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Ask and Listen
The head of the Minneapolis Fed, Narayana Kocherlakota gave a presentation
in Marseilles, France on Friday. This was another attempt at convincing
the public that the Fed can fix anything provided they are left to their
own devices and have unlimited capacity to print money. The
presentation was a “No Sale” for me.
The deep thinkers in Minneapolis have come up with a new formula. Bubbly Equilibria? What does that mean?
I suppose that someone has to create such drivel. The formulas were
based on an Apples and Bananas economic model. Unfortunately the real
world is a bit more complex.
The bottom line from Mr. K is that bubbles of any kind don’t create a threat to employment provided that the Fed provides the “appropriate”
level of monetary stimulus. He does point out the limits of monetary
policy due to the limitations of zero interest rates. So really this is
just a defense of QE. His words:
“The bubble collapse has no impact on unemployment or output, given sufficiently accommodative monetary policy,”
This suggests that the Fed can "fix" all bubbles. What Mr. K does not
seem to get is that the Fed is the one that causes bubbles. They do it
with accommodative monetary policy. We are seeing this in ink every day.
Look at the S&P, look at the CRB and look at the two-year note. They are all at bubble levels today. It’s cheap money and loose monetary policy that did it. The current bubbles formed by the Fed will pop. And when (not if) they do, guys like Kocherlakota will respond with: “We need more stimulus!!”
We do need some folks at the Fed who are purely academic economists. But they should not be pulling the strings on policy. We need pragmatists. Ones that can look beyond the next six months and say, “We should follow policies that promote long –term stability”.
The current policies that create bubbles, and then fight them when they
burst with more monetary stimulus, are old school. We need some new
leadership. That leadership should not come from academia.
Want some evidence of that? (Reuters)
In one of the paper's more surprising claims, Kocherlakota suggested that extending unemployment benefits
-- sometimes seen as adding to the jobless rate because it can
discourage those receiving benefits from actively seeking jobs -- actually reduces it.
Mr. K. has to get out of ivory tower and talk to the people.
He may be able to argue that extending unemployment benefits is
countercyclical. But if he bothered to ask around and see what is
happening he would understand that extending unemployment just creates
more unemployed. I’d be happy to introduce him to a few folks that maxed
out unemployment because it was much easier than working. But those people found work as soon as the checks stopped.
I suspect he would hear as much back in Minneapolis (if he bothered to ask). He would also hear that the folks in his district are just sick and tired of bubbles and the Fed that keeps causing them.
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To his credit naray was opposed to TARP when he chaired the eco dept at UofM, though that may have been more politics than economics.
Hey, I need my roof done, I'll pay you $2.25/hr.
But Bruce and Leo have to..... never mind
$2.25/hr sounds fine.
Please pay with pre-1964 dimes and quarters only.
LMAO!
Up +
+1
Sure! how do I get there?
Well said, Mr. Fred, well said.
They mythology that there are plenty of jobs to go around continues to be spun relentlessly by the usual suspects (US Chamber of Commerce, N.A.M, et al. as in efftard f**kwits).
With 37 million missing jobs [Breakdown: 22 million created offshore the past decade, and a real 15 million offshored -- they continously fudge the numbers and falsely claim it's only 8 mil to 11 million "lost," there is a concise reason why real unemployment is somewhere between 28% to over 31% of the population, and as one who has been religiously following the payroll data, allow me to repeat that payrolls have been consistently falling SINCE 1999 --- that's right, kiddies and NAM freakazoids, SINCE 1999 --- while the working population has only been growing.
Bruce,
I liked your comment until I read this:
I have a question for you and others down south, are there good jobs for qualified people? I was in Albany, NY last weekend for my CCSVI procedure and people there told me there are no jobs. Not exactly. The nurses told me that there are plenty of jobs in healthcare but nobody wants to work in their field. But many people who lost good jobs told me they're having a hard time finding decent jobs in their field. How does cutting their unemployment benefits help them? Are you arguing that they should accept any crappy job and be part of the working poor, effectively underemployed? Seems very harsh to me.
