The U.S. Economy and Jobs Thread, or...

[pchang]

more importantly, 57,000 jobs is nothing in a country that adds ~150,000 to the labor force in the same time period.

[Dinner]

57,000 jobs is basically nothing in a country with a labor force of ~150 million.

Yeah, supposedly the private sector is holding back looking for good news while the layoffs in the public sector are essentially skewing all the stats so they look bad (mainly because they are bad). With just 2% of what we used to bailout the criminals on Wall St (sorry, KH) we could have kept those cops, teachers, and firefighters employed and then had job growth in the 100,000-200,000 range which isn't bad for a month. As it is we're almost a wash.

[Tupac Shakur]

With just 2% of what we used to bailout the criminals on Wall St (sorry, KH)

The government is going to make money on TARP, you idiot. It is losing a ****load on the auto bailouts, however, which you were adamantly in favor of. OIAW*...

Spoiler:

* Oerdin is always wrong.

[KrazyHorse]

Now I suggest you stop weaseling and give your own answers

I have no problem doing so. In order, 70%, 20%, 10%, 0%

[KrazyHorse]

Yeah, supposedly the private sector is holding back looking for good news while the layoffs in the public sector are essentially skewing all the stats so they look bad (mainly because they are bad). With just 2% of what we used to bailout the criminals on Wall St (sorry, KH) we could have kept those cops, teachers, and firefighters employed and then had job growth in the 100,000-200,000 range which isn't bad for a month. As it is we're almost a wash.

I am going to guess you are going with (1) then.

If so, you should be yelling about the Fed, whose job it is to support AD, not the Congress/state&local governments whose job it is not.

[KrazyHorse]

1 -> 3 is a vicious cycle. Vicious cycles typically become virtuous if you push them in the other direction. So we can fix 3 at least in part by fixing 1.

This is true. Being out of work destroys skills match. However, it is not apparent to me that there is not a significant (although minor) non-nominal component to both skills mismatches and other structural problems. It is not good for the supply side of the economy to have 2 years of unemployment benefits available to people, and to have an incredible explosion in governmental interference in at least two major sectors of the economy (health care and finance).

At the same time, the Fed continues to fail in its job...

[Kitschum]

Yeah, you're screwed and it's glorious.

[Tupac Shakur]

Europe is way more ****ed.

[Kitschum]

N/a

[Kuciwalker]

This is true. Being out of work destroys skills match. However, it is not apparent to me that there is not a significant (although minor) non-nominal component to both skills mismatches and other structural problems. It is not good for the supply side of the economy to have 2 years of unemployment benefits available to people, and to have an incredible explosion in governmental interference in at least two major sectors of the economy (health care and finance).

I was counting the 2-year unemployment benefits as a consequence of the Fed's malfeasance.

Even PPACA and Dodd-Frank are endogenous, if you think the recession affected the 2008 election...

[KrazyHorse]

You're chasing a rabbit down a hole now. You van blame it all on a butterfly's wings flapping too. The point is that the connection between fed incompetence and proximate cause gets very tenuous when you begin to include the political process too.

[Kuciwalker]

With respect to the election, sure, but I think the causality is very firm wrt unemployment benefits. Do you really see any plausible path to reducing those besides an economic recovery?

[KrazyHorse]

Yes. As far as I know, unemployment benefits were significantly lower during other major recessions (e.g. the early 80s Volcker recession). Taking the fed as the ONLY independent actor its just as silly as claiming that they did enough because interest rates are at zero.

[giblets]

How would the Fed cause more production to occur once interest rates are zero?

[KrazyHorse]

Two things:

1) At macroeconomic level, both monetary and fiscal policy do the exact same thing: they affect nominal aggregates (e.g. aggregate demand/NGDP). A statement about the Fed being powerless to affect the real macroeconomy because all they can do is affect inflation means that deficit spending can only affect inflation as well (this is the statement that crowding out is one for one)

2) NOMINAL INTEREST RATES ARE NOT THE PROPER MEASURE OF THE STANCE OF MONETARY POLICY. Imagine a world where both the fed funds rate as well as the market rate for all government bonds is 0. Now imagine that the Ben Bernank buys a bunch of government bonds at 0 yield and burns them. There is no change in interest rates, but no sane macroeconomist would say that nominal aggregates would not be changed by this action. To quote Sumner, "no central bank under a fiat crrency has ever tried and failed to produce inflation".