« Cityphilia | Main | How useful is Okun's Law? »

Thursday, January 03, 2008

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341caf5253ef00e54fd079ab8834

Listed below are links to weblogs that reference 2008: No US recession:

Comments

Nick

Nice call on the jobs.... NOT

nobody

I think you all need to go back to school and actually read the text books. (In fact, I received an A in Macroeconomics so you know). It is very clear what the future economic impact will be. Wages have gone up for who? We all make less now than in 2000, and the american consumer is tapped out. (negative savings rate). You know there were very positive statements from so called educated people in 1929 that it's all good... there is nothing to worry about.... very similar things as said today. What ye reap is what ye sew.

JP

Yea, You reap what you sew, Stop buying crap on credit. You make less than you did in 2000? Well find a better job. The American Consumer is tapped out because there own financial stupidities. There are plenty of jobs out there.

JP

noel

Time to immigrate and leave the us. plenty of jobs growth in australia
why stay in the tired old usa.

jj

Things are not better off now than in 2000. There maybe jobs out there but how many are part time offering no benefits?

I was laid off from a large company after 22 yrs of service. Didn't see it coming.

Now to start over, its going to take me twice as long to earn the wage I was earning. And that is if I am lucky. So that leaves me working until I am 91 yrs old!?! And then retire on what? I will be dead by then!

Face it, the middle class is disappearing quickly. And if you are middle class or below, you should be concerned.

CEO's are making 500 times more than the average worker today. In the 1970's it was around 40 times more.

And the average worker is making 70% less this day than in 1999....compared to the cost of living.

You can play with numbers all day long, the reality of it is people are living it right now and there are folks in denial about it. Numbers on paper and numbers in the real lives of individuals are two different things.

And yes, some of it might be because frivilous spending, but look at society? How children are raised?

Its almost embarrassing that the largest flat screen tv or the latest in techno crap takes precident over the homeless, starving, sick in our own country. Thats where America is going to pot.

Materialism has taken over our natural instinct to help others. It IS our instinct. Its society that trains us to be selfish and not life giving.

Think about that!

Arthur Eckart

JJ, the data don't support your statements. U.S. real compensation has increased 70% over the past few decades. Also, U.S. asset prices have risen substantially, over the past 10 or 20 years (the real value of U.S. assets is much higher, including houses, where $300 billion a year was spend on home improvements and an oversupply of houses were built). Moreover, interest rates, and prices of many goods, are lower.

Most people I know network to find higher-paying jobs or start their own businesses rather than stay at the same job for over 20 years. I know several engineers at EBAY, who earn well over $100,000 a year (one told me the Indian engineers don't know how to do the work). The security guards at EBAY earn $22 an hour (one of the two guards I talked to earned $5,300 and took home $3,800, after taxes, with overtime, in two weeks or a month). A friend's son earns $300,000 in financial sales. Another friend's brother-in-law earns about $100,000 at AT&T. Yet, another friend's sister earns $5,000 a month running a catering service, and another friend earns over $45,000 a year as a private delivery contractor. The Comcast guy, who fixed my computer, earns about $25 an hour, while the guy who fixed my clothes dryer charged me $75 to change a fuse (although, he also gave me a warranty). Moreover, I suspect, most construction and transportation workers earn over $15 an hour. However, many illegal aliens at restaurants and hotels may earn only $10 an hour working part-time. I know several people who saved and then started their own businesses (one started several businesses that became successful and then sold them!).

I typically talk to people about my job and then they talk to me about their jobs, which is another way to network. I know several people who don't like their jobs much. However, the jobs pay so much they don't want to quit.

JJ

Networking yourself has nothing to do with the previous message.

The middle class is going away.

The folks working lower paying jobs would be thankful to make $10 an hour!! I know a family in our church, this couple works in janitorial services, both for an Assisted Living Residency and for a major Hospital in our area. Both make under $10 an hour. Try more like just $8. And with 4 children at home they can't make it. And they don't get bennies, they are state assisted. Most of these companies don't offer full time work so they don't have to pay benefits.
Our church helps them regularly. But they have no high dollar skills, no time to learn skills because they work 2 jobs and they used to manage with their money and get by, but now they are going under. Now add even $2 an hr to that wage and it still wouldn't be enough.
Both their raises the last 2 yrs have been .15 cents and hour!
Imagine working a year and getting .15 cents! A pack of hot dogs went up more than .15 cents!!! lol I mean this is a raise!
And I take that back, it was after a year and a half the first year because they had a 6 month probation period, then their year started. Oh, and after a year they both had accumulated 6 hrs of sick time each and 17 hrs of vacation time. hmmm.....