And there is the problem. "Are you arguing that they should accept any crappy job and be part of the working poor, effectively underemployed?" Sometimes you have to suck it up and press on to get through rough patches. That is where American ingenuity comes from, not from sitting around feeling sorry for yourself and blaming everything and everyone else for your problems. Unfortunately that seems to be the primary theme here in our country now. Extend, pretend, and when all else fails, blame someone else. Best stated in a Descendents song.
We flipped our finger to the king of england
Stole our country from the indians
With god on our side and guns in our hands
We took it for our own
A nation dedicated to liberty
Justice and equality
Does it look that way to you?
It doesn't look that way to me
The sickest joke I know
Listen up man, I'll tell you who I am
Just another stupid american
You don't wanna listen
You don't wanna understand
So finish up your drink and go home
I come from the land of Ben Franklin
Twain and Poe and Walt Whitman
Otis Redding, Ellington,
The country that I love
But it's a land of the slaves and the ku klux klan
Haymarket riot and the great depression
Joe McCarthy, Vietnam
The sickest joke I know
I'm proud and ashamed
Every fourth of july
You got to know the truth
Before you say that you got pride
Now the cops got tanks 'cause the kids got guns
Shrinks pushin' pills on everyone
Cancer from the ocean, cancer from the sun
Straight to Hell we go
Helps them go get a job. Helps them persue entrpreneurial goals. Helps them actually contribute something to the country their forefathers fought for.
This is exactly why I do not read his writing, a real lack of economic foundation.
Hunger is a great motivator. Paying someone to sit on his ass is not.
Chucky
When your tummy growls a little bit before suppertime-THAT AIN'T HUNGER !
You do not know a thing about hunger. Or you wouldn't be offering your pithy comments.
But I agree that if the government is going dump out tax dollars, it ought to create wealth/assets, not more TV viewers.
Who in America knows about hunger? If you have a neighborhood grocery store without a "dragon" (trash compactor), go behind and take a peek in the dumpster. I guarantee you can live out of that thing and never have to buy food again.. until everything collapses. THEN the dumpster will be empty.
It's all in the attitude one takes towards one's life. Once a victim, always a victim. once the master of one's own life, never again a slave. The elite knnow this, and abuse the power of their freedom to exploit those who are held in bondage to fear. Those who subscribe to victimhood gain as a consequense the luxury of never again being responsible for themselves or their destiny.
Why not be free and choose to respect others?
Sorry, every grocery store dumpster in my city is claimed already.
You obviously have no clue just how little you get when you're on the dole. But if the alternative is a McJob that pays no better, why would you take it?
Exactly. Why would you take it? Until 99 weeks go by you don't.
I'm sorry that this is the case. But it is the case.
In the spirit of DBurn above, let me try to be nice before my rant. First I disclose that I am a trust fund baby, not big but enough so that I could ¨do whatever I wanted, but not do nothing¨. Going on to disclose more (than perhaps I should), I had fairly good jobs right out of college for about 5 years (ending in 1984). I SAVED money during that time, I guess I am lucky I did not have to spend it on cell phones and iPads...
I then got bored working for others and decided to go into business. My first business (just me) crashed and burned, me losing a lot of dough, but not stiffing anybody. I then started another business, this time with two other guys. This business crashed and burned too, but again, we did not stiff anyone. My third business barely broke even, and that was with no salary. I lost a lot of money...
It was not until my fourth business (with my Peruvian in-laws) did I finally get a business to work out (yet we have lots of competition). I am in Peru right now, on business...
Rant starts:
HERE IN PERU THEY DO NOT HAVE WELFARE AND PROGRAMS! Peru is poor! You work, somehow, or you go hungry! I see people every day who are REALLY POOR. And, yes, people with disabilities in Peru have it very bad. I see working people every day (some we have HIRED) who get MUCH less than you whiners above.
I would never start another business in the USA. No way, NFW. Unions, .gov, lawsuits, forget it.
