It is small wonder that the employment rate cannot keep pace with population growth. The US government issues 125,000 green cards every month, no matter how many Americans are thrown out of work, lose their homes, or can't buy shoes for their kids. The US government is more interested in replacing US workers than it is in helping them find jobs.
The question is not "How many jobs are needed to keep up with population growth?", it is "What is reasonable population growth given the current job creation rate?". The answer right now is a big, fat ZERO, although this hasn't stopped our blind government from continuing to issue 1 - 1.5 million work permits to new immigrants. This is on par with having a birthday cake that feeds 20, but continuing to invite guests until the party swells to 500.... With all the talk of job creation and dismay over the unemployment rates, they are not doing the simplest, least expensive thing they can do ensure more Americans are employed. QUIT IMPORTING JOB TAKERS!!! This is too simple a concept for Congress to comprehend... or is it VOTES they're importing, and TECHNO lobbyists they're supporting while presumably actually believing that there is a shortage of technically skilled Americans??? All Americans, especially unemployed Americans should be making this their primary issue with their so-called representatives. That birthday cake only goes so far....
and it's also true the executive branch and Congress has the ability to limit immigration and it's also true they continually want to increase it. Worse still is the spin, which is as thick as a blizzard, that increased immigration adds jobs. No it does not, all things static. There is worker displacement, substitution with the immigrant labor instead of the worker who is already here. Worse still is the claim that we have a worker shortage. Every year we import millions of foreign guest workers and that's just obscene considering the high levels of unemployment. There is no skills shortage, not in any occupational category, including scientists, PhDs, engineers in this country.
Probably the most brazen example of the denial that immigration levels negatively impact those already here when there exists weak economic labor demand (high unemployment), is the refusal to reduce H-2B foreign temporary guest workers. Literally stimulus funds were used to hire H-2B foreign guest workers instead of those locally, in areas with 30%+ percent unemployment and in most cases, where the local area unemployed already had the skills and had been working at those jobs for decades until they were lost.
This site is non-partisan but the spin on immigration is beyond disgusting. One wants to blame Democrats since they are the party of illegals, but don't buy that. The GOP ALSO wants more foreign guest workers and also tried to claim the above. Why? Because corporations, foreign business and other nations lobby our politicians and make huge campaign contributions, all to get their unlimited supply of foreign labor which also happens to be a conduit to offshore outsource even more jobs.
Not all immigration is worker substitution but a lot of it sure as hell is, esp. these days with 28 million people in reality needing a good job. Lobbyists and their economist cohorts write fictional white papers, literally setting the worker substitution variables to zero in labor economic theoretical formulas, or removing these variables completely out of the equation. These people should be condemned for biasing their figures, same as a pharmaceutical company putting out bogus clinical trial data.
Of course only a few nerdy people such as myself can follow the mathematics and know they just trumped up some completely bogus assumptions and assertions to spin their results in these papers. You can bet politicians don't read that deep or read anything beyond the number on the check. Politicians' staff might read a glossy fictional one page flier from a lobbyist, complete with talking points to lift for speeches.
Population growth is a choice that Congress - not the American people - make. Eighty-two percent of all U.S. population growth between 2005 and 2050 will be due to arriving immigrants and their children, according to the Pew Hispanic Center. That is a federal policy that can be adjusted or regulated just like any other. But the feds choose to continue record levels of immigration despite the slow recovery.
Look, media, esp. Fox news doesn't even report statistics accurately. On this site we try our damnest to be accurate because of that.
But trying to blame the left is just ridiculous, it is BOTH and it is NOT taxes which cost so many jobs, it is GLOBALIZATION, bad trade deals and the STRUCTURE of those business taxes.
BOTH PARTIES only do lobbyists' bidding and that is the problem, but don't think it's just Obama/Reid/Pelosi. It's also Boehner/McConnell/Ryan.
Then, if that isn't bad enough, sprinkle the other Senators and House leaders who sabotage important bills, add loopholes, refuse to regulate derivatives, enable stimulus funds to be offshore outsourced, refuse to put U.S. citizens in top priority for jobs and the list goes on and on.
Bottom line, if you want to fix a problem, it would be very helpful to identify the correct cause and we spend a lot of time on this, from the facts, statistics, not some rant du jour from some pundit.
We need as many jobs that we had before we went into the Recession. We need for jobs to come back to the US. This is the problem. Businessmen have stated it over and over and over. You cannot OverTax
the Businesses that were here before the Recession. That is what made the Recession. We are in a
Depression and unless and until Congress stops ignoring these facts, it won't get any better.
Obama promised all these Greem Jobs. America is not ready to go completely Green. Its an IDEAL, but its not a fact. Businesses coming back to the US will have to have their Taxes Reduced until they can
get going again. Its too SIMPLE and Congress doesn't get it. If one more Congressman says they are
going to Fix WASHINGTON, I am going to throw up. Another 4 years of Obama playing around with the Economy
will not get it. He hasn't enough guts to put a Mandate on Congress. We need a Take Charge President. somebody that is willing to Stand up to Pelosi, Harry Reid and all the Special Interest Groups that keep popping in with their AGENDA. I am talking about the Overwhelimg Latino Population that decides what
they need and want. If we had a President that the American Public Liked and he would stop pandering to
everybody but the TAXPAYER--- he would find out that what has worked for hundreds of years, will still work. We can't have our Government fighting amongst themselves. We can't have a President that lets the Lobbyiest take over. President Obama said he would make a change, the only thing he changed was giving us
a Health Care Plan that he can't pay for. We are in debt Trillions of dollars. He never seems to mind that his Ideas are just good on paper and verbally, but nothing has transpired except the Debt. He has not done anything he promised. He now asks us to give him more time? For What. We don't hear any new ideas, just use the same ones a little longer. Are you kidding me.