I guess in our country, minimum wage should be able to support at least the person making it! And it can't even do that.
One person working for minimum wage cannot afford a small apartment, transportation, groceries, heat, electric, phone etc. And we have many families with the main bread winner working for minimum wages.

My daughters neighbor works for the local gas company. Over half of his check goes towards health insurance!! It has gone UP 33% in the last 3 yrs! So he is making less today than 3 yrs ago. Then add cost of living in there.....what don't you get??? And working for the gas company used to be "good job".
Did the guy who fixed your gas dryer tell you his story??? That after all the withdrawals from his check he is really only making $12 an hour and has 4 kids?
Did the guy who fixed your computer tell you he made a good living????

I think you might be out in left field.

The cost of everything has gone up more than wages(where do you shop?)

I think you are one of the people I was talking about, living with the numbers on paper and not what folks are actually living everyday. I was trying to get away from statistics for a minute and look at reality. Your head is in the clouds and if you make so much money and are so happy why are you here?? lol
I don't think you touch base with those in need and listen to those needs. Really hear them.

Society says we need the "extra essentials" ie, ipods, flat screen tvs, wii's, play stations, cell phones for every child, Hummers with all the bells and whistles......and we have grown accustomed to thinking they are essentials! When they are not. So for a poorer family to make a judement call and buy something like this, its society telling them they need it.
And that is what has happened to the middle class also. Suddenly the middle class can't afford it AND so therefore it rolls into all their bills...they just can't afford them anymore. All in a matter of 3-5 yrs!!!

I think the problem with society is selfishness. Now I make a good salary, enough to support a family of 4 comfortably, but I give and give and give to help others so in all actuality I AM the middle class!! And believe me, my counterparts are disappearing into the poor house fast. Its scarey.

The rich get richer and the middle class is going away and becoming part of poverty.

And I beg to differ that most folks that have been working for the last 30 yrs would say they haven't stayed at a company for a long period of time. If you like your job and are making a good wage why would you want to leave?

I guess my whole point. The wages are not going up for the needy. But the rich get richer by the minute.

How can the McD worker or the retail worker at Target (which only pays $7/hr - my neice worked their in highschool) ever be able to make a living? Don't you think those people exist??
Do you think they are all highschool workers living at home?
NO! There are plenty that are working there for their main jobs!
And in America, they should be able to at least support themselves on that wage. Remember, the last I checked it was a higher wage than minimum wage. And many are trying to supplement their income to support their families that "used to get by 3 yrs ago" but now find they need a part time job just to put groceries on the table and gas in the tank!

Just had to explain things and I hope you realize how even making $5000 a month, after taxes, health insurance, other insurances, retirement, clothes, food, gas, electric, water, sewer,trash collection, groceries, necessities, children, school college funds, school fundraising, school sports, babysitting, savings, haircuts, prescriptions, Dr copays, any other costs that you can think of....how can $5000 a month be enough? Was that before or after tax?
$45,000 a year averages out to only $2000 a month after taxes!!

Boy, where do you live, I want to live by you! ;-)) It must be cheaper living!

We are in Minnesota! brrrrr!!!

Arthur Eckart

JJ, I work full-time and often talk to people about their jobs. So, I know a little about the real world. Yes, I've been told janitors earn $8 to $10 an hour (a government janitor told me he earned $15 an hour part-time and has another job). However, almost all the janitors I've seen are from Third World countries, who perhaps earned much less than $8 an hour, or didn't have a job, in their countries. So, it seems, their living standards improved substantially.

There continues to be tremendous upward mobility in the U.S., although of course not for everyone. Currently, 20% of U.S. households earn over $100,000 a year, while millions of Third World immigrant households earn much less. The fastest growth is in high-paying U.S. jobs, which are increasing faster than Americans can acquire the needed skills. Consequently, there's a shortage of skilled workers in the U.S., although the U.S. is a most highly educated country.

The guy who fixed my clothes dryer drove an almost new large truck (he's an immigrant). The Comcast guy drove the company's van. $45,000 a year is not $2,000 a month after taxes. It's over $3,000 a month (also, my friend who earns over $45,000 a year was able to purchased an almost new large house in Boulder Colorado six or seven years ago that went way up in value and he has a low mortgage rate after refinancing).

