The State of the Economy

[stude53]

Jerry,
Just drink a little of the White corn from your Mason Jar and get some sleep.

Bob

 

[cdiggy]

^^^ haha^^^
I prefer potato squeezins' myself

 

[Seraphim]

Lol - I did have the opportunity to try 'shine once, but couldn't tell you what it was made of ...tasted heavily of licorice.

Wanted to clarify the previous post, then I'll shut up a bit and let someone else talk. Didn't get much sleep, DW didn't even TRY to wake me up for church (I'll hear about that later), and I wanted to finish up that solar install today *yawn*

The year the mandate came about was around early 2006, and here's a Bloomberg chart of the consequences.




http://greenecon.net/wp-content/uploads/2008/06/corn.jpg

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About a factor of 4, not 6...

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Prices continued to spike, after a recessionary drop, but this was the initial reaction.

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Bottom line is the government controls the economy and the government is controlled by the major corporations. That is good for the ultra wealthy and the companies they own and bad for everyone else. Until the government is by the people for the people and not 'We, the corporations of The United States' we will continue to see middle class America disappear and more people at or below the poverty line.

There is much truth to what you say. Being a politician was once a service to the people. It's become a lucrative career choice, and maintaining ones career overshadows making the best choice for the middle class. So decisions affecting the economy become skewed by the decision makers personal financial situation. Human nature, I suppose. The problem is, the people who need to legislate change are the politicians.

I sincerely think most of them have the good of the people in mind, or at least believe that to be true.

Oops -DWs home. Time to take my scolding...

 

[HarmonicaBruce]

The unemployment is actually calculated several different ways from the same set of polls. Some include discouraged workers in the labor force, others don't. The data set generally quoted by the politicians is the latter, because it looks more favorable. The former is more accurate.

Well, according to the Bureau of Labor Statistics: "There is only one official definition of unemployment—people who are jobless, actively seeking work, and available to take a job... The official unemployment rate for the nation is the number of unemployed as a percentage of the labor force (the sum of the employed and unemployed)." I suppose anyone can come up with their own "unemployment" figures, but there is only one "official" figure.

...about ten years ago - price of a bushel of corn skyrocketed. I think the the price increased by a factor of 6, but I may be misremembering.

Historic corn prices can be found here. Since 2000, the cheapest corn prices were in Aug, 2000, when corn was $1.52 per bushel. A bushel of corn is about 60 pounds, so in Aug, 2000, for ONE DOLLAR you could buy 40 pounds of corn. Think about that for a minute. The highest was Aug, 2012 when it hit $7.63 / bushel, when a dollar would only buy 12 pounds of corn. Corn heaters were getting popular for awhile, but with the high price of corn, not so much.

The effects were more far reaching than this, involving increased production, need for more migrant workers, insufficient labor pool for such...

I can only imagine where you get your information. My family has grown corn here in Michigan for 40 years. NO migrant workers are used or needed. NO labor is needed. It's all done by a guy on a tractor. The guy on the tractor owns the tractor, (or his father or uncle owns it). Things might be different other places. Perhaps migrant workers pick the corn by hand, but I doubt it (unless we're talking about the Amish, who don't produce a significant amount).

In regards to government policy, for the past 8 years or so my family has received payments from the department of agriculture to NOT PLANT about 30 acres. It's called the CRP program. We're anxious to plant those acres, but if we do, we would be required to REPAY the payments we've received for the last 8 years. I'm not blowing smoke out of my butt here, I personally went to the USDA office and discussed it. Why does the USDA do this? The only explanation I can come up with is that instead of brains, they have cow manure between their ears.

But, don't want to talk about politics.

 

[GotSmart]

Ethanol~~ Skyy Vodka. I have a story about that. (How it came to be.)

Moon Shine. Midnight Moon Apple Pie. I restrict myself to no more than twice a year. New year coming in two weeks!!!!

The economy is controlled by the members of The Bohemian Grove. Nuf said.

 

[Seraphim]

Bruce

Your comment on the migratory workers is valid. I thought of that last night, but couldn't make a correction. There's be no connection between corn prices and the issues of the migratory workers. I stand corrected.

The Bureau of Labor statistics can claim what they like: they're politically oriented. Allow to me to find a more cohesive link.

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You're not going to care, I suspect, but here it is. From the Buteau of Labor Statistics


http://www.bls.gov/news.release/empsit.t15.htm

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Just because a person gives up, doesn't mean he shouldn't be counted...he's as unemployed as the next guy, and probably depressed to boot.

 

[Seraphim]

Bruce - link you provided isn't working for me. Shows an error....

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Huh. My link's not working, either.

