The last economic crisis was ~10 years ago, and conventional wisdom says the boom and bust cycle is also ~10 years, so in that sense we're "due" for one. Conventional wisdom doesn't always hold. For example, unemployment is historically low (
cite), but there's no upward pressure on wage growth (
cite). AresProphet had an
effort post about it.
In the last year Mr. Trump decided since Trade Wars are the easiest thing in the world to win, he would go ahead and start them with basically the entire world. This has led to a tit for tat escalation with China, with no signs of either side backing down. For the last few quarters, companies have been stockpiling materials in anticipation of increased costs (leading to deceptively high economic growth), but this could have catastrophic long term consequences for the US. For example, Chinese buyers are shifting away from US soybeans, and even if a future president ends the tariffs, there's no guarantee they'll ever come back to US markets.
Also worrying is the impending no-deal Brexit. Although the finer points can be discussed in the relevant thread, if it goes forward as is it promises to be a disastrous exogenous shock to the global economy.
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Dumb question; wouldn't the counter to this be that if we raised this back up, businesses would flock to other countries? Given that there are way more 1st/2nd world countries now vs the 50's + Internet?
This was on individuals.
Business taxes are a bit of a different beast. There were built in breaks for reinvestment and such. But not say for buying back your own stock. A lot of things legal now were not then. It is hard to do a 1 to 1 comparison.
They can't do much with domestic revenues. But even then... a great deal of the issue here is definitely a lack of international cooperation - it's just too easy to the wealthy to move around, to extort tax breaks (look at fucking sports stadiums in the US, how cities will bend over backwards to get Amazon to open an office, etc)...
Although, the thought of revenues as what you tax makes me wonder if that's how you go after the rich too. Tax any net outflow of cash from the country above a certain amount. Then you can figure out a lower wealth tax rate, tuning it so that it's unappealing for companies to move the money out of the country, but it discourages sitting on excessive assets? You could make the tax a function of revenue and assets, so that it's based on what % of annual cashflow or something?
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Before the pandemy the US had more ore less full employment, right? Unemployment in Germany was almost twice as high as in the US.
On the other hand participation the the workforce has been on the decline in the Us for years and been down to 67% or so in 2019. In Germany the participation rate as been rising and over 80%. (I'm not sure the percentages are measured with the same criteria for a start, but still one is declining the other rsising)
Can someone explanin to me how these numbers might correlate and what the difference might mean? I'm an economics dummy.
The most reported figure is known as U3. It is the amount of people that currently work 0 hours, but are actively working to find some kind of job.
A more complete figure is the U6. This is the "old" standard, the switch happened in the '90s. U6 includes people who are so discouraged they are not seeking actively, people who are working fewer hours than they'd like.
U3 & U6 are USA metrics but the EU uses an analog.
When people talk about workforce participation, it's again important to look at the underlying statistics. I know the Netherlands uses this as a percentage of the total of 15-75 year olds, which I've always found strange, since so many are expected to be in school at the lower end, and so few people work beyond 67y here. This is becoming ever sillier, as just like Germany our population is aging, so the 65+ cohort is increasing in size.
It should be noted that the Netherlands did institute a slew of changes to increase participation in the 55-65 bracket in the last 20 years, which was needed.
Comparing unemployment numbers between countries is usually not very useful unless you are very aware of the specifics of the country.
The other problem is that we live in a completely different macroeconomic regulatory state. There is no Bretton Woods anymore which, for all its flaws, made things much simpler from an analytical standpoint.
Calling U6 a more complete figure is a bit misleading. It's just measuring a different thing. There's been a ton of conspiracy theory and social media garbage for years (especially during the Obama years "strangely") about how the government is hiding the real unemployment figures and blah blah blah. It's important to understand that they are just different metrics. Sort of like how CPI can exclude food and energy prices.
Source please. This is news to me and is the sort of thing I should really know.
U6 was introduced in 1994, which is why the data doesn't go back further than that.
U3 is still the 'headline' rate, but it's a less encompassing measure and U6 is much more helpful to get a better view of the labor market as a whole. It would be nice if the media were to switch to U6 going forward, since it is a better measure and pandemic unemployment is already massive enough and a unique enough circumstance that people won't really notice.
Depends on what you want to know though. Like if the question is how much could the economy recover if everything is reopened (safely, like with a vaccine), U6 would be misleading. Because a lot of those people wouldn't go back to work even if everything was safe.
If you're asking how many people are living off of no income right now than U6 is a better number. Or like how many people need help to get back on their feet.
It just depends on what you are trying to determine really. Which is probably why they record both numbers.
If they wouldn't go back to work at all then they wouldn't be considered unemployed/ marginally attached, even on U6 and eventually slide off. They'd just be out of the labor market, which labor force participation measures. U6 includes part time employees who want to be full time employees but can't find a full time job to employ them because the economy isn't hiring sufficiently.
@SanderJK was claiming that U6 was the "old standard" for the unemployment rate prior to the 90s.
U3 is the same methodology as the UNRATE, and goes back to 1948 in FRED. I think there was a methodology change then compared to the Depression, or maybe just frequency. Not 100% sure and didn't bother to look. It is a more useful metric in order to compare things over time, since it has such a longer timescale, but that's about the only benefit it has going for it. And today isn't really that comparable to the Korean War.
I don’t know much about either so you could be totally right, but I’d be interested in seeing how they each respond after certain events. Like during the Great Recession did one crash faster? Did one recover faster? Etc.