Most (US) small business people I know are having a really hard time now.
It is a hard and unfair world out their, bitchez! Visit Peru or any poor country and you will see for yourselves.
Bruce is right. There is ALWAYS work. It may suck, be low paid, whatever. I kow this sounds callous from a lucky guy, but you whiners need to realize that well over 50% of the world is much worse off than you. Don´t like being unemployed? Then get to work!
Your rant considered then rejected. Doesn't matter where you live. If the distribution of wealth is too highly concentrated then the majority of population has a lower standard of living. If this ratio increases to critical mass then there is revolution and that is what we are watching and will experience in USA and even your precious country Peru.
Since you proudly say you own a business, do you pay your workers a living wage?
If not, you ARE the problem.
PUD
@ Ying-Yang
Yes, we pay our workers way more than average (the average is close to Peru´s minimum wage, which is very low). We need quality workers who know computers, can do solid bookkeeping, do not have a criminal record, and who can remember details (names of customers, which bearings go into which model of Hyundai, who can figure out a short route when delivering parts to customers in different parts of Lima, etc.).
Just today I was asking one of my in-laws if the provinces are improving. Lima has gotten MUCH better over the past 10 years, but the provinces have almost always been poorer than Lima. The response was yes, things are getting better all over (on the average, Peru suffered its own 8 + earthquake two or three years ago). More malls in regional cities(!). More roads being paved. More electricity going to remote towns.
I agree with much of what you say re wealth concentration being unhealthy. My investment HERE in Peru has benefitted Peruviaans in that we pay WELL. We are bringing people UP the ladder, not pushing them down like USA banksters. And we have a viable business in a field where I could NOT in the USA. Oh, and we have NO DEBT, except to me personally. It is my ass that is on the line, not yours (as a taxpayer or a banker).
I am not part of the problem. I am part of the SOLUTION. We have eight full time employees who likely would be working for LESS (on the average) were it not for our company. We also pay three men commissions when we collect the money from sales to their customers.
How about you? Are you part of the problem or part of the solution?
Who decides that? You?
Idiot.
Low Profile... each owner determines what to pay. I asked... "do you pay your workers a living wage?" and I see no reply other than your ignorant statement. Read sloooooowly then comment, or not.
PUD
Bravo Bearing, Bravo.
My parents are European immigrants. I learned about hard work from them. I grew up in an urban, immigrant neighborhood. There were two types of kids - you knew at an early age who the bums were gonna be. Cut-to a whole bunch of years later, there are the bums, never saved anything, always an excuse, know more than anybody else, always somebody else's fault, always bad luck.
BTW, I crashed and burn several times till I got lucky. Wasn't fun or easy - but never took anything from the 'STATE' -- i.e., my fellow citizens. It not anyone else's responsibility to support me, ever...
DoChenRB,
You pointed out a key problem but then picked the wrong answer. The increased cost of doing business here in the USA - labor burden, taxes, regulatory overhead, political climate, etc. has facilitated the massive outsourcing that has bled a big chunk of the job market. Concurrently, the cost of living here has priced potential employees out of the same shrinking job market. Couple that with those factors and uncertanties related to same which act disincentives for capital formation one can't just "get to work". Companies, if they are hiring, are looking only for 1) a very specific set of skills to fill a very specific, and finite, set of needs, or 2) cheap labor to perform low skilled tasks. And there aren't many companies hiring these days.
I don't know what the correct set of policy mandates are but I sense the cheap money, push liquidity out the wazoo until we are awash in greenbacks might not end up being the rainbow farting, candy spitting unicorn we all really, really want to have rescue us from the impending doom.
One very easy trade maneuver would do wonders for workers here. Slap a duty on the imported work product of developing countries like India . We still do import duties right? What difference does it make if it comes in containers or 0s and 1s over deep sea cable. As long as I'm a dreamin' shit, why not make it a non-deductible line item on Corporate in tax returns. See? Just a few words changed here and there.