As expected. Oil broke $100/barrel today, first time in 4 months. Soybeans jumped, gold 6 month high and so on.
I still blame this administration and Congress. I fully expect a GOP wipe out this election but little good that will do us. When they had full control they did not implement what was needed, so I imagine if they get full control we'll see even more bad trade deals and of course Dems will try to pass "immigration reform" to flood the labor market more than it is.
Honestly, while I think QE is ineffective, crack cocaine for Wall Street and will raise commodities, prices, inflation, at least they are trying to do something, unlike our Congress and this administration who could care less about the economy.
Instead they are busy using the economy in attempts to gain political power.
Here we go, within 24 hours of Fed flooding market with free cash for TBTF, we have violence and mayhem in North Africa and the Middle East spreading (Yemen, Sudan, and other places along with Libya and Egypt) which will directly affect oil supplies. All that money printed will now chase less oil and we can sit back, watch oil prices skyrocket, and feel the pinch in everything we buy or rent or use that depends on oil (which goes way beyond just filling up at the gas station). Thanks Fed and the TBTF that control the Fed at our expense.
The Fed can control short term rates less than 2 years maturity, and it has more control the closer we get to the Fed Funds rate for overnight reserves. Even the Fed admits it cannot control long term rates. Each QE episode has resulted in rates moving up from where they were when the program started. This one will probably be no exception, and I would not be surprised to see a mini-spike in note and bond rates because of the unlimited nature of the QE3 program.
I agree with you that the Fed does not at this point need to reduce its balance sheet. QE3 will if conducted over the next year bring the balance sheet to $4 trillion. I suspect the Fed can hold on to those assets until maturity, and I believe it already announced that all existing MBS assets will be kept until their maturity. Note however, that the Fed does not hedge the interest rate or prepayment risk on its mortgage portfolio, because it feels it is the central bank and doesn't have to worry about the impact of losses. It also somewhat misleadingly describes the interest income thrown off by this portfolio as "profits" that it is returning every year to the Treasury. Even Fannie and Freddie knew better than to manage their portfolios this way. The Fed, therefore, is not treating its portfolio in the professional away required by a bank in the private sector. It seems to be more concerned about the political implications of its portfolio, without recognizing that the tens of billions of dollars of profit it pays to the Treasury every year is really interest income that used to go to the private sector and has now been siphoned off by the government.
I understand your qualification that the US can pay its bills under all circumstances, inflation permitting. The idea that the US can roll over its debt indefinitely comes from the illusion that the US is exempt from the laws of economics. This illusion exists because of the halo effect that the country enjoys from 100 years of commercial and political power on a global basis, from 100 years of a AAA rating for fiscal and monetary rectitude, and from being the only hyperpower in the world. This halo can last for a very long time since it takes many years to eat the seed corn that the country has built up in the 20th century. But the US is indeed digging increasingly into its wealth for survival, rather than generating new wealth that would permit it to continue in its prosperous lifestyle. This is quite evident in the way the public debt has mushroomed, and in the declining asset holdings of the population at large (losses on equity holdings, loss on housing stock, losses on real income). Most politicians don't recognize this, and if they do they spend a lot of time talking about how the other guy is going to have to cut back on their living standards. No one is looking much at the work that would be necessary to restore productive capacity to the economy, which means in particular getting the trade deficit down. The Fed governors talk openly about how they can ramp up their balance sheet as high as necessary until the economy takes off again. They don't see that the practice of using debt to spur growth, which did buy 100 years of prosperity for the country, got out of control in the 80s and went on a exponential tear until the debt mountain began to collapse under its own weight. Rather than deal with the debt problem - rather than force those actors in the economy who made bad investments and bad choices to accept the pain of bankruptcy (especially the banks), the Fed is trying to restart the debt cycle all over again and push it to yet another new, exponential height. It isn't working because it can't work, and the economy has run out of assets to inflate, so everyone is turning to the Treasury as the last great chunk of equity left to plunder (i.e., the good faith and credit of the country at large). That isn't working either, as we have seen with the loss of the Aaa rating. So I don't agree that the US can roll over its debt indefinitely. The USG has a better shot at it than anybody else, but the private sector is leading the way to debt liquidation through default, since the alternative of debt liquidation through inflation isn't working.
Finally, I think fiscal policy is the answer only in a limited sense - in alleviating or mitigating the pain the average person is going to experience as debt liquidation accelerates. We see this mitigation occuring in the explosion in the use of food stamps - up to 15% of the population. Obviously the risk here is that you create a segment of the population that develops a permanent dependency on the government for the basics in life. Rather than decry this, the US is eventually going to have to accept that 25% or more of the population will be permanently poor and permanently living off welfare in some fashion, while people hustle to find occasional work and odd jobs to supplement their income. This is the nature of every third world society I've ever visited, and we should not be acting so surprised that this is what is occurring in the US as it converts itself into something of a third world country.