Almost all your statements are not realistic or represent extreme cases. They don't reflect mainstream U.S. workers or households. Nonetheless, I know people where their income roughly equals their bills, because they bought more, e.g. larger houses and cars than they needed, and too many toys for their kids, while I know others who actually save, although their incomes aren't high. Obviously, there are trade-offs. It's not realistic to spend $6,000 a month when your income is $5,000 a month.

Mark

All crap has hit the fan and the stock market has officially CRASHED! So much for your out look on 2008 that we won't see a RECESSION there bud

Lafayette

AE: However, almost all the janitors I've seen are from Third World countries, who perhaps earned much less than $8 an hour, or didn't have a job, in their countries. So, it seems, their living standards improved substantially.

And so did their costs of living. But, not necessarily their living standards, since both income and costs have to be taken into account when making that statement.

You're OTT again, AE.

Arthur Eckart

Lafayette, why would Third World immigrants move and work in the U.S. when there's no difference in living standards? (You really only need to look at the pictures). I went to school with a guy from Indonesia. He actually lived in a hut and normally walked barefooted in his country. He was considered upper middle class.

Mark Dockery

*Yawn*

There will be no recession and there will be no downfall of the US.

P.S. JJ: you're an idiot. That family is an idiot. They can do a few things:
1) Get a better job.
2) NOT HAVE SO MANY KIDS.

Why do people have kids when they cannot support them? They put themselves in the predicament they're in. Unfortunately, religion is more than willing to accept the lower end of the spectrum but that's another story altogether.

jj

You are all not getting it.

I tried to word it simply.

For one: having too many kids has nothing to do with it.

You must not of been able to of read the part about how minimum wage cannot even support a single person.

Ok....lets say joe shmoe wants a better job but there aren't any that he is qualified for.....

(get qualified, go back to school, volunteer to get experience.....right?)

But how can he or she support themselves in the mean time especially when minimum wage doesn't cut it.

Now....add kids to the picture.....it is worse. budda bing budda boom!

Secondly....you must not of read the part about this family making ends meet 3 yrs ago! hmmmm.....??
They were living fine and fully supporting their 4 children and had no more struggles than the average family.

Why would you cut down immigrants when your great grandparents were the same thing? They are no different than any of you.....standard of living or not - it is society that decides the standard of living....oh...and I bet you couldn't read the part I wrote about that either....

Who is calling who an idiot?? You make no sense and its obvious if you speak of something so shallow as using having too many children as your scapegoat. Lets just bring them all to the local Vet and have them euthanized! Would that be the thing to do???

The whole point, recession or not, things have changed and not for the better. If you think differently, just wait, it will hit you too eventually.

Lafayette

Guha: "The US will skate along the brink of recession in early 2008, but should avoid tipping over the brink, in part owing to continued strong exports to the rest of the world."

Exports shmexports. They barely represent 7% of US GNP. Exports minus Imports alone will NOT help the US from tipping over into a full-fledged half-year recession.

It is Consumption that counts, and that means consumers who shop-till-they-drop. But, in order to do that, they will depend upon credit. America is first and foremost a Credit Economy.

That is where Consumers are hurting, the ones who still have jobs. Defaults are cropping up in car repayments, even credit card repayments. They have not reached tsunami-like proportions and IF they get no worse, then the US COULD POSSIBLY "skirt" a recession.

Meaning two quarters of very little or no growth, but NOT negative growth. We'll be lucky if GNP-growth finds itself anywhere between 0 and 0.5% for both quarters of the first half of the year. Exports minus imports will likely add a quarter of a point, whilst Consumption could contract by the same amount.

That's just guessing, because that is all that can be done. No one really knows.

Darel

"I received an A in Macroeconomics so you know"

Somehow I doubt that very much... you're trying to compare 1929 to current economic conditions? Do you even have a clue what you are talking about??

"What ye reap is what ye sew"

That should be "sow". I guess you got a D in english...

