We Are On the Verge of Great, Great Depression
All in all, not looking like it will be a fun summer.
That is according to Peter Yastrow.
“What we’ve got right now is almost near panic going on with money managers and people who are responsible for money,” he said. “They can not find a yield and you just don’t want to be putting your money into commodities or things that are punts that might work out or they might not depending on what happens with the economy.
“We need to find real yield and real returns on these assets. You see bad data, you see Treasurys rally, you see all bonds and all fixed-income rally and then the people who are betting against the U.S. economy start getting bearish on stocks. That’s a huge mistake.”
“Interest rates are amazingly low and that, thanks to Ben Bernanke, is driving everything,” Yastrow said. “We’re on the verge of a great, great depression. The [Federal Reserve] knows it.
I think at the very least the idea of a “double dip” is much more of a possibility now than it was a few months ago. Dave Schuler has three posts (here, here and here) about the weakness of the recovery. Dave notes the anemic job growth even though the recovery is almost
a year old two years old (thanks Dave). The slow down in manufacturing, drop in consumer confidence, the malaise that the housing market is in, and other wonderful news.
On top of it there is this interesting post by Prof. James Hamilton about when the economy reaches “stall speed”. Much like an airplane when an economy’s growth rate drops below a certain threshold (yet is still positive) it strongly suggests the economy is about to go into a decline.
Nalewaik notes first that the 4 quarters prior to recessions were usually characterized by slower real GDP growth than is typically observed in an economic expansion.
He then estimates Markov-switching models in which there may be an intermediate phase the economy moves into before or after an economic recession. This approach allows for a variety of possible outcomes. For example, it could capture a phase of rapid GDP growth in the first few quarters of a recovery, as proposed by Sichel (1994). However, Nalewaik usually finds evidence of a “stall” phase that the economy enters before going into a full-blown recession. For example, real GDP might be expected to grow at only a +1 to +2 percent annual growth rate per quarter while in the stall phase, before falling outright at a -1 to -2 percent rate during a recession. Unemployment in the stall phase might be expected to increase by 0.1% per quarter, before rising at 0.6% per quarter once the recession proper begins.
Consider that one of the points Dave Schuler noted was that the BEA in calculating real GDP is using a GDP deflater that is considerably lower than similar statistics put out by agencies such as the BLS (link). Using a higher deflater for calculating real GDP could in fact mean that growth is very anemic or even possibly negative.
The importance of the price deflater used by the BEA cannot be overstated. In calculating the “real” GDP the BEA continued to use an overall 1.9% annualized inflation rate, which is substantially lower than the inflation rates being reported by any of the BEA’s sister agencies. The mathematical implications of the deflater are simple: a lower deflater creates a higher “real” GDP reading. If April’s CPI-U (as reported by the Bureau of Labor Statistics) of 3.2% year-over-year inflation is used as the deflater, the reported 1.84% annualized growth rate shrinks to a 0.56% annualized rate, and the “real final sales of domestic products” is actually contracting at a 0.63% rate. If instead of the year-over-year CPI-U we were to use the annualized CPI-U from just the first quarter (5.7%), the “real” GDP would be shrinking at a 1.82% annualized rate, and the “real final sales of domestic products” would be contracting at a recession-like 3.01%.
Makes me wonder, did all of the government spending on TARP and the stimulus mitigate the depths of the economic down turn only to extend the duration? Are our current problems related to the sky rocketing debt with no end in sight? I’m not surprised by the bad news in the labor market. After all the previous two recessions had long recovery times in labor markets and the recovery time was longer in the most recent recession–i.e. if the pattern holds and given the depth of this recession the job market could remain grim for a considerable period of time. And as Dave Schuler notes we should expect something similar in the housing market. With the last recession we basically diverted too many assets into housing. And housing has historically played a significant role in the economy.
All in all, not looking like it will be a fun summer.
Two years aaccording to the NBER which puts the end of the last recession at June 2009.
For some time my kvetch has been the persistent misconception that recoveries last forever. We’re now about 24 months into a recovery. The average expansion is 52 months (and that includes two atypically long expansions of over a hundred months the most recent of which was notable for the housing bubble. The median recovery is shorter. Given the history I think we should expect a significantly shorter recovery and the recovery to date has been piss poor.
At what point do we stop accusing the Obama administration, and Obama himself, of mere incompetence and start to entertain seriously the notion that the increasing wreckage around him is actually what he is trying to do?
Given his political history, it is by no means unbelievable that in his world view, a significantly and permanently weakened America would be a good thing for the world.
Furthermore, what cogent, compelling argument can be made against this proposition? Mere denial of no longer hold sway.
I maintain, based on the repeated failures of Obama’s policies to strengthen the country domestically, economically and in foreign affairs, that a coherent argument can be made that the decline of the country in every major indicator is not accidental on the administration’s part. I also maintain that after almost 2-1/2 years of this administration that it is easier to make that case than to argue against it, based on the actual actions and results of the policies of the president and his administration.
Put another way: if this decline is not in fact their goal, then why do they keep doing more of the same? And what would they be doing differently if it really was their goal?
I asked these questions not long ago of a liberal friend, and she admitted she had no answer. Does anyone?
If we follow your proposition, should we also argue that GW Bush’s goal was equally to destroy America? Or was he just a buffoon and in-effectial leader whose policies failed to prevent this crash? And, if you follow some people arguments, those same policies continued then to only be extended by the Obama Administration (TARP, the general approach to prosecuting the war, centralizing executive control)?
So was Bush the architect of our destruction? Or did he just fiddle while the US burned? Did he hate America? Or, if his history doesn’t allow for that reading (i.e. he isn’t an “other”), then do we just assume that he was an idiotic fortunate son (which many might might argue befits his biography)?
Thanks Dave, I was thinking the recovery started last summer, but you are quite right.
Political sniping aside… Thanks for this analysis Steve and Dave. Can’t say its particularly cheery, but it’s taken a lot of complex econ stuff and made it make sense.
Question… in terms of past depressions and recessions — has there ever been any good poli-sci (or journalistic) analysis on attempts by political parties (either in or out of power) to intentionally stall recoveries/sustain recessions in order to shift control of governments?
I mean beyond conspiracy theories (see above)? I’m looking for summer reading and this is something I’ve been curious about for quite a while…
Re “We’re now about 24 months into a recovery”
I’m not sure if want to call what we had the last 24 months a “recovery”. It is about like saying someone on life support has made a recovery because they are not as bad as when they came in.
