Rolling US Economy Into The Shitbin Thread

also just words but booms are good, bubbles are bad. most booms aren't bubbles http://www.nber.org/digest/jan16/w21693.html

'boom' in the sense of 'boom and bust' so yes i meant 'bubble' FINE

click that link i posted and read the first like 100 words or just look at this picture; not every boom goes bust and very few busts wipe out the gains of the boom

http://www.nber.org/digest/jan16/Bubbles.jpg

is that graph about the stock market?

yeah

obviously i agree with krugman and baker, but it's been a long time since 2008. even krugman subtly shifted from 'we need stimulus NOW' to 'we did need stimulus then'

we need stimulus whenever demand is depressed and money is cheap, sheesh krugman keep up

contractionary monetary and fiscal policies are still contractionary though
it seems fairly clear that austerity is pretty useless and again, many many many opportunities exist for investment in infrastructure and in stability i.e. moar social security

for example how the hell is the DC metro having to consider a fare increase to cover costs? DC metro should be planning new lines and adding fancy new rolling stock, and Amtrak should be averaging 100mph between here and Boston, shit is ridiculous

fiscal policy isn't contractionary right now, last budget blew a gasket in the deficit (including some good stuff like extending eitc). contractionary isn't just not-stimulus you have to like, contract. i suspect demand is still depressed but the further and further out we go the harder it is to separate long term and short term.

the argument about whethr or not to invest in infrastructure is a combo of cyclical (do it when it's cheap and other resources are underutilized) and more long term cost-benefit stuff. seems obvious to me that now and last five years is an extremely good time, and it's super frustrating.

there was a nice NYT piece on this before the holidays: http://www.nytimes.com/2015/12/18/business/dealbook/a-missed-opportunity-of-ultra-cheap-money.html

Unemployment filings were at a 6-month high last week.

sssshhhhhhhhhhhhhhhh

http://fortune.com/silicon-valley-tech-ipo-market/

been trying to follow alphaville's discussion of capital-flows reversing but its pretty impenetrable to me.

who are these frightful people good god

lol

https://twitter.com/ObsoleteDogma/status/691452952939204608

tee hee

https://www.google.com/finance?q=NYSE%3ADATA%2C+NYSE%3ALNKD&ei=sde0VvKAOcnBe-iwiZAN

weird - is that just a coincidence?

i feel like it's two not amazing earnings reports plus the SV bubble

Yeah looks like a lot of big tech stocks are taking sizeable hits today -- FB, TWTR, YELP, although nothing close to that.

http://www.theguardian.com/business/2016/feb/10/deutsche-bank-germany-financial-colossus-stumbles

ah don't worry they'll be fine

https://twitter.com/ddayen/status/697431928551526400

WE HAVE TO CONTROL THE DEFICIT, PEOPLE, IT IS A MORAL OBLIGATION TO THE NEXT GENERATION BECAUSE THE BOND WOLVES ARE AT THE DOOR AND INFLATION - wait 10-year- bonds are yielding 1.7% err never mind

http://fivethirtyeight.com/features/what-is-the-real-unemployment-rate/

The “labor force participation rate” — the share of adults who are either working or actively looking for work — is near a three-decade low, which might seem to suggest that there are lots of people waiting to return to the job market. But a big part of that decline is due to the retirement of the baby boom generation. And even controlling for the aging population, labor participation was falling long before the recession, for reasons that are only partly understood.

The White House, in its report, estimates that the combination of demographics (“aging trends” in the chart below) and other long-term trends (“residual”) together account for the vast majority of the decline in labor force participation since 2009. Only the small sliver in the middle of the chart is due to the state of the economy. In the Obama administration’s estimation, there are about half a million Americans who should be in the labor force but aren’t. If they were counted as unemployed, the jobless rate would be about 5.2 percent, only a few ticks higher than the official rate.

The White House, of course, has an incentive to make the economy look as good as possible. So as a check on their number, I built my own simple model (an updated version of the one I used in this story a few years ago) to estimate how many people are still missing from the official unemployment rate. (I’ll put the details in a footnote,1 but essentially I just assumed that prerecession trends held steady.) My model estimates there are as many as 1.5 million people who should be included in the unemployment rate. That’s triple the White House’s estimate, but it still implies the “real” unemployment rate is down to 5.8 percent.