The army of unemployed out here can tell you indeed.com and all the other relevant sites are showing fewer and fewer positions. If someone's unemployed out here in the US in 2012, he/she can quickly tell you from personal experience that the same jobs are being posted month after month or taken down and then reposted. Long-term unemployed will have all the miserable intel on the state of the US worker and non-existent jobs. Temp firms always solicit resumes and then never get back to people, or even have them come in for interviews, fill out extensive forms, talk to them for 10 minutes, promise all sorts of great opportunities sure to come soon, and then radio silence - they will also ignore every email or phone attempt to reach them. While fake jobs were posted with more frequency, now it's basically temp firms and it's easier to spot them because no temp firm has so many new jobs every day at the salaries they quote. Also, check out craigslist and other major sites that are demanding people work for free for "experience."
Also, check out the forums on indeed.com by frustrated job seekers, sites for unemployed support or city-data sites. Also about.com has thousands of tales from people talking about their situations (everything from new MBAs that can't get started to IBM workers fired at 50 after training their replacements). I trust those sites far, far more than any govt. propaganda or press. The real experiences of the folks struggling gives us far more real, believable info. and clearly flies in the face of govt. and business lies that "workers suck in the USA, and we're ready to hire except for uncertainty and the fact that Americans are unskilled welfare addicts."
Actually if that happened, they have captured SO MUCH of our manufacturing, literally we could not make a host of electronics, computers, devices, if that happened. The U.S. literally offshore outsourced almost all of their advanced technology. Intel does have FABS here but all of those parts and pieces around the processor are ONLY available in China.
Sad. According to EPI a conservative estimate of job losses just to goods (manufacturing offshore outsourced) is 2.7 million (see the link).
So, we can't really blockade China, but we could certainly confront them on currency manipulation AND make a national program to bring back certain key manufacturing industries, products are are key to the national interest.
It's not just computers where we're stuck, the U.S. sold to China key technologies in all sorts of national security and strategically critical areas. Literally our boneheads of corruption offshore outsourced national security to China by doing this. (both parties, no need to pick a color on this one).
Job openings one has to question if employers are just putting up snow to obtain more foreign guest workers and to outsource, and/or if they are being so unbelievably picky they simply do not want a human being in the position.
JOLTS was actually released September 11th and because there is just so little movement in the statistics, I weren't going to overview the report.
I changed my mind with Bernanke using the the jobs crisis to justify open ended quantitative easing to show how stagnant this is.
It is NOT a skills mismatch. We skipped the Beveridge curve graph because we are so stuck in a jobs crisis for so long, even that graph has become impossible to read. There is only so long one can place a data point on top of a data point, as they barely budge and are on top of each other year after year. That said, there is NO skills mismatch. It's not an employee problem, it's an employer problem. See the bottom links for the BLS graphs.
Well, of course the government DOES have a tool to restore jobs. It's spelled B-L-O-C-K-A-D-E. Nothing goes into China, nothing comes here from China. No stuff, no money, no jobs. Anyone who attempts to break the blockade dies.
That would restore jobs with amazing speed. Some corporate traitors (eg Apple) are so ferociously anti-American that they will die before they give a job to an American. But I'm sure a few would respond, however grudgingly, to the threat of a bullet.
And as requested, the Fed gives the TBTF banks exactly what they wanted - more free money printed out of thin air. And all that money, when not siphoned off for unearned bonuses and salaries over $20 million/year, will go chasing food and fuel, driving up food prices for everyone (not a real worry for those that dine in posh restaurants every day at taxpayer expense) and fuel prices. Toss in any Middle East oil supply shortage and we're screwed. All transportation costs will shoot up for everything carried anywhere for sale, plane tickets, heating oil, driving to or from a job (if those are anywhere to be found) or riding a bus or transportation of any kind, petroleum products will become more expensive (which basically covers a huge number of items, from chemicals to plastics and everything else in modern society), etc. In the previous two attempts, the Fed has done nothing to improve the unemployment situation. This money printing is only done at the behest of the big banks that don't care if we suffer inflation like the Weimar Republic or Robert Mugabe's Hades. People on fixed incomes are now doomed. Ironically, people collecting fixed incomes from unemployment are one of the major groups to be screwed, but Ben says he's looking for job growth? Great, suffer now for sure, and maybe in 1-10 years you might benefit somehow, but not likely at all.
But because nearly all of us are barely scraping by, the Fed's claim that it was concerned about the unemployed is a complete lie. Bernanke himself said in one interview he was purposely blowing up asset prices in the market because if people felt richer, they would feel better about spending money, creating demand, and that would cause companies to hire. Is that convoluted and tortured thinking or what?
First, no one has enough money in the stock market to feel better in 2012. Second, if stocks are going up, people are most likely to take that money out to feed and clothe themselves and pay off debt in 2012. Third, assuming people actually spend the money and companies hire, those companies have been proven time and time again to not hire Americans, but overseas, so the $ never winds up here as a paycheck. Fourth, isn't the building up of, and obsession over, "confidence" and feeling good the marks of a Ponzi and confidence game? So the Fed finally admits it. Finally, how about the Fed is honest, says these moves just give out money to TBTF, and this time, it realizes Americans outside corporate boardrooms and TBTF banks could actually use any money to pay bills and survive. I'd settle for 1/20 of Dimon's paycheck, I'll wait for it in the mail Ben, thanks.