mike

WELL FRIENDS ,I PURCHASE EQUIPMENT FROM ALL OVER THE UNITED STATES FROM ALL MANUFACTURING PLANTS AND OTHER RELATED PLANTS I CAN SEE THAT PLANTS ARE CLOSING FASTER THAN THEY CAN REBUILD THEM AND WHEN THEY REBUILD THEM THERE WILL BE LESS EMPLOYEES .IVE SAID TO MYSELF THAT MY JOB WOULD BE SLOW IN THE FUTURE CAUSE THE PLANTS WOULD RUN OUT ,I SEE 1000'S OF PEOPLE OUT OF A JOB AT A TIME AND ITS NOT LOOKING GOOD FOR THE US .MY FATHER IS AN OLD-TIMER AND EVERY YEAR HE STATES THIS YEAR IS GOING TO BE BAD FOR THE ECONOMY AND I JUST AGREE BUT OVER THE LAST PAST YEARS I SEE IT COMING .THEY WERE BUILDING HOUSES LEFT AND RIGHT AND MORTAGE COMPANIES WAS PUTTING FAMILYS IN THESE HOUSES FAST AS THEY COULD EVEN IF THIS MEANS NOT CARING ABOUT THE HOME OWNER BUT JUST TRYING TO PUT THAT EXTRA DOLLAR IN THEIR POCKET AND NOW THE HOMEOWNERS ARE PAYING FOR THEIR GREED. THE US BETTER BE LOOKING FOR AN ANSWER OR SOMETHING BAD WILL HAPPEN TO ALL LOWER AND MIDDLE CLASS PEOPLE.I BELIEVE IF THE GOVERMENT WOULD START DRUG TESTING EVERYONE THAT RECIEVES A WELFARE CHECK I SEE TO MANY PEOPLE THAT IS RUNNING AROUND WITH WLFARE CHECKS THAT IS BUYING DRUGS "JUST A THOUGHT"

Bryce Boudreaux

Hi. Well my names Bryce and im 15, well I heard my free enterprise teacher talking a bout a recession so i searched it up. I know I may be just 15 but for some reason I really seem to care about what is going to become of the actual human people and the economy and all that stuff. I actually think that for every new class of students that comes into high school. They get lazier, more ignorant, and just ugh. I mean I was sitting in the gym because my shop teacher was absent and all of the eigth graders were sitting in the gym getting ready for P.E. , and they were all just EXTREMELY immature, and the principal came into the gym with a handful of papers. He starts calling out a bunch of peoples names. Out of the 86 people in that class there were 13 left when he stopped calling names to talk to them. Turns out it was about their report cards. Everyone he called had 2 or more F's. TWO OR MORE!!! I thought this was insane. It sort of made me think of the movie Idiocrocy. I know its just a comedy movie, if you actually think about it, if we keep heading the way that the world is heading than it might just turn out like that. Sometimes I just wish i could get away from all this war and crap and make my own country. That would be sweet.
-bryce

Ryan

Actually everyone is wrong. The real reason the US has been having money issues is that we left the "GOLD STANDARD" every since the the dollar has been worth less. Just printing more money does not give you more money there must be Gold in place to cover the value of the money.

The US needs to be ashamed of itself and its spending habits. We need to place greater value on Cash, then credit. Also, stop trying to keep up with the Jones. We need to know how to live with less and be more satisfied. For all we spend we are no more happy.

I work in IT and I have a Masters and about to start my Doctorate in Information Technology. You do need to educate yourself and make better personal decisions. Other countries require this, ours could care less as long as somebody makes a profit. That being said, we need to re-evaluate our values in the us.

I am also a military veteran of 14 years and I spent 10 years overseas and I understand many in the world who far less, however they are much more satisfied people.

I am raising my son to appreciate the blessings of this country and to avoid the lies told by so many. My wife is from Russia and knows hard times. She recent joined the Army and loves not having to worry about a paycheck and also traveling. She has a nice job, benefits and she worked hard for it. Did I mention that she has a Masters Degree also. If you want a better lifestyle you must WORK for it and not expect someone to give it to you.

GOD BLESS AMERICA, we sure need it right now!

Arthur Eckart

Ryan, unless you can explain how going back to the gold standard improves economies, your statement is meaningless. U.S. data show there were many economic boom/bust cycles, including two deep depressions, under the gold standard. It's rational to spend when prices of assets and goods are low, and dissave when interest rates are low. Americans shouldn't be "ashamed" of being rational. Americans are fortunate they have the opportunity to earn masters or doctorate degrees, unlike many other countries. The U.S. spends 50% more on education than Canada and 100% more than Britain. Consequently, 20% of U.S. households earn over $100,000 a year, while the U.S. has the highest ratio of skilled workers in the world, and yet there's a shortage of skilled workers in the U.S. There are many misperceptions about the U.S. Below are some of my prior comments:

The U.S. economy can be viewed as a "Black Hole," attracting imports and capital, and now attracting the affluent foreigners themselves who own that capital. Foreigners are buying dollars instead of U.S. goods, not "dumping" dollars (rather, they're "dumping" goods), because they need to absorb dollars to maintain their high output and employment levels through exports. Also, they need dollars to buy oil, because oil is priced in dollars on the world market.

