Comments on: The Downturn is Over for Wall Street, but Main Street’s is Still Going On http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going-on/ Firedoglake weblog Sat, 18 Feb 2012 00:09:33 -0600 hourly 1 http://wordpress.org/?v=3.1.2 By: masslib http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going-on/#comment-1952896 masslib Mon, 10 Aug 2009 02:25:47 +0000 http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going/#comment-1952896 <p>You know, even after the recession “ends” for main street, I’m pretty sure our economy is fundamentally changed. I was a student of Micheal Porter’s protege in business school and he told us on the eve of the Kerry/Bush election that over the next few years we would see a shift in this country(Kerry would have slowed it, but not halted it, mostly because his policies would have been slightly more protectionist). Anyway, he said what we know as the middle class wouldn’t be the same. That the economy was splitting apart. Some would move up, some would move down, but unlike other times in American history when one could move back up, this time the barriers to do so would be near insurmountable. He also said the breakup would be virtually non discriminate. That education wasn’t a guarantee of ending up on the right side of the tracks. Anyway, I think about that all the time with the jobless recovery. Really seems he was right.</p> You know, even after the recession “ends” for main street, I’m pretty sure our economy is fundamentally changed. I was a student of Micheal Porter’s protege in business school and he told us on the eve of the Kerry/Bush election that over the next few years we would see a shift in this country(Kerry would have slowed it, but not halted it, mostly because his policies would have been slightly more protectionist). Anyway, he said what we know as the middle class wouldn’t be the same. That the economy was splitting apart. Some would move up, some would move down, but unlike other times in American history when one could move back up, this time the barriers to do so would be near insurmountable. He also said the breakup would be virtually non discriminate. That education wasn’t a guarantee of ending up on the right side of the tracks. Anyway, I think about that all the time with the jobless recovery. Really seems he was right.

]]> By: TarheelDem http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going-on/#comment-1952886 TarheelDem Mon, 10 Aug 2009 01:31:31 +0000 http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going/#comment-1952886 <p>Corporations with cash are leaving on the table their two best investments because they are so counter-intuitive:</p> <p>- Paying more taxes earlier<br /> - Hiring people and training them for the next economic upturn and having them figure out how to do it with fewer natural resources or materials or energy</p> <p>If government can’t do it because everyone is so deficit-nutty, then it’s back on corporations that have cash.</p> Corporations with cash are leaving on the table their two best investments because they are so counter-intuitive:

- Paying more taxes earlier
- Hiring people and training them for the next economic upturn and having them figure out how to do it with fewer natural resources or materials or energy

If government can’t do it because everyone is so deficit-nutty, then it’s back on corporations that have cash.

]]> By: cufford http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going-on/#comment-1952870 cufford Mon, 10 Aug 2009 00:14:32 +0000 http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going/#comment-1952870 <p>What I find so disturbing is all of this focus on “UNemployment” numbers when that’s not the big problem we have. Rather it’s “UNDERemployment”.</p> <p>If we had full employment (theoretically), but everyone was only earning minimum wage, our economy would still be where it is today, because it’s not the UNemployment, but the UNDERemployment created by lowering wages for the masses in this country.</p> <p>That’s the problem with this big focus on UNemployment, which is only a part of UNDERemployment. It assumes that if you’re “employed” then you’re doing fine, but that’s clearly not the case now. It might have been 30 years ago when employed working class people were making a not just a living wage but a very good wage, but that’s not the case today. The UNemployment barometer is simply, completely, missing what’s going on here and why our economy is in turmoil.</p> <p>Today we’ve got people working two or more jobs just to try and keep current on the rent and utilities, let alone buying new cars or television sets.</p> <p>This is why I see little hope right now, when so many people are just missing the point.</p> <p>Low wages for the masses is the problem. The result of 30+ years of the war on organized labor in this country, and which NAFTA and subsequent trade policies kicked into high gear.</p> <p>It’s not the lack of jobs as much as it is the lack of ‘good paying’ jobs.</p> What I find so disturbing is all of this focus on “UNemployment” numbers when that’s not the big problem we have. Rather it’s “UNDERemployment”.