The reality is : The middle class is not represented in DC nor are small business owners. Meaning we don't have the money to pay the ransom demands from our elected officials who have managed to institutionalize corruption
Edmund, what you say is true, at least mostly.
Still, people here in Peru can get work! It isn´t fun and it doesn´t pay much. But, almost ANYONE in Peru can get work... It has been that way for at least 15 years when I first asked my brother-in-law if people could find work here.
There is always something that has to be done (= work).
+ 1 re not knowing what to do to reverse course. We might start with lowering the regulatory burdens, lower taxes, tort reform, less .gov (especially), etc. But we know THAT will not happen...
It's high living on that 300 a week in IL. you pinkie fingered elitist. High living on 300 a week, I think I will try unemployment it's such a great life. Your an asshole Bruce. I don't remember ever calling anyone here that before?300 a week, fuck you and your RNC pinkie fingered prick 1%ers. Have another cup of tea as you piss on working people.
See my rant not far below. The $300 / week (call it $15,000 / year) is MUCH MORE than your average Peruvian.
My daughter (English and French major, almost two years out of school) earns $640 / week (plus some overtime) in Chicago. She got the job by looking for and working hard for it. And, no, her job does not involve either field she studied in college.
Hehehe. +1!!!
Puuhlease, Leo, Brucey is as clueless as all these clown governors of the Fed Reset System.
The majority of Ameritards are still completely clueless -- an event which did not exist at the similar timeframe after the Great Crash of 1929, BTW -- about the cause of the financial meltdown, and why it will only get worse.
That trillions of dollars of debt (as in securitized debt) was sold -- payment came due -- but nobody could pay for all that phantom debt.
Ergo, it was "socialized" as in put on the shoulders of the public to bear the burden, while said peddling of debt continues unabated.
Which is why the majority of the GDP -- once called the GNP for a very logically reason -- is now simply fantasy finance -- as in there is no economy, only commerce.
But had America an actual media, I suspect many more Americans would understand this!
+10
Please pardon the explosive rant below. I always try to be polite before I go fucking nuts.
I always wonder about people who come to conclusions about the way other people's lives have changed where "lazy, hand-outs, iPhones , Cable and get a job, any job," is used to slam the malignant cancer of millions of unemployed "slobs" as if social safety nets were the cause, without mentioning why people are in that particular situation in the first place.
Sure globalization and labor arbitrage used by large corporations and made lawful and cheap by policymakers has peeled layer upon layer off the work force for the last 20 years or so. Yet in a nation that has this crazy thing about fundamental fairness which could include "the rule of law is for everyone", not only for people below a certain income/net worth level, never do we hear about the trust fund babies who never saw a hard day in their lives, or the failure of the govt to arrest the Bankers who broke the back of the American Dream. Think about those billions in bonuses they got and at the same time ask who got paid millions per family in 2001 and who got nothing in 2005. Think about it.
Nope , it's always the poor people from high skilled to low skilled who got laid off that is the root cause of all problems. Surprisingly little is said about the former mid 6 figure earners who lost their jobs and filed bankruptcy when it became apparent there wasn't anything out there but those $10.00 /hour jobs that are only good for people in perfect health between the ages of 30-50 who don't know enough about business to call bullshit when they see it which is commonly referred to as "overqualified" . Broke and desperate but still over qualified because you know, it's hard to fuck someone who knows how to Google .
Nothing is mentioned about trickle down moral hazard economics; a simple theory really. If the rule of law is ignored at the upper strata of society in finance with total impunity because of a corrupt govt, then the effect of that is a trickle down process where many Americans feel they should just get what they can while the getting is good because they damn well know that their old lifestyle has been stolen by those who helicopter home from the Street to the Hamptons. Federal elected officials and permanent employees aided and abetted this practice. No one would question that. Yet somehow they are better for "working" then the people who got in the way of the buzz-saw. You can't stand in the way of the Govt and the Banks no matter who the fuck you are. Most people were on the wrong side of that trade.
