Your ideas/thoughts on what should to be done to return to healthy economy grow.

[Gone4Good]

Official SSA statistic for disabled people receiving benefits 8,899,047 (not 11 millions) . ..

Different sources, different questions, different numbers. So what?

9 MM people get disability checks and 11 MM people say they're not working because they have a disability, some of whom don't get a check. What's so hard to reconcile?

There is no conspiracy.

 

[VFK57]

Different sources, different questions, different numbers. So what?

9 MM people get disability checks and 11 MM people say they're not working because they have a disability, some of whom don't get a check. What's so hard to reconcile?

There is no conspiracy.

The point is about the official and unofficial unemployment what most of us contribute to economy health. And if we have over 26 millions working age people who do not work or operate their own business, are not retired early and not counted as unemployed then there is something wrong with economy and official stats numbers.

 

[LOL!]

16-19 year-olds are in the stats, so one cannot just count college students, but must also add some high school students.

 

[Gone4Good]

The point is about the official and unofficial unemployment what most of us contribute to economy health. And if we have over 26 millions working age people who do not work or operate their own business, are not retired early and not counted as unemployed then there is something wrong with economy and official stats numbers.

Statistics is hard. And especially so when trying to estimate something like the unemployment rate of a 320MM population or calculate the inflation rate in an economy with well over 1 billion prices.

What's easy is to second guess delicately decided and sometimes technically complex questions of methodology from 30,000 feet and spin the resulting misunderstandings as either deliberate manipulations or proof of incompetence.

It's so easy, in fact, that some folks have made lucrative profession out of it - see Stockman, David; Shadowstats, etc.

If nothing else, take comfort in the fact that investors with billions of dollars on the line (some of which is their own money) analyze and pick apart every possible detail of economic data. If there were some glaring error in the government stats, something so obvious you could unearth it with a couple of Google searches, it would already be common knowledge.

And if the government numbers were as bad as you fear we'd also see widely respected alternative measures of government statistics produced by the investment community. What we see instead is the investment community waiting with bated breath for each government stat release. Why? Because the government bean counters are pretty freaking awesome at their job and their numbers represent the gold standard. They're not perfect, because the task is hard, but they're the best economic data the world has managed to produce and by a very large margin too.

 

[imoldernu]

ER members are doing their part to open opportunities for younger wage earners.

 

[VFK57]

I agree that the true accurate data is a hard thing to deliver. The Government is manipulating the data in some cases to keep consumer confidence high while opponents of the Government economic policies (Jim Rickars, Peter Schiff, Jim Rogers, Mark Faber etc) are manipulating the data in order to gain popularity and sell their books, guidance, attract more customers. Yet the weak signs of our economy are obvious and will be very foolish to ignore. U.S. National Debt Clock : Real Time

 

[Gone4Good]

The Government is manipulating the data in some cases to keep consumer confidence high

No.

 

[sengsational]

It's interesting, though, that the official figures come out and are not that bad. Then later, more quietly, they get revised more toward bad. Maybe that's my confirmation bias, though.

 

[Gone4Good]

It's interesting, though, that the official figures come out and are not that bad. Then later, more quietly, they get revised more toward bad. Maybe that's my confirmation bias, though.

I think it's probably confirmation bias. I don't know if there's any research looking into the the direction of the revisions, but from my experience those revisions tend to go both ways.

Here, for example, are the unemployment revisions for the past several months . . .

The change in total nonfarm payroll employment for November was revised from +252,000 to +280,000, and the change for December was revised from +292,000 to +262,000. With these revisions, employment gains in November and December combined were 2,000 lower than previously reported.

The change in total nonfarm payroll employment for September was revised from +256,000 to +271,000, and the change for October was revised from +214,000 to +243,000. With these revisions, employment gains in September and October combined were 44,000 more than previously reported.

The more sophisticated users of government data (i.e. not the talking heads on squawk box or elsewhere) will look at the direction of the revisions as well as the revised numbers themselves as pretty important indicators.


The reason we have revisions is because data collection isn't instantaneous. The govt. agencies release their initial estimate when most, but not all, the data is available. They'll then update those estimates as trailing data becomes available.

Again, this is nothing sinister. It's just an attempt to be timely, and therefore, useful.

 

[CaliforniaMan]

Statistics is hard. And especially so when trying to estimate something like the unemployment rate of a 320MM population or calculate the inflation rate in an economy with well over 1 billion prices.