If we had full employment (theoretically), but everyone was only earning minimum wage, our economy would still be where it is today, because it’s not the UNemployment, but the UNDERemployment created by lowering wages for the masses in this country.

That’s the problem with this big focus on UNemployment, which is only a part of UNDERemployment. It assumes that if you’re “employed” then you’re doing fine, but that’s clearly not the case now. It might have been 30 years ago when employed working class people were making a not just a living wage but a very good wage, but that’s not the case today. The UNemployment barometer is simply, completely, missing what’s going on here and why our economy is in turmoil.

Today we’ve got people working two or more jobs just to try and keep current on the rent and utilities, let alone buying new cars or television sets.

This is why I see little hope right now, when so many people are just missing the point.

Low wages for the masses is the problem. The result of 30+ years of the war on organized labor in this country, and which NAFTA and subsequent trade policies kicked into high gear.

It’s not the lack of jobs as much as it is the lack of ‘good paying’ jobs.

]]> By: Stirling Newberry http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going-on/#comment-1952869 Stirling Newberry Mon, 10 Aug 2009 00:01:22 +0000 http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going/#comment-1952869 <p>For comparison purposes, there are fewer jobs now than there were in August of 1999.</p> For comparison purposes, there are fewer jobs now than there were in August of 1999.

]]> By: Stirling Newberry http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going-on/#comment-1952868 Stirling Newberry Sun, 09 Aug 2009 23:56:19 +0000 http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going/#comment-1952868 <p>Remember UI is heavily influenced on a month to month basis by job seeking behavior. What the figures say is that about half a million people didn’t even bother to hunt for a job, and have left the labor force entirely, not just become marginally attached.</p> Remember UI is heavily influenced on a month to month basis by job seeking behavior. What the figures say is that about half a million people didn’t even bother to hunt for a job, and have left the labor force entirely, not just become marginally attached.

]]> By: Stirling Newberry http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going-on/#comment-1952867 Stirling Newberry Sun, 09 Aug 2009 23:54:44 +0000 http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going/#comment-1952867 <p>The US UI number isn’t meaningless, but it’s meaning is heavily determined by the intent of the number. I did conversions of the A - House hold - tables to the B - Payroll tables - back in the early part of the decade, and correcting for the different universes, and time factors, they come out the same. The catch is that the Household universe and time scale is both more volatile, and measures employment demand, where as the payroll figures measure employment supply. </p> <p>If you think if the headline figure as “how many people who think they need a full time job but can’t find one no matter what they do, but are still burning resources equivalent to having a job.” That’s a good translation of it.</p> <p>Other nations, because they have different policy needs, have a different number. The American UI is primarily useful for looking at macro-economic interest rate calls, that is to say, for central bankers. Which is why virtually everyone has shifted their focus to using payroll numbers, and for comparison over time, I use percentages of payrolls, because that corrects for the size of the working population over time. Hence the chart, which shows that we are still shedding large shares of the employment base.</p> The US UI number isn’t meaningless, but it’s meaning is heavily determined by the intent of the number. I did conversions of the A – House hold – tables to the B – Payroll tables – back in the early part of the decade, and correcting for the different universes, and time factors, they come out the same. The catch is that the Household universe and time scale is both more volatile, and measures employment demand, where as the payroll figures measure employment supply.

If you think if the headline figure as “how many people who think they need a full time job but can’t find one no matter what they do, but are still burning resources equivalent to having a job.” That’s a good translation of it.

Other nations, because they have different policy needs, have a different number. The American UI is primarily useful for looking at macro-economic interest rate calls, that is to say, for central bankers. Which is why virtually everyone has shifted their focus to using payroll numbers, and for comparison over time, I use percentages of payrolls, because that corrects for the size of the working population over time. Hence the chart, which shows that we are still shedding large shares of the employment base.

]]> By: masaccio http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going-on/#comment-1952866 masaccio Sun, 09 Aug 2009 23:50:10 +0000 http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going/#comment-1952866 <p>I’m having trouble understanding the July 09 figures, because the reports also indicate that 250000 jobs were lost. I assumed that the U6 figure ticked up, but it is down. How did that happen? Is it an artifact of seasonal adjustments?</p> I’m having trouble understanding the July 09 figures, because the reports also indicate that 250000 jobs were lost. I assumed that the U6 figure ticked up, but it is down. How did that happen? Is it an artifact of seasonal adjustments?