Numerian said: "If the US ever got into trouble like Spain or Greece, which means if long term interest rates ever spiked up "
But there is no comparison between the US and Greece. The US issues its own currency and sets its own interest rates. Greece does not issue its own currency and does not set its own interest rates.
Numerian said: "The Fed’s balance sheet is now going to exceed 20% of the GDP of the US, and it is clearly impossible for the Fed to reduce its balance sheet significantly without severely damaging the economy."
But why would the Fed need to reduce its balance sheet ? Why not let the Fed's holdings mature and then be swept back into the Treasury ? The Fed buys and sells stuff to control interest rates, not to manage its balance sheet for the sake of managing its balance sheet.
Numerian said: "No nation, not even the US, can print money indefinitely."
Actually, the US can pay any bill with only keystrokes, indefinitely, limited only by inflation. The US can continue to roll over its debt indefinitely. Or Congress could repeal the nearly 100 year old law that requires the Treasury to sell debt in the first place, since that law no longer serves any purpose other than to subsidize the financial sector.
Agree with Numerian that the unintended consequences of permanent zero are worrisome.
The best I can say about QE3 is that, if it doesn't work, maybe that'll be monetarism's last breath, and then we turn our attention to fiscal policy like we should have done all along ?
When the Fed finally unloads it's holdings, boy is that going to be painful. This is like a heroin addict. We now have an unlimited time line for Wall Street crack, we're all supposed to "invest" in this 75% HFT gambling casino now.
Great details Numerian, I don't think the financial press has discussed the actual holdings and their implications in a long time.
We wrote up a detailed post on Bernanke's claim QE creates jobs.
It's ridiculous, but on the other side, the Fed cannot create a direct jobs program unless somehow they can do some funky finance to expand their own budget and hire 3 million people to cut the Federal Reserve building grass with scissors and then replant new grass with tweezers. Or maybe Ben needs a team of 500,000 make up artists for press conferences. He could hire 2 million hole diggers to dig and then fill up the holes, or maybe he could start a "let's dig to China and get our jobs back" project.
;)
Ok, today was an improvement in that he was more realistic in terms of trying to get corporations to hire Americans and claim it was a confidence thing.
I also took unlimited QE as almost a threat, as in "we're going to keep this up until you assholes start hiring some Americans".
The real problem is this administration and Congress and maybe the press as well. Everyday I see completely bogus claims, often from CEOs on financial news networks on what they want "to create jobs". It's pure bullshit. Corporations, MNCs are demanding even more policies to offshore outsource jobs, to not pay taxes, to not let anyone sue them and import more foreign guest workers to labor arbitrage, i.e. displace or NOT hire Americans.
This is just ridiculous and needs a direct confrontation that these agendas will COST more American jobs.
Then, on the other side, the fiscal cliff is real and we have corrupt Democrats, beyond brazen corrupt congressional leadership and an administration, also corrupt, who will not act in the national interest and simply pass policies, programs that are KNOWN to work, huge "bang for the buck" with the big multiplier not being GDP but Jobs.
For better or worse everyone hates the Fed and also acts like the Fed somehow can 100% control the economy, when it's this administration and Congress that have control over labor policies.
I'm sick to death of the economic fiction and the agendas and could list maybe 20 policies that should be palatable to most people in the U.S. that would save and create jobs.
This site was literally founded over the disgust of economic fiction. That's when someone claims agenda x will have effect y, when in truth it is well proven it will have effect z and effect z means bad news for the U.S. economy, middle class and American jobs.
QE3 is the blowing of a new bubble nothing more. It is designed to further fatten the larders of the 1%.
Here's the transmission mechanism:
FED buys MBS (mortgage backed securities), thus further lowering yields on these bonds.
Because yields on bonds are low, money flows into the stock market in a quest for yield. Stocks go up because more money flows into stock market.
Home prices go up because lower interest on home loans allows lower payments and more people can thus afford to buy. Prices can't rise unless there is turnover.
Thus we have the goosing of the stock market and a re-inflation of the housing market to stabilize prices in an artificially high region.
No reason the above should stimulate jobs beyond creating a new crop of real estate agents and stock hucksters. Yet another giveaway to the rentiers.
If you want a good laugh read the below article on Bloomberg concerning Qe3. It illustrates the insanity of our current policy makers.
It is small wonder that the employment rate cannot keep pace with population growth. The US government issues 125,000 green cards every month, no matter how many Americans are thrown out of work, lose their homes, or can't buy shoes for their kids. The US government is more interested in replacing US workers than it is in helping them find jobs.
AMERICANS NEED JOBS !! NOW !!
MY SUGGESTION WOULD BE THAT PRESIDENT OBAMA SHOULD CALL EVERY COMPANY IN THE USA AND SAY ,,
HAVE I GOT A DEAL FOR YOU !!
FOR EVERY NEW WORKER THAT YOU HIRE THE GOVERNMENT WILL PAY 50% OF THOSE NEW !! WORKERS WAGES FOR ONE YEAR !!
ALSO THE GOVERNMENT WILL LOWER YOUR COMPANIES TAXES BY 20% FOR 5 YEARS !!
NOW IS THAT ASKING TOO MUCH FROM OUR GOVERNMENT ?????????????
I BET THERE WOULD BE MILLIONS OF NEW JOBS OVER NIGHT !!
