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Happy Days are here again ! GDP + 5.7%

Discussions about the economic and financial ramifications of PEAK OIL

Re: Happy Days are here again ! GDP + 5.7%

Unread postby Daniel_Plainview » Sun 31 Jan 2010, 09:39:38

$this->bbcode_second_pass_quote('Kristjan', '')$this->bbcode_second_pass_quote('Daniel_Plainview', '
')1. The US's hollowed-out manufacturing base (less than 9% of the economy is mfg, back to 1941 levels)

Where do you get this number from? According to Wikipedia (citing CIA), in 2005 the industrial sector accounted for 20.4% of US GDP: http://en.wikipedia.org/wiki/List_of_co ... omposition
According to CIA Factbook, in 2009 industry accounted for 21.9% of US GDP. Do you have a source to back up your claim or did you get it from Glenn Beck? :-D


Kristjan, I was referring to the percentage of employees in the mfgr sector, not the percentage of GDP. Specifically, US manufacturing has not had this few jobs since 1941:
Image
Manufacturing employment in the US peaked in June 1979 with 19,553,000 jobs, and by July 2009, manufacturing employment had collapsed to 11,817,000 jobs, the lowest level of manufacturing jobs since April 1941.
Image
As a percent of the total labor force, in July 09 US manufacturing employment fell below 9% -- the lowest level in BLS history dating back to 1939 (see chart above).

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Re: Happy Days are here again ! GDP + 5.7%

Unread postby pablonite » Sun 31 Jan 2010, 11:00:32

$this->bbcode_second_pass_quote('Tanada', 'T')hat is the most likely reason the Markets didn't get a bump from the rosy picture presented, they do no believe the number is real and neither do I.
I read a good article a while back about this factor as to when the big crash comes, the market calling the bluff so to speak. At some point, the stock market will be called out for what it is, a casino, then things get ugly.

Pretty sure it was a Bob Chapman piece at the international forecaster but can't find it, if you read a few of his articles you'll get his take on the whole situation.
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Re: Happy Days are here again ! GDP + 5.7%

Unread postby dsula » Sun 31 Jan 2010, 11:18:48

$this->bbcode_second_pass_quote('Ludi', '
')We don't need to worry about the rich, they will be fine. We need to be worrying about the rest of us.

Very much we need to worry about the rich. Many of the rich are rich because they built successful businesses, employing the rest of us. Or do you expect J6P to be able to feed himself without a 'strong' employer to show him what to do? I don't think so.

This reminds me of a cute little story during early Swiss industrialization as textile mills were built everywhere. The Swiss loosing their 'home' textile business to the new mills, they got upset and went and burned down factories hoping everyhting will go back to 'as it used to be'. Only after, they realized that they couldn't sustain themselves in the face of english and german mills. So they came crawling back to the rich, asking them to invest and rebuild factories so they could have a job.
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Re: Happy Days are here again ! GDP + 5.7%

Unread postby Kristjan » Sun 31 Jan 2010, 11:27:39

$this->bbcode_second_pass_quote('Daniel_Plainview', '
')1. The US's hollowed-out manufacturing base (less than 9% of the economy is mfg, back to 1941 levels)

$this->bbcode_second_pass_quote('Daniel_Plainview', '
')Kristjan, I was referring to the percentage of employees in the mfgr sector, not the percentage of GDP.
/.../
As a percent of the total labor force, in July 09 US manufacturing employment fell below 9% -- the lowest level in BLS history dating back to 1939

Daniel, so you think productivity gains are bad? Because that's what you're implying. The two data sources that I referred to were from 2005 and 2009. They were both CIA numbers and during that short period, the manufacturing output in terms of % of GDP increased and though I don't have the exact dollar figures, I would derive that the output also grew in terms of dollars. And all the while the number of people employed by the sector decreased. That is what you call productivity gains.

In the first post where you enlisted all the macroeconomic problems in the US, you said only 9% of the economy was manufacturing. You later clarified that you meant 9% of the employment force was working in manufacturing. And that's what confuses me. You are unhappy about the fact that less than a tenth of the workforce is occupied in manufacturing. You said nothing about the output of the US manufacturing sector. So my question here is - would you like to see manufacturing output rise to more than 21.9% of GDP or would you just like to have people employed in the sector? If you wish the latter, then that means you want the low paying jobs that require no specific skills to be returned to America. But by doing that, you would create another macroeconomic problem - you would ignore the principle of comparative advantage thus you would be wasting human resources.
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Re: Happy Days are here again ! GDP + 5.7%

Unread postby Ludi » Sun 31 Jan 2010, 11:32:54

$this->bbcode_second_pass_quote('dsula', '
')Very much we need to worry about the rich. Many of the rich are rich because they built successful businesses, employing the rest of us. Or do you expect J6P to be able to feed himself without a 'strong' employer to show him what to do?