I could be nitpicking but that my perception of the last couple years.
If we really want an economic boom we need to get government out of business way. Allow them to exploit our natural resources and do away with regulations and policies that punish success. Expand our energy base. Stop the delaying tactics of phony EPA regulatory practices. Yes there are valid ones but what they are doing now is using bureaucracy process as a delaying tactic not as a valid nature protection. Having a President that doesn’t take every opportunity to attack big business would help to.
Actually the average expansion is 59 months, so we aren’t quite half way, but well into the recovery. The median is 51.5 (call it 52). This is all for the post war years though. Granted expansions in the last part of that time period have seen longer expansions, but I think your point is well taken Dave. We are well on our way towards the next recession, and this expansion hasn’t given us much.
Please note that Yastrow was brought to us by CNBC, which was talking both the stock market and the housing market up before the crash (and all the way through the crash). Everybody responsible for that network’s ‘analysis’ is a liar and a fraud.
China’s massive economic growth will be the flywheel that prevents the world’s economy from stalling into a depression.
America’s economic problem isn’t government policies, it’s a very mediocre class of business executives who have set up personal salary systems that rewards them for their incompetence, corruption and stupidity.
Is there some bottomless pit supplying an endless supply of this crap? Scratch a conservative, no matter how seemingly respectable they may seem for a while, and you seem to very often run into some barking lunatic spouting these grand conspiracy theories.
Yeah moron, its all part of the grand plan. Get yourself elected president so you can destroy the country It must be part of that Kenyan anti-colonialist thing. Or maybe just laying the groundwork for the moooslim Caliphate. Or maybe he is just an old Commie plant that they set up in Hawaii back in the Cold War, and no one called him back in when the Soviets collapsed.
Why don’t you go crawl back in your hole….
Yup, we shouldn’t automatically discount the possibility that he’s actually an alien from another planet, softening the earth up for the inevitable invasion of UFO’s that even now are just hiding on the far side of the moon.
At what point do we stop accusing the Obama administration, and Obama himself, of mere incompetence and start to entertain seriously the notion that the increasing wreckage around him is actually what he is trying to do?
We? At the point when reality starts resembling the imaginary world of wingnuts’ imaginations. Wingnuts, of course, have been at the point you describe since before Obama even took office.
One thing on the BEA GDP deflator that is often misunderstood – it is not a measurement of inflation like the CPI. GDP is a measurment of domestic production, so the delfator only looks at price changes for domestically produced goods and services. Whereas, CPI includes imports. Energy and other commodities have been the driving components the CPI or other measures lately, and these are on net imported.
“Makes me wonder, did all of the government spending on TARP and the stimulus mitigate the depths of the economic down turn only to extend the duration?”
This is my primary critique of fiscal stimulus with regards to the practical effects of it. Aggragate demand and supply are not homogenous blobs. A doctor is not the same as a construction worker.
So say we spend a ton of money on building bridges. Some combination of the following occurs. Bridge building firms realize the spending is temporary, and therefore do not make long term investments; they do not make a lot of capital expenses or hire a lot of new workers. They just push their existing resources further and raise their prices. The effect is no signifigant increases in output, higher prices for brige builders and more public debt.
Ont he other hand, if firms see it as perminant, then they hire more and purchase more capital eqipment. You then get a temporary boost in GDP relative to what you would have had. But once this spending is gone, these firms then have to start laying off people and liquidating capital because this supply does not match what the natural demand is for, so it drags out the recovery as this process realigns.
So the spectrum is somewhere between innefective and making the fall shallower but drags it out longer. Either one is not overly convicing to make such policies the norm.
that whole thing was a very nicely written load of substance free bullshite. youre just making assertions, such as that the president of the united states, based on a virtually nonsensical interpretations of his personal and political history, is out to ruin the united states because…because?
clearly, she is not very bright.
I’ve got to go with the liberals on this one.
I have confidence that Obama isn’t deliberately trying to wreck the country and that every misstep, poor decision, flip-flop, dithering and his total lack of leadership is due to incompetence and the fact that he was totally unqualified for the office.
We have political scientists who have never heard of Saul Alinsky, so it’s quite possible to have a Harvard lawyer who doesn’t know the first thing about what America work.
and yes, thank you for the report. the only conclusion i can come to is that our political system has failed us completely. to scapegoat one man or administration makes no sense to me.
im afraid that hyperpartisanship will bring us to our knees, when all is said and done
chug chug chuggin that koolaid…
Yes, that is true. The GDP deflator is also based on whatever is being consumed or invested in, as such it isn’t directly comparable to something like the CPI which is based on a fixed basket of goods.
However, I’d be curious about the historical differences. Are the about the same now or has the gap widened. If it has widened then there may be cause for concern…although it isn’t clear that the GDP deflator is necessarily wrong, could be the CPI overstating price increases.
That’s why I asked the question about studies on tactical use of recessions to bring about social/political change.
The thing is most folks would say that while this is a contentious time, it’s by no means the most partisan time in US history (see Civil War period as an excellent starting point). That said, there’s a growing sense that maybe this isn’t business as usual, and I don’t know if that’s just akin to being in the moment, or if there’s something else going on.
We have political scientists who have never heard of Saul Alinsky, so it’s quite possible to have a Harvard lawyer who doesn’t know the first thing about what America work.
Or maybe your knowledge of the field of political science and how America works are so lacking that you don’t actually have a clue what you’re talking about? Consider that as a possibility.
ej, as im an economic layman (see: idiot), i honestly ask what is the (an?) alternative to your described spectrum in the first place?
point taken about not being the most partisan environment we have ever seen, but you nailed what i was getting at with the last part.
I’ve often wondered how much worse it would have been if we had left everything fail in 2008 and used the money from TARP/stimulus/auto bailout/etc to pick up the pieces instead. It would have hurt and hurt bad but it could have reset things to zero instead of papering it over like we actually did.
I always consider that possibility, but the answer continues to be that I’m right and they’re wrong.
Over the long run the CPI has been critiqued for overstating inflation for two major reasons:
1. it has no subsitution effect. What that means is that in real life if you consumer 5 oranges and 5 apples but then the price of apples doubles, you will shift to eating more oranges and less apples. But the CPI assumes you keep eating 5 and 5. This overstates the inflation of yoru total basket.