]]> By: iceman15 http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going-on/#comment-1952865 iceman15 Sun, 09 Aug 2009 23:30:47 +0000 http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going/#comment-1952865 <p>Well we’re getting into deep stuff here. I’ll stick to just one aspect of the post. The very concept ‘unemployment’ is fungible (as good bankers like to say). The data is extensively manipulated & is so unreliable that it’s virtually meaningless for comparison both internationally & over time. A good example is how the payroll data (used to ‘calculate’ the unemployment rate) has drifted in definition. The current measure - U3 - became the base release in the mid-90’s, replacing the broader U6.</p> <p>The July BLS release (http://www.bls.gov/news.release/empsit.nr0.htm) shows this difference directly in table A12 (http://www.bls.gov/news.release/empsit.t12.htm). This contrasts U3 & U6 (seasonally adjusted) between July 08 and July ‘09 (Some data points not noted, A12 defines the difference between U3 & other measures such as U6):<br /> July ‘08<br /> U3: 5.8%; U6: 10.4%<br /> Mar ‘09<br /> U3: 8.5%; U6: 15.6%<br /> Jun ‘09<br /> U3: 9.5%; U6: 16.5%<br /> Jul ‘09 (provisional)<br /> U3: 9.4%; U6: 16.3%</p> <p>Most economists who have examined the data completely discount U3. Differences between U6 & pre-1948 data are extensive and are usually subject to individual ‘interpretation.’ A ‘gross’ comparison between U6 and Great Depression unemployment saw the latter peak at just under 25% in 1933. Virtually no (reputable) economist even bothers comparing the US U3 measure with any other OECD data over any timeline.</p> Well we’re getting into deep stuff here. I’ll stick to just one aspect of the post. The very concept ‘unemployment’ is fungible (as good bankers like to say). The data is extensively manipulated & is so unreliable that it’s virtually meaningless for comparison both internationally & over time. A good example is how the payroll data (used to ‘calculate’ the unemployment rate) has drifted in definition. The current measure – U3 – became the base release in the mid-90’s, replacing the broader U6.

The July BLS release (http://www.bls.gov/news.release/empsit.nr0.htm) shows this difference directly in table A12 (http://www.bls.gov/news.release/empsit.t12.htm). This contrasts U3 & U6 (seasonally adjusted) between July 08 and July ‘09 (Some data points not noted, A12 defines the difference between U3 & other measures such as U6):
July ‘08
U3: 5.8%; U6: 10.4%
Mar ‘09
U3: 8.5%; U6: 15.6%
Jun ‘09
U3: 9.5%; U6: 16.5%
Jul ‘09 (provisional)
U3: 9.4%; U6: 16.3%

Most economists who have examined the data completely discount U3. Differences between U6 & pre-1948 data are extensive and are usually subject to individual ‘interpretation.’ A ‘gross’ comparison between U6 and Great Depression unemployment saw the latter peak at just under 25% in 1933. Virtually no (reputable) economist even bothers comparing the US U3 measure with any other OECD data over any timeline.

]]> By: greenwarrior http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going-on/#comment-1952850 greenwarrior Sun, 09 Aug 2009 22:48:02 +0000 http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going/#comment-1952850 <p>thank you, sweethheart. your care and your comment nourish my heart.</p> thank you, sweethheart. your care and your comment nourish my heart.

]]> By: Bluetoe2 http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going-on/#comment-1952839 Bluetoe2 Sun, 09 Aug 2009 22:36:03 +0000 http://firedoglake.com/2009/08/09/the-downturn-is-over-for-wall-street-but-main-streets-is-still-going/#comment-1952839 <p>Grasshopper, Raven is the resident cynic. Be not deterred by those who have lost all hope and energy.</p> Grasshopper, Raven is the resident cynic. Be not deterred by those who have lost all hope and energy.

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