The U.S. has rising prices, while export-led countries have declining prices, because the U.S. produces higher quality goods in older industries and high quality new goods (e.g. in the Information-Age and Biotech Revolution, where the U.S. leads the rest of the world combined, in both revenues and profits), while the U.S. offshored obsolete goods to export-led countries for big profits. U.S per capita income was $45,000 in 2007, which was over $10,000 a year more than the E.U.

The U.S. has benefited from cheap imports and cheap capital, which induced U.S. demand, while export-led countries benefited by keeping their output and employment levels high, although they produce heavier goods and buy oil at high prices (the U.S. also buys oil at high prices, however, the U.S. is the third largest oil producer in the world, and U.S. oil firms have operations throughout much of the world). When foreigners produce obsolete U.S. goods, then limited resources are freed-up for emerging U.S. industries.

So, the U.S. has tremendous market power producing "core" goods (i.e. high quality/more profitable goods) in older industries, producing goods where there are really no competitors in newer industries (e.g. Google, Microsoft, Apple, Genentech, etc.), and most of all, foreigners will eventually have to buy U.S. goods, at prices U.S. firms command, i.e. world prices, for those dollars to flow back to the U.S. Unfortunately, export-led economies cannot afford many U.S. goods, because they're too poor working for the U.S. almost for free, while paying high prices for oil.

The U.S. dollar is the world's reserve currency. The Euro cannot become the dominant world currency, because the E.U. economy would fall into recession with huge negative net exports, because of its poor economic policies (which I can list for you). Also, the E.U. will not fight in the Middle East. So, OPEC (i.e. the Middle Eastern OPEC U.S. allies) cannot rely on the E.U. and wouldn't want to sell its oil in Euros.

Only 13 million U.S. workers are needed to produce over $5 trillion a year in U.S. manufacturing output, because of U.S. productivity, market power, and improving "terms-of-trade."

China and India have poor education systems and generally cannot compete with Americans, with the exception of a few top schools in China and India. They can graduate all the engineers they want. However, 99% of them cannot compete with an average U.S. engineer.

The trade deficits were caused by export-led economies and facilitated by the U.S. for larger gains of trade. It's not a U.S. problem. Export-led countries need dollars or their economies would collapse, and they wouldn't be able to buy oil. Everything in economics is interrelated. That's why the U.S. is the worlds only superpower.

Arthur Eckart

Ryan, also you stated "You do need to educate yourself and make better personal decisions. Other countries require this, ours could care less as long as somebody makes a profit. That being said, we need to re-evaluate our values in the us."

More Americans should educate themselves and make better decisions. However, it's misleading to assume other countries are better educated and make better decisions. The data certainly don't support your belief. The U.S. promotes individual responsibility and independence, unlike many countries. Also, Americans aren't inherently smarter than anyone else. The U.S. is a superpower, because of its values, policies, and philosophy.

Arthur Eckart

The information below supports my statements about U.S. firms. Also, I've stated before, the U.S. government received free money in real terms from foreigners. U.S. households are relatively weak financially (although, not in real terms), in part, because abundant and cheap assets and goods induced demand. Nonetheless, U.S. households will likely maintain autonomous consumption (or their higher living standards), while paying-down debt and building-up saving (U.S. real consumption is rarely negative). U.S. real income should continue to rise, with relatively low unemployment.

April 14, 2008 (Bloomberg) -- The U.S. economy has what Alan Greenspan calls one ``major advantage'' as it falls into a recession: Businesses are in far better financial shape than they were entering the past two contractions.

Corporations outside of financial services -- from Cisco Systems Inc. to Coca-Cola Co. -- have collectively socked away more than half a trillion dollars in cash. They have also reduced short-term debt and cut inventories to near record-low levels in relation to sales, leaving them better prepared than in the past to weather a contraction.

Companies were rewarded for their discipline with 20 consecutive quarters of double-digit profit growth that ended only in the middle of last year. As a result, industrial corporations in the Standard & Poor's 500 have amassed $615.5 billion in cash and cash equivalents.

Irving, Texas-based Exxon Mobil Corp., the world's biggest oil company, leads the pack with $34.5 billion, followed by New York's Pfizer Inc., the world's largest drugmaker, with $25.5 billion, and San Jose, California-based Cisco, the world's biggest maker of computer-networking equipment, with $22.7 billion.

