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magisme

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U.S. Has Best Jobs Year Since 1999

"The Labor Department’s December jobs report, released Friday, shows that 2014 was the best year for the U.S. labor market since 1999. The jobless rate declined to 5.6 percent, the lowest level since June 2008. The final month of the year added 252,000 jobs, on top of the 353,000 added the previous month—though earnings took an unexpected decline. In total, about 2.95 million Americans found work in 2014, the most in 15 years."

http://www.thedailybeast.com/cheats/2015/01/09/u-s-has-best-job-year-since-1999.html

More at: http://www.bloomberg.com/news/2015-01-09/december-employment-gain-caps-best-year-for-u-s-since-1999.html

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How's median income look? Any truth to the whole "only low paying, part time jobs" thing?

overall wages are down 23% in the US since 2008 last i saw, they went down again as it was being reported on the news today.
Yea, I figured. Isn't unemployment technically 0% in China?
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How's median income look? Any truth to the whole "only low paying, part time jobs" thing?

overall wages are down 23% in the US since 2008 last i saw, they went down again as it was being reported on the news today.
Yea, I figured. Isn't unemployment technically 0% in China?
That's what sewing footballs at six will do for your metrics.
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Sorry, downzy, but you don't even understand your own posts. You are clearly not versed in economics, so I'm just not gonna do this. I can't debate you because you confuse almost all the economic terms you use and contradict yourself in virtually every sentence.

Ah, deflection.

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A whole six years? :lol:

And I'm not talking about hyperinflation yet. I'm actually talking about the deflation that comes first.

How long did it take to blow the housing bubble and then burst it? Oh yeah, seven years. :lol:

Oh, that's right, you're the "deflation causes inflation" guy....

Enough said :P

I honestly don't know what's going to happen with inflation in the long run.

This would have been a good place to leave it. That is, before you started rambling about "TPTB", and other abstractions, and flagrant misuse of economic terms.

In your words, explain to me the conundrum that exists between inflation, and deflation without using emoticons.

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How's median income look? Any truth to the whole "only low paying, part time jobs" thing?

overall wages are down 23% in the US since 2008 last i saw, they went down again as it was being reported on the news today.

Yes, of course they went down.

A whole six years? :lol:

And I'm not talking about hyperinflation yet. I'm actually talking about the deflation that comes first.

How long did it take to blow the housing bubble and then burst it? Oh yeah, seven years. :lol:

Oh, that's right, you're the "deflation causes inflation" guy....

Enough said :P

I honestly don't know what's going to happen with inflation in the long run.

This would have been a good place to leave it. That is, before you started rambling about "TPTB", and other abstractions, and flagrant misuse of economic terms.

In your words, explain to me the conundrum that exists between inflation, and deflation without using emoticons.

Real simple. The whole debt problem downzy was talking about is part and parcel of the same thing. Public and private debt get out of control. More and more of wages and tax revenues are spent on debt servicing, therefore less on purchasing goods, therefore lower demand, therefore deflation, debt doesn't get any better, in fact it gets worse, deflation threatens both the domestic economy and trade, the government decides to either devalue the currency or default on their debts or both to try to get out of the trap, and then, soon enough, no one wants their currency.

So what I've been saying is not that deflation is the sole cause of inflation, but that it almost always comes before hyperinflation. Which is of course not to say that there aren't a million other economic factors at play.

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How's median income look? Any truth to the whole "only low paying, part time jobs" thing?

overall wages are down 23% in the US since 2008 last i saw, they went down again as it was being reported on the news today.

That's a bit of a misnomer, considering most reporting on this figure treated all wages in a uniform fashion.

A big reason why wages, if one simply takes an average across the board, fell is because the housing market virtually disappeared throughout the country from 2008 onwards. Construction jobs generally pay more than the low-wage service jobs that people relied on while the economy was bad. See this chart:

saupload_09_09_17_housing_starts.png

It wasn't as though all wages took a 23 percent hit. An accountant or school teacher is likely making the same or slightly more today than they were in 2008. With the housing market starting to come back, hopefully the broad job wage rates will start to come back. Granted, housing/construction wasn't the only reason why the national average wage took a hit, but it was a significant factor as to why wages as a whole took a knock.