Here's a perfect example: Take the Mortgage Bankers Association, whose members have a big part in the double hammer depression that didn't have to be. The Mortgage Bankers Association had this new 79 Million dollar building that they "strategically defaulted on" because they found rent was better. At the same time the head of the MBA gets on the TV and lectures people about their social responsibilities in paying the money back, all of it, on a house that isn't worth 25% of the mortgage's face value.
It's amazing hypocrisy to condemn the people who lost hope for the American dream to "take some time off" on a sliver of what the banks have taken and are taking. Really someone tell me how much in benefits have been paid compared to the estimated 23 trillion dollar bail-out of the few, the proud, the sociopaths?
When I hear people slamming other people for not doing what they would never do or have to do, it makes me somehow think of elitism from commentators who think people should be compensated at a tiny percentage of their former income, maybe move 4 states over to get the job and in the ultimate outsized risk vs reward balance, watch the company lay them off a week later after they start. I guess one would get antsy about moving. But the world according to the screamers here is; "fuck em if they can't take a joke"
Imagine the outrage I caused when I was fishing for contract programming jobs. First they told me about the drug tests and the background check plus credit check, strip search , you know the works. When I had the unmitigated audacity to ask for the companies audited financial statements over the last five years with the auditors working papers, the phone went dead on me. Shit they needed me to move 5 states over and all I wanted to know was the state of the company's financial condition. Seems sensible if they want to look up my ass in the new normal of "fuck em all to get ahead", that I wanted to , you know, feel them up too.
So a large material fuck-you to all of the assholes who think certain people "sniff" beneath them make too much and need to be put in their places. Who the fuck are going to buy goods from companies to subsidize the globalization push? No one ever thought about that did they? Also, A especially large fuck-you to those of you who don't produce a goddamn thing themselves except the bullshit mentioned above.
Why? Because all of this starts and stops with the banks. Until we slap cuffs on the fucks, this slide continues. Unfortunately many of them are laughing as the SOL rapidly approaches. So keep the spotlight on the victims because the thieves are all about to get pardoned by congress and the executive office.
+ awesome
Bravo, Dburn!!
Your rant will not make any difference. Here's why. Americans think that we are a classless society and that anyone can make it to the top. Hence, those who are at the top are just joe-sixpacks that made it. We applaud their success.
Reposted by TruthInSunshine & Nominated for Best Post of the Month on ZeroHedge:
Seconded
The answer is YES...
The CorPirate bastards, Banksters, Illuminati fucks, and other globalist scum do have fun corn-holing the masses. Yes, it's true, and they will have to answer for their economic buggery before the Throne of God, Karmic Backlash, or whatever form of Transcendant Justice one subscribes to.
But so far, no-one has actually placed me in shackles and set me on the slaver's block. i haven't been whippped, or in any other concrete physical way been FORCED to do something I didn't want to.
This is real slavery, when you either do what you're told, or you are physically abused.
The only slavery we face is a conceptual slavery. We are emasculated by fear, held by chains of "what if". What if I lose my job? What if i lose my health insurance? What if I lose my retirement? What if? What if?
Now we are losing it all. Yes, some third world person is being exploited, and they have my job. They are being fucked, and they think they're lucky. We're being fucked and we think we're getting fucked...who's happier?
But we do't have to be victims! I think that's the point we can all agree on. So we all had good jobs with health care and retirement, and then the capitalist whoremongers took it all away from us because it cost them too much money. It's wrong and bad, but beyond this, why fret and moan and look for some other position of servitude? Free your mind, and the rest will follow...
The bankers blame the poor for fraudulently filling out the loan applications, and the rest of us blame the bankers for fraudulently selling the fraudulent loans to suckahs everywhere. Who's to blame? The answer is YES. I say, "don't lie cheat or steal, not even so much as a paperclip, and it's not your problem."
Fucking brilliant rant! Thank you, Dburn.
This is rubbish, Bruce...