U.S. multinationals have also benefited from stronger growth abroad. Their global profits in 2007 were 142 percent higher than in 2000 and 507 percent more than in 1990.

http://www.bloomberg.com/apps/news?pid=20601109&sid=ao6RcBfOUJz8&s=polyhoo

Moreover, I've stated before, it's a paradox that U.S. actual output was generally below potential output throughout the 2000s, while U.S. living standards rose at a steeper rate, and when U.S. economic growth reaccelerates to where actual output exceeds potential output in a few years, U.S. living standards will rise at a slower rate. Nonetheless, U.S. living standards will continue to rise at near an optimal rate.

Arthur Eckart

One reason U.S. living standards rose at a steeper rate in the 2000s is the U.S. offshored obsolete heavy goods for big profits and bought those goods at lower prices (through imports). So, more U.S. resources were freed-up and shifted into higher quality and more profitable U.S. goods.

However, I expect U.S. living standards to rise at a slower rate over the next few years, given Americans have been living beyond their means. Of course, there are still lots of bargains. So, Americans may continue to overconsume, although they'll change their consumption mix, somewhat, given price differentials, e.g. between goods. U.S. real income will continue to rise, while the U.S. will continue to be the largest consumer market in the world by far.

Angela H.

NOBODY wrote on Jan 6:
there are plenty of jobs out there....
yeah? where?

I see the ads in the papers and online...I see the postings by agencies...I even see signs in the windows of shops and stores...but, I have 15 yrs of work experience, am skilled in all manner of computer software and professional communications, have a masters' degree (business marketing) and will take a job as a receptionist...
but no one is hiring..

even the temp agencies have been putting me off..and I WILL work for minimum wage..if they will hire me..but they won't.

I am out of work NOW because the temp agencies tell me ..on a daily basis: 'we have nothing'. I network through friends and colleagues and still, I can't even get a job as a typist or as a switchboard operator...
and, because I temped for ONLY three months last year (living the rest of the time as a freelancer earning less than $100 a week and tapping all of my savings and credit to pay rent)...I don't qualify for unemployment..

so, Nobody...when you find yourself on the unemployment line, keep repeating that mantra: people are poor/homeless/unemployed due to their own stupidity.......and remember just how heartless and ignorantly self-superior statements like yours can be.

Arthur Eckart

Angela, it seems, you're making a dishonest social statement. If you have an MA in business marketing, sales jobs are plentiful. Someone I know in financial sales makes $300,000 a year. Yet, you're willing to work for minimum wage. Also, I find it hard to believe you can't even find a minimum wage job through networking. Even if you're not good at marketing, you may want to check out Craigslist (link below) for other jobs. Also, my girlfriend found me a good job in the newspaper. It was the first job she picked and I was hired almost right away.

http://www.craigslist.org/about/sites.html

Josh

There's a simple problem and there's no fix to it because it's been around since the beginning of time. That problem is GREED. It's what makes the world go 'round. My economics professor at IOWA once had a quote for everything and I'll never forget it. "It's always about the money." AMEN!!! We could have affordable, non-oil using cars on the market tomorrow... but we don't, and why? "Because it's always about the money." It's so investors in the oil market can squeeze out another quarter of record profits (Exxon-Mobile hint hint). Now I'm even mad at the farmers who are trying to get every last penny for their grain. I know they've had it hard for years, but that doesn't excuse ethanol producers to gouge consumers just because oil has gone so high. Look at your pumps, for every dime gas goes up, so does E85. Ethanol is renewable and it shouldn't cost no $3.00 a gallon or more to make. It's called extortion people. Oil is just one of the sectors with this problem. Look at healthcare! Ever asked for an itemized bill from a day in ER? It would blow your mind how much a hospital charges for supplies. Do you think nurses get even 40% of what the hospital bills your insurance company for? I'm an RN nurse that gets $32 an hour. The hospital I work for charges the patients $100 an hour for my time. Where does all that go I wonder? We have Blue Cross for insurance, and do you know what the last co-pay for our last child was? $6000 and everything went well with no complications. Our policy only pays for 55% and that's to keep our premiums down (798.62/month for a family of four). Financially we are ok, but I make 66,000 a year before taxes and my wife stays home to save with daycare which would run us at least 12 dollars an hour. How many US citizens make 66,000 or more a year? Maybe 45%, which means another 55% are struggling to make ends meet. Some of these people, like it was noted before, don't have a professional job, and I don't even want to talk about how many "middle class" are running around without health insurance because the premiums have out-done their ability to pay them. Also, don't even get me started on our government's ability to freely spend our tax-paying money. Bush's defense budget for 2008-2009 was $481 billion and an additional $141 billion to continue the war on terror. My GOD!!! does anyone else see the problem with this??? When our country's education budget lingers around $56 billion. No wonder we lack professional workers in the jobforce. Duh, and what's our national debt looking like nowadays? $9 Trillion just round it off... Meaning that as of today, every man, woman, and child owes $30.861 in this countries debt. Yeah, I'd be pissed too. The question is when are we as US citizens going to stop letting capitalist corporations and the government financially rape us? As a country we need to start making our own stuff. The money doesn't stay here if we don't. I know financial analyst say that we would be paying $30 for a shirt or $70 for a pair of jeans. Wake up America, we already do. It's called GAP, American Eagle, etc. and do you think their clothes are made here? I would much rather buy a pair of jeans from Walmart for $60 dollars that were made here, than a $60 dollar pair at GAP that where imported from Indonesia. Banks that loan out our Government's and ultimately our money back to us for 20% interest should be outlawed. Where do you think WAMU, CHASE, CAPITAL ONE, etc. get most of their funds? From our record low FED rates (3.5%) and borrow it back to us consumers at sometimes 27%. It's enough to make you just sick. These problems are why our country is tight-roping on the edge of recession. GREED. As a matter of fact I'd love an all out recession right now, and I'll tell you why. If you refer back to the 1930's it wasn't the poor that were hanging themselves and throwing themselves off of 10 story buildings. It's was the rich, greedy stock holders that lost everything they had in a day. The poor learned to survive and adapt and I'm sure we will again.

