RoyalWe
2734
I think the point is that with the labor force participation rate rising (more who were on the sidelines becoming employed) that the ‘slack’ is being taken out of the labor pool which means there is no real pressure on wages to increase. For years the Fed has pointed to labor market slack as an excuse for keeping interest rates low. Recently the discussion has been whether falling slack in the labor market meant that rates should get higher in a hurry but the Fed has stated that it would allow rates to remain low as a way to further reduce unemployment (suggesting that there is still a lot of slack to be removed).
Chairwoman Yellen has said that the link between a tighter labor market and inflation seems to have weakened in recent years (falling unemployment doesn’t exert a direct upward push on inflation anymore – aka the “Phillips curve”). We haven’t seen a Phillips curve relationship since the subprime mortgage crash which is bad because the central bank wanted both lower unemployment and higher inflation.
Well, this is good, right?
[quote]
At a meeting Tuesday morning with sheriffs from around the country, Sheriff Harold Eavenson complained about a state senator for getting in the way of measures on asset forfeiture he felt would be helpful.
“Want to give his name? We’ll destroy his career,” Trump offered.
The sheriff declined, according to pool reporters on hand in the Roosevelt Room and Oval Office at the White House, where Trump met with law officers from around the country.[/quote]
I’m not thrilled with current civil asset forfeiture, but good on that sheriff for declining Trump’s idiocy.
So DeVos was confirmed. Since this is the optimism thread, though, I’ll point out the vote was 50-50. Meaning Pence had to break the tie, putting his name on it. So he can’t weasel out in 2020 and say it was all Trump’s doing, VPs do nothing.
Do you think Pence will be running for President in 2020? This is the optimism thread! Pretty sure he’s going to have Trump stink on him no matter what, and if he’s the one running, it will be after the man he repeatedly defended and promoted was impeached, so the only way something like his DeVos vote even comes into play is if Trump dies in office (or leaves for some other medical reason), and Pence then tries to heal the divides and blame the rancor on Trump’s personal quirks.
Nah. Trump will run again.
And there’s a good chance he’ll win again.
Lets get through 2017 alive before we worry about 2020 I say :-)
This sounds logical on the surface, and may in fact be true. But that should be true for every recession, so the issue at hand is that wage recovery after the 2008 crash has been very sluggish compared to recent historical examples… especially over the long haul.
The hidden graph below is GDP, not hourly wages, but they do tend to correlate. The hourly wage recovery for the 2008 recession has a similar shape (second graphic), though I haven’t found a graph that shows hourly wage recovery of other recessions interposed.
[details=Summary]https://www.economicshelp.org/blog/wp-content/uploads/2013/03/recessions-different-recoveries-500x362.png
[/details]
Some try and point out the slow wage recovery is because the jobs that are being created are low-wage jobs. This seems not to be the case, according to a few studies.
SHARE OF JOBS
|
Low |
Middle |
High |
| 2000 |
24.4% |
43.9 |
31.7 |
| 2007 |
25 |
43.3 |
31.6 |
| 2015 |
25.7 |
42.7 |
31.7 |
Source: Economic Policy Institute
Nesrie
2741
You’re using lagging indicators as a indication of where the economy is going. There are a lot of issues with that.
Again, my main issue is this idea that Trump’s actions will lead to years of boom and then a bust is questionable. And while I respect a lot of economists, there weren’t a lot who had a good handle on 2009. Greenspan himself talked about his errors in estimates and the self-correcting powers of various markets.
I absolutely understand that giving money to banks gives exponential money into the economy in the forms of loans… but they don’t have to do that. They can sit on them. And for awhile, even as the Feds encouraged money to pump into the economy that’s what businesses did, they sat on large cash reserves.
It’s an error to think that before a bust we have to go up even more… we’re already up. And as I stated before, wage growth was not seen with our last recovery… it’s just not there.
Alstein
2742
Depends largely on the economy, and whether the Dems shoot themselves in the foot with an establishment candidate again.
RoyalWe
2743
It’s a great point. So what factors could be contributing to this?