The unemployment rate for skilled trades in at least 18 states (and probably as many as 30, but who is counting?) is in excess of 35%. I am not speaking of finish carpenters or electricians who are now doing something outside their skill set, but not doing what they are skilled in.
As for nursing, how many of the jobs that you are referencing include $12 an hour positions at elder care facilities or nursing homes?
hello
I never said there were good jobs. I said there was work. I keep saying this; we are not as wealthy a country as you think. Many good jobs have been lost and they are not coming back. That's not rubbish. It's a fact. Sorry.
Bruce, most of the people giving you shit still live in La-La land. They think 100% "free" health care is a god given right. They pray at the alter of "union wages" like it was some Aztecan temple. They believe that all the "free" shit they got when the ponzi was on full throttle was as natural as taking a breath. It's not really their fault because they partook in the Kool-aid Slurpee fest that the true believing pedagogues were serving.
No fiat system has lasted longer than 100 years. The unwind is here and most refuse to believe it will happen.
BK, thanks for your continued great post.
Bruce you state the obvious.....
What are you doing about it? What is your plan of action? I say this because you like to put your opinion out there and on ZH. Create discourse, fine but why not your call, as you see it, to what we need to do.
If you want to state the obvious why not offer up something tangible other than "
I never said there were good jobs. I said there was work. I keep saying this; we are not as wealthy a country as you think. Many good jobs have been lost and they are not coming back. That's not rubbish. It's a fact. Sorry."
Oh well, Bruce, keep hacking away.
In defense of some of Bruce's comments...
"we are not as wealthy a country as you think"
I think this is the understatement of the thread. Um... I think we are fucking BROKE!
to all who might whine a bit about the dolorous lie of a wage slave, I say,
"free yourself, fer chissakes!"
(whaaah) I have a shitty job!"
(whaah) I'm unemployed!"
(whaaah) Life is hard these days!"
Wake up, this is the era of personal responsibility. If you don't like workin' for the Man, then work for yourself. If you don't have health insurance because of this, well, take care of your own health. Quit drinking so much ad eating so much junk food, fer cryin' out loud, it's ot rocket science! If the gummit lakes it hard to do business, go underground. If you make less tha 13,000 a year, the IRS will leave you alone. If you can't fly like an eagle, crawl like a reptile. Are you warm, dry, healthy and fed? Then count your blessings and free yourself from slavery.
...sheesh...
No, Bruce is right, the "good" jobs aren't coming back. Redefine your notion of "good", and hopefully you'll discover that freedom is better than either corPirate or Gummit welfare.
Stop being a slave.
Work exists purely for the purpose of moral development. Lots of people eat without working, but they suffer for it. If you want to be a moral person, you'll get off the couch and exert yourself. Those that expect to be fed can expect to be harvested (slaughtered).
+1
Perhaps those who junked you have not (yet) felt enough pain to learn to think outside the box.
Don't apologize Bruce. The people complaining voted for the politicians that put us in this place. They haven't figured out the cause and effect cycle, and keep voting in the same people in, making things worse with each political cycle.
Here's the key - a society has to build wealth via producing before it can be wealthy. We stopped building wealth (building something that boosts productivity, growing something, mining something) a long time ago. But we want to reward those that don't produce wealth (anything that comes from government, be it bureaucrats, teachers, police or free money). Without building wealth, standard of living declines - that's where we are.
My personal opinion is that it's past the tipping point. There's nothing to do to change the path we're on - only thing left to do is prepare.
Demand for RNs is still strong and will be getting stronger. The pay is good, but not great, depending on ones definition of great, but the stress and the working hours suck. You also have to get used to body smells , secretions and of course death, up close and personal.
Other than the burn-out at 50+ it's a rewarding career, so I'm told when my sister is semi- lucid around donut hole time. She's 56. She went on disability at 51.
Yes, every part of your statement is untrue in the states of Illinois and Arizona where I live. I know many tradesmen and all are scrambling for work at far below union scale. Cabbies making 200/day? Fantasy island.