The difference between 4.9 percent and 5.8 percent is small but significant. Many economists consider 5 percent to be a rough long-term floor for the unemployment rate (other economists think the floor is lower); unemployment can’t drop much below that threshold without triggering inflation. But if there are really hundreds of thousands or even millions of willing workers just waiting to get back into the labor market, that means there is room for job growth to continue without driving up inflation. The participation rate has edged up in recent months, suggesting that the stronger economy is drawing workers off the sidelines. Next week’s jobs report will give the latest sign of whether that trend is continuing.

WHAT DOES BREXIT MEAN FOR THE US GAZ COOMBES

It means stock up on your Amazon UK purchases now!

http://www.theatlantic.com/business/archive/2016/09/the-free-time-paradox-in-america/499826/

Erik Hurst, an economist at the University of Chicago, was delivering a speech at the Booth School of Business this June about the rise in leisure among young men who didn’t go to college. He told students that one “staggering” statistic stood above the rest. "In 2015, 22 percent of lower-skilled men [those without a college degree] aged 21 to 30 had not worked at all during the prior twelve months,” he said.

"Think about that for a second,” he went on. Twentysomething male high-school grads used to be the most dependable working cohort in America. Today one in five are now essentially idle. The employment rate of this group has fallen 10 percentage points just this century, and it has triggered a cultural, economic, and social decline. "These younger, lower-skilled men are now less likely to work, less likely to marry, and more likely to live with parents or close relatives,” he said.

So, what are are these young, non-working men doing with their time? Three quarters of their additional leisure time is spent with video games, Hurst’s research has shown. And these young men are happy—or, at least, they self-report higher satisfaction than this age group used to, even when its employment rate was 10 percentage points higher.

The Atlantic is so bad

happier playing video games than working. some invaluable research there.

It's like everyone is so acclimated to this "counterintuitive" freakonomics way of thinking about things now that they analyze obvious things backwards. The economy is not providing good employment opportunities to people in a certain category is like 95% of what's important here, the video games are peripheral. Plus you get the classic Chicago school ruling-class-pseudomorality-disguised-as-economics in statements like "The rich were meant to have the most leisure time. The working poor were meant to have the least. The opposite is happening," and "It is a relief to know that one can be poor, young, and unemployed, and yet fairly content with life; indeed, one of the hallmarks of a decent society is that it can make even poverty bearable," and "Elite men in the U.S. are the world’s chief workaholics. They work longer hours than poorer men in the U.S. and rich men in other advanced countries. In the last generation, they have reduced their leisure time by more than any other demographic. As the economist Robert Frank wrote, “building wealth to them is a creative process, and the closest thing they have to fun.”

I'd love to see a study like this that looks at shut-ins who spend all their time posting on internet forums

didn't read the rest of the article there's nothing freakonomics about that quote, the guy is just reporting stats from time-use surveys, interpret them how you wish

"The rich were meant to have the most leisure time. The working poor were meant to have the least. The opposite is happening," and "It is a relief to know that one can be poor, young, and unemployed, and yet fairly content with life; indeed, one of the hallmarks of a decent society is that it can make even poverty bearable," and "Elite men in the U.S. are the world’s chief workaholics. They work longer hours than poorer men in the U.S. and rich men in other advanced countries. In the last generation, they have reduced their leisure time by more than any other demographic. As the economist Robert Frank wrote, “building wealth to them is a creative process, and the closest thing they have to fun.”

lmao i thought u made these quotes up until i read this stupid article

"The rich were meant to have the most leisure time. The working poor were meant to have the least. The opposite is happening,"

when the author says 'meant to have', they mean according to "Chicago-school" assumptions about how people choose their leisure. How is the opposite of the chicago school models' prediction also chicago school?