-
Automation - Amazon has over 45,000 robots in its warehouses and is looking to further automate other aspects of its business. It’s just one example, but it’s a big one. Where there were human occupied jobs, those jobs may have disappeared lessening demand for human labor (and we’d see the same elements of slack moving in the wrong direction). Companies are investing in depreciating assets instead of human capital. When they do this, you have wage pressure pushing downward. Does anyone here have a robot vacuum?
-
A steady deterioration in the quality of the American labor force. This is where debate gets heated as many unpleasant explanations arise. Is the education system failing? If so, why? Is it a general deterioration of the culture away from responsibility and ambition toward freewheeling personal satisfaction? If so, why?
A recent article in the WSJ interviewed Brad Mountz, president and CEO of Mountz Inc. in San Jose, CA who told them at they spend about 36 hours a year on employee development, but from six to eight hours three years ago. He says the labor market is the tightest he’s seen since before the dot com bubble bust in 2001 and the reason is lack of good candidates.
“It’s especially difficult to find engineers in Silicon Valley, but production workers are also scarce. Many applicants lack even the most rudimentary skills, such as filling out an application correctly, Mr. Mountz has found.”
“We feel like we have to do more training when the labor market tightens, because you can’t find a person who can do the job right off the bat. We’ve close to quadrupled our training budget to ensure people are capable of doing their jobs. I would say in this valley, people looking for jobs are unemployed for a reason.”
No small wonder why companies would consider buying robots to do the work properly from the start without training, lawsuits, illnesses, payroll, etc.
So, if the labor market is hit with both slack and tightness due to the plummeting quality of its work force, while at the same time automation technology is rapidly advancing, it’s easy to see the long-term challenge policymakers will face.
RoyalWe
2744
Well the good news is that you can’t have an economic bubble burst without the boom. You never see the bubbles until after they’ve burst anyway, so nothing we can do but wait and see what happens.
Glad we agree.
Nesrie
2745
We do agree on somethings but just look at the last ten years… what makes you think we can’t go down from that? Or put another way why do we HAVE to go up to go back down, and not just up but up for several years. I think we can go down just fine without a sudden increase and still call it a recession or “bust”.
I mean there are lots of graphs you can use as a comparison, keeping in mind historical analysis is not a guarantee for future outcomes:
Look at our last recession and look at where we are today. The real question is why doesn’t it feel like we’ve had so much progress? Why are we doing so well when so many feel we’re not… and then we’re back to wages and employment again.
If I may step back a bit, I find it interesting that the fact that robots are now doing so much of the work for us is seen as a problem. It might once have been seen as a utopian solution, an increase of leisure for the masses.
In a context where both your economic and psychological well-being are tied to the concept of ‘having a job,’ of course, a robot doing the work for you is in fact an occasion for great suffering. Even if everyone received a guaranteed minimum income, the issues of self-worth would not be addressed. Speaking for myself, if I am not earning money through some labor I perform, I feel like half a man.
LMN8R
2747
With a populace opposing a minimum wage that enables you to be out of poverty, it’s unsurprising that full automation eliminating jobs entirely is so scary. It would require a universal basic income which is an order of magnitude more difficult to accept than simply increasing the minimum wage.
RoyalWe
2748
I should clarify that if I knew for certain what the economy would do then I would be on my private island right now. Of course the market could go down without a boom. The economy and stock markets are mesmerizing because they cannot be predicted except to say that they generally go up and also go down, but have generally gone up over the long haul.
RoyalWe
2749
Don’t worry about it. We’ll all be batteries soon.
But, if we replaced the minimum wage with a basic income, then people who felt that way would still work, while those who only have jobs for the sake of not starving would not. That would mean more jobs for everyone who wanted them, and less suffering in general.
Nesrie
2752
My issue with your previous statement is you indicated you thought we would see a economic boom for several years if the banks were deregulated before any bust might occur. When we’re talking about economic forecasting, it’s always a might. I don’t think it’s a minor point to think there will be this huge boom where some people think they can rake it all in and jump out before the bust; there are very likely individuals out there who voted the way they did with that very thought… think they could get one more chance to “win”.
RoyalWe
2753
I retract using several and cede the point.
