Drudge has this:
But Legal Insurrection digs deeper and finds the 9.4% report isn’t anything to cheer about. Turns out, a bunch of the “gain” came from people dropping out and not looking for work. He includes this depressing chart showing a 20 year high in the “real” unemployment, which includes unemployed, discouraged and marginalized workers:
Ambrose Evans-Pitchard thinks Asia will falter in 2011, just in time to smack us again.
Policy levers in the US, Europe, and Japan remain set on uber-stimulus with the fiscal pedal pressed to the floor and rates near zero everywhere, yet OECD industrial output has not regained the peaks of 2007-2008 by a wide margin. Leading indicators are tipping over again. We are one shock away from a liquidity trap.
His assessment is long and globally complete. I recommend reading it all.
H/T Instapundit
Not quite the investment we hoped for!
Home prices seem likely to drop more. 20% says Gary Shilling.
The biggies are:
I wish it weren’t so, but these are so BIG that no policy can over come them. Piper… must… be… paid.
What can be done?
The government needs to dramatically cut spending, taxes, and regulation so that we become a job creating machine. Only with work can houses be bought. The only place government spending should rise, assuming offsetting cuts in stupid spending, is energy creation. Nuke. Nuke. Nuke.
Is it surprising that the next most likely 10 cities to default/go bankrupt are all run by Democrats, and have been for a long time?
http://www.businessinsider.com/first-city-pensions-insolvent-2010-12?slop=1#slideshow-start
Democrats are the symptom. They are really just hired hands for public employee unions that are the real cause of the terrible financial situations.
Our population isn’t growing fast enough to meet the promises oldsters made to themselves (of your money) long ago.
Commenter Carl doesn’t think that 99 weeks of unemployment payments is too long, and suggests it is necessary to avoid having “jobs become a commodity market” and a “deflationary wage cycle”.
I believe that paying people not to work gives you more people that don’t work. This XtraNormal video explains it using cartoon characters and text-to-speech. I hope it helps.
That’s the spirit!
Government names usually mislead. An “Internet Security Act” would undoubtedly make the Internet less secure. The “Dream Act” isn’t about a dream, but a nightmare. The National Recovery Act (Stimulus) was really pork for teachers. So forth…
So you can imagine just how backwards “unemployment insurance” would be if a government provided it.
Insurance works like this… you have a risk, you bet against yourself with an insurance provider, and if your risk happens, they pay.
Insurance doesn’t work like this… you have a risk, you bet against yourself, the risk happens, they pay, you decide you need more pay, they pay, you decide you need more, they pay.
But that is how unemployment insurance, provided by the state and Federal government is working. As unemployment length increased they kept extending benefits to recently unemployed until some actually get 99 weeks of unemployment insurance, when they only had been paying for a 1/3 that period before they lost their jobs..
You might call this harsh of me, sitting here in my relatively secure job, but this is CRAZY and is gumming up our whole employment system. If you pay me for two years to not get a job, I won’t make adjustments in pay, geography, and skill set needed to find work.
If I’m a $50K a year welder, and you are paying me $35K a year on unemployment, why would I move to Chicago to be a 35K a year Assistant Manager at McDonalds?
The RIGHT answer is to honor insurance obligations and no more. If people can’t find a job, they can use up assets, and then go on welfare.
I guarantee you that once they start paying for their own vacation, it wont’ last long.
I actually had the job ad written for Monster.com and Dice.com and a site hosted by a consortium of western university placement departments. But… I never pulled the trigger.
Sure, we have too much to do. Way too much, but… a lot of the tasks are speculative, and they can wait.
I just don’t feel “right” about hiring somebody. I had a moment of joy after the election, and with a solid and steady uptick of sales, but watching these lame duck fools sure hasn’t given me more confidence.
And Barry is around for 2 more years of crony capitalism and screw you if you aren’t in his voter bloc.
I wonder if my European sales going to hold up? The euro, and many economies over there, sure looks shaky.
My health insurance costs jumped $20K or so higher for 2011. Why make it worse for 2012 by adding somebody?
Gas sure does seem to be heading higher. That hurts equipment manufacturers that are large part of my business.
Does anybody else think Defense acquisitions will drop? I certainly think they will, and with them kill a lot of software projects.
Odds are the new hire wouldn’t work out anyway, at least not in the short term. Steep learning curves and generally suspect work ethic from many young people make return on investment tough in my game.
In other words… what the HECK kind of FEVER was I running to even remotely think of hiring somebody?
Silly me!
Corruption personified.
Ethanol subsidies are up for renewal and are likely to be part of this bogus tax deal Obama and the Republicans are cooking up.
Why? One Senator, Charles Grassley, from the state that gets most of the subsidies.
Gold sure has been touted of late, and it is the next bubble. Well, one of the next bubbles.
But is gold “right”? It really depends on what problem you are trying to solve.
It has been seized before by the US government. Remember, if you have it, they want it. Whether it is cash, gold, or time.
And if you have it in any form that isn’t physically in your safe at home, do you really “have it”?
To be safe, Rickards says you should take out your gold out of the banks before governments freeze physical holdings.
Sellers of gold, like Goldline for instance, say you should buy collectable coins, which were exempt from past seizures. But those are generally over priced and who knows if they will really be marketable.