Search 'table a15 labor underutilization' and find the link to the BLS site.

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But the point is , "official" or not, the BLS's own data sets indicate the true problem when it comes to unemployment. They can claim the U3 is official, but the U6 data set shows the overall percentage of people out of work. I'm surprised you fall for the governmental 'official' line, you anti-mainstream thinker, you...

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From the BLS site sorry for the poor formatting. The numbers are percentages from the last nine months, the final number being November. Since the link didn't work:


U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force
3.5 2.6 2.7 3.7 3.1 3.1 2.9 2.8 2.9
U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate)
6.6 5.5 5.5 7.0 6.2 6.1 5.9 5.8 5.8
U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers
7.1 6.0 5.9 7.4 6.6 6.6 6.4 6.2 6.2
U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force
7.9 6.8 6.8 8.2 7.5 7.4 7.3 7.1 7.1
U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force
12.7 11.1 11.0 13.1 12.2 12.0 11.8 11.5 11.4

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Note the difference between the 'official' numbers and the total true unemployed.

Just noticed my 14% figure is out of date.

 

[Seraphim]

Via Morningstar contributor this morning, considering a very minor rebound in oil prices this morning.

"That rebound came even after the energy minister of the United Arab Emirates, Suhail Al-Mazrouei, told Bloomberg on Sunday that the cartel would accept a price slump right down to $40 per barrel and would only consider convening an extraordinary meeting in three months' time.

"One could almost believe that OPEC wants to see how far it can push the current situation," commented Commerzbank analysts in a note."

This may be good news both for consumers and investors. It indicates, to me, that lower prices at the pump may continue for the next three months, plus the lemming investors are going to start buying back the equities they dumped, bring market returns back up (up already about .75% in the first 45 minutes of trading this morning)

A win/win for everyone except American oil companies.

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And Iranian, Russian, Venuzualian

 

[HarmonicaBruce]

Bruce... I stand corrected.

Wow, I'm surprised. It's not very often anyone admits to me that they were wrong. I'm impressed.

You're not going to care, I suspect, but here it is....

Most people who engage in discussions on forums, or in person, have no interest in learning anything. All they want to do is spread their knowledge. I'm different. I'm a dumb hillbilly, and always eager to learn.

From the Buteau of Labor Statistics...

Yes, there are "Alternative measures of labor underutilization". We could all be working harder. To go back to an agricultural example. My Russian wife was born in about 1957. When she went to college, it was free. But, everyone had to work during the summer. One job she had was to cut down wheat with a sythe. That's middle ages technology. She said she would ache all over after doing that for a few days. I told her about the good running 1947 John Deere model B tractor that we bought in 1969 for $200. That tractor could cut down more wheat in a day than 100 students with sythes, and the driver wouldn't be sore or even tired. I claim Russia at that time didn't suffer from labor underutilization. Was that good?

It takes me a long time to write things on a forum because I check all my facts, as well as my spelling. I believe that if you have to lie to prove your point, maybe your point is invalid. Exaggeration is a type of lie.

 

[GotSmart]

One thing I learned in obtaining my degree in communication is this quote from Mark Twain. There are three kinds of lies. Lies, damn lies, and (government) statistics.

By the government experts deliberately excluding certain items, you can make the numbers say what you want. I chose to deal with the world on my own terms. One situation at a time. I also refuse to take things too seriously, especially the GOOBERMENT.

 

[Seraphim]

Never considered myself perfect lol. I'm not agriculturally inclined, but I should have realized corn harvesting does not utilize migrant workers. My only excuse is I was tired and not thinking.

I discuss things to hear others POV. As I said, I found Dragonfly's definition of a good economy intriguing, and well stated.

I find the Russian comparison, personally, irrelevant to a discussion of the US economy, unless we're discussing it's place in the global market. I don't know about about the underutilization of labor in Russia, because it wasn't all agrarian - I guess. But again, it's not useful and n in a discussion of the current American economy.

In a discussion of labor and economics, the unemployment data used depends on the nature of the discussion. I think it's more to consider how many people actually WANT jobs, as opposed merely to those who actively looked in the last four weeks. U2 data has its place, but is extremely deceptive when used in an economic context.

The topic of this thread is to discuss resource allocation in the US. Products, per se, are not resources in this context, but assets, consumable or otherwise, to purchased with available resources - for the purposes of our discussion, basically the American dollar. Barter can be done, but I think the amount in the US isn't significant enough to be any influence. The sale or trade of used goods is not significant except to the degree it affects sales of new products. Food is only significant as its a product to be purchased with one's available resources - which is why the discussion of hunger and food acquisition was taking this thread off topic. One can hunt squirrels to get food, but that has nothing to do with the US economy

Generally, I discuss things as per my experience, learning and understanding. As in the corn example, I was working from memory, and made it quite clear I was doing so. The specific information was not what was relevant to my point, but the process of government action affecting the economy, demonstrated by the results was. Specific prices, and the actual dates weren't important to the discussion.