ALL I REALLY WANT TO KNOW IS MY IDEA A GOOD ONE OR AM I NOT SMART ENOUGH TO KNOW THAT MAYBE MY IDEA IS NOT REALLY A GOOD IDEA ???
MY SIMPLE LOGIC IS THAT IF MY IDEA IS IMPLEMENTED THEN THE NEW WORKERS WILL BE WORKING AND AT THE SAME TIME THEY WILL BE PAYING !! TAXES !!
ALSO THE NEW WORKERS WILL START BUYING
A NEW CAR OR
A NEW HOME AND OTHER NEW ! PRODUCTS AND WHEN DOING THAT ,
THEN MORE NEW JOBS WILL BE CREATED .
OR IS MY COMMON SENSE APPROACH A WRONG IDEA ??????????
If a lot of people get Jobs when the Government offers to Pay 50% of their Salary then those people will ,,
NOT !! be collecting UNEMPLOYMENT
and NOT collecting WELFARE
and NOT collecting FOOD STAMPS ,,
but they will be working a regular Job and PAYING TAXES and BUYING NEW Products like maybe a
NEW TV or
a NEW COMPUTER or
a NEW CAR or
a NEW HOME , Etc. Etc.
and that will creat NEW JOBS !!
So is my Idea sounding better now ???????
The question is not "How many jobs are needed to keep up with population growth?", it is "What is reasonable population growth given the current job creation rate?". The answer right now is a big, fat ZERO, although this hasn't stopped our blind government from continuing to issue 1 - 1.5 million work permits to new immigrants. This is on par with having a birthday cake that feeds 20, but continuing to invite guests until the party swells to 500.... With all the talk of job creation and dismay over the unemployment rates, they are not doing the simplest, least expensive thing they can do ensure more Americans are employed. QUIT IMPORTING JOB TAKERS!!! This is too simple a concept for Congress to comprehend... or is it VOTES they're importing, and TECHNO lobbyists they're supporting while presumably actually believing that there is a shortage of technically skilled Americans??? All Americans, especially unemployed Americans should be making this their primary issue with their so-called representatives. That birthday cake only goes so far....
and it's also true the executive branch and Congress has the ability to limit immigration and it's also true they continually want to increase it. Worse still is the spin, which is as thick as a blizzard, that increased immigration adds jobs. No it does not, all things static. There is worker displacement, substitution with the immigrant labor instead of the worker who is already here. Worse still is the claim that we have a worker shortage. Every year we import millions of foreign guest workers and that's just obscene considering the high levels of unemployment. There is no skills shortage, not in any occupational category, including scientists, PhDs, engineers in this country.
Probably the most brazen example of the denial that immigration levels negatively impact those already here when there exists weak economic labor demand (high unemployment), is the refusal to reduce H-2B foreign temporary guest workers. Literally stimulus funds were used to hire H-2B foreign guest workers instead of those locally, in areas with 30%+ percent unemployment and in most cases, where the local area unemployed already had the skills and had been working at those jobs for decades until they were lost.
This site is non-partisan but the spin on immigration is beyond disgusting. One wants to blame Democrats since they are the party of illegals, but don't buy that. The GOP ALSO wants more foreign guest workers and also tried to claim the above. Why? Because corporations, foreign business and other nations lobby our politicians and make huge campaign contributions, all to get their unlimited supply of foreign labor which also happens to be a conduit to offshore outsource even more jobs.
Not all immigration is worker substitution but a lot of it sure as hell is, esp. these days with 28 million people in reality needing a good job. Lobbyists and their economist cohorts write fictional white papers, literally setting the worker substitution variables to zero in labor economic theoretical formulas, or removing these variables completely out of the equation. These people should be condemned for biasing their figures, same as a pharmaceutical company putting out bogus clinical trial data.
Of course only a few nerdy people such as myself can follow the mathematics and know they just trumped up some completely bogus assumptions and assertions to spin their results in these papers. You can bet politicians don't read that deep or read anything beyond the number on the check. Politicians' staff might read a glossy fictional one page flier from a lobbyist, complete with talking points to lift for speeches.
Population growth is a choice that Congress - not the American people - make. Eighty-two percent of all U.S. population growth between 2005 and 2050 will be due to arriving immigrants and their children, according to the Pew Hispanic Center. That is a federal policy that can be adjusted or regulated just like any other. But the feds choose to continue record levels of immigration despite the slow recovery.
Look, media, esp. Fox news doesn't even report statistics accurately. On this site we try our damnest to be accurate because of that.
But trying to blame the left is just ridiculous, it is BOTH and it is NOT taxes which cost so many jobs, it is GLOBALIZATION, bad trade deals and the STRUCTURE of those business taxes.
BOTH PARTIES only do lobbyists' bidding and that is the problem, but don't think it's just Obama/Reid/Pelosi. It's also Boehner/McConnell/Ryan.
Then, if that isn't bad enough, sprinkle the other Senators and House leaders who sabotage important bills, add loopholes, refuse to regulate derivatives, enable stimulus funds to be offshore outsourced, refuse to put U.S. citizens in top priority for jobs and the list goes on and on.
Bottom line, if you want to fix a problem, it would be very helpful to identify the correct cause and we spend a lot of time on this, from the facts, statistics, not some rant du jour from some pundit.
And where is this population growth coming from? Immigration accounts for 82% of it and that doesn't even count the illegal uninvited segment.
