Economy adds 625,000 jobs in last 2 months

[Whoha]

Originally posted by Tripledoc
Reports say that the United States spent 944 billion dollars in March on housing, roads and public works. That is a rise which is three times expectations.
The rise was 1.5 % compared to March 2003. Construction is equally divided between the private and public sectors. Meanwhile the American governments planned public works is making progress. The projects are a part of Bush's struggle to bring down unemployment. This has for instance meant a $18.6 billion package to the public traffic sector, and increase of 8.5%

I elsewhere made the point that current US economic policy is more akin to Socialdemocracy, than conservatism.

I wonder how this sudden surge in expenditure on public works is financed?

Freddie Mac and Fannie Mae.

[Colon™]

Originally posted by DanS


I agreed that there was a stock market bubble. There was a bubble, but it was only in a few asset classes. So when a crisis picture was painted by Hershell and he went on and on about real estate prices, I found it difficult to get all worked up about it and thought that it would all work out OK. To be fair, Hershell was describing a set of real risks. I just thought the probability for the worst case was low.

But you're right that at that time, I probably wouldn't have described it as a bubble economy. Now, I just did describe it as a bubble economy. I should probably hash that out. Certainly, parts of it were unsustainable. Profits at very low levels and rapidly increasing investment, for instance.

Anyway, we probably know right now that we aren't in a bubble economy. It's true that in some areas -- like my own -- you could make the argument that we have a residential real estate bubble. But I doubt that will have much impact economy-wide when it all comes to an end, as it is rapidly doing.

Well for the record, without intending to argue about it, I think the US has been entering a boom and bust pattern. I guess 2004 and 2005 will be good years, but I expect a new bust afterwards. IMO the recession was ended by pumping up asset prices again (mainly real estate), not by actually rectifying the imbalances.

[chequita guevara]

Originally posted by Colon
I think the US has been entering a boom and bust pattern.

That's like saying, I think Belgians can breathe air. Boom/bust is inherent to the capitalist system. It's called a business cycle.

[Colon™]

dp

[Colon™]

Originally posted by chegitz guevara


That's like saying, I think Belgians can breathe air. Boom/bust is inherent to the capitalist system. It's called a business cycle.

With a boom'n bust pattern the ferocity of the booms and the severity of the busts are markedly stronger and they happen in quick succession. If you look at the Eurozone's GDP growth since the late 90's you'll notice that even though GDP growth over the whole was smaller, the recession was less deep as well. (IIRC unemployment rose by just 1% in the eurozone from the lowest to the highest point, in the US that was something like 2.5%)

[DanS]

There doesn't seem much evidence to support your boom/bust economy theory. The latest recession was one of the mildest on record. Americans seem to hire and fire more quickly (almost everyone is employed at-will), which probably is why you get the amplified unemployment swings.

But, if you don't want to argue it...

Anyway, I agree that it's evident that we still have some imbalances. We're in a much better position to deal with them now rather than we were two years ago, however. For instance, corporate profits aren't pathetic, like they were.

[chequita guevara]

I hear the Nikei is tanking because money is being pulled out of Asia to invest here. Good for us, bad for them, which in turn could be bad for us if they can't buy our products, but then we can buy more of theirs which might keep them from tanking too far.

[pchang]

Japan

Don't worry about Japan. They don't buy much from us. Business in Japan is being boosted by big demand increases from China. As long as China is good, the Japanese recovery will continue.

[GePap]

So anyway we cut it, China is now the engine of world economic growth?

Puts a little bit of presure on the Beijing leadership.

[DanS]

China is now an engine of world economic growth. Much of the increase in demand from China is for parts for exported goods to the United States. Domestic Chinese demand is now also contributing in a substantial way, which is a change.

Anyway, the Chinese economy is overheating. They're unable to generate enough electricity to meet demand, for instance.

[Whoha]

Actually, both run hideous trade surpluses with the US, so we can influence Japan a great deal.

and Gepap, China is only buying from the Greater Chinese Area(Korea,Japan,Taiwan,Russia,etc). The AGOA,south America,etc can only sell to the US, and even there they only have the part of the market that isn't swamped with Chinese goods.

[GePap]

and Gepap, China is only buying from the Greater Chinese Area(Korea,Japan,Taiwan,Russia,etc). The AGOA,south America,etc can only sell to the US, and even there they only have the part of the market that isn't swamped with Chinese goods.

That still does not mean China is not the one place growing like crazy and bringing the world along-I mean, 7%-9% growth for 20 years straight?

[GePap]

Originally posted by Whoha
Actually, both run hideous trade surpluses with the US, so we can influence Japan a great deal.

Yeah, but we buy that on credit, credit coming from European, Japanese and Chinese capital holdings.

[Whoha]

credit created by the trade surplus, yes, but by there has been more property sold to foreigners to pay for the trade deficit then there has money borrowed right now.

by influence I mean that when we are unable to fund the trade deficit anymore, both will take hits if they are still addicted to exporting to us when we finally do collapse.

[Giancarlo]

Typical Leftist line in here: Oh I hate job growth. I hate economic prosperity. I hate it because it is under Bush's watch. I hate jobs. I won't advance my stupid agenda if there is job growth.

Pathetic.