But back to the discussion. We have a far larger labor force than the U2 data relates to. It also doesn't account for the invisible people in our work force - the he biggest example I can think of offhand being illegal immigrants whom the system doesn't see. They are not accounted for, either, in the U2 data. U2 is probably the easiest for statisticians to work with, easier to get reliable data. But it offers a deceptive picture, especially to a public which has no idea what the the data refers to. Ask an average person what a 6% unemploy,net rate refers to, and the most likely answer you'll get, effectively, is that 94% of the population has a job. We both know that is inaccurate.

For our discussion, what's more important is information such as Bob provided. That gives us a much clearer view of the economic situation, plus gives a base which, when other factors are considered in, gives us a model from which we can speculate future economic conditions.

We currently have an economic system which, when available assets are used, favors the wealthy. The money supply - all the money available to be used in the US - is mostly in the hands of the top 25%. That's a general statement - if you want something more exact look it up lol. This was not always the case. But the trend has gotten stronger since 2008. I don't think you'll argue that point.

The more money in circulation, being spent, the better off the economy is. We can go into detail of that if you wish. But wealthier people tend to save and invest large portions of their resources - keeping it out of circulation. It's not just a matter of they have so we don't, but it's a matter that all that money is not being spent, so that's money businesses aren't earning, which eventually affects cost of goods. So everyone pays more for goods.

I'm wandering a bit, but to get a focus on the economy, there are so many factors lol.

One more piece of trivia - last I checked, several ago, I believe the available US money supply was about $10 trillion. Don't quote me, I'm working from memory. But look at how much we owe. Look at the data Bob supplied - 34% of the population carrying the cost of the federal government. Look to the growth trend of the population and the work force. More importantly, look to the availability, and quantity, of jobs. We currently have a large labor force - much larger than the U2 data accounts for. What we DONT have are quality full time jobs. Yes, people can be entrepreneurs and start their own businesses, but they still rely on potential customers with income to pay their wages. Also, take into account the current GDP, which has been in defib near 60% of what the average has been from the 50s, IIRC. What do I speculate?

An extremely rough economic period ahead of us. We have kept our head above water, with slight growth, due to Fed action. Those actions have ceased, and the Feds are going to have to let interest rates rise. Those low interest rates are what helped us keep our heads above water.

I'm tired, and you're probably tired of listening to me. But none of the trends I mentioned above show any signs slowing. Government spending is still running up deficits. I don't see Armageddon and civil uprising of the masses. But I see the economic future for lower and middle classes getting much worse - increased costs, reduced government incentives/ benefits, no real increase in quality job availability, larger unemployed work force, continued low consumerism...

Not a rosy picture

 

[Seraphim]

Bruce

As for your question about saving $1000 a month.

I'm a big advocate of working, living below your means saving and investing. I think most Americans spend far too much money on unnecessary 'things' and save too little. Good for the economy, not so good when it comes time to retire - or emergencies strike. OK this is really about personal finance, but I'll relate it to economics by saying this tendency is helping put a strain on the economy because, come retirement, more people wil be putting a strain on public services. SS and MediCare are there to assist us, but they're not designed to provide for our every needs. Unfortunately, IMO, most people don't see it this way.

Can everyone work and save $1000 a month? No. Can people curtail unnecessary expenditures, and save and invest a portion of their earnings? Yes, for the most part. How much? Depends on the income and family size.

I think a family of four with a median income of say $50000 ( and I know that's a little high now, as the figure has dropped) can save an average of 15% a year, separate from SS or pension, if available. So let's say an average of $7500 a year over a 35 year period. Over a quarter million dollars.

Someone working several minimum wage, part time jobs, especially a single parent with two or three kids, can't save that much. And it doesn't help to rant about responsible parenting, shouldn't have had kids, both parents should contribute... That's not going to change anything.
This person, working a 60 hour week at $7.50 an hour with no vacation is going to make $23,400. Consider child care, taxes, etc, and no, that person is not going to save $1000 a month. That person is going to save nothing.

 

[akrvbob]

I personally know 5 professional people who were laid of in 2008 and because they are i their 50s, they will never work again except as minimum wage. Why:

They got their degrees 30 years ago,
They've been with one company most of the time since
Their experience makes them expensive.
They are going too retire soon.

