Rolling US Economy Into The Shitbin Thread

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!

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 can't help but feel the same way. I think it's the imperative of pattern recognition based on generalizing from the known to the unknown, even when the thing I'm observing is complex far beyond my ability to know or understand its patterns.

I can't exactly come up with a logical justification of that reaction, but it just feels like our economy is so stacked to send all the benefits to the top that it's only at the peak of the bubble that you get a bit of trickle-down, and then the whole thing collapses.

https://fred.stlouisfed.org/graph/fredgraph.png?g=79q6

median income increased for 6 years from the trough of 1993 to peak in 1999, then increased for four years from 2004 to 2007, and increased for at least 5 years from 1984 to 1989. we probably have a couple years of growth ahead of us (fingers crossed)

As far as the pattern of 'things getting good just presage things being about to get bad', that's a tautology in any cyclical thing. You may as well say, the sun rising is just a sign that it's about to get dark soon

Honestly before Monday I had begun to suspect we would never see median income increase again

Are there any sector by sector stats (people in retail earning X% more, people in manual occupations earning Y% more) or is it bare household income across salary bands? I'm slightly suspicious of median household income as an indicator on its own, particularly in the lower bands, in the context of the current shift towards supplementing core income with casualised labour (driving for Uber in evenings and at weekends, etc).

had a quick look and couldn't find anything but here is the actual report: http://www.census.gov/library/publications/2016/demo/p60-256.html

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!

www.ilxor.com/ILX/ThreadSelectedControllerServlet?boardid=67&threadid=104035

how do I shot web

Everybody on ILG complains about Twitch

http://www.bls.gov/opub/mlr/2015/book-review/locked-up-and-locked-out-of-the-u-s-labor-market.htm

Didn't read the Atlantic article, but does it mention mass incarceration issues and how that now influences getting a job?

'eight' rhymes with 'great'!

OK give me the bad news, how much has my wife's retirement fund already lost?

S+P 500 is actually up 0.8% perhaps reflecting that if nothing else the outcome was at least decisive

huh. thanks, i think.

God, fuck the Times
http://www.nytimes.com/2016/12/09/business/economy/donald-trump-economy-confidence-booming.html

Booming along before the election, too, iirc. The Fed Board was already talking up the idea of a December rate hike last November.

sucks that Trump gets to ride a boom that he will get credit for, but otoh it's better to have Trump in good times and to have had Obama during bad times. 20th century fascists all took advantage of economic crises

The Trump economy is going to be a total capitalism eats itself economy.

Not even a little convinced Trump is going to ride any sort of boom.

That's the problem with that article - almost no real people actually feel "economically confident" now, as a society we're all in a constant state of waiting for the other shoe to drop. Republicans say they do because their guy won but still doesn't have any power to do anything and the ultra-wealthy do, but there's no rational reason to believe that the economy is going to improve for the lower 3/4 of the economic spectrum (and plenty of Trump voters and Republicans would admit that, particularly after 6 months or a year of their reign). Maaaaaaybe those ultra-wealthy can convince themselves to keep the stock market high to prop up GOP policies but even that's questionable - global capital is even more effected by a trade war with China or declining world influence than the average person.

if he doesn't fuck it up by starting a trade war (or literal war) with China he can ride a decent post-recovery boom (with help from deficit spending) for at least 2 years, just by sheer momentum

There might be some initial stimulus effect from his tax plan I guess, but isn't the agenda otherwise to slash government spending?

Nah they're gonna let him do a big deficit-spending infrastructure bonanza. everyone is keynesian when their party is in power

http://www.politico.com/story/2016/12/trump-free-market-republicans-stimulus-232387

That assumes the infrastructure spending doesn't get funneled directly to people who are going to stash it. Even more than under Reagan or Dubya, this round of trickle-down spending is going to go directly into the pockets of the billionaire class - Keynesianism only works if that money is actually being spent.

ya Trump stimulus is gonna suck as hard as possible ito regressivity and ineffiency, but still might work demand-wise at least short- to medium-term

Yeah, I guess I need to read the details but it sounded to me like maybe it was just gonna be some tax credit giveaways to people who were already going to do the same shit anyway and aren't going to, like, go spend the extra money on new jeans and restaurant dinners.

relevant: https://mainlymacro.blogspot.ca/2016/12/reactionary-keynesianism.html

Well, when GDP hits 7-8% you'll all have egg on your faces.

lol that's usually a precursor to a huge debilitating crash, so not really

http://cepr.net/blogs/beat-the-press/robert-samuelson-and-the-second-great-depression-myth

https://www.nytimes.com/2017/01/23/opinion/opening-salvos-in-president-trumps-trade-war.html

Translation from econ people out there?

https://www.bloomberg.com/news/articles/2017-02-12/america-s-biggest-creditors-dump-treasuries-in-warning-to-trump

The US Treasury holds auctions of new US debt obligations (T-Bills and bonds) on a regular basis to fund the US government, which runs chronic deficits and must borrow to cover current expenses. There is also a secondary market where people or institutions can buy and sell US T-bills and bonds, too.