Yes, and Chicago school always has an implicit and unacknowledged moral dimension, so the word choice was at least amusing.

the atlantic is awful now

"We thought the rich would get the most leisure time and the poor would get the least. But that's not happening, because shiftless poors, especially blacks, would rather live in their parents' basements and play video games, while elite MEN take pride in working long, grueling hours to power the economy that pulls everyone else along. One partial reason might be the incentive structure of jobs that aren't as much fun as video games while not providing enough financial incentive to make up the fun differential. But that's not the whole story."

i say if the Elite men can only have fun through "building wealth", that counts as leisure time.

That's part of the point and the author makes it explicitly in the piece; skilled work is becoming more 'rewarding' and also has more leisure leaking into it (fairly certain that at the very least Hurting, marcos and I all reading this thread from work) while unskilled work has stayed as grueling and repetitive or gotten even moreso. also Hurting he explicitly says black men are discriminated against by retail employers, it's unclear that just having less Keynesian unemployment would fix this

unrelated but interesting that this of all threads was bumped the day after that census report

i can't speak about an entire demographic, but i know a few men who work in chicago, are well-off, they really are workaholics, and, i swear to you, they actually love working and think it is so creative. the problem with these dudes is that this is all they want and can talk about. i go to dinner with them and they love talking business and most of their knowledge/expertise is in that area they work in

That's most of DC. "What do you do?" isn't so much because it's how we size each other up, in my experience. It's a significant part of our identity. In that sense, it also effectively substitutes for "what things do you care about?" in a lot of ways.

Flopson otm btw that is kinda funny

That's most of DC. "What do you do?"

Hasn't this cliché about a certain class of people in DC existed for a long time now.

Meanwhile is Erik Hurst, an economist at the University of Chicago reference above, sure that the unemployed black men of DC are asking one another what video games they are playing? I hope someone is giving Hurst grief to his face

unrelated but interesting that this of all threads was bumped the day after that census report

I don't know, maybe it's not so weird. As Morbs (Morbs!) quipped:

@JimPethokoukis
"This is the first statistically significant annual increase [in real median household income] since 2007" - IHS Global

and man, that one sure led to memorable things

I've come to have this cynical, knee-jerk reaction to news like this that if things are actually improving for the little guy, the shit must be ready to hit the fan.

I think you guys are reading some malicious intent into Erik Hurst that's not there, imo. also Chicago booth is not Chicago Econ, and Chicago econ is not what it was in the 70's and 80's. also this is pretty atheoretical statistical research, you can disagree with his hypothesis but the basic facts are just like averages from surveys

"We thought the rich would get the most leisure time and the poor would get the least. But that's not happening, because shiftless poors, especially blacks, would rather live in their parents' basements and play video games, while elite MEN take pride in working long, grueling hours to power the economy that pulls everyone else along. One partial reason might be the incentive structure of jobs that aren't as much fun as video games while not providing enough financial incentive to make up the fun differential. But that's not the whole story."

This seems to read an absurd amount of malice into the text

let's say the Atlantic article was just the following bullet points

- long term unemployment among low-skilled men has increased from almost zero to 20%
- long-term unemployed report surprisingly high subjective well being in surveys, and in time use surveys report spending a lot of time playing videogames
- high-skilled men reduced leisure more than any other demographic in the last 20 years

would you be mad at that? I think you're reading a malicious interpretation into the stats that's I don't see

Like i don't think there is an implied moral judgment on the long-term unemployed (even if some right wing economists have m/l explicitly made such a judgment: Tyler Cowen this week said that "Maybe employers just aren't that keen to hire those males who prefer to live at home, watch porn and not get married. Is that more of a personal failure on the part of the worker than a market failure?" and got swiftly and justly roasted for it), imo it's completely a failure of government and society that they are unemployed in the first place. but it seems paradoxical from a social science perspective that they report high life satisfaction; we all imagine the stigma related to unemployment, stuff about 'work gives you purpose' would all weigh in the other direction. it's a statistic so obvs there are a lot of miserable unemployed in there, but it's interesting the average would go in the direction counter to our inuition, no?

isnt this a positive development for the 'end of work'? keep these unemployed young men sedated with their video games since the robots took all their jerbs!