Why would anybody hire them???? They can hire somebody in their thirties for half the price, with much more current education and experience. They can work them for 20 more years then dump them too.

My friends all want to work and would if they could, there simply are no jobs for them, except minimum wage.

One of them worked as a computer programmer for one of the biggest banks in the country for over 20 years and now he lives in a van on $350 a month. He divided his savings by the number of months til he could get SS and that's what it came out to.

But the government doesn't consider them to be unemployed.
Bob

 

[HarmonicaBruce]

We have a far larger labor force than the U2 data relates to. It also doesn't account for the invisible people in our work force - the he biggest example I can think of offhand being illegal immigrants whom the system doesn't see. They are not accounted for, either, in the U2 data. U2 is probably the easiest for statisticians to work with, easier to get reliable data.

Like Ronald Reagan said about Jimmy Carter, there he goes again.

You're wrong.

To quote from the bureau of labor statistics frequently asked questions:
2. Are undocumented immigrants counted in the surveys?

It is likely that both surveys include at least some undocumented immigrants. However, neither the establishment nor the household survey is designed to identify the legal status of workers. Therefore, it is not possible to determine how many are counted in either survey. The establishment survey does not collect data on the legal status of workers. The household survey does include questions which identify the foreign and native born, but it does not include questions about the legal status of the foreign born.

http://www.bls.gov/news.release/empsit.faq.htm

By the way, the graph you posted showing corn prices is somewhat misleading. It doesn't show what happened the following year, when prices tumbled. The farmers actually take prices into consideration when deciding what to plant. When corn prices spiked, farmers went crazy planting corn, and they grew so much the prices came way down the following year.

In a discussion of labor and economics, the unemployment data used depends on the nature of the discussion. I think it's more to consider how many people actually WANT jobs, as opposed merely to those who actively looked in the last four weeks.

I agree. But, I claim that just because someone SAYS they want a job, if they haven't gotten off their dead ass and done something, other than whine, complain, and hope, then they don't REALLY want a job. Suppose your nephew wasn't working, but said he wanted a job. But, he hasn't looked because he's "discouraged". What do you do? Keep letting him live in your basement for free?

We currently have an economic system which, when available assets are used, favors the wealthy.

Well yes, people with more money can buy more stuff than people with less money. I'd think that's rather obvious.

I find the Russian comparison, personally, irrelevant to a discussion of the lUS economy...

I was illustrating the fact that "labor underutilization" is not a useful indicator of anything.

The money supply - all the money available to be used in the US...

Ok, how much money do I personally have available? I can count the cash in my pockets, and the balance of my checking account. But, I could cash in my IRA, which would mean I have to sell all my stocks. If EVERYONE were to do that, the stocks would be literally worthless. How about my credit cards, do I count the unused credit available? Suppose I started answering all the offers I get for credit cards? I claim the "money supply" is a misnomer. I realize it's used by economists, but I also realize that economics is a "social science", which really means "pseudo science". The highest form of human thinking of course is mathematics. It's the only intellectual discipline that has never been wrong. So, the pseudo sciences try to incorporate mathematics into their jargon to give it some legitimacy.

An extremely rough economic period ahead of us. We have kept our head above water, with slight growth, due to Fed action. Those actions have ceased, and the Feds are going to have to let interest rates rise. Those low interest rates are what helped us keep our heads above water.

What bad things do you think might happen? What's not going to happen is we're not going to run out of food, we're not going to run out of places to live, and we're not going to run out of oil. If needed, the fed will "print" more money. Inflation is good for those in debt, bad for those who are rich.

We do have things to worry about, real serious things that I'm not allowed to talk about here, or anywhere else. But the economy isn't one of them. We should be happy and grateful that the economy is so strong.

It doesn't matter how many people are working, what matters is how much work is getting done.

I'll say it again, don't worry, be happy.

It's a very rosy picture indeed.

 

[Seraphim]

the chart was designed to show the results of one event - what happened afterward was not relevant to the point being made.myes, corn prices dipped after that, then rose even higher.

Stereotyping everyone who doesn't have a job as lazy is naive. Some are. No poll is going to be extremely accurate, because people lie. That's a given.

The system doesn't favor the wealthy because they can buy more. The system favors the wealthy because it rewards income from real estate and investment more than that it does income from labor, as the wealthy has more money to invest, and more land to lease out. When the wealthy buy more, it's a good thing - good for the economy.

You're Russian example speaks nothing of 'labor underutilization'. You'd have to have a picture of the entire Russian work force to realize if it was being under utilized. How one works or farms gives no indication about the rest of the work force...