Business owners needn't be rich. As a self-employed person, I don't need someone to "show me what to do."
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Re: Happy Days are here again ! GDP + 5.7%

Unread postby Kristjan » Sun 31 Jan 2010, 13:45:27

$this->bbcode_second_pass_quote('pstarr', '')$this->bbcode_second_pass_quote('Kristjan', 'y')ou want the low paying jobs that require no specific skills to be returned to America.
you mean like burger flipping? And blogging? :P

pstarr, someone has to do the burger flipping because 1) there is demand for burgers 2) burger flippin' can't be outsourced. Industrial production can be outsourced and since this whole topic is about economics, why would a business owner keep his business here if he can ship it to Asia?
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Re: Happy Days are here again ! GDP + 5.7%

Unread postby Ludi » Sun 31 Jan 2010, 14:14:43

$this->bbcode_second_pass_quote('Kristjan', 'w')hy would a business owner keep his business here if he can ship it to Asia?



Because he's a good citizen and a decent human being?

(I know, I know, don't laugh! :oops: )
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Re: Happy Days are here again ! GDP + 5.7%

Unread postby rangerone314 » Mon 01 Feb 2010, 09:07:53

Something about GDP +5.7% at this point reminds me of the "dead cat" bounce that sometimes happens in a stock market.
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Re: Happy Days are here again ! GDP + 5.7%

Unread postby Kristjan » Mon 01 Feb 2010, 17:47:35

$this->bbcode_second_pass_quote('rangerone314', 'S')omething about GDP +5.7% at this point reminds me of the "dead cat" bounce that sometimes happens in a stock market.

Could you be more specific, please?

OK, I'll answer that myself. :-D The reason why you feel like it was a dead cat's bounce is because it kind of was... a large portion of the GDP growth was attributed to inventory restocking (inventory stocking is counted as an investment in the GDP number, GDP=Consumption+Govt spending+Net Exports+Investments). Restocking was needed because last year, businesses were getting rid of their inventories and were unwilling to restock because they were unsure of the future. Now that things have cleared a little bit and every business knows where it stands, they can make investments.

But I don't think this is a dead cat's bounce. Why? Because businesses will have to start rehiring. If you look at the number of people that were laid off and compare that to previous recessions then you will see that businesses overreacted. You can't blame them, really, because everyone and their mother was panicking last year. But given the way things are right now, businesses have really stretched their buck and if they want to expand further, they will have to start hiring. In addition, if you look at the other macro data that came out today, you will find further confirmation that things are slowly starting to look up. Private consumption increased, wages increased (yeah, I know, not a lot of people are working these days but this is a positive sign nonetheless).

I understand that for some it is very easy to get caught up in the Peter Schiff world where every economic figure, bet it negative or positive, is really negative. But you need to get over that and look at the real world. Yes, the government is fudging the numbers somewhat. Yes, government spending can and has artificially boosted the GDP number. But if you get consecutive quarters of economic expansion and all or most of the economic indicators are supporting that, there is no reason to doubt the numbers. I mean, people don't trust most of what the elected (and unelected) officials tell them, but why do they trust everything Mr. Schiff or Mr. Roubini tells them? You need to think for yourself a bit. And remember, Mr. Schiff is just another (aspiring) politician who is trying to get elected. (I don't want to start a discussion around Mr. Schiff or Mr. Roubini, they were just the first examples that sprang to my mind. You can replace their names with any überbears' names you like).
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Re: Happy Days are here again ! GDP + 5.7%

Unread postby Ludi » Mon 01 Feb 2010, 21:23:19

$this->bbcode_second_pass_quote('Kristjan', ' ')But you need to get over that and look at the real world.



If we were looking at the real world we wouldn't be looking at the "economy." We would be looking at the soil, the water, the plants, the animals, the air, etc. Which are all in a pretty sad state these days in most places. :(
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Re: Happy Days are here again ! GDP + 5.7%

Unread postby Outcast_Searcher » Mon 01 Feb 2010, 21:52:00

$this->bbcode_second_pass_quote('Ludi', '')$this->bbcode_second_pass_quote('Kristjan', 'w')hy would a business owner keep his business here if he can ship it to Asia?