But if you look at wages on a long-term basis, the past five to seven years haven't been much of a deviation:

average-hourly-earnings-of-production-wo

Much of that can be explained by a multitude of forces. Globalization, drop in worker productivity as margins on technological and bureaucratic efficiencies relating to human labour get smaller, human labour being replaced by technology, a steep drop in inflation over the same period, and a regulatory system that has failed to keep up with the shifting economic realities.

The other issue with looking at wage growth as simply an average of all incomes is that it presumes that the increases have been equal, when they haven't:

household-income.jpg

The bottom fifty percent of U.S. households made almost no gains in their yearly income from 1967 to 2011 when compared to the gains made by the top ten percent. And if you broke it down even more and just examined the top one percent, the 0.01 percent did exorbitantly better than the just the top 1 percent. Until politicians figure out a way to tackle the rampant inequality that's plaguing the U.S. economy, slow wage growth isn't going to change. We've had nearly 35 years of pro-growth, deregulation, anti-union policies that have helped boost the economy, but often at the expense of the lower and middle-class worker.

Mags points to debt as being the primary problem, but the U.S. and other western economies have overcome that problem before (most notably, after WW2). Debt to GDP was way higher in the 1940s than it is today. What's different now is fewer and fewer have access to the tremendous wealth that resides within the domestic state:

450px-2008_Top1percentUSA.png

You cannot have an economy where the economic health is based on consumption suffer from such levels of inequality. Money circulates far better when a larger share of the population enjoys the nation's cumulative output.

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As for a large chunk of the very few quality jobs that have been created, here's where that's going:

20150109_Shale.jpg

20150109_rig.jpg


....

And I don't believe downzy's numbers include public AND private debt. As far as I've seen, put those two together and we're well beyond WWII era levels.

Edited by magisme
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So the wage drop that everyone admits, thank Christ for once, is occurring doesn't matter? And even the graph you posted is dominated by shit and part time jobs, except for construction, and pray tell how that's going to last.

Edited by magisme
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As for a large chunk of the very few quality jobs that have been created, here's where that's going:

And I don't believe downzy's numbers include public AND private debt. As far as I've seen, put those two together and we're well beyond WWII era levels.

Your perspective on debt fails to take into account the serviceability of said debt. You seem to be ignoring that not all debt is created equal in that public/private debt that comes with low interest rates isn't nearly as problematic as debt that's charged much higher interest. Again, not all debt is created equal. It's why there was a run on Greek treasuries a few years back didn't happen in Japan, a nation with a much higher debt-to-GDP ratio (Japan's debt is mostly domestically owned, and is charged a far lower interest rate, meaning it can service that debt at a much lower cost).

So the wage drop that everyone admits, thank Christ for once, is occurring doesn't matter? And even the graph you posted is dominated by shit and part time jobs, except for construction, and pray tell how that's going to last.

We must be seeing a different table, because out of the top five growth sectors for jobs, only one (Hospitality and leisure) is generally associated with low wages.

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As for a large chunk of the very few quality jobs that have been created, here's where that's going:

And I don't believe downzy's numbers include public AND private debt. As far as I've seen, put those two together and we're well beyond WWII era levels.

Your perspective on debt fails to take into account the serviceability of said debt. You seem to be ignoring that not all debt is created equal in that public/private debt that comes with low interest rates isn't nearly as problematic as debt that's charged much higher interest. Again, not all debt is created equal. It's why there was a run on Greek treasuries a few years back didn't happen in Japan, a nation with a much higher debt-to-GDP ratio (Japan's debt is mostly domestically owned, and is charged a far lower interest rate, meaning it can service that debt at a much lower cost).

Tell me what rate people are paying credit cards and student loans back at, especially student loans. How's that looking for serviceable? And of course the rates are low on public debt for now. The Fed has made sure of it. But how much longer can the Fed keep up that charade in an economy like this? We'll see.

