Wednesday, July 7, 2010

Don't expect recovery (before collapse)

Greetings good citizen,

Under the category of ‘that didn’t last long’ here we are, two days into the resumption of regular posts and I’m already working from somebody else’s copy…but this is an ‘example’ darn it! Don’t expect it to become a regular thing…even if I have been doing it for almost five years now.

Um, every once in a while you encounter an article that can be used as a ‘foil’ for the mainstream perception they keep trying to sell you.

The headline often says it all, in tonight’s example the headline reads “Don’t expect a full labor market recovery’, like anyone actually expects this!

In a moment of unusual candor, the Vice President belabored the obvious by coming right out with what everybody already knows…those 8 million jobs we lost during the ‘transition’ between the Obama and the Bush administrations are ‘gone for good’, they ain’t ever coming back.

So what’s wrong with fucktard? Where did s/he (sorry, Casey can swing both ways) get the idea that anyone expected thirty years of the ‘race to the bottom’ to suddenly reverse itself?

What we are experiencing now is the ‘end result’ of this socially irresponsible, er, ‘consolidation of market share’. It don’t do jack for the consumer but it sure made a hell of a lot of billionaires, and in ‘jig time’ too! (Even if most of them have already sunk back into multi-millionaire territory, as was inevitable…)

I’ll leave it up to you to decide if ‘blogger’s suck at economics’ (because it’s a proven fact that economists suck at it worse!)

Don’t Expect a Full Labor Market Recovery
Today's Economist

Casey B. Mulligan is an economics professor at the University of Chicago.

Labor market statistics for June 2010 were widely received with disappointment. But it is no surprise that some workers whose jobs ended in this recession will never work again. [Okay, second sentence and we’re in trouble already. Casey is ‘correct’ that ‘some’ workers, due to their age/type of work they performed, won’t work ‘ever again’. What s/he isn’t saying is if you’re over 50 in this ‘man-cession’ you’re toast. If you’re unemployed, you’re also unemployable.]

It has always been clear that there would eventually be some kind of recovery from the 2008-9 recession. After all, falling housing prices and underwater mortgages were not going to last forever. Our population continues to grow, and eventually that population will demand more space in which to live. And worker productivity [in China] remains strong. [It would be EXTREMELY tedious if I were to refute every, er, ‘mis-conception’ Casey puts forth so I’ll try to stick to the ‘whoppers’ like ‘some kind of recovery’: this is an outright lie. ‘Shrinking’ the economy to fit the level of economic output is NOT a recovery, it is ‘creative accounting’. It is the same kind of ‘fiction’ that allow our already bankrupt banking sector to pretend it is solvent. This runs dangerously close to the fiction that allows us all to pretend our money is actually worth something…]

Consumers apparently agreed with this assessment, because they reduced their spending from previous trends much less than employers cut jobs. [Read that a couple of times and see if it confuses you. Is Bobo saying consumers reduced spending less or is s/he saying consumers are spending more than they did during previous economic downturns? Since there is no ‘magic’ and you don’t get to have it both ways (although those who ‘lie with statistics’ are constantly ‘re-labeling’ negative outcomes as positive events) the truth remains there to be seen IF you know what you are looking at.]

The chart below shows seasonally adjusted indexes of consumer spending (adjusted for inflation and productivity growth before the recession) and hours worked (adjusted for population growth). For example, a value of 96 for consumer spending means that inflation-adjusted consumer spending was 4 percent below its trend before the recession, and a value of 90 for aggregate hours means that hours worked per American were 10 percent below what they were when the recession began. [Um, did I mention ‘lie with statistics’? There still isn’t enough information here to reach any kind of a conclusion, much less an accurate one! ‘population growth has nothing to do with the size of the workforce, which is now global, thank you very much! (So how the hell do you ‘adjust’ that unless you are pulling shit out of your backside to support your own foregone conclusions, based on the flimsiest evidence available.) Same thing with ‘hours worked’, what does measuring the hours worked by the ‘non-redundant’ workforce tell you? That demand is down…because they cut 8 million workers from the payroll. Workers that they have no clue about how to return these people to productive activity!

Consumers reduced their spending a lot by historical standards – it’s only once in a generation that consumer spending falls 4 percent below trend as it did by the end of 2008 – but by late 2009 their spending had been cut only half as much as their hours worked had. Either consumers have been expecting that employment will at least partly rebound, or they plan yet further large spending cuts. [Honestly good citizen, most of you are scared spitless that the wheels are about to come flying off of this shit wagon and you’re going to find out what being ‘on your own’ is really like! Stupidly, this article ‘implies’ that people are hoarding ‘cash’ (and maybe the idiotic rich are) but wise are actually still spending it while it is still worth something against the day when you won’t be able to get what you need without resorting to ‘deadly force’.]