2. new technologies are entered into the basket late – new technologies usually fall in price quickly in their early years – but these are not entered into the basket until late
With that said yeah the CPI and GDP deflator have been dioverging but thats so much of the CPI has been due to energy price increase. Over the longer run i don’t know. And I’m not saying that the CPI or the GDP deflator are not wrong, I’m just sying you cant use the CPI like this guy did in the article to deflate GDP. They are measuring two different things.
I’ll add the Fed likes using the PCE deflator in the personal income and consumption data series as a measure of inflation because it tries to adjust for the substituion effect that the CPI does not.
I’m not sure what you are asking.
I always consider that possibility, but the answer continues to be that I’m right and they’re wrong.
Of course it does.
i misread what you wrote, so neither am i actually. disregard.
If I am reading you right, the basic textbook model is that you can borrow money to create new aggragate demand and that firms react to this borrwed spending (or tax cuts) as if its perminant. This new demand changes firms behavior – they hire nore and purchase more capital that is being unused due to the recession. It looks at all demand and supply as the same thing. Labor is labor. Capital is capital. BUt this is not true. Unemployed auto workers and equipment are not sitting around to be used to pave roads.
Now in reality, economists or modern models are not simplistic work but this is the basic texbook theory people tend to talk about. What is missed is the micro econonomic underpinnings of the macro theorty.
This is a good article that touches upon this topic and discussed the broader micro implications:
ah, understood. and yeah that was a bit of word salad in the first place. thanks.
I’ve been kvetching about this for years. Take the current employment situation. Unemployed mortgage bankers can’t readily be re-hired as medical technicians. They might be retrained—it would take years, given the present cost of education at a cost sure to give sticker shock, and, since such programs have wait lists, the time for retraining would be even longer.
Additionally, a job at McDonalds and one at Countryside may count the same in the employment statistics but they’re very different in terms of income expectations. Not really a substitute.
Utter incompetence bred in the lofty chambers of higher education. In order for them to change course, they would have to first acknowledge that the foundations of their perceived political virtues have been built on nonexistent bedrock.
It seems to me that this the fault/ultimate end-point of Smith/Marxian/Fordist economic theory. The transition away from a manufacturing economy, seems like it requires far more abstract models for dealing with things like unemployment.
What would those be?
Noting that none of my profane critics have actually addressed the issue, I will only point out that in 2003, I wrote this about GW Bush:
I also note that Obama defenders are unable to write a comment without recourse to gross profanity, the hallmark of crude, illiterate and unread minds incapable of higher-order analysis. But I knew this about the Left already. Having no insights, they only know how to swear and thereby consider themselves effective debaters.
They have replaced, ” ‘Shut up,’ he explained,” with ” “Blank you,’ I reply,” and evidently consider it an improvement. Well, short little words are best for small, incapable minds. (And yet they wonder why no one takes them seriously…)
However, the question remains: Are Obama, et. al., merely incompetent or is their wreckage deliberate? Using the record since January 2009, can his defenders rebut not one but both possible assessments? For to rebut only one proves the other.
Or conversely, do you think that his economic “accomplishments” have been positive? And if so, why?
And the really, really hard question: Can you respond without cussing? (Personally, I think not, but surprise me, please).
“However, the question remains: Are Obama, et. al., merely incompetent or is their wreckage deliberate? Using the record since January 2009, can his defenders rebut not one but both possible assessments? For to rebut only one proves the other.”
Oh, stop it, for Christ’s sake. That’s not a serious question. It’s an ideological glandular secretion masquerading as a question. Let me ask you this, is there anything, anything at all, you would accept as evidence to the contrary vis-a-vis your belief in his alleged incompetence or his alleged evil designs on this country? And if so, what would that evidence be?
You cannot have an economic recovery if you are sending jobs overseas. You cannot have an economic recovery if you have added 2 billion cheap laborers into the free market system, and add to that automation, lean principles, and mergers and consolidation all at the same time. And you cannot have an economic recovery if you have used up every stimulus and you have some 57,000 factories closed and the loss of six million jobs over a decade.
Today, we see the republicans saying we need more in tax cuts when we already had a near decade of tax cuts. We see the democrats wanting more spending and we are running up deficits and debt. We see the fed who wants to print more money and to have low interest rates to create jobs by selling exports (however, they don’t account the fact that we lost 1/3 of our manufacturing). And we see each state passing legislation to have casinos for jobs.
We had a roughly 25 year cycle of low inflation, lower interest rates, and lower unemployment. And it gets harder to keep a cycle going if you have achieved your goal. And that cycle ended under Bush. In a world of our own, I suppose the best situation we had was when Clinton and Gingrich left office with the deficit down. Many of the problems of the day were manageable.
There were many mistakes in the past decade that has gotten us into this situation. The achievements under Clinton/Gingrich were ignored by Bush. And Bush created a “guns and butter” economics. The last “guns and butter” economics was with LBJ. That was Vietnam and the Great Society programs. In his case, he had money printed and Nixon, Ford, and Carter had to deal with inflation. Paul Volcker fixed it by raising interest rates. Bush did his “guns and butter” by using deficit spending. That is not paying for his wars, Medicare part D, and the tax cuts. And of course, as a consequence, we will suffer perhaps 20 years for his blunder. You cannot give tax cuts, send our money to Iraq, ignore the infrastructure, and send jobs overseas. Now, that is what I saw for eight years under Bush. In fact, I have never seen a more incompetent president in my lifetime. Obama might be lost in his ways, but so is everyone else. Bush “stayed the course” and he ran both the economy and two wars into the ground.
Now, before, I said “in a world of our own” and what we have ignored is globalization and the 2 billion cheap laborers. Clinton had signed the agreements and we did not see the disastrous results until Bush was in office. And yet today, these disastrous results are still ignored. Obama, and practically all the politicians on the left and right and including the fed, think we will produce jobs through exports. And that gets us to the point of my first two paragraphs. We also were told years ago that we were going to be a service society and that we did not need manufacturing. And over a decade, housing was targeted to produce jobs and home ownership. Now, recently, on C-span, there have been a couple “economists” who say we need more manufacturing. Well, I don’t know where these guys were years ago, when we were told the opposite. And, as I said, most everyone is still relying on free trade to work.
So, today, we are in a situation where democrats have spent and some of it has saved the country at least from not falling off the cliff. The republicans have spent their tax cuts for the “here and now” and it is mostly useless if we are sending jobs overseas. So everyone is still caught up with their ideologies and we have not done anything on globalization in which we should have done something over a decade ago. New technology has displaced workers and jobs have gone overseas.