Arthur Eckart

Josh, I wouldn't say the free market system is about "GREED." It's about increasing the capital stock through efficiencies rather than decreasing it through waste. So, the economy can continue to expand. Not everyone can afford expensive small electric cars. The goal is to raise living standards at the fastest sustainable rate. Also, you need a sense of proportion. Skilled workers are paid more and higher quality capital goods cost more, U.S. military expenditures are a low percentage of GDP historically, the U.S. national debt, which represents the accumulated debt of the entire history of the U.S., is roughly 70% of one year GDP (U.S. assets are over $100 trillion and U.S. income over the next 10 years will be more than $160 trillion), U.S. homeowners gained at the expense of U.S. banks (which was necessary to help raise U.S. living standards at a steeper rate), the U.S. invests 50% more per student in education than Canada and 100% more per student than Britain, etc. Are rational or optimal economic choices really GREED? I think it's arrogant to replace the free market system without understanding it first. Also, by the way, below is information on the Q1 2008 components of U.S. GDP.

Gross Domestic Product Data Shows U.S. Economy (Barely) Growing
4/30/2008 9:47 AM

The U.S. economy grew at an annual rate of 0.6% during the first quarter, the latest real gross domestic product (GDP) data claims. Economists expected an increase of 0.2%. In current dollars, GDP increased 3.2% to an annualized rate of $14.19 trillion.

More specifically, inventory building added 0.8% to growth, final sales of domestic product fell 0.2%, and final domestic sales dropped 0.4% - marking the first decline since 1991. Consumer spending increased at an annual pace of 1%, marking the weakest growth since 2001.

Meanwhile, business investment dropped 2.5% - a new 4-year low – while residential investment crumbled at an annualized rate of 26.7%, the worst decline in housing since 1981. As a whole, housing investments subtracted 1.2% from growth.

The GDP price index rose at an annualized pace of 2.6%, marking the highest inflation in a year. Consumer prices also jumped higher, growing 2.5%, while core prices (excluding food and energy) rose 2.2%.

Exports increased 5.5% in the fourth quarter, while imports rose 2.5%. Government spending increased by 2%, with Federal government spending increasing 4.6%, and state and local spending growing 0.5%.

http://www.schaeffersresearch.com/commentary/optionbytes.aspx?c=bytefeed&byteID=84336&single=true