What's easy is to second guess delicately decided and sometimes technically complex questions of methodology from 30,000 feet and spin the resulting misunderstandings as either deliberate manipulations or proof of incompetence.

It's so easy, in fact, that some folks have made lucrative profession out of it - see Stockman, David; Shadowstats, etc.

If nothing else, take comfort in the fact that investors with billions of dollars on the line (some of which is their own money) analyze and pick apart every possible detail of economic data. If there were some glaring error in the government stats, something so obvious you could unearth it with a couple of Google searches, it would already be common knowledge.

And if the government numbers were as bad as you fear we'd also see widely respected alternative measures of government statistics produced by the investment community. What we see instead is the investment community waiting with bated breath for each government stat release. Why? Because the government bean counters are pretty freaking awesome at their job and their numbers represent the gold standard. They're not perfect, because the task is hard, but they're the best economic data the world has managed to produce and by a very large margin too.

+1000
Thanks for your very thought post. It is often difficult to see the obvious when it is so much more fun to see treachery and conspiracy.

 

[LOL!]

This article in the NYTimes explains a recent survey which shows the dichotomy between places that have poor economic prospects and those that have recovered well.

http://www.nytimes.com/2016/02/25/b...sed-out-on-boons-of-recovery-study-finds.html

So it also explains the differences between what people are reporting in this thread.

The solution (not from the NYTimes article): Move out of the poor areas. This is because it appears there is nothing better to do in those doomed areas. It is basically impossible to have places like Detroit, Newark, Camden stage a comeback. One might see that the refugee crisis in Europe is a manifestation of the same thing: Escape from Poverty.

For those reading this thread who think there is not healthy economic growth, please read the article because it clearly shows healthy economic growth.

For those who think there is healthy economic growth, please read the article because it clearly shows that many places do not have any growth.

“The most prosperous areas have enjoyed rocket-shiplike growth,” said John Lettieri, senior director for policy and strategy at the Economic Innovation Group. “There you are very unlikely to run into someone without a high school diploma, a person living below the poverty line or a vacant house. That is just not part of your experience.”

By contrast, in places the recovery has passed by, things look very different.

 

[Senator]

P.S. Those blips in 2000 and 2010 are temporary census workers.

We need a census every year. That would fix things.

 

[Gone4Good]

We need a census every year. That would fix things.

Gee, when you put it like that. So instead lets try deliberately adding 1.5 percentage points of displaced workers to the unemployment rolls at the same time we were trying desperately to reduce unemployment. That sounds like a much more intelligent strategy to "fix things" because, you know, "gubmint."

 

[Senator]

20 years ago, I would have been in favor of the French idea of 35 hour weeks. And since we can always do better than the French, I would have liked 30 hour weeks (or less). That would create jobs.

Now that I am near FIRE, paying people over 55 not to work seems like a better idea. It would open up more j*bs for the younger folks. It seems like they are the only ones crying for work...

 

[Gone4Good]

20 years ago, I would have been in favor of the French idea of 35 hour weeks. And since we can always do better than the French, I would have liked 30 hour weeks (or less). That would create jobs.

Now that I am near FIRE, paying people over 55 not to work seems like a better idea. It would open up more j*bs for the younger folks. It seems like they are the only ones crying for work...

Yes, we've already learned in this thread that "We mustn't become the French, the French, I say!" Not because anyone is actually suggesting that we do so but because simple appeals to stereotypes are always easier than thoughtful arguments.

 

[Gone4Good]

So here's a thought experiment:

What would have happened had U.S. government employment not declined relative to trend by about 2.4MM workers since 2009, keeping in mind that most of those government jobs are state and local not Federal positions?

Possible things to consider:

1) Would today's unemployment rate of 4.9% (7.8MM/158MM) be the same, decline to 3.4% (5.4MM/158MM) or be at some other level? Why?

2) In light of the answer to Question 1, would the Fed still be holding rates near zero or would rates be higher and possibly even closer to "normal" today?

3) What's the net effect of all of this on government fiscal balances keeping in mind that the cost of unemployment insurance and lost tax revenue exploded during the Great Recession.

4) To the extent these jobs were not needed, is it better to pursue pro-cyclical policies that cut jobs when unemployment is unusually high or wait until recovery when the impact on workers, the economy, and even the government burden of added unemployment insurance expenses might be lessened?

