. There should have been more of them, but clearly I'm not allowed to blame the people who wanted the stimulus shrunk for some reason. It'll make some difference later this year, but as a few of us said back then, there should have been a lot more of it.

 

And permanent spending increase? Seriously, by the CBO numbers, 80% is out the door by 2010. Virtually all of the rest is out the door by 2012, and that part is spent on upgrades to the electricity grid. Care to back up your point with something harder than a talking point?

 

Um, unfunded mandates?

 

And again, spending in 2010 is doing NOTHING to stem the recession today. If the money had been done the right way, you might not have needed the spending in 2012. And if you did, you would have had the option to tailor it around what you needed. Instead you are locked into Obama's plan, for better or for worse.

 

It's also really trite to blame the minority party for everything, when they have zero control over anything. They got the blame when they were in power, and now they get the blame if they were out of power. If they had that much ability to control everything, why did we end up with the plan the Democrats largely wanted? GMAB.

[Balta1701]

Um, unfunded mandates?

 

And again, spending in 2010 is doing NOTHING to stem the recession today. If the money had been done the right way, you might not have needed the spending in 2012. And if you did, you would have had the option to tailor it around what you needed. Instead you are locked into Obama's plan, for better or for worse.

 

It's also really trite to blame the minority party for everything, when they have zero control over anything. They got the blame when they were in power, and now they get the blame if they were out of power. If they had that much ability to control everything, why did we end up with the plan the Democrats largely wanted? GMAB.

Zero control over anything? Seriously? Am I the only one who has paid any attention to the Senate? The new 60 vote supermajority requirement for all votes?

 

Saying "Unfunded mandates" doesn't exactly provide direct evidence that they all exist.

[southsider2k5]

Am I the only one who remembers the forced expansion and invention of programs with only temporary funding in the stimulus package?

[klaus kinski]

I deal with distressed businesses every day and to a person they say the stimulus should have went to businesses that can put people to work, pay their bills, get credit lines etc. Not to banks who hoard the $ and to companies that were terminally ill. I dont know anyone that got "laid off" that has been called back. Thats the failure of the stimulus policy.

If people work, they buy, travel and spend $. Not enuf middle class people can get work-executives dont get laid off

[NorthSideSox72]

I deal with distressed businesses every day and to a person they say the stimulus should have went to businesses that can put people to work, pay their bills, get credit lines etc. Not to banks who hoard the $ and to companies that were terminally ill. I dont know anyone that got "laid off" that has been called back. Thats the failure of the stimulus policy.

If people work, they buy, travel and spend $. Not enuf middle class people can get work-executives dont get laid off

I think you are confusing TARP, which went to banks, and the Stimulus bill, which did not.

 

[kapkomet]

I think you are confusing TARP, which went to banks, and the Stimulus bill, which did not.

In this case, it's pretty much the same. Wasted.

 

[Balta1701]

In this case, it's pretty much the same. Wasted.

If the goal of TARP was to convince everyone that the government will do whatever it takes to keep the banks alive, it's worked.

[kapkomet]

If the goal of TARP was to convince everyone that the government will do whatever it takes to keep the banks alive, it's worked.

Well, yea. I guess. But it's bunk.

 

[Balta1701]

Well, yea. I guess. But it's bunk.

Of course it's bunk. Its working, but I totally agree it's bunk.

[kapkomet]

Of course it's bunk. Its working, but I totally agree it's bunk.

It must be a cold day in hell. This is twice today.