Here are some PhD's since you love them so much. :P

http://economics.ucdavis.edu/people/amtaylor/files/w15512.pdf

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As for a large chunk of the very few quality jobs that have been created, here's where that's going:

And I don't believe downzy's numbers include public AND private debt. As far as I've seen, put those two together and we're well beyond WWII era levels.

Your perspective on debt fails to take into account the serviceability of said debt. You seem to be ignoring that not all debt is created equal in that public/private debt that comes with low interest rates isn't nearly as problematic as debt that's charged much higher interest. Again, not all debt is created equal. It's why there was a run on Greek treasuries a few years back didn't happen in Japan, a nation with a much higher debt-to-GDP ratio (Japan's debt is mostly domestically owned, and is charged a far lower interest rate, meaning it can service that debt at a much lower cost).

Tell me what rate people are paying credit cards and student loans back at, especially student loans. How's that looking for serviceable? And of course the rates are low on public debt for now. The Fed has made sure of it. But how much longer can the Fed keep up that charade in an economy like this? We'll see.

Here are some PhD's since you love them so much. :P

http://economics.ucdavis.edu/people/amtaylor/files/w15512.pdf

But now you're swinging the conversation in a different direction. Undoubtedly private credit not tied to assets is a bad thing, which is basically the summary of the argument made by the scholarly paper you just linked to. Much of Taylor and Schularick's argument is that there needs to be better regulatory infrastructure put into place to safekeep the economy from what happened in 2008. Private debt that is not tied to anything tangible and not regulated by proper governmental channels is definitely not a good thing, but that's not the same argument than the one I've been making: that efforts to fight deflation have not produced inflation or hyperinflation. Public debt is fine so long as it remains serviceable and is used for the right reasons (i.e. to pump prime an sagging economy economy vs. military adventurism). If you want to limit the conversation to private debt, then that's a different discussion. But you've been using public-debt tables/graphs in your argument, so excuse me for thinking that you were speaking on private debt.

Moreover, and perhaps I'm wrong, but your assertions the past few pages seem to be grounded on the notion that any form of debt is a sin, and that such attempts to increase debt loads regardless of context sets an economy on a path to ruin by first causing deflation which then provokes a inflationary response. And my response is that's just not the case. Again, if you want to speak about unfettered private debt, then yeah, that's a different conversation, but private and public debt shouldn't be treated as one in the same.

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I'm talking about both. And both are significant. I don't understand why I'd be restricted to one or the other. Our private debt is not serviceable and our public debt is, imo, temporarily and artificially serviceable.

I'm not a huge fan of debt in general, but I have no idea where you're getting that second paragraph from. Debt doesn't get out of control whenever there's debt. Debt gets out of control when it gets out of control, and that's about where I think we are. Could it last a few more years or even a decade? Maybe. I don't know. The confidence game ends when one party calls the bluff and loses confidence. No one in their right minds thinks these debts are actually going to be paid off. How fucked up is that? Think about that? Service them? Sure, some people think we can do that to infinity, although they're wrong, but NO ONE thinks the debts will be fully repaid. So private debt is an incredible burden, and public debt just can't stay where it is with a domestic and global economy so shit, not forever, so imo, debt servicing will become increasingly onerous, both private and public - although the Fed will probably prop up the public debt for at least a couple more years - and more and more of the money base goes to debt servicing, less to everything else, and then the governments have some tough decisions to make. They usually choose currency devaluation, and monetizing debt and propping up prices through currency devaluation is a dangerous game.

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It's not just a matter of "paying off" public debt. As has been the case in the past, growth can temper or even eliminate debt. A $500 billion deficit is far less significant now than it was in the mid 1980s, since the size of the economy is much bigger. For all intents and purposes, the U.S. basically grew its way out of the debt it incurred during the second world war. The problem is when the economy stops growing or the debt becomes more expensive to service. Since neither seem a likely proposition now or in the near to medium future (at least for the U.S.), the doom and gloom that you like to preach is, in my opinion, off base. Most economists don't foresee drastic increases in interest rates for the time being. Moreover, both private and public debt as a percentage of the GDP is coming down, and has been for the past couple of years.