Dan

I have read a few of the Posts above and they are true but I dont think people are stupid in spending what money they don't have. The retail market tells us to buy and buy as well to use credit cards. Wal-Mart for a example does not have a layaway plan but you can get a wal-mart credit card at 19%APR (or what ever APR% you may fall into)and now you pay more than you have paid if it were on layaway at no percentage rate and plus you had 90 days up to 6 months.
GAs is another reason why most of us dont have a lot of money being right now as of 5/29/2008 in DeLAnd FL, mid grade gas is 4.15 a gal. What use to cost me to fill my V8 from 3/4 tank to full in 1993 was 13.00 dollars now at 42.00 dollars and my truck is not bad on gas. 20 MPG highway 15 City. imagine if I had to fill it from empty to full. $ 156.56 go figure I only make 350 dollars in a week.-insuranve -food -rent -TV/sat -water/electric then im in a hole. One good job I had was 11.63 an hour 32 hrs a week but they laid off workers in dEcember 2007 and its Lowes in DeLand FL.
as for moving to another country I say go for it, thats what I'm doing right now. I got my Canadian Citizenship and going up there until the US gets better, heck I just might stay. There are no jobs in ther USA at Current time and in the USA today or AP (in the Newsjournal, Volusia for sure)there was a article that said "job market worse in 60 years" that went for teans and adults from 20 to 30's ,and Mexicans are having a hard time because older working americans are still working and due to slow economy.
Banks and anyone in business is in for a profit but there are some that are being greedy and over charging on APR's and OIL Companies and we suffer, we get poor and they get rich and more rich and atop that they get huge tax breaks from the government(USA).
WE are in a recession right now and if there is no action taken we will be living in another economic depression then other countries will follow there after. Why I say that, Thats because the USA and Britain are the two major Super powers and playrs in the stock markets. Peace.

Joe

I'm sorry to say there is a recession in the U.S. seems to be heading to 2009

debtcollectionor

Australian Economic Observer

I guess that you're wrong huh?

Elmer

I just pray things will be alright sometime soon. Yes many of us of the working class will struggle hard in this times. I just hope we all will keep our Jobs... My only recomendation will be to buy American products!!!

joleine

i guess everyone here is straying away from the point!!its not just about America!!its about the whole world.....the lives that wish to see a better tomorrow!!why is everyone here trying to prove each other wrong??why can't we just join forces and work things out!!i probably am sounding as if i fantasise but the truth is if we don't have a dream we'll never reach anywhere!!everyone wants to have a happy old age..if i step on your stomach,someone else will step on mine!!who knows the real truth..whatever is shown by the media and told to us by the company CEO's is what we believe....those guys aren't the ones who'll suffer but its going to be us...i don't wish to suffer and if i got to save someone else for me to survive,i will do it without having second thoughts...if you people out there are such great economists then why don't you come up and be the 'heros' for the moment..maybe ,many others might just follow your example...i'm just 20 and i believe i have a long way to go and i really want to go as far as i can...i have already started doing my best....lets see who joins in............

T-

Considering that this is July 20, 2009, the author and "New Economist" are dead wrong. Each has no credibility, and the author should have stuck to his day job instead of writing this article. Ooops! Maybe the author was rightsized between then and now and there is no more day job.

rolex daytona

I think you are one of the people I was talking about, living with the numbers on paper and not what folks are actually living everyday. I was trying to get away from statistics for a minute and look at reality. Your head is in the clouds and if you make so much money and are so happy why are you here?

cheap air jordans

$9 Trillion just round it off... Meaning that as of today, every man, woman, and child owes $30.861 in this countries debt. Yeah, I'd be pissed too. The question is when are we as US citizens

rolex submariner

thanks for you share ,i like so much,It is so lucky to read your blog,it is full of useful message

horkes

Remove it from the loud sound described as among the People of the individual during sleep, especially in the medical sense, the most common cause of snoring soft palate observed in adults, little more than normal growth of the tongue, the muscles sag and lose tension and blockage of the airway during sleep titresmesidir little of the language.

sac çikarici

Internet users in more than 2 billion people worldwide, 778 million the number of computers registered to the internet, the web of 313 million, a total of 205 million units in the name of that reported.

To the extent that there is hundreds of millions of blogs and video Ahmed, said that Turkey has been estimated that there's at around 30 million.

Ahmed, the computer recorded the number of Internet in Turkey has been reported around 4 million, 250 thousand under .. en told that the domain name.

diş beyazlatma kalemi

Save the essence of life in the treatment of skin allantoinle Snail! This essence creates a bad appearance and have no choice tahribatlarının skin no longer be removed even if the so-called cracks.

Nature of this herbal solution effectively and safely as possible to get rid of sivilcelerinizden! Skin care products on behalf of the choice deliberately choose to adhere and creams containing natural formulas that you keep the fault

extra jel

As millions of people who want to lose weight, but youDid he can not succeed in a kind of worry about your weight yanıyorsunuz more? You might think, and this process will be much easier to lose weight in a healthy way to get over ... Now a much more difficult as it used to have a nice view, but you have to do is that you want to attenuation.

The comments to this entry are closed.

Information




  • TEST


  • Subscribe in NewsGator Online

Economist Weblogs

Disclaimer


  • This is a personal web site, produced in my own time and solely reflecting my personal opinions. Statements on this site do not represent the views or policies of my employer, past or present, or any other organisation with which I may be affiliated. The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities.