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What happened to all of the doom and gloom economic threads?

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Obama's New Jobs!

:cool:

A new study by the liberal National Employment Law Project (NELP) finds that 58 percent of all jobs recovered in the last two years have been in low-wage occupations, which grew 2.7 times faster than mid-wage and higher-wage jobs.
Other key findings included:
Lower-wage occupations were 21 percent of recession losses, but 58 percent of recovery growth.
Mid-wage occupations were 60 percent of recession losses, but only 22 percent of recovery growth.
Higher-wage occupations were 19 percent of recession job losses, and 20 percent of recovery growth.
Three low-wage industries have added 1.7 million jobs in the recovery and constitute 43 percent of total net growth: food services, retail, and administrative, support and waste management services (largely employment services, i.e., temp jobs).
The study examined employment trends in 366 occupations using the government's wage and job survey, known as the Current Population Survey (CPS).
"In short," concludes the report, "America's good jobs deficit continues."
Click to expand...
http://www.nelp.org/page/-/Job_Creation/LowWageRecovery2012.pdf?nocdn=1
 
Central bankers and economists are so wrapped up in warped mathematical formulas they fail to understand the obvious. The answer, which they refuse to accept, or even consider as a possibility, is that central bankers and the monetary system itself are the problem.

Belief that a bunch of central planners can sit in a room and divine interest rates and the proper amount of money in circulation is as ridiculous as belief that Russian central planners could properly set the price and quantity of steel or orange juice.

The boom-bust cycles of ever-increasing amplitude benefiting the 1% while hollowing out the middle class should be poof enough central bankers do not know what they are doing.

That they met in Jackson Hole wondering why their policies are not working is also sufficient proof they do not know what they are doing.

What's holding back the economy is three-fold.

Three Root Causes

Fractional Reserve Lending
No enforcement mechanism on governmental spending (i.e. lack of a gold standard)
Central bank and governmental meddling

For a discussion of point number 2 above, please see Hugo Salinas Price and Michael Pettis on the Trade Imbalance Dilemma; Gold's Honest Discipline Revisited

http://globaleconomicanalysis.blogspot.com/2011/07/hugo-salinas-price-and-michael-pettis.html

Since the end of the great depression until the year 2000 the Fed had tailwinds at its back and that made it appear Fed policy was successful.

Four Major Tailwinds

US productive capacity not destroyed in WWII
Baby boomer demographics
Women entering the workforce en masse
Internet revolution

Those major tailwinds, in order, are what made it appear Fed policy was working. It is easy to inflate when powerful forces are at your back.

Party-of-a-Lifetime

Following the 2001 recession, the Greenspan Fed held interest rates too low too long, allowing one last party. And it was the party-of-a-lifetime, culminating in the biggest housing and credit bubbles the world has ever seen.

In the wake of that party, all that is left is a big hangover and ten major headwinds.

Ten Major Headwinds

Boomers heading into retirement have insufficient savings
Student debt holds back home-buying, marriage, and family formation
Ability and willingness of individuals and businesses to take on more debt has shrunk dramatically. Attitudes towards lending, borrowing, and home ownership have changed.
Bank bailouts at taxpayer expense left banks intact but did nothing for households deep in debt
Tax policy encourages flight of jobs and capital
Technology now serves to destroy more jobs than it creates. Please see Robots to Rule the World? Taking All Jobs? Replace Women? for a discussion.
Untenable pension problems at the city, state, and federal level can no longer be put off.
Public unions and collective bargaining are structural problems at the heart of the pension mess as well as the heart of numerous city bankruptcies.
Artificially low interest rates weakens those on fixed income
Commercial real estate bust on top of housing bust limits further job expansion. How many more Walmart, Pizza Huts, McDonalds, nail salons, Kohl's stores, Office Depots, Home Depots do we need? Where?

Inflate to Grow Model Never Worked

It is disconcerting yet entirely predictable that central planners and government bureaucrats cannot see what the root problems are. After all, no one wants to blame themselves.

However, one might expect central bankers to at least understand headwinds and tailwinds. Sadly, you can forget about that as well.

The simple truth of the matter is the central planners model of "lowering interest rates to spur growth" never worked in the first place. Rather, four major tailwinds coupled with consumer attitudes (willingness to take on more debt) only made it appear so.

Central planners still fail to understand 10 obvious reasons why their policies are futile. And they are supposed to be guiding the economy!

Since central bankers cannot and will not admit the truth, they are left scratching their heads asking easily explainable questions like "What is holding the economy back?"

I would have loved to present my views in a speech at Jackson Hole, but even if I was allowed, the participants would not have taken too kindly to the obvious truth: Central bankers and planners are a huge part of the problem, and no part of the solution.
Click to expand...

Mike "Mish" Shedlock
Read more at http://globaleconomicanalysis.blogspot.com/#fO5QVUth0ievRWzp.99
 
RECOVERY!


June Foodstamp Recipients Hit All Time High As Three Times As Many Americans Enter Poverty As Find Jobs





Following a brief period in which it seemed that US foodstamp recipients may have peaked, with those living in poverty maxing out at 46.514 million in December 2011, and then declining modestly for the next few months, June saw a new surge in those Americans living in poverty and thus eligible for foodstamps, with 173,600 new entrants into the system, bringing the total to a new all time high of 46.670 million and once again rising fast. Furthermore, with subsequent emergency events affecting the heartland due to the drought, the administration has made sure even more Americans will be eligible going forward. As a result expect the July and August numbers to promptly surpass 47 million on their way to the psychological resistance level of 50 million. Indicatively, the 173,600 increase in Foodstamps recipients in June was three times greater than Americans finding jobs (64,000, most of which part-time) according to the BLS. Finally, a new record was also breached for American households on foodstamps, which now hit 22.4 million, an increase of 106,298 households. The average benefit per household decline once more, this time to $276.5. Not an all time low, but just above it.
 
RECOVERY

Manufacturing ISM Misses, Third Month In Contraction Territory; Biggest Miss In Construction Spending In One Year





So much for the transitory bounce in positive economic reports from August. While hopes were high that maybe, just maybe, the virtuous cycle has once again been restored and the Fed's intervention would be unneeded, the August Manufacturing ISM just printed at 49.6, down from July's 49.8, and well below expectations of 50. This was the third contraction in a row, and fourth sequential miss to expectations, and joins the global PMI which as we reported yesterday now has 80% of the world in contractionary territory. The kicker was the Prices Paid category which soared to 54.0 from 39.5, a whopping 14.5 surge, which together with the always hollow Inventories category which rose from 49.0 to 53.0, and Employment, which dipped from 52.0 to 51.6, were the only categories in the 50+ region. Everything else is now contracting.
 
If only Romney were president he wouldn't let Spain have economic problems.
 

By Joe Nocera

...Had there been a Dutch Tulip Inquiry Commission nearly four centuries ago, it would no doubt have found tulip salesmen who fraudulently persuaded people to borrow money they could never pay back to buy tulips. It would have criticized the regulators who looked the other way at the sleazy practices of tulip growers. It would have found speculators trying to corner the tulip market. But centuries later, we all understand that the roots of tulipmania were less the actions of particular Dutchmen than the fact that the entire society was suffering under the delusion that tulip prices could only go up. That’s what bubbles are: they’re examples of mass delusions.


Was it really any different this time? In truth, it wasn’t. To have so many people acting so foolishly required the same kind of delusion, only this time around, it was about housing prices...



________________
Nocera, Joe. 2011. “Inquiry is Missing Bottom Line.” New York Times, page B1. January 29, 2011. Available at http://www.nytimes.com/2011/01/29/business/29nocera.html .
Click to expand...


 
But....BUT....>Ryand and the MARATHON and Goebells:rolleyes:


DARK CLOUDS: Democrats gather amid a drumbeat of bad economic signals.“Today we learned that U.S. manufacturing plunged to July 2009 levels and construction suffered its biggest drop in a year. Coupled with several weeks of increased first-time jobless claims, we can expect a poor jobs report on Friday.”
 
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