The more US debt that is dumped into the secondary market, the more competition there is for the new debt we're trying to fob off on investors. If normally big buyers of new US debt stop buying and turn into sellers instead, then the government will have to pay higher interest rates to attract buyers for the new US debt.

There is one big loophole in this process that can be exploited, if the Federal Reserve can be persuaded to play along. The Fed can enter the auction of new US debt and buy as much as it wants to, whenever it wants to, with money that it has created for that purpose. This process is called "monetizing the debt" and it is the infamous "paying for government by printing up more money" that is so poorly understood by the masses.

The drawback to monetizing the debt is that, if it is done immoderately, it can flood the financial system with new money and cause inflation, devaluing the dollar and triggering even more dumping of US debt, even higher interest rates and necessitate budget cuts or a new round of monetization. Can you say "vicious circle"?

Of course, the Fed is usually loath to tread anywhere near such a remedy except in the face of a crash and a looming depression. So, the main upshot we're talking about is higher borrowing costs for the US government.

The other side of the story is that (and I only speak anecdotally) bond yields in other countries are kinda shit right now (maybe even negative) and the US's are pretty attractive. In spite of this, people dont want to buy US bonds because Trump is insane and his policies will lead to lower yields/rates or something worse.

that's a great explanation, Aimless! :)

yah, breaking fed-treasury independence is how you get hyper-inflation

international sell-off mostly being countered by more domestic demand for t-bills: https://www.bloomberg.com/news/articles/2017-02-07/demand-for-treasuries-is-now-a-made-in-the-u-s-a-phenomenon

Ha, asked on the wrong thread. What is stagflation?

Inflation + High Unemployment

wasn't thought to be possible during Keynesian consensus (which maintained they would be negatively related) in the 50s and 60s, until it happened in the 70s. macroeconomics hasn't really recovered since

high inflation also completely fucks over idiots like me who were too afraid of equities to invest and have just been sitting on an ever dwindling cash pile in a savings account. luckily I have a 401k from my old job where I was at for 12 years to make up for it.

FWIW, finance people I know hypothesized that the only thing keeping markets afloat had been the promise of massive tax cuts, which seemed at least plausible with a GOP White House and Congress. But seeing as that now seems unlikely to pass any time soon, that might partially explain today's big sell off. Let's see how things go tomorrow, but a market correction seems like it needed to happen, at least to better reflect the tenuous state of the economy but also to further put a check on the GOP's more draconian ideas.

372 points off the DJIA is a pretty modest-sized sell off when it's above 20,000. Several more shoes would need to drop before it becomes a real market correction. Greed hasn't yet given way to fear, but it is pretty obvious that the big sugar daddies in DC aren't well positioned to deliver on Wall Street's dream legislation. They will be lucky to get Dodds-Frank repealed before Christmas.

Yeah, let's see now things go tomorrow.

stock market != economy. fundamentals are fine. finance ppl are deranged

holding steady . . .

http://nymag.com/daily/intelligencer/2017/07/the-u-s-economy-doesnt-care-whos-president.html

“Who cares about fixed-income trading in the last two weeks of June? I mean, seriously,” Dimon said after a reporter asked about the health of the bonds markets.

“That is the weather,” he said of changes in the markets. “It goes up and down, this and that, and that’s 80% of what you guys focus on.”

Dimon said financial journalists would be better off concentrating on the “bad policies” that are hurting average Americans.

“It’s almost an embarrassment being an American traveling around the world and listening to the stupid shit Americans have to deal with,” he said.

- JP Morgan Chief Jamie Dimon
https://www.theguardian.com/business/2017/jul/14/jp-morgan-chief-jamie-dimon-american?CMP=Share_iOSApp_Other

Jesus was not a poor man. As the son of God, he had access to essentially limitless wealth -- consider, as just one example, the fact that since he (or one facet of him) created the Earth, he knew where all the gold deposits were -- and yet he deliberately chose to never claim this vast wealth. In essence, he elected to forgo his rightful fortune, which was absolutely his for the taking, in order to reach out to the poor and the sick, etc. This is what made the people's betrayal of him in the end so especially jarring -- not only were they turning their back on the Son of God, but they were turning their back on, potentially, the richest man on Earth. It was a double rejection of him, in other words, and it's why it's so especially galling that today we still have people committing the sin of scorning the wealthy -- denying them tax cuts; blaming them for every recession, depression, and economic collapse; accusing them of not giving away enough of their wealth. It hurts the Lord to see this sort of behavior, which is why He has given us, through his newest group of prophets, the wonders of the Prosperity Gospel to guide us. There is still hope in His plan.

Recognizing the satire, but IRL Mary Magdalene (probably a wealthy widow) financed Jesus, James, and the rest of his retinue.

the magdalenes curated a lucrative pre-MAGA pyramid scheme, distributing foot ointments and such as independent contractors; they believed in school vouchers and private mercenary armies iirc