I think we need a new round of thinking of how we move forward. And I have advocated that we need to invest in our country, in the people, and in the future. Of course this takes money and our country is broke. But that is where we are in the world. We need to reinvent and rebuild our country. And if we don’t do it, then someone else in the world will do it. China is growing at 8% a year. And if we see over 3% for one year out of a four year period, we would be lucky. And we need to do a lot better. We may see 3% growth, but that does not mean we will create jobs.
Yes we know:
Free trade bad (why it is bad on an international level, but not intra-national is not clear).
Automation and technological advancement is bad.
And fat and sloppy business are the way to prosperity.
Thanks for checking in Gerry.
Yes. This is the heart of the matter. The issue is the total debt load our economy is carrying, public AND private. Not just govt debt but all debt, financial, consumer, biz, and govt. Prior to the great recession, the total debt load had hit an all time high of 375% of GDP. Prior to that, the all time high was in 260% at the start of the great depression.
At the start of the downturn, govt debt was the lowest of the 4. The financial debt load was the highest (all those banks and hedge funds running 30 to 1 leverage), then consumer (70% of that is mortgages) and then biz (corporate bonds) and the lowest was govt.
The high debt load is the reason the economy has been so sluggish for the last 10 years or so. It has taken more and more debt to raise $1 of GDP. More and more of the debt was speculative (requiring the underlying asset to raise in value in order to pay off the debt) and less and less was productive ( defined as the income generated from what the debt built would pay off the loan by itself). This has caused more and more capital to be spent paying off unproductive debt which meant less capital available for productive investment.
And then you get a economic shock, the assets bought by the speculative debt dive in value (hedge funds with MBS, consumers and their real estate mortgages). Now there is no chance that debt will every be paid off and as Bush I would say, you are in deep do-do.
So we need to clear the debt, it is never going to be paid off anyway and the load of carrying this debt is slowly killing the economy so this is not a bad thing. But it DOES mean the banks will have to go out of business. The problem is so huge that clearing it up means the whole financial system will need to be torn down and re-built. Dangerous stuff, mismanage that and you WILL have a great depression. In fact, that is how they got the last one.
So instead of dealing with it, we have the govt transfer the debt to them. It keeps the banks open which is all the bankers care about and since they run the country now, it is all the politicians care about. Financial and consumers have deleveraged some but the govt has increased debt just as much so we have done nothing about the main problem. The debt is a bomb still waiting to go off.
So until the debt is cleared we will get at best anemic growth. To clear out the debt means we will have a deep recession, bigger than the last one. That is a given, the best case scenario. Botch the debt clear out and we will have the 2nd depression. Dont clear out the debt and there is a small chance you can keep the muddle through going for the 10 to 20 years it will need to pay off the current debt load. The bigger chance is sometime in that 10 to 20 years there is a shock to the system that forces the issue and you get the 2nd great depression anyway.
Since no pol will ever vote for a deep recession so they will do nothing, hoping to muddle through until some shock to the system forces the collapse. Probably a EU sovereign default which should kick off the CDS defaults which will kill the banks.
This down turn is probably just a down draft in the anemic, muddle along economy. Unless something big happens that takes out the banks (clearing out the bad debt in the process), we are not going to see the 2nd great depression. We are also not going to see any thing like the economic growth we had the last 50 years.
2 billion cheap laborers and not enough jobs to go around.
Misplaced workers and less jobs
Not at all, but we are right back to cheap labor, automation, lean principles, and mergers and consolidation. And with so many people out of work and misplaced, just what will create the jobs and what will create that upward movement?
Can you tell me what widget can be built in the USA and not in some other country?
Can you tell me how you support small business in a community that has factories closed?
Can you tell me, if you have tax cuts and people buy into the economy, what products we buy that are American made, so that we employ people? Since half the products are foreign made.
Interesting how the right keeps ignoring the problems. And as I said before. You may have a recovery but that may not translate into jobs.
Gerry, you might want to read up on comparative advantage. Even if Country A makes everything more efficiently than Country B, free trade between Country A and Country B benefits both countries.
No, this is faith based economics, ‘Free trade is always good no matter what’.
Well Hallelujah! We have arrived at the promise land. Cant you tell how good free trade is by how well the economy has performed the last 10 years? Look at our real GDP growth the last 10 years and just compare it to those bad, dark days of protectionism, the 50’s and 60’s. How the in the world did those people put food on the table between the protectionism, the high taxes, the high regulation. Must have be an economic hell to run a biz back then
Trade is great, as much as you can get, as long as it is either balanced or you are running a trade surplus. But a deficit means more money is leaving your country than is coming in (and dont quote me any Wall Street BS about capital flows makes up for it. That is just accounting, you run trade deficits, there will be capital flows to cover it. It does not make up for the loss of wealth)
It is not free trade vs protectionism (which is all any one every wants to talk about, I guess because it is such a straw man). It is the trade deficit.
I think as long as you have cheap labor and you are throwing the middle class under the bus, then “comparative advantage” is all hogwash. The economy is not what it is said to be by the economists and the globalists. And if “comparative advantage” was working, then why aren’t spending by the democrats working? Why are the tax cuts not working by the republicans? Why are lower interest rates not working? None of that is working. So, no model is working. You need to deal with globalization. And I have been saying this since 2004. You have just completely ignored the unemployed. And as long as we keep shipping jobs overseas, you cannot solve one problem. Not the deficit problem, not getting people back to work, not supporting cities and state, and not supporting any government program.
“Moron” is gross profanity???
The shoe fits Sensing. What else would you call someone who (apparently) seriously hypothesizes that the President is intent on purposely harming the country? The notion is so far removed from reality – so lost in the world of paranoid conspiracy theories, that it is not worth the time of any rational person to even address it. Yet I have chosen to respnd to you – you should take my response in the generous spirit in which it is offered. I don’t know if you were ever a rational human being, but if so, you have fallen into some bizarre black hole, and a well-aimed verbal dope-slap might be just the thing you need.
Who is this “they” that you refer to??? More paranoid conspiracy spewing? We all have names attached to our comments here – if you have an issue with anything I or someone else has said in response to you, then address us personally. We all speak for ourselves here, not for some vast “left” or “right”.
And please disabuse yourself of the notion that any of us have even attempted to debate with you. We give you a dope-slap ; that is all your tripe deserves.
In your mind, perhaps, and maybe in your fellow inmates at the asylum. I am sorry the dope slap did not work.
