One Idea How To Generate 5.8 Million Jobs

Tyler Durden's picture

According to the Economic Policy Institute, a Washington think tank supported by organized labor, the answer to generating up to 6 million more jobs is as simple as ending global currency manipulation. But not in the sense of ramping USDJPY or AUDUSD at key market inflection points which mostly benefits such FX-rigging chatrooms as "the Cartel", no: they are thinking more big picture, in the "central bank manipulation sense."

The report says that "several foreign countries devalue their currencies to make their products cheaper, making it difficult for U.S. manufacturers to compete, the report said." In essence what the group suggests is that the US currency is overvalued relative to the rest of the world, and that by "realigning exchange rates, U.S. trade deficits would be reduced by up to $500 billion per year by 2015. Such a move would increase U.S. gross domestic product by up to $720 billion per year and create up to 5.8 million jobs, the report said." Said otherwise: stop foreign currency manipulation, but allow and encourage the US to keep pushing its own currency even lower.

This is all wonderful, however it appears the unions or their mouthpiece thinktank have never heard of the Fed, whose job over the past 5 years has been, among other things, to keep the dollar weaker than it would normally be. If anything, the rest of the world is merely mimicking the policies of the Fed, which have been adopted first by the Bank of England, next the Bank of Japan, and soon, maybe, the European Central Bank. We can't wait to see how much screaming and yelling will ensue if and when Mario Draghi does indeed engage in unsterilized QE, and sends the Euro plunging (now that there is supposedly no fear of redenomination) and by implication, the USD soaring making exports of US goods and services to Europe even more prohibitive. And don't tell labor unions about the recent collapse in the Chinese Yuan: that would really put their noses out of joint.

Because while superficially they are absolutely correct, a weaker dollar would on paper boost US exports and potentially generate a few million extra jobs (assuming there are no robots who can fill those positions at a fraction of the cost and none of the wages), the flip side is that it would crush all export-reliant emerging economies, resulting in many more millions of job losses in countries that unlike the US, have no welfare-state safety nets, and thus send the risk of global revolutions through the roof, which in turn would jeopardize the most precious thing of all: the global stock markets, currently at all time highs, courtesy of precisely the kind of currency manipulation that all the central banks - not just the Fed - are engaging in.

The story, as reported by the LA Times, continues as expected:

Realigning exchange rates could also prompt increased tax revenue and reduce federal budget deficits by up to $266 billion in 2015, the EPI said.


"Congress and the administration have a new focus on manufacturing because they understand its value to the American economy," said Scott Paul, president of the Alliance for American Manufacturing. "But they are ignoring the most important job-creating opportunity for manufacturing: stopping currency manipulation. The key to an economic recovery, especially in California, is restoring manufacturing job growth. To shore up those jobs, Washington should launch a national manufacturing strategy that starts with passing bipartisan legislation to end currency manipulation."


A bipartisan majority in the Senate and the House has signed letters urging the Obama administration to address "foreign currency manipulation" in the talks with Japan and the other nations.


And there has been an outcry in congressional and business circles, particularly the auto industry, over Japan's weakened currency. The yen has fallen about 25% against the dollar in the last year, helping boost that country's exports and profits by making its goods cheaper in foreign markets.


"Currency manipulation can negate or greatly reduce the benefits of a free-trade agreement and may have a devastating impact on American companies and workers," said the Senate letter, signed by 60 members and led by Lindsey Graham (R-S.C.) and Debbie Stabenow (D-Mich.).

What was unsaid is that it was currency manipulation by others that is what is at stake here. As for the Fed: why, give us more. But just pray that the pent up inflation doesn't finally crack the Fed's dam door, and floor all these workers who are demanding more of the same, because then they will really see what the side effects of manipulated, artificial global markets truly is.

And finally, who cares about trade anyway? Recall what the latest IMF "forecast" (and its previous iterations) have to say about world trade (hint - not much):


A far better option for all the disgruntled workers engaging in such an old normal concept as actually creating exportable goods, is to get an E-trade account, request a few grand from Obama (call it populist bailout venture capital), and bet it all on Tesla. After all, there is just one "trickling down" wealth effect left in the room.

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Cognitive Dissonance's picture

The ends always seems to justify the means when you're the big man on campus. When you're at the top of the financial food chain there is only one direction left to go. 

<Until, that is, it all comes crashing down.>

DavrosoftheDaleks's picture

Go Long GOLD and Silver is what they are saying.

smlbizman's picture

they will create 5.8 mil jobs...they'll need them to feed the 40mil newly created homeless at the soup kitchens

BigJim's picture

 "...Such a move would increase U.S. gross domestic product by up to $720 billion per year and create up to 5.8 million jobs, the report said."

$720 billion more of GDP measured in dollars that buy $720 billion less actual stufff... being spent by 5.8 million more workers who have (along with the rest of the 99%) become more employable because the minimum wage has, effectively, been reduced.

I just love these guys.

Meanwhie, the only way to reduce the value of USD is to produce more of it... and who gets those new dollars? It ain't the 99%, that's for sure.

mickeyman's picture

With all the high-tech capabilities of the US, you'd think they could devalue faster than anybody else. Some Fed Ph.Ds aren't piling it high enough.

bania's picture

So easy a caveman would go extinct doing it

Ariadne's picture

5.8 million FEMA guards sounds about right...

Flakmeister's picture

You do understand the difference between nominal and real gains, don't you?

BigJim's picture

The authors of the report clearly don't.

acetinker's picture

Well yes, with enough manipulation, every useless eater can have a 'job' doing nothing that is productive.  They can all make a thousand dollars a day.  The problem which arises, is that a loaf of bread will shortly cost $500.

I'm far from an elitist, Flak.  I suspect LoP and Oldwood are in a similar situation as me.  We compete with others like us- and it's brutal at times.

I don't assume that my qualifications entitle me to a higher wage than a competitor halfway around the world by virtue of my accidental birth in the US.  It's clear that this is not true.

It is also crystal clear that useless eaters are very real.  Maybe a more descriptive phrase is 'free shit army', or 'the willfully ignorant'.  (Yes, I know you would apply that last one to me vis-a-vis AGW).

I've said this before, but I'm not your enemy.  More than likely, people like LoP, Oldwood, and me are the basis (collateral) that keeps your heroes liquid with debt money.  If you manage to kill us off, you will die shortly thereafter.


Flakmeister's picture

What the fuck do you mean "my heros"?

Richard Feynman is behind all this mess?

acetinