T Nation

Unemployment: GD1 vs. GD2

Read it and weep:
http://www.washingtonsblog.com/2007/08/unemployment.html

This fits my belief that demand for credit will remain low even if supply goes up. This might keep us in deflation, stagflation, or low inflation.

You can’t get a mortgage without a job, and the bulk of the credit expansion in the Bush years was mortgages.

Credit card balances continue to be called in with rates going through the roof.

Good article. Judging by more acute standards, uenmployment is closer to 20%. It is no small secret washington would like us to believe its lower to stimulate some confidence in the broken system, though business owners can see through the facade. At least my Econ degree is letting me see how fucked my country is, and not facilitating my job hunt in the mean time.

[quote]666Rich wrote:
Good article. Judging by more acute standards, uenmployment is closer to 20%. It is no small secret washington would like us to believe its lower to stimulate some confidence in the broken system, though business owners can see through the facade. At least my Econ degree is letting me see how fucked my country is, and not facilitating my job hunt in the mean time.[/quote]

I’m reading through Samuelson’s economics right now. Good stuff. I’ve got a copy dating back to the 1970s. It’s amazing how little has changed.

[quote]PRCalDude wrote:
666Rich wrote:
Good article. Judging by more acute standards, uenmployment is closer to 20%. It is no small secret washington would like us to believe its lower to stimulate some confidence in the broken system, though business owners can see through the facade. At least my Econ degree is letting me see how fucked my country is, and not facilitating my job hunt in the mean time.

I’m reading through Samuelson’s economics right now. Good stuff. I’ve got a copy dating back to the 1970s. It’s amazing how little has changed. [/quote]

In my high svhool econ book, he said that the Soviet Union would exceed the USA by the year 2000.

All macroecon is a crock. They use continuous functions from Calculus to describe human societies, and that is simply bogus. Life is discontinuous and chaotic.

Because of chaos, governments become authoritarian attempting to stop the breakdown. Sometimes they can be successful for decades (China, NK, even the Soviets). But it can’t last. It’s like repealing the Law of Thermodynamics.

This is why I favor LF capitalism. We KNOW that chaos is natural so just back off and let it run. Then the chaos is low and self-correcting. Its when government seeks to stop the chaos (because everyone wants a secure job, free everything) that eventually dooms societies.

[quote]PRCalDude wrote:
Read it and weep:
http://www.washingtonsblog.com/2007/08/unemployment.html

This fits my belief that demand for credit will remain low even if supply goes up. This might keep us in deflation, stagflation, or low inflation.
[/quote]
deflation? not unless they stop printing money. or do you just mean falling prices?

Are you asserting that low demand for credit is a bad thing?

I wouldnt say that macroecon is bullshit. Like science, economics is continually evolving. I happened to have a fantastic macro teacher that took the time to relate everything in class to the real world. We have been breaking the fundamental law, consuming more than we produce. We did this on credit. CDO’s, variable rate mortgages taken for selling, extending foreign finance to keep taxes low even though we are paying for useless shit. Outlays > expenditures = funded by debt, debt = crisis, unsustainable course of debt = paid off with debt to keep the pseudo system running.

I wrote a very nice paper on the budget deficit before TARP. If anyone would like to read it I can send a file.

[quote]666Rich wrote:
I wouldnt say that macroecon is bullshit. Like science, economics is continually evolving. I happened to have a fantastic macro teacher that took the time to relate everything in class to the real world. We have been breaking the fundamental law, consuming more than we produce. We did this on credit. CDO’s, variable rate mortgages taken for selling, extending foreign finance to keep taxes low even though we are paying for useless shit. Outlays > expenditures = funded by debt, debt = crisis, unsustainable course of debt = paid off with debt to keep the pseudo system running.

I wrote a very nice paper on the budget deficit before TARP. If anyone would like to read it I can send a file.[/quote]

Hell yeah, I’ll read it.

I would be interested in reading it too.

The government is crowding out private borrowers and this is being encouraged by the government. Banks are investing in treasuries, not making loans. If they make loans they are at risk and will be judged as being to risky by federal regulators, which will affect compensation.

It’s extremely difficult to borrow money right now for expansion or investment. That will cap employment and the present unemployment levels will remain where they are until the adults take back the government. Business will not invest equity because of the lack of confidence in the political climate. They can’t borrow money to fund capital purchases so the need for additional employees remains stagnant or will contract.

If I didn’t have a shit load of equity financing in my company we would be in a lot of trouble, much like my competitors are today. It’s purely lack of confidence in the political leadership that is destroying this economy right now.