Comments on: Economy Lost 533,000 Jobs: You Ain’t Seen Nothing Yet

By: craz3z

craz3z — Sat, 06 Dec 2008 17:39:30 +0000

Ian, it looks like Krugman has been reading your posts. :-)

http://krugman.blogs.nytimes.c.....t-numbers/

By: klynn

klynn — Sat, 06 Dec 2008 12:56:53 +0000

Ian,

You were quite smart to jump on the Labor data and get a post up. This data tipped the hand of Congress to move on a bailout. It’s fun to compare your time of post to the timing of the PR churn on the Hill last night…Very interesting.

Netroots, keep up the information drive…

Great journalistic move. Thank you.

By: sunshine

sunshine — Sat, 06 Dec 2008 03:56:12 +0000

Maybe it’s just here in Mi

By: Ian Welsh

Ian Welsh — Sat, 06 Dec 2008 03:13:55 +0000

When you reset at a lower level it can persist for a long time. The financial sector is badly broken, the velocity of money is dropping through the floor. 8 trillion dollars has been used to very little effect so far. I am not all that sanguine. I think this is going to keep getting worse until serious stimulus is used to get us out, and I worry that Obama won’t do a big enough stimulus.

As for the financial sector, it’s not working right now. The Fed is becoming, step by step, a national bank, in the sense that it is lending more and more directly.

By: Blub

Blub — Sat, 06 Dec 2008 00:20:03 +0000

“Republicons are a far greater threat to American values than any cave dwelling terrorist.”

we assuming that they’re not actually connected somehow?

By: Bluetoe2

Bluetoe2 — Sat, 06 Dec 2008 00:08:06 +0000

Had a brief conversation at the check out at the local Piggly Wiggly with a 20 year old cashier and a UAW member who was doing a little shopping. Both were angry and bewildered at Congress bailing out bankers with no strings attached but would seem to be willing to let the Big 2 1/2 go bust. The UAW member was worried about losing his pension after working for GM for 34 years. People in Michigan are strarting to get it. Republicons are a far greater threat to American values than any cave dwelling terrorist.

By: Blub

Blub — Fri, 05 Dec 2008 23:40:32 +0000

like I said above, I do think that there are probably (systemic) risks for structural crisis in our economic system, and those risks are growing. When oil prices were at $5 per gallon I thought that we were actually looking at a situation where goods and people could no longer get to where they need to work, and employment and supply chain decisions were starting to be made solely on the basis of transportation costs (as happened in the ’70s). But that seems to be less of an issue right now.

By: radiofreewill

radiofreewill — Fri, 05 Dec 2008 23:40:04 +0000

Thanks for that great answer!

If only We could generate wide-spread understanding of an ‘elegant’ Economic contraction like you posit, then We would be empowered to Compassionately build a Smart Safety Net for the jobs lost.

People who lose jobs aren’t bad, but those who don’t catch them when they fall certainly are.

By: wesgpc

wesgpc — Fri, 05 Dec 2008 23:38:42 +0000

I think you have identified some of the most important structural risks, but I am not so optimistic that they are long term problems.

I wonder whether( that the current mortgage securities system can handle anything other than constantly increasing home prices and sales volumes. I wonder whether the reforms so far are adequate. That is why I hope for what many would consider radical solutions such as a new Home Owners Loan Corporation, and Alan Blinder’s recommendation of standard mortgage securities contracts sold only in formal exchanges with an information clearinghouse.

But I have to admit my ideas are based more on my perhaps underinformed economic thought experiemnts than data.

By: klynn

klynn — Fri, 05 Dec 2008 23:37:27 +0000

Remember, this sort of collapse is self reinforcing. The more people who lose jobs, the less money gets spent, which means more businesses have to let people go, which means even less money being spent, which means… well, I assume you get the picture.

Ian I am just exhausted trying to get people to understand this simple picture and the ripple effect if the Big 2.5 tank in terms of supply chain beginning with parts manufacturers.

It. Is. Easy. To Understand.

Thanks for the post.