Wow. With a grasp of logic like that, no wonder you are totally at sea when it comes to understanding the world.
” It’s an ideological glandular secretion masquerading as a question. Let me ask you this…”
That’s pretty good, sam. Now let me ask YOU a question. Do you have an explanation for the pursuit of economic policies that are leading us nowhere? We are in a tough spot, and cheerleading for the guy responsible doesn’t really cut it. By the way, a thread is coming off your skirt….sis boom bah….
@Dave S wrote:
At this point I think its worth pointing out that Adam Smith, for example, would fundamentally disagree with this point (and did in Wealth of Nations… need to pull my copy to find the specific section, but this is tied up in the modern re-interpretation of the “invisible hand” that emerges at the U of C in the mid 20th century).
He wouldn’t say it’s good for both countries (and in fact didn’t). He’s said it’s good for specific parties within each country and bad for others. That said, he didn’t have a better solution for this situtation.
Marx then picks up on that tread to suggest that capitalism doesn’t hold national allegiances (at least in the long run). This is part of the reason he argued for the revolution — that capital would ultimately dissolve national boundaries and cause the exploited workers to realize that it isn’t nation-state versus nation-state but class versus class.
Personally, I’m not a Marxist, actually closer on most points to Smith… but I think that the claim that competitive advantages are best for both National interests is a pretty naive statement. The problem, of course, is I (and most folks) don’t have any workable counter proposals.
Well, Tano, thank you! As you vehemently deny that the administration is deliberately sabotaging the economy and standing of the United States in the world, your position can only be that it is trying to improve it. Ergo, you have argued strenuously in favor of their incompetence.
I rest my case.
your ‘point’ was nonsensical accusations based on ‘bullshite’ talking points aimed at simply denigrating a politician you loathe. you can dress it up with nice prose as much as you weant, but its still bullshite.
sorry for being profane.
no, don, were not all ‘leftists’. we would simply like to have a legitimate discussion based in, you know, reality.
Sorry, but it is time for another dope slap.
I won’t characterize you personally, but I will say that your logic is of the type that one finds in the utterances of complete idiots.
I suspect that you fancy yourself to be something higher than that, so this is just a friendly note to inform you how you appear to others.
Yes, the administration is trying to improve things. I have not argued strenuously that they are incompetent, as you well know. To try to claim that I did, when I said no such thing is the mark of a desperate man. And to claim that by so mischaracterizing my words, you have established your case would be laughable, if it were not so mean to laugh at people in your condition.
Maybe you don’t get out very much and talk to real people – is that the problem here? Because you seem quite comfortable with this dynamic whereby you lay out some bizarro-world scenario, with a few alternatives built in, then claim that others have argued strenuously for the alternative that they ridiculed the least. As if the only possibilities in the world are the two that you make up.
Here is a hint. If you ever want to engage in a real conversation with real people, then approach them with respect, ask for their thoughts and share your own, once you make the effort to see where they are coming from. You will find that the world is far more complicated, and interesting, than the nutty alternatives that you come up with yourself.
First, congratz on having identified the real problems that accelerated during the Bush Administration. I expect that, barring any executive turn arounds (which would only happen in a second term), you’ve made a somewhat accurate prediction.
Beyond that, especially in terms of your analysis of the Obama administration, you might be right in regards to the ultimate consequences, but that doesn’t mean you’re rational for getting to that answer is correct.
Like most conspiracy theorists, you’ve challenged us to prove an unprovable — essentially you’ve asked us to either prove or disprove the existence of God. There’s no way we can sway you in your interpretation of “the facts” — but that doesn’t necessarily make you right.
And you’ve yet to post anything that sways the majority of us from our interpretation of “the facts.” And while that doesn’t necessarily make us correct, at somepoint you should ask if everyone is saying “X” and I am saying “Y” does that mean:
a. We are all sheep (most likely your answer) or “in on it”
b. Or might my (or rather your) explanation be more subjective than objective.
Put a different way, most kids can tell you the sky is blue — a lot less of them can correctly explain why its blue.
@Donald… one other question, if we assume good faith on all people’s parts… can you think of anyone who is currently in office who meets your formula of “competence?”
Yes, there is tremendous pressure to “fix the problem” and that fix is seen as getting us back to something like where we were in the last 2-4 years or so. But the last 2 – 4 years were in the bubble so they aren’t really attainable.
Robert Higgs noted years ago that during a crisis governments often respond by expanding and becoming more powerful, then using that power and the crisis to do things that it otherwise could not. However, these types of shifts in policy…a shift in regimes, leads to greater uncertainty which can slow recovery from the initial crisis, especially in the economic sphere. His book Depression, War and Cold War look at this issue.
We don’t need to posit maliciousness on the part of Obama as Sensing is doing. Obama isn’t doing anything that Bush either didn’t start or wasn’t considering. Granted there might have been differences in approach, but cutting taxes massively would have likely landed us in a similar mess as increasing spending massively. Basically a ginormous debt and an uncertain economic future.
Or to put it differently, people would have been clamoring for something….anything to be done about this problem. So elected officials would try to do something, even if it was not a good idea. And if doesn’t work, don’t shift gears, double down. Never admit you were wrong or made a mistake. Add on that the state these policies are trying to return us to are not at all attainable that only adds to the uncertainty because they are doomed to failure. Politicians only deal with the current. Current industries, current special interest groups, and so forth. They don’t represent very well the future. Future industries or markets that can supply growth. Why not? We don’t know what they are, if you do, lucky you as you’ll have a bit of jump on the rest of us and can make alot of money.
Your problem is this:
I can’t imagine where we will get economic growth, so therefore we will never get economic growth.
Problem is that time and again, this has proven to not be the case. While unemployed “resources”–i.e. people, capital, and such–are not good for the short run they also create opportunities for future economic growth. Somebody comes up with a novel idea and goes and uses those unemployed resources to see if it will turn a profit.
I know it is rather uncertain and that can make it scary, but no economic down turn has lasted forever. Policies to try and “turn back the clock” are doomed to failure.
And as for your personal issue about factories, get over it. Economies, like the living organisms that comprise them, evolve. One hundred and fifty years or so ago we had a largely agricultural based economy. Then the industrial revolution occurred and people left the farms for the cities to work in your vaunted factories. I’m sure a good historian could find pleas to stop such a horrible migration and change to our country that would sound very much like your posts.
Now we have automation that appears very much to be doing the same thing to manufacturing. What will replace it? I don’t know, but trying to stop it is like trying to hold back the tides.