We need as many jobs that we had before we went into the Recession. We need for jobs to come back to the US. This is the problem. Businessmen have stated it over and over and over. You cannot OverTax
the Businesses that were here before the Recession. That is what made the Recession. We are in a
Depression and unless and until Congress stops ignoring these facts, it won't get any better.
Obama promised all these Greem Jobs. America is not ready to go completely Green. Its an IDEAL, but its not a fact. Businesses coming back to the US will have to have their Taxes Reduced until they can
get going again. Its too SIMPLE and Congress doesn't get it. If one more Congressman says they are
going to Fix WASHINGTON, I am going to throw up. Another 4 years of Obama playing around with the Economy
will not get it. He hasn't enough guts to put a Mandate on Congress. We need a Take Charge President. somebody that is willing to Stand up to Pelosi, Harry Reid and all the Special Interest Groups that keep popping in with their AGENDA. I am talking about the Overwhelimg Latino Population that decides what
they need and want. If we had a President that the American Public Liked and he would stop pandering to
everybody but the TAXPAYER--- he would find out that what has worked for hundreds of years, will still work. We can't have our Government fighting amongst themselves. We can't have a President that lets the Lobbyiest take over. President Obama said he would make a change, the only thing he changed was giving us
a Health Care Plan that he can't pay for. We are in debt Trillions of dollars. He never seems to mind that his Ideas are just good on paper and verbally, but nothing has transpired except the Debt. He has not done anything he promised. He now asks us to give him more time? For What. We don't hear any new ideas, just use the same ones a little longer. Are you kidding me.
As expected. Oil broke $100/barrel today, first time in 4 months. Soybeans jumped, gold 6 month high and so on.
I still blame this administration and Congress. I fully expect a GOP wipe out this election but little good that will do us. When they had full control they did not implement what was needed, so I imagine if they get full control we'll see even more bad trade deals and of course Dems will try to pass "immigration reform" to flood the labor market more than it is.
Honestly, while I think QE is ineffective, crack cocaine for Wall Street and will raise commodities, prices, inflation, at least they are trying to do something, unlike our Congress and this administration who could care less about the economy.
Instead they are busy using the economy in attempts to gain political power.
Here we go, within 24 hours of Fed flooding market with free cash for TBTF, we have violence and mayhem in North Africa and the Middle East spreading (Yemen, Sudan, and other places along with Libya and Egypt) which will directly affect oil supplies. All that money printed will now chase less oil and we can sit back, watch oil prices skyrocket, and feel the pinch in everything we buy or rent or use that depends on oil (which goes way beyond just filling up at the gas station). Thanks Fed and the TBTF that control the Fed at our expense.
The Fed can control short term rates less than 2 years maturity, and it has more control the closer we get to the Fed Funds rate for overnight reserves. Even the Fed admits it cannot control long term rates. Each QE episode has resulted in rates moving up from where they were when the program started. This one will probably be no exception, and I would not be surprised to see a mini-spike in note and bond rates because of the unlimited nature of the QE3 program.
I agree with you that the Fed does not at this point need to reduce its balance sheet. QE3 will if conducted over the next year bring the balance sheet to $4 trillion. I suspect the Fed can hold on to those assets until maturity, and I believe it already announced that all existing MBS assets will be kept until their maturity. Note however, that the Fed does not hedge the interest rate or prepayment risk on its mortgage portfolio, because it feels it is the central bank and doesn't have to worry about the impact of losses. It also somewhat misleadingly describes the interest income thrown off by this portfolio as "profits" that it is returning every year to the Treasury. Even Fannie and Freddie knew better than to manage their portfolios this way. The Fed, therefore, is not treating its portfolio in the professional away required by a bank in the private sector. It seems to be more concerned about the political implications of its portfolio, without recognizing that the tens of billions of dollars of profit it pays to the Treasury every year is really interest income that used to go to the private sector and has now been siphoned off by the government.
I understand your qualification that the US can pay its bills under all circumstances, inflation permitting. The idea that the US can roll over its debt indefinitely comes from the illusion that the US is exempt from the laws of economics. This illusion exists because of the halo effect that the country enjoys from 100 years of commercial and political power on a global basis, from 100 years of a AAA rating for fiscal and monetary rectitude, and from being the only hyperpower in the world. This halo can last for a very long time since it takes many years to eat the seed corn that the country has built up in the 20th century. But the US is indeed digging increasingly into its wealth for survival, rather than generating new wealth that would permit it to continue in its prosperous lifestyle. This is quite evident in the way the public debt has mushroomed, and in the declining asset holdings of the population at large (losses on equity holdings, loss on housing stock, losses on real income). Most politicians don't recognize this, and if they do they spend a lot of time talking about how the other guy is going to have to cut back on their living standards. No one is looking much at the work that would be necessary to restore productive capacity to the economy, which means in particular getting the trade deficit down. The Fed governors talk openly about how they can ramp up their balance sheet as high as necessary until the economy takes off again. They don't see that the practice of using debt to spur growth, which did buy 100 years of prosperity for the country, got out of control in the 80s and went on a exponential tear until the debt mountain began to collapse under its own weight. Rather than deal with the debt problem - rather than force those actors in the economy who made bad investments and bad choices to accept the pain of bankruptcy (especially the banks), the Fed is trying to restart the debt cycle all over again and push it to yet another new, exponential height. It isn't working because it can't work, and the economy has run out of assets to inflate, so everyone is turning to the Treasury as the last great chunk of equity left to plunder (i.e., the good faith and credit of the country at large). That isn't working either, as we have seen with the loss of the Aaa rating. So I don't agree that the US can roll over its debt indefinitely. The USG has a better shot at it than anybody else, but the private sector is leading the way to debt liquidation through default, since the alternative of debt liquidation through inflation isn't working.