Because he's a good citizen and a decent human being?

(I know, I know, don't laugh! :oops: )

That's a nice sentiment (and a laudable goal). Unfortunately, if this makes the owner uncompetitive, the business will do poorly or fail, and then the workers will be out their jobs anyway, AND the business owner will be far worse off economically.

It only pays to be "nice" in business, if there is an advantage. Big companies like IBM were this way until the late 80's (when they were wildly profitable by being nice to long term productive employees). Then the worm turned. Now it's all the ugly reality of labor arbitrage.
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Re: Happy Days are here again ! GDP + 5.7%

Unread postby Ludi » Mon 01 Feb 2010, 22:03:48

$this->bbcode_second_pass_quote('Outcast_Searcher', '
')
It only pays to be "nice" in business, if there is an advantage.



I've only ever been "nice" in business.

Still in business after 15 years. :)
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Re: Happy Days are here again ! GDP + 5.7%

Unread postby Outcast_Searcher » Mon 01 Feb 2010, 22:05:50

$this->bbcode_second_pass_quote('dsula', '')$this->bbcode_second_pass_quote('Ludi', '
')We don't need to worry about the rich, they will be fine. We need to be worrying about the rest of us.

Very much we need to worry about the rich. Many of the rich are rich because they built successful businesses, employing the rest of us. Or do you expect J6P to be able to feed himself without a 'strong' employer to show him what to do? I don't think so.

Big time +1, Dsula. Nail hit squarely on the head and all that...

All but a realtive handful of folks with the right skills and inclination either aren't capable or aren't inclined to be self employed. Small business owners create the most tenable "real" jobs by far.

Soaking the rich may be fun and seem like easy (tax) pickings in the short run, but will just hurt the economy in the long run.

Ayn Rand's 1957 "Atlas Shrugged" is an outstanding tutorial outlining the types of consequences (moral and economic) of government that behaves like ours is strongly trending toward.

Hint: minimum wage increases never keep up with the LONG RUN inflation that government overspending will cause (and has caused). The folks they claim to help are the ones they hurt the worst.
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Re: Happy Days are here again ! GDP + 5.7%

Unread postby rangerone314 » Tue 02 Feb 2010, 10:28:42

Its a shame Ayn Rand is dead.

Then maybe she could have written a book about how to tackle the issue of globalization and the race to the bottom in wages, employment, environmental and living standards, and how "The Fountainhead" relates to outsourcing and China.

it would be interesting to see her takes on mountaintop removal and well-water contamination by fracking, and how that relates to Objectivism.
An ideology is by definition not a search for TRUTH-but a search for PROOF that its point of view is right

Equals barter and negotiate-people with power just take

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Re: Happy Days are here again ! GDP + 5.7%

Unread postby Ludi » Tue 02 Feb 2010, 10:36:39

$this->bbcode_second_pass_quote('rangerone314', '
')it would be interesting to see her takes on mountaintop removal and well-water contamination by fracking, and how that relates to Objectivism.



Looks like the rich getting richer at the expense of the non-rich.


But that's ok because the rich are better than the rest of us and deserve to be rich because of all their hard work.
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Re: Happy Days are here again ! GDP + 5.7%

Unread postby Revi » Tue 02 Feb 2010, 10:46:01

I think there are a lot of different economies, and the most obvious is the wage earning, paper profits one that is in trouble. The household economy and the natural economy continue.

Mountaintop removal is a crazy thing to do. Remove the fertility of the earth so that we can keep i-pods running is suicidal. But we do it to feed the "real" economy.

The most fertile part of Australia is getting pulverized to get the coal out and send it to China.

How nuts is that?

Coal minehttp://www.xstrata.com/operation/mangoola/details/

Those are really nice forested hills that are going to be turned into a pile of waste which will benefit the "Economy" and provide 240 jobs.

Those woods could provide 240 jobs for a thousand years.
Deep in the mud and slime of things, even there, something sings.
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Re: Happy Days are here again ! GDP + 5.7%

Unread postby Kristjan » Tue 02 Feb 2010, 14:49:00

$this->bbcode_second_pass_quote('rangerone314', 'I')ts a shame Ayn Rand is dead.

Given her complete lack of communication skills and her disdainful attitude toward people who were not as successful as she was (as an author, anyway), I'd say we're not missing anything. Like it or not, but communication skills are very important, especially these days when everything can be recorded and replayed. The sad thing about insufficient comm. skills is that it actually turns people against you.
My $0.02
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