That’s the thing. You don’t know. So we close some 57,000 factories and we have nothing to replace them. And to wait, it will take decades. In the meantime we have deficits and debt, China is growing at 8% and will surpass us in a few years, and we will add more government because you cannot throw people out in the street. Yeah, problem solved.
The fact remains is that we have never had a situation like this with globalization and we never prepared for it. Normally, in private industry, you just go broke. Because, if you don’t know how to compete with you competitor, you will fold up. Our country has to compete with China and other countries. Of course the quickest remedy is to lower wages to a dollar to five dollars an hour. But no one wants to say that. As it is, we are we have lost the upward movement and we are losing the middle class.
This is not a normal recession, it is proportions that we have never seen. As far as an industrial revolution and the change in farming-it was gradual, and you had upward movement as there was other places to go to. We closed 57,000 factories with no place to go to.
All of this, 2 billion cheap laborers, automation, lean principles, and mergers and consolidation has hit us all at the same time. So, I repeat, we have no upward movement and the money is spent and all the stimulus everyone is doing-democrats spending and deficits, republicans-tax cuts and deficits, the fed printing money-low dollar and inflation, states-casinos, none of this is doing anything. It is a waste of time, money, and we are still throwing the middle class under the bus.
I know I have posted this before. It will not solve all the problems. It will not replace the factories that are closed. But for once, can we invest in our country, in our people, and in the future instead of the same failed ideologies? If we lived in a world of our own, then maybe an ideology would work, but we have not faced this before and it is time we invest in our country. Everyone is acting like we are benefitting from “free trade” and it has not worked, yet. The economists and globalists keep changing their tune. Before they said it will be a service society. Today, they are saying we need manufacturing. They said a little upheaval, and it is more than that. They say Wal Mart jobs are better than manufacturing jobs. They are nuts.
Anyway, here is what we have to do to invest in our country. Not perfect, but it is better than sitting back and doing nothing.
1. Invest in your country: That is energy independence for security and jobs. Also a new air traffic control system that will save 12% on fuel. The savings to the airlines can go to build new aircraft. A nationwide high speed internet system. Perhaps high speed rail within reason.
2. Invest in your people: That is mandatory vocational training. We live in a globalized world and you can no longer rely on factories. We have to be an educated society.
3. Invest in the future: Federal research grants to be given to universities and business to bring out new technologies. Today there are no new jobs to go to for those unemployed. You need new areas of growth. No playing games with embryonic stem cell research.
4. Fix the antitrust laws that Reagan relaxed. Monopolies and consolidations destroyed jobs.
5. Consider an “American job elimination tax” on companies that move out of the country. These companies do not pay middle class wages, healthcare, pensions, social security, or city and state taxes.
6. Get away from failed ideology. We saw it for 8 years. Tax cuts was used as an ideology. It did not prevent recessions. And did not create prosperity. You still have to solve problems. Ideology does not solve problems.
7. Supporting small business sounds nice and it is heard in Washington, but it does not work in my community as the big business left. That means you cannot have small business where factories have closed.
8. We are losing the middle class. We cannot compete with 2 billion cheap laborers in the world that want our jobs. There are not enough jobs to go around. Competition is good, but it can be harmful also. All we are doing in this country is build the same business environment so that we can knock the other guy out. A person loses his job and has no place to go to. And the reason is that we did not invest in our country, in our people, and in the future.
9. Have commissions to cut government spending. It seems to be the only approach to doing this. Obviously, one side or the other will complain, but something has to be done now. Actually, Obama had this but did not follow through.
10. Government appointed jobs and organizations need to be slimmed down. Every 50 to 60 years we need to go through this. There are too many secretaries, deputy-secretaries, under-secretaries, and under-under-secretaries. Information gets loss through the process and government becomes ineffective. The last time this was done was with the Hoover Commission in the late 40’s.
11. Pour money into new drugs and preliminary medical science. Drugs are becoming less resistant to diseases. And potential super bugs are coming.
12. Fix the infrastructure. It is the reflection of our country and to the rest of the world.
13 And if we have not kept up with it, every school should have physical education. Also wash your hands when you come home to prevent viruses and less trips to the doctor. And as we see so often, stop throwing pop cans, etc. outside the car.
14 We need to slow down urban sprawl. Inner cities are being abandoned. As people leave there is no money left to support the inner city. This maybe controversial to some, but at some point we will have to deal with the problem. Sprawl also takes away from farms and spreads cities out too far in a time when you have empty buildings. We cannot have cities in decay. And cities in decay cannot create jobs and small business.
15.Create an hour period each school day for freshmen high school students to study any subject for a month (9 months-9 subjects) that they would have not normally have taken. It may be the hardest of subjects in which students would have been afraid in failing like algebra, geometry, calculus, languages, music, or any other subject including learning sports, like golf, football, baseball, or tennis as examples. There are many retired people who would like to teach what they learned in life. There could be a test at the end of the month, but this would only to see if the student learned anything in that subject and would not count against him in his grade average. The point is to have students learn as much as they can on different subjects and to see if they like a certain subject that they did not anticipate.
16. The Bush tax cuts is spent money. It was for the “here and now” and did nothing for our future. The tax cuts did not trickle down as our jobs went overseas. It would have been better to revitalize our cities and towns across America. I look at my town with closed factories and a downtown with empty 100 year old buildings. It is a disgrace as China is building for the 21st and 22nd century. While you will have some white elephants, the 800 billion dollar tax cuts was the biggest white elephant of all and we have nothing to show for it. Having revitalized city centers means support for small business and would give a renewed enthusiasm for our country.
17. And finally, I don’t think our electoral political system works anymore. Every candidate is bought off and it takes huge amounts of money to run a campaign. I would suggest a management team or a turn around specialist to be appointed as president for a couple of years or more. And there would be a board of directors who he answers to and for the middle class. That does not mean that we do not support the rich or free enterprise, it is a matter of working with them to see what works.The parties are riddled with failed ideologies. We can do better that what we have.
To add, I am not saying much more than what Fareed Zakaria is saying.
I rest my case.
OK. Now you can go back to barking at the moon.
Making absurd assertions and defying anyone to disprove them is not exactly a cogent argument.
Yes, I don’t know and I’m fine with that. Why? Because time and time again these kinds of things have happened and it eventually works out. Basically the creative-destruction process. Only problem I see here is the government one thwarting this process and trying to cling to the past.