Finally, I think fiscal policy is the answer only in a limited sense - in alleviating or mitigating the pain the average person is going to experience as debt liquidation accelerates. We see this mitigation occuring in the explosion in the use of food stamps - up to 15% of the population. Obviously the risk here is that you create a segment of the population that develops a permanent dependency on the government for the basics in life. Rather than decry this, the US is eventually going to have to accept that 25% or more of the population will be permanently poor and permanently living off welfare in some fashion, while people hustle to find occasional work and odd jobs to supplement their income. This is the nature of every third world society I've ever visited, and we should not be acting so surprised that this is what is occurring in the US as it converts itself into something of a third world country.
The army of unemployed out here can tell you indeed.com and all the other relevant sites are showing fewer and fewer positions. If someone's unemployed out here in the US in 2012, he/she can quickly tell you from personal experience that the same jobs are being posted month after month or taken down and then reposted. Long-term unemployed will have all the miserable intel on the state of the US worker and non-existent jobs. Temp firms always solicit resumes and then never get back to people, or even have them come in for interviews, fill out extensive forms, talk to them for 10 minutes, promise all sorts of great opportunities sure to come soon, and then radio silence - they will also ignore every email or phone attempt to reach them. While fake jobs were posted with more frequency, now it's basically temp firms and it's easier to spot them because no temp firm has so many new jobs every day at the salaries they quote. Also, check out craigslist and other major sites that are demanding people work for free for "experience."
Also, check out the forums on indeed.com by frustrated job seekers, sites for unemployed support or city-data sites. Also about.com has thousands of tales from people talking about their situations (everything from new MBAs that can't get started to IBM workers fired at 50 after training their replacements). I trust those sites far, far more than any govt. propaganda or press. The real experiences of the folks struggling gives us far more real, believable info. and clearly flies in the face of govt. and business lies that "workers suck in the USA, and we're ready to hire except for uncertainty and the fact that Americans are unskilled welfare addicts."
Actually if that happened, they have captured SO MUCH of our manufacturing, literally we could not make a host of electronics, computers, devices, if that happened. The U.S. literally offshore outsourced almost all of their advanced technology. Intel does have FABS here but all of those parts and pieces around the processor are ONLY available in China.
Sad. According to EPI a conservative estimate of job losses just to goods (manufacturing offshore outsourced) is 2.7 million (see the link).
So, we can't really blockade China, but we could certainly confront them on currency manipulation AND make a national program to bring back certain key manufacturing industries, products are are key to the national interest.
It's not just computers where we're stuck, the U.S. sold to China key technologies in all sorts of national security and strategically critical areas. Literally our boneheads of corruption offshore outsourced national security to China by doing this. (both parties, no need to pick a color on this one).
Job openings one has to question if employers are just putting up snow to obtain more foreign guest workers and to outsource, and/or if they are being so unbelievably picky they simply do not want a human being in the position.
JOLTS was actually released September 11th and because there is just so little movement in the statistics, I weren't going to overview the report.
I changed my mind with Bernanke using the the jobs crisis to justify open ended quantitative easing to show how stagnant this is.
It is NOT a skills mismatch. We skipped the Beveridge curve graph because we are so stuck in a jobs crisis for so long, even that graph has become impossible to read. There is only so long one can place a data point on top of a data point, as they barely budge and are on top of each other year after year. That said, there is NO skills mismatch. It's not an employee problem, it's an employer problem. See the bottom links for the BLS graphs.
Well, of course the government DOES have a tool to restore jobs. It's spelled B-L-O-C-K-A-D-E. Nothing goes into China, nothing comes here from China. No stuff, no money, no jobs. Anyone who attempts to break the blockade dies.
That would restore jobs with amazing speed. Some corporate traitors (eg Apple) are so ferociously anti-American that they will die before they give a job to an American. But I'm sure a few would respond, however grudgingly, to the threat of a bullet.
And as requested, the Fed gives the TBTF banks exactly what they wanted - more free money printed out of thin air. And all that money, when not siphoned off for unearned bonuses and salaries over $20 million/year, will go chasing food and fuel, driving up food prices for everyone (not a real worry for those that dine in posh restaurants every day at taxpayer expense) and fuel prices. Toss in any Middle East oil supply shortage and we're screwed. All transportation costs will shoot up for everything carried anywhere for sale, plane tickets, heating oil, driving to or from a job (if those are anywhere to be found) or riding a bus or transportation of any kind, petroleum products will become more expensive (which basically covers a huge number of items, from chemicals to plastics and everything else in modern society), etc. In the previous two attempts, the Fed has done nothing to improve the unemployment situation. This money printing is only done at the behest of the big banks that don't care if we suffer inflation like the Weimar Republic or Robert Mugabe's Hades. People on fixed incomes are now doomed. Ironically, people collecting fixed incomes from unemployment are one of the major groups to be screwed, but Ben says he's looking for job growth? Great, suffer now for sure, and maybe in 1-10 years you might benefit somehow, but not likely at all.