5) Is it possible it would have turned us in to France?

 

[NW-Bound]

Yes, we've already learned in this thread that "We mustn't become the French, the French, I say!" Not because anyone is actually suggesting that we do so but because simple appeals to stereotypes are always easier than thoughtful arguments.

I like France, more than any foreign country. I like its food, its drink, its music and literature, its history in science (French mathematicians ruled supreme in the 18th-19th centuries).

If one can keep the same US stock performance with the current French lifestyle, I am all in.

By the way, I recently read somewhere that there are fewer unionized workers in France than in the US, percentage wise that is. Who would have thought?

 

[LOL!]

By the way, I recently read somewhere that there are fewer unionized workers in France than in the US, percentage wise that is. Who would have thought?

I think that is mostly because of the definition of "workers"

 

[VFK57]

French (1799) and Russian (1917) Revolutions were very bloody and the reason they happened was same: rich and powerful neglected poor conditions of millions hard working people in addition to war. That is why most European countries have kind of blend between Socialism and Capitalism. So far it was working well.

 

[NW-Bound]

I think that is mostly because of the definition of "workers"

Hey, I think that that statistics defines a worker as someone drawing a paycheck, no matter how hard or even if he works. Are you OK with that?

I found that article in the Economist again.

... less than 8% of employees in France belong to a trade union, a figure that has collapsed from a high of about 30% in the 1950s. The figure today is below that in Britain (26%), Germany (18%) and even America (11%). In the French private sector, the rate is lower still: just 5%, next to 14% among civil servants.

For more: The Economist explains: Why French trade unions are so strong | The Economist.

 

[karen1972]

One thing I always think about is that in Europe, labor is fluid, people take other jobs in other countries and move with ease place to place wherever a good job can be found.. here in the US, that just doesn't happen.

ie the reason why the small business person says there is absolutely no one who will take job x and there are 100 people in 2 cities over looking for job x.

I'm not sure if it requires a national database, better infrastructure to make commuting possible, a change in culture? it just seems to me that we likely have enough jobs, but not the right people in the right spots.. ie why those same business people then walk down to immigration and bring in someone from outside the country to do the job. If we had a national database of jobs (vs. the ridiculous go to 680 job sites to figure out which one any given job is posted on).. and then you would know exactly how many jobs are open in a single area, what type of jobs, you could then incentivize people to go to where the work is or say hey we have 300 workers looking for jobs that all have skillsets a,b,and d so maybe we could entice a business looking for that to set up shop here...

ie I get frustrated looking for jobs by trying to figure out where jobs may or may not be posted.. once you apply for job is it really actually open or already filled or opened just to get an H1B visa (ok I know a few tech companies that clearly do this)... and you have no idea how much they even think to pay, what level of job it really is, if re-location is even an option... etc.. ie your not getting the best candidates when no one can find the job in the first place.

 

[NW-Bound]

Hmmm.... I have always thought that American people have better mobility than any other country's citizenry. Most of us are rootless people, and people moving from coast to coast is not a big deal.

Are there any statistics or studies on this subject?

 

[gcgang]

To return to healthy economic growth, debt needs to expand.

 

[NW-Bound]

Ah hah, the Paradox of Thrift.

We do not want to incur debts for ourselves, but want the other guys to borrow money to spend and businesses to borrow money to expand factories.

This is so that our stocks go up, and we can sit at home lazy and happy counting money.

 

[karen1972]

Hmmm.... I have always thought that American people have better mobility than any other country's citizenry. Most of us are rootless people, and people moving from coast to coast is not a big deal.

Are there any statistics or studies on this subject?

I'm going to go looking as while there isn't legal restrictions.. it comes down to money being a big blocker to mobility.. and that comes down to tons of issues such as lack of affordable day care so having to stay near relatives, money to even fund a move as not all companies pay, money to afford to pay for flights if the company won't fly you out.. or even if they will.. you have to have enough money to float that.. I know people that took home 6 figures that couldn't put a flight on their own credit card because it was maxed out. From personal experience my BF was floating almost $2500 in interview trips to a single company that he didnt' get hired at.

And as I said there is also cultural.. not sure that's the right word.. I just know lots of people who haven't really traveled too far from home that would be too scared to move across country or even to another state... especially when you have no guarantee when you get there you won't be let go in the next round of layoffs.