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OK, I've found the fundamental disagreement. I think we're going to see shit growth for the foreseeable future. I mean, how rich can the top .01% really get before shit breaks? Because no one else is seeing any benefits, that's for sure. :lol:


And by coming down, do you mean that tiny little blip at the end? :lol:

clip_image004.jpg

Edited by magisme
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OK, I've found the fundamental disagreement. I think we're going to see shit growth for the foreseeable future. I mean, how rich can the top .01% really get before shit breaks? Because no one else is seeing any benefits, that's for sure. :lol:

And by coming down, do you mean that tiny little blip at the end? :lol:

clip_image004.jpg

I'll agree that the biggest issue is inequality going forward. Laws need to change (particular tax laws) so that more of the output ends up in more hands.

But the U.S. GDP has been clipping along around 5 percent the past two quarters, with analysts expecting similar performance over the next year.

As for your chart, again, you're being selective in regards to the time frame depicted. If you stretch the timeline back a bit more, you'll see that the U.S. had a significantly higher public debt to GDP percentage during WW2 than it does now. And it was able to overcome/pay off that debt. Not suggesting that the U.S. is ready for a post WW2 surge, but to suggest that the country can't come back from such high debt loads ignores the fact that it has done it before.

us-gross-public-debt-as-a-percentage-of-

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I was posting that chart specifically in response to your saying that Debt/GDP is decreasing. But if you want to talk about comparisons to WWII era, you have to take into account both public and private debt, which your chart does not.

First, your graph ends for FY2012. U.S. deficits have been shrinking exponentially over the past two years, so again you're using incomplete data. I'm not arguing that U.S. debt-to-GDP will return to the historical average tomorrow, but it's on a downward trajectory and picking up steam.

Second, again, you're being unbelievably inconsistent in the data you present as it relates to your arguments. First you wanted it to be about public debt, then the argument was public and private debt combined, then you present a graph that solely depicts public debt, and now you're taking issue with the graph I used to respond because it doesn't include private debt. Seriously Mags, you're as consistent in all of this as much as Len likes blanket statements about Muslims.

And yes, when you look at combined public and private debt, the U.S. has seen similar times. Granted, not as high, but public/private debt in 1933 was comparable to what we're seeing today.

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There's no inconsistency. I was showing a chart for public debt as a response to your saying that it was decreasing, just like I said in my last post. I wasn't trying to make an argument with it. It was more like an, "Oh yeah?", you know? Can you show me numbers for this exponentially decreasing Debt/GDP?

So the flip side is that you were trying to make an argument with your post, and I said your argument is incomplete when you don't include private debt.

This makes zero sense that the discussion has to be about only public debt. Because I began by discussing public debt I'm not allowed to give more depth to the discussion by addressing private debt as well? :lol:

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You can talk about whatever you want, but the dangers of public debt versus private debt are very different, again, depending on context. And that's all my argument is: increasing debt loads isn't necessarily a foreshadowing of economic doom. The U.S. and other nations have been through periods of having large debt amounts and got through it. The world didn't end then and I don't think it will end now, especially considering the economic picture in the U.S. is improving while interest rates (the cost of servicing the high debt amounts) is at historical lows. I'd agree that if the economy had not started to pick up in 2012 and debt loads continued to increase we'd be in for another rough go, but that's not what we're seeing right now. The opposite is true with respect to [EDIT} federal public debt the rate of federal debt expansion:

deficitchart_v2_0.jpg

And all signs show similar results with private debt as well, with household, non-financial corporate, and financial debt all coming down the last four years.

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You do know that deficit and debt are not the same thing, right? :lol:

Yeah, sorry, I meant to say the rate of federal debt expansion is slowing down. And considering the GDP is clipping along between 4 and 5 percent, the overall effect has been a decrease in federal public debt as a percentage of the overall economy.

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