But because nearly all of us are barely scraping by, the Fed's claim that it was concerned about the unemployed is a complete lie. Bernanke himself said in one interview he was purposely blowing up asset prices in the market because if people felt richer, they would feel better about spending money, creating demand, and that would cause companies to hire. Is that convoluted and tortured thinking or what?
First, no one has enough money in the stock market to feel better in 2012. Second, if stocks are going up, people are most likely to take that money out to feed and clothe themselves and pay off debt in 2012. Third, assuming people actually spend the money and companies hire, those companies have been proven time and time again to not hire Americans, but overseas, so the $ never winds up here as a paycheck. Fourth, isn't the building up of, and obsession over, "confidence" and feeling good the marks of a Ponzi and confidence game? So the Fed finally admits it. Finally, how about the Fed is honest, says these moves just give out money to TBTF, and this time, it realizes Americans outside corporate boardrooms and TBTF banks could actually use any money to pay bills and survive. I'd settle for 1/20 of Dimon's paycheck, I'll wait for it in the mail Ben, thanks.
Numerian said: "If the US ever got into trouble like Spain or Greece, which means if long term interest rates ever spiked up "
But there is no comparison between the US and Greece. The US issues its own currency and sets its own interest rates. Greece does not issue its own currency and does not set its own interest rates.
Numerian said: "The Fed’s balance sheet is now going to exceed 20% of the GDP of the US, and it is clearly impossible for the Fed to reduce its balance sheet significantly without severely damaging the economy."
But why would the Fed need to reduce its balance sheet ? Why not let the Fed's holdings mature and then be swept back into the Treasury ? The Fed buys and sells stuff to control interest rates, not to manage its balance sheet for the sake of managing its balance sheet.
Numerian said: "No nation, not even the US, can print money indefinitely."
Actually, the US can pay any bill with only keystrokes, indefinitely, limited only by inflation. The US can continue to roll over its debt indefinitely. Or Congress could repeal the nearly 100 year old law that requires the Treasury to sell debt in the first place, since that law no longer serves any purpose other than to subsidize the financial sector.
Agree with Numerian that the unintended consequences of permanent zero are worrisome.
The best I can say about QE3 is that, if it doesn't work, maybe that'll be monetarism's last breath, and then we turn our attention to fiscal policy like we should have done all along ?
When the Fed finally unloads it's holdings, boy is that going to be painful. This is like a heroin addict. We now have an unlimited time line for Wall Street crack, we're all supposed to "invest" in this 75% HFT gambling casino now.
Great details Numerian, I don't think the financial press has discussed the actual holdings and their implications in a long time.
We wrote up a detailed post on Bernanke's claim QE creates jobs.
It's ridiculous, but on the other side, the Fed cannot create a direct jobs program unless somehow they can do some funky finance to expand their own budget and hire 3 million people to cut the Federal Reserve building grass with scissors and then replant new grass with tweezers. Or maybe Ben needs a team of 500,000 make up artists for press conferences. He could hire 2 million hole diggers to dig and then fill up the holes, or maybe he could start a "let's dig to China and get our jobs back" project.
;)
Ok, today was an improvement in that he was more realistic in terms of trying to get corporations to hire Americans and claim it was a confidence thing.
I also took unlimited QE as almost a threat, as in "we're going to keep this up until you assholes start hiring some Americans".
The real problem is this administration and Congress and maybe the press as well. Everyday I see completely bogus claims, often from CEOs on financial news networks on what they want "to create jobs". It's pure bullshit. Corporations, MNCs are demanding even more policies to offshore outsource jobs, to not pay taxes, to not let anyone sue them and import more foreign guest workers to labor arbitrage, i.e. displace or NOT hire Americans.
This is just ridiculous and needs a direct confrontation that these agendas will COST more American jobs.
Then, on the other side, the fiscal cliff is real and we have corrupt Democrats, beyond brazen corrupt congressional leadership and an administration, also corrupt, who will not act in the national interest and simply pass policies, programs that are KNOWN to work, huge "bang for the buck" with the big multiplier not being GDP but Jobs.
For better or worse everyone hates the Fed and also acts like the Fed somehow can 100% control the economy, when it's this administration and Congress that have control over labor policies.
I'm sick to death of the economic fiction and the agendas and could list maybe 20 policies that should be palatable to most people in the U.S. that would save and create jobs.
This site was literally founded over the disgust of economic fiction. That's when someone claims agenda x will have effect y, when in truth it is well proven it will have effect z and effect z means bad news for the U.S. economy, middle class and American jobs.
QE3 is the blowing of a new bubble nothing more. It is designed to further fatten the larders of the 1%.
Here's the transmission mechanism:
FED buys MBS (mortgage backed securities), thus further lowering yields on these bonds.
Because yields on bonds are low, money flows into the stock market in a quest for yield. Stocks go up because more money flows into stock market.
Home prices go up because lower interest on home loans allows lower payments and more people can thus afford to buy. Prices can't rise unless there is turnover.
Thus we have the goosing of the stock market and a re-inflation of the housing market to stabilize prices in an artificially high region.
No reason the above should stimulate jobs beyond creating a new crop of real estate agents and stock hucksters. Yet another giveaway to the rentiers.
If you want a good laugh read the below article on Bloomberg concerning Qe3. It illustrates the insanity of our current policy makers.
http://www.bloomberg.com/news/2012-09-13/with-qe3-we-all-win-poor-and-ri...
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