As for China, so they surpass us? Do I see some fear here? Are you worried about the Chinese menace? Or that America/Americans wont be #1?
As for government growth, I agree that is a problem, but I don’t see a way to stop it. Americans want it. And when a crisis hits they want it even more.
I’m not going to respond to all your points as there are just too many of them. But suffice it to say I disagree with most of them. And as for your fear of cheap labor, cheap labor is not everything. Sure its great if you are building a wall or digging a ditch, but for other products have a trained and skilled work force is optimal….even if it costs more. Stop treating labor as an undifferentiated product.
Well that is your problem. An otherwise fertile imagination hobbled by forcing it through the filter of ideology. Then submit the whole thing to repeated bouts of confirmation bias.
Go back to step one. Disabuse yourself of the silly notion that anyone is trying to cling to the past. If your car breaks down, do you instantly trash it and buy a new one? Or do you try to repair it? Does repairing it mean you are trying to “cling to the past”? No. Sometimes repairing the car, or instituting various fixes and reforms to some other type of system, is simply the rational option going forward.
You seem to dismiss that right off the bat. It comes across as basic prejudice – a prejudgement, most likely based on ideology.
Yes, I can’t remember in my lifetime when we closed so many factories and there are no jobs to replace them. Never mind we can’t get out of a recession and create jobs, never mind that we have deficits and debt and only 45% of the people pay taxes, never mind that people will be more dependent on government, and never mind that cities and states relies on industry and employed people. Evidently, we don’t have any problems or don’t want to fix them. And just listening to FOX, they are complaining we can’t create jobs.
There is no clinging to the past. It is about moving forward. Clinging to failed ideology and “stay the course” is a failure.
I don’t fear China, I fear our lack of investment in our country, in our people, and in the future. China will do what they do. They have the advantage of cheap labor and with all those profits, they are rebuilding their country. We sit with failed ideology, an infrastructure in disrepair, and political parties still sitting in the past.
That’s the problem with those on the right. Thinking taxes their brains too much.
In the meantime, we will watch the foolishness. The democrats will spend more, the republicans will ignore everything but will want more tax cuts, the fed will print the money and have a low dollar, and the states will want more casinos. And all the economists will be praising free trade and the loss of jobs. Again, all to hilarious.
Okay, this is my last word on this. To review my position: after 2-1/2 years in office, Obama’s record can be and should be assessed based on its results. The results are almost uniformly negative, of which only some examples are:
1. An illegal war in Libya
2. He promised early that unemployment would not rise above over 8%, but it reached more than 10% and has not dropped as far as 8% since then, and is rising now.
3. Unemployment among minorities is much higher than the general rate, more than 16% among black Americans, for example, higher than at any time in the Bush administration.
4. Home prices in the United States have sunk to their lowest levels since 2002 and continue to drop (falling in 19 of the 20 most major markets).
5. There has also been a steep slowdown in the manufacturing sector – slowest growth in that sector since September 2009.
6. Robert Reich wrote today in The Financial Times, “The US economy was supposed to be in bloom by late spring, but it is hardly growing at all. Expectations for second-quarter growth are not much better than the measly 1.8 per cent annualised rate of the first quarter. That is not nearly fast enough to reduce America’s ferociously high level of unemployment.” And that after Obama’s term is more than half done.
7. In the first 19 months of the Obama administration, the federal debt held by the public increased by $2.5260 trillion, which is more than the cumulative total of the national debt held by the public that was amassed by all U.S. presidents from George Washington through Ronald Reagan.
8. Jobs created in 2010 were concentrated in mid-wage and lower-wage industries. In 2008-2009, net job losses affected every wage or pay level, high to low. But jobs created last year were disproportionately found in businesses with median wages below $15 per hour.
9. The GDP actually shrank by almost 2% annualized in the first quarter of this year when using the USG’s the government’s own estimate of inflation (deflater figure) for Q1 (5.7%).
10. The WaPo reports today, “The economic recovery is faltering, and Washington is running out of ways to get it back on track.”
11. More Americans are on food stamps today than at any time in American history.
12. Consumer confidence measures are lower now than in at least 25 years.
13. The president’s latest budget proposal was crushed in the House (87 Democrats voting against) and buried in the Senate, 97-0.
I could go on, but you get the idea. The questions are these:
Are these results unintended by the administration? That is, did Obama et. al. set out to stop unemployment from rising? Did they try to create conditions under which jobs added would be higher-paying jobs? Did they want to reduce the number of Americans receiving government assistance such as food stamps? Did they want to increase overall American manufacturing activity? Did they want to keep minority unemployment low?
If your answer to these questions is “yes” (that these results are unintended) then you are tacitly admitting that this administration is incompetent, because they have accomplished exactly the opposite of what they set out to do and more than halfway through their term show no signs of course correction.
Then we come to a set of somewhat different questions. These relate to actions that the administration indubitably intended to do, but whose effects are questionable at the least:
Did Obama intend to more than double the amount of federal debt? Yes, of course, it’s not possible to borrow that much money unintentionally. But this debt has badly weakened the dollar, made the country financially beholden to China and a handful of other debt financiers and helped to spike the price of energy for American consumers and businesses, as well as caused other major economies to actively discuss abandoning the dollar as the world benchmark. Were these effects also intentional?
The administration shoveled money into the American banks to “stimulate” the economy but it did not. Particularly, the plan included revitalizing the housing market with stimulus money, but the housing market is now worse than ever. Was this effect unintentional?
Again, these actions by the administration were intentional, but with almost-uniformly-negative results. Yet again, no evidence of course correction. Does this constitute ineptitude on the administration’s part? If not, what does it evidence?
Defenders of the president are faced with two unattractive choices:
1. The president genuinely wanted to reverse the recession that began in 2008, and genuinely desires for Americans to go back to work in the millions at high-paying jobs. He really does want to reduce the number of Americans on welfare of some kind. He truly does want to manufacturing sector to recover significantly, even taking into account that American manufacturing has been declining for a few decades. He does want a stronger dollar and lower-cost energy. He does want budgetary discipline (despite a budget proposal that both parties in Congress stomped on). But none of these goals are being reached, quite the opposite in fact. So Obama’s heart is in the right place but he simply does not know how to reach his goals; in fact he keeps trying the same things that have already failed. Therefore, the president is incompetent in his office even though his desires and goals are admirable.