It seems like there are some fundamental differences on how people would respond between the two groups. But I guess I don’t really know.
I don't think there are any states offering a stimulus. Most are having to borrow heavily/layoff state employees/cut services/OPEN EVERYTHING! to cover unemployment costs, since the federal government won't step in and help.
States really can't do counter-cyclical spending since with the exception of Vermont they are more or less* required to run a balanced budget. That's something that I think some of the more competent states should probably take a look at.
* Specific details vary on a state by state basis, since each one wrote that stupidity into their constitution/laws in their own uniquely stupid way. Though states are able to go into debt, what with issuing bonds for various big infrastructure projects.
Agree that in general states can't do deficit funding, but some states do have 'rainy day funds', which are counter cyclical.
Millennials have faced the worst economic odds, and many will never recover
This article is depressing how behind Millenials are across the board. More heavily affected by the recessions. Never really recovered from 2008. I mean most of us are living it so we know but man we are a fully lost generation in the US.
Some of the graphs:
Give zoomers a chance.
Also, I'll take the ~couple % slower GDP growth compared to the lives the actual Lost Generation had. If I were born a century prior (and didn't die in childbirth, which I likely would have) you've got the First World War, Spanish Flu, Dust Bowl, Great Depression, and World War Two before retirement. We've had it rough, but we haven't reprised all of those yet.
Climate change...
(The blue employment line)
This fucked up a ton of reliable voters and helped usher in the fascists
Not just in the US, it’s a global thing
edit: in fact I'd be willing to bet that income recovery that doesn't correspond to a rise in employment probably reflects a mix of folks getting paid more and folks starting up their SS payments.
Losing your job after age 55 has some of the harshest economic impacts. The only thing worse is when you are entering the labor force. Finding a new job is harder as places are less likely to hire someone older, the pay cuts are more substantial and without any time left to narrow the gap before retirement, and that also generally coincides with rather large new enduring medical expenses. It's not like most people can bridge the better part of a decade out of pocket to make it to retirement, and it's not like they can make much more additional income while retired.
I genuinely don't know what point you're trying to make when it relies on some interpretation of one of the most useless graphs I've ever seen. It could just be a picture of what someone's kid scribbled on a wall
EDIT: OK my bad there, I didn't realize it was cut from a graph up the page.
Fuck me for browsing on a phone where you're lucky if one post fits on the screen.
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Yeah, I'd imagine he wouldn't want people seeing those before the election.
Doesn't the bond market kind of need those to operate?
That was sloppy editing on my part, my bad
I was just pointing out that while income for boomers came closest of all generations to recovering, that employment didn’t recover has been cited as a cause for further boomer brain worms and them taking comfort in the fascists’ propaganda giving them an excuse of “the other” that’s keeping them from getting jobs
I think what the full graph may represent is rich boomers taking a larger slice of the economic pie by replacing higher paid peers with lower paid youngins
I mean, the same thing happened in Nazi Germany. It wasn't the workers who suffered the worst effects of the post-WWI economy and Depression that supported the facists. They were predominantly either mainstream voters or Communists.
It was the small business owners, bankers, and other middle class folks who were doing relatively well financially who flocked to the Nazis. That because the dynamic with fascism isn't "Everyone who became poor becomes fascists."
It's that people lose faith in the systems, the assholes band together because they think "Only we can solve this!", and no one tries that hard to stop them because they are disillusioned. Eventually, it turns out the assholes' solution is "Murder everyone who disagrees with us", and it's downhill from there.
Repeat and rinse, and that's the story of the rise of fascism wherever it happens. The Powers That Be fuck up, the nation's asshole bosses and generals get together to fix things, and it all goes to hell.
You're thinking beyond what makes Trump feel good in today's news cycle, so you've already exceeded his foresight.
Imagine if he hadn't based his entire presidency on juicing the Dow Jones industrial average and had taken the virus seriously from the get go. He would get to be the president that fought the virus to keep you safe, and could also blame the bad economy on the virus as well.
But that would require more work than playing golf and watching Fox and friends, so instead it's time for his version of "the fundamentals of our economy are very strong" bullshit for the next 5+ months, surely no one will check the numbers? Oh they will? Well we'll just refuse to release them, what could possibly go wrong?
This all starts with a simmering racial resentment that makes for an "other" to pin all the problems on. Eventually, solving those problems gets connecting with getting rid of those "others", which logically then leads to "let's open up some death camps".
Fascism is rooted in racism and loathing of the other, for whatever definition of other is convenient at the time.
To tie this back to the economy, racism means it's easy to blame globalism (the other), globalists (AKA the Jewish, always a convenient other), and immigrants (ditto) for why it's so hard to get ahead in today's economy, instead of the home-grown assholes who have systematically stacked the deck legislatively to favor concentration of wealth over the last 50 years. Capital attracts capital, and absent a moderating force like the government, we have shown it will cheerfully lead us back to a feudal society...but with Twitter.
And as the "First they came for..." poem shows, the racism is just the opening salvo. Left without opposition, fascists will target an endless list of internal enemies and each other as they devour the nation seeking others to blame for their failures.
So next Friday, when they should have released the new unemployment numbers showing 25%+ unemployment, we'll instead just get silence?
Trump sees the writing on the wall and is trying to whitewash it away.
Also new unemployment claims rose by ~2 million last week, bringing the total new claims over 40 million in the last 10 weeks.
Source: https://www.cnbc.com/2020/05/28/weekly-jobless-claims.html