Thus, one piece of good news over the last nine months is that the latter has not yet transpired: the average consumer has not cut spending further, but rather since September 2009 has increased spending at a rate somewhat faster than before the recession (the trend-adjusted consumer-spending index went to 96.8 from 95.9; the spike in August was related to cash for clunkers). [Punctuation belongs inside the parentheses, but Casey is an ‘economist’ and not an English major, which apparently differs little from those who major in journalism, who are just as guilty of such ignorance.]

The other news is that hours worked have increased somewhat faster than the population over the past nine months, which is consistent with the view that the labor market would at least partly recover, and not get worse than it was in 2009. [Again left unsaid here is the fact that after beating the crap out of worker’s wages for the past two years, the pricks have finally started handing out (tiny) pay increases, which has allowed consumers to start spending again. Sadly, these miniscule raises are going to a significantly smaller workforce, while the overall population proceeds to rise at a ‘pre-crisis’ pace.]

On the other hand, no one should have anticipated a rapid and full recovery for hours worked. For example, it will not be too long until large numbers of baby boomers are retired, rather than working as most of them are now. [Like I said, I’ll try to cover the ‘whoppers’. ‘Most’ baby boomers ‘should’ still be employed but only a handful have managed to hold on to their hard own posts, ‘most’ have been ‘churned’ multiple times and a significant number of boomers now work part time because they can’t find full-time jobs. So the ‘inaccuracy’ here is that ‘most boomers’ have sufficient funds to ‘retire’ now or at any time in the extremely uncertain future.]

For better or for worse, many in our country want a more extensive safety net and more government regulation of business activities, as Western Europeans already have. Economists may argue about the short-run effects of a generous safety net, and whether it is desirable in the long run, but they agree that one way or another a generous safety net eventually reduces hours worked per person. [Logic alone should tell you that the more workers there are, the less each one needs to work to achieve ‘market satisfaction’, IF these workers were being managed for the benefit of humanity and not just the humans who claim to own our collective inheritance…]

Even without expanding social programs, it seems that the Bush tax cuts may expire, and the federal government may otherwise raise taxes. With higher tax rates in the future, we have to expect hours worked per American to remain below what it was before the recession. [How can an ‘economist’ responsibly make a statement like this? You can’t assume an equation that eliminates wide swaths of the population will produce a viable economy. As I have said many times before, the problems created by globalization are ‘insoluble’. There is no way for ‘capitalist democracy’ to move forward without splitting the population into an ‘us vs. them’ scenario, where the destruction will be incredible.]

Consumer behavior also seems to agree that the labor market will not fully recover. By my calculations, consumers could have cut their spending half as much as they actually did if they had expected the labor market to get back to pre-recession levels by 2012. But in fact we saw the biggest consumer spending cut in a generation. [Worse, Casey is using a ‘distorted’ picture of what constitutes a ‘consumer’, the same twisted model most economists use, that of only looking at the top ten percent of the payroll distribution. In the past, like now, the top ten percent accounts for 80% of consumer spending which equals 80% of the economy. Is it any wonder economists keep ‘getting it wrong?’]

So if you expect all of the people who lost jobs in this recession to someday be working again, there will be many disappointing employment reports ahead. But you can expect the job market to grow at least as fast as our population over the next couple of years.


How do these people show their face in public?

Our ‘currently global’ labor market will indeed continue to expand roughly in pace with the global population…but this talk of ‘global parity’ isn’t particularly comforting when the developed world is being thrown head first into its own septic system.

The weasels who did this to us are at the ‘pay-off’ stage of the big bet they made so many years ago, that the people they outsourced the ‘Western way of life’ to will now pick up the harness and pull them to the top of their newly created markets.

Bizarrely, at the end of the day it wasn’t about ‘ideology’, it was all about numbers. The fucking beancounters threw their own civilization ‘under the bus’ to capture ‘larger markets’ that will ultimately do them zero good.

Dead people don’t need your junk…which will become the sad bottom line of the coming ‘resource wars’.

If you don’t appreciate the dire need to radically alter what we do and why we do it, please do the rest of us a favor and blow your own head off!

That said, thanks for letting me inside YOUR head,


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