You're commentary on the money supply makes no sense. If you think economics is a false science, there's no point discussing it with you. It's like someone trying to discuss the merits of magic with me, when I don't believe in magic.

The Fed doesn't print money. The US mint does. The mint does not listen to the Fed. The Fed is a group of bankers working under the auspices of a politically appointed chairman. I've explained its function already. Seems worthless to repeat myself. But even if the mint prints more money, printing money only changes the value of the dollar. It shifts the entire dynamic, but doesn't change it. Buying power is not changed, since the dollar is worth less, it takes more dollars to buy goods.

Plenty of food, plenty of housing, plenty of oil. But if if a large portion of the population hasn't the resources to buy such things, availability has no meaning. The food spoils, or is sold overseas, the houses sit empty, and the oil sells somewhere else...

Again, you say the economy is strong, but offer no evidence. You don't seem to understand the concepts, but since you believe economics is a false science, there's no reason you should I guess.

We disagree. There's no point in further discussion, IMO, with you. I sincerely hope your life continues to be rosy.

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I personally know 5 professional people who were laid of in 2008 and because they are i their 50s, they will never work again except as minimum wage. Why:

They got their degrees 30 years ago,
They've been with one company most of the time since
Their experience makes them expensive.
They are going too retire soon.

Why would anybody hire them???? They can hire somebody in their thirties for half the price, with much more current education and experience. They can work them for 20 more years then dump them too.

My friends all want to work and would if they could, there simply are no jobs for them, except minimum wage.

One of them worked as a computer programmer for one of the biggest banks in the country for over 20 years and now he lives in a van on $350 a month. He divided his savings by the number of months til he could get SS and that's what it came out to.

But the government doesn't consider them to be unemployed.
Bob

We're wasting our time, Bob. Obviously no one's hungry, everyone who really wants a job has one, and the economy is going to be great because the Fed can always print more money. Ain't lfe grand?

Sorry. Mostly...

 

[HarmonicaBruce]

I worked as an independent data processing contractor. I remember reading a posting on DICE (direct independent contractors exchange) for a contract position in Boston. At the end of the posting it said -

Local candidates only

We sponsor H1 visas

Yes, they didn't want Bruce, who didn't live in Boston, but they'd take Abdul in Pakistan who didn't speak english, in fact they'd sponsor his visa. The idea for the H1 visa is if you can't find an American for a job, you can get a foreigner. The premise is invalid. You can ALWAYS get an American to do the job, you just have to pay enough. Not only would Abdul work cheaper, he can't sue and he can't quit his job. If he quits, he has to go back. When I stopped working, I couldn't get an entry level job. Government policy has virtually destroyed the data processing industry in America. I contracted for GMAC in St. Louis, and all they were doing was trying to move their data center to India.

But, don't want to talk about politics.

 

[cdiggy]

'Get off there dead ass' nice objective attitude

 

[akrvbob]

One thing I've seen is that different people have different ways of thinking and it's difficult for them to debate each other. Has nothing to do with intelligence or being right or wrong, just a different way to think through issues and reach a conclusion.

That's been going one on here from the beginning and I thought it could not end well.

Neener neener, I told you so!!!!
Bob

 

[Dust-In-the-Wind]

Submitted for your approval, ....or not. Just a mini-lesson in economics.

A man comes to a small town and enters the hotel lobby. The clerk/owner/proprietor greets him. The man says he would like to rent a room but wants to make sure the rooms view, furnishings and ambiance are acceptable since he plans to stay for a month. He offers the hotel owner a $100 bill as a temporary deposit for using the room for an hour to check it out. The hotel owner agrees, gives him a key and he disappears upstairs.

The hotel owner then takes the $100 bill down the street to the butcher and pays him for the meat he'd purchased earlier in the month.

The butcher then takes the $100 bill to the farmer and paid him for the pig that he'd bought earlier in the month.

The farmer then took the $100 bill to the farm supply store and paid his feed/seed bill from earlier in the month.

The farm supply store owner then took the $100 bill to the hotel where he paid the owner in advance for the 2 rooms his brother and sister-in-law would need when they came for the holidays.

The $100 bill was still laying on the counter when the man came down from checking out the room. He stated that it just didn't meet his needs, retrieved the $100 bill, put it in his pocket and left.

Everyone's bill was paid and they lived happily ever after.

Just for fun and for lightening the Holiday mood.

 

[Seraphim]

Using one person's labor to pay another's via an IOU. Everyone in the loop provided a service or goods of the same value. Each gave and each received. Kind of the way it's supposed to work. It's merely no longer that simple, in reality, because it no longer involves just four people in the same community.