2. The results of this president’s administration are actually desirable on the whole. A weaker dollar, greatly higher energy costs, continuing high unemployment, a depressed housing and manufacturing economy, enormous deficits, massively-increased federal debt and record numbers of Americans on welfare are actually desirable things. So the state of the economy, both domestically and internationally, accords to what the president is trying to do.
There is no third choice to defend this administration. He has either tried and failed and learned no lessons or he is doing (mostly, anyway) what he set out to do.
And so far not one of you Obama advocates on this comment thread are willing to address these facts. Not one of you is able to defend this president’s record based on the record. Instead you attack me for asking the questions. Fine, I’m a grown man and can take it. As for you: Either you have to admit that Obama’s record is dismal or you must defend the notion that his record is good and salutary. And in either case, the question is why you think so.
And that is precisely the explanation you cannot bring yourself to offer.
PS – Let me save some of you the trouble of responding. I’ll respond on your behalf:
Sensing, you right-wing moron, all you rate is a dope slap for being so stupid.
Sensing, I bet you’re a racist, too. And you listen to Limbaugh.
Where did you get your crap? Fox News? I thought so.
Sensing, where do you get this *m!):$&? Go crawl back in your hole.
Just go bark at the moon some more.
More utterance from a total idiot.
Etc. See, it’s easy to think and write like a liberal!
End note: My own assessment is that the actual object of this president is to increase the power and control of the government at the expense of the people, a trend that he certainly did not start but which he has put into higher speed than ever. (And so did GWB. The intended purpose of Bush’s TARP was to halt the crash, but its effect was to grow government.) As for QE1 and QE2 and other measures taken by the Obama administration, the intended purpose was mostly to cement government control and influence over markets and banks by making the administration Wall Steet’s indispensable partner (so saith Cornel West, remember), a level of crony capitalism undreamed of by any Republican, in which Wall Street is a willing partner since it enhances their monopolism. The massive expansion of the federal government and of public dependence on government? Those are considered good things in and of themselves. Obama has said in many speeches that working for the government is more noble than for private business. Not only has the number of federal employees skyrocketed since January 2009, so have their salaries, such that, as OTB recently reported, more than 77,000 federal employees make more than the governors of the states in which they live. This is by design and is seen as a good thing in itself. Obama said bluntly during his campaign that the government should spread the wealth around. This is done by direct payments and by funneling government contracts to political supporters, the purpose of his recent executive order requiring bidders to report minute details of all political contributions they have made. He said bluntly during the campaign that energy costs would have to rise and his energy secretary said that we should pay as much for gasoline as Europeans do. This administration is, at best, indifferent to rising energy costs and their effects on the economy and more likely desires higher energy costs to enable crony partnerships with “green” energy concerns.
I believe that Obama’s primary goal is increasing the power and control of the government. He sees that as good and desirable in its own right, justified in itself and not “for” some other reason. If he could do that by driving to 4 percent employment, a rising GDP, strengthening the dollar, balancing the budget, reducing energy costs, revitalizing the housing market, etc., he would. But if it takes high unemployment, a weakened dollar, inflation, high energy costs, an illegal war, massive federal debt, etc. then he will do that, too.
Gerry I have no clue how many family farms ceased to exist during the industrial revolution but I bet it was just as big. Please, try to look outside your own range of experience.
Does it not occur to you that moving forward might entail not having nearly as many factories as we once did? Just like don’t have as many farms, at least in terms of absolute numbers. I guess I’d be worried if manufacturing goods were shrinking as a part of our economy, but it isn’t so I’m not.
This has nothing to do with how many factories close down. Investment in our country has to do with our low savings rate. Our low savings rate is tied to our tax structures, Medicare, Medicaid, and other things that discourage savings.
I’m not “on the right” and I looked over your enumerated points. I just didn’t want to respond to each and everyone.
“on life support” – not a bad description of the economy that Obama inherited.
The Bush admin basically said to business “fellas, make money. we don’t care how you do it”. That worked out well…
I was going to write a lot on the subject, but I think it is a waste of my time and yours.
I think Fareed Zakaria is right on the button and I have gone beyond what he has said. We have seen years of neglect, ignorance, and arrogance and it continues on. Yes the world changes, but we have not changed with it. All we did is throw people out of work and there is no place for them to go to. We did not prepare for this, no more than preparing for a terrorist attack, or being energy independent.
The U.S. government needs to focus very hard on the problem of creating jobs. U.S. officials need to recognize that we are in a unique situation where growth alone is not producing jobs. We can no longer say, “We’ll grow and somehow we’ll magically dispose of all our problems.”
What we really need is a job creation policy. My cover story for TIME Magazine tries to detail exactly what such a policy should look like. Broadly speaking, the U.S. needs to hit job creation at five different levels.
1. Revitalize manufacturing in this country. Germany offers a powerful example of how to do this. They have managed to maintain high-end manufacturing in their country.
2. Focus on retraining workers. We have a generation of people whose skills are not going to provide them with employment in the current global economy.
3. Focus on the growth industries like entertainment, healthcare and tourism. One of the simplest things to do in life is double down on things that are succeeding.
4. Promote small business. Small business creates most of the new jobs in this country. The single biggest thing the U.S. government could do to help small businesses is allow more skilled immigrants into the country.
We train the world’s best and brightest – often at public expense since they go to state universities or they get grants from the U.S. government – and then just at the point at which they’re about to start filing patents, making inventions, creating jobs and paying taxes, we kick them out of the country. It’s an incredibly counterproductive policy.
5. Invest in infrastructure today. The crisis is now and we know that a large number of unemployed people in America come out of the construction and housing industry. We also know we have a huge crisis in infrastructure. We have bridges falling down, highways that need repair and airports that need building. We’ve got to come up with some way to finance infrastructure that will allow us to employ hundreds of thousands, if not millions of American workers.
There are ways to do this that are not as costly to the public. We can develop infrastructure banks and forge public-private partnerships. America is one of the few countries in the world that doesn’t allow the private sector to participate in building and financing public infrastructure. Why shouldn’t we open it up so that we can get the capital we need, which will in turn create more jobs?
In short, we need to do all of these things because America faces a huge structural problem – a jobless recovery – and no single action will be enough to help American workers recover and prosper.
Okay, couldn’t resist:
Yes, we have known this for at least a year or two. The factories are closed in my town and people are displaced with what is available, so they drop out of the job market. There are less jobs and less classification of jobs. It means more spending on unemployment insurance, welfare, less spending in the economy, and less in taxes paid into the system.