I think practically about what problem I’m trying to solve. Gold cannot solve inflation, the government will keep you from using it to solve inflation. They have before, they will again. Well, it can, but only if you time getting off the train right. But that is true of any inflation protection device.
Gold is basically an alternate currency. That is GOVERNMENT’s domain, and they jealously guard it. You go around buying stuff with gold and… well, eventually, you will get a visit from your local Fed.
I see two scenarios… one is that the government will forbid the use of gold, and shoot me if I’m found spending it. Or send troops to come get it. The other is that others know I have gold and come over to steal it from me. Unless, of course, I’m part of the government. KGB officers, for instance, seemed to have plenty of US dollars even though they were denied “regular” Soviet citizens.
Assuming you are concerned about such “end of time” matters, or you have enough money to just be “safe not sorry”, then I’d recommend this instead of gold:
– food for a year
– water for a year, including filtration
– ammo for a year. Basic gun maintenance stuff as well.
– basic medical supplies for a year
– 2 major trauma kits, these handle gun shots and other major bleeding wounds
– basic hand tools and construction supplies. Hammers, nails, hand saws, screws, so forth.
– tarps. Light and when forced to evacuate, you’ve got shelter.
This is what I’ve got, except for the trauma kits, which I’m still trying to decide on which to get.
Those wanting an inflation hedge would use their money wiser to fund political efforts to restore a Constitutional low involvement government. After all, anything you can think of, a government with no rules can take.
Would you keep driving?
A 1 year small drop in the employee part of FICA will just let some employees pocket a modest amount of money to prepare for the really crappy 2012.
And a temporary extension of tax rates just mean I’ll prepare as if they are high now.
And it hardly smacks of “problem solving” to cut income to a Social Security heading for bankruptcy, and to do nothing on the spending side.
Instead of political gimmicks, Obama should govern as if his vast fortune from writing crappy books depended on it.
Our problems are structural, and he keeps offering duct tape.
Government pay scale… Plus benefits…
Evan Siegfried thinks we shouldn’t cut Federal pay, but should cut Federal workers. He writes:
At the end of the day, not one person can honestly tell you there isn’t a problem with the manner in which federal workers are compensated. This is not a partisan issue. The government needs to get serious and provide bold leadership in thinning its ranks.
I say… why choose. Cut their pay and cut their numbers. We won’t miss them if they leave for private employment, nor will we miss them if they just aren’t there anymore.
Evan gives a few anecdotes about government staffing… I’ll share my own. I’ve taught classes to software programmers over the years. When teaching private companies, 18 of 20 were typically pretty sharp, with a couple being “not so sure”. In a typical government class of 20, maybe 5 will be folks I might hire, 10 will be “okay for government”, and 5 will be incapable of programming. I’ve even had students who literally couldn’t type on a computer, and didn’t know the basics of computer programming, yet they were GS-9 Computer Programmers pulling in mid-40K + great benefits.
Basically government just hires and hires until the job is done by 15% of who they have hired. And they don’t fire.
I’ve known incredibly sharp government engineers. Smart folks who could make it anywhere. But… I’ve also known too many that are just dumb as doornails and only hold the position because the government never fires anybody unless, sometimes, if they commit a crime.
The government has too many people working on too many activities. We need to shed both the people and the things they are working on.
“What we have right now is a situation where every saver in the country is, essentially, paying a huge tax to bail out the banking system,” noted Raghuram Rajan, the University of Chicago economist who, back in 2005, had issued a fateful warning about the dangers of a financial blowup. “We are all getting screwed on our money market accounts—getting 0.25 percent—and the banks are making a huge spread on nearly every asset they hold, because they are financing them at pretty close to zero rates.”
Raghuram Rajan
as quoted by John Cassidy in “Why they failed”.
Underwater… the view for many Americans.
Many “middle class” live well but all that separates them from poverty is a thin thin line called “a job”. Although older, they haven’t saved. And their assets, mainly house and car, have lost value. Many owe more in debt than assets and cash.
The Washington Post has a story about Chrissanda Walker of Fort Meyers, FL, a nursing home executive that lost her job one and half years ago.
Walker used to make $100,000 a year as a nursing home executive until she lost her job a year and a half ago. Unable to find a new one, she shed her business suits and high heels and put on an apron and soft-soled shoes. This year, she and her daughter are living on $11,000: her unemployment benefits plus whatever she can earn selling home-cooked dinners for $10 apiece.
I was impressed with Ms. Walker and those helping her. I like her faith. I like her work ethic. Wil Haygood, the author of the piece, goes into interesting detail but as happens with so many “journalists” they don’t ask the tough questions.
Like… where is your husband Ms. Walker? Or where is the father of your daughter? Why isn’t he helping? And why didn’t you save? What did you buy before, instead of saving, that you regret now? Are you only looking for nursing home executive jobs? Will your job hunt standards change once the unemployment benefits run out? How long, btw, is “fair” for those?
I’d like to see journalists asking tough questions like this to somebody other than Sarah Palin. Wouldn’t you?
I’m pretty well off. I probably save more than many earn each year, but I could save more. And I invest. And I own a business. But I know that it all come crashing down, and quickly. Especially with government assistance (Mr. Obama, Mr. Bernake). So I’m not speaking from the “glass house”. I’m far more irked with Mr. Haygood, than Ms. Walker.
But both represent fundamental problems in America… not planning for the future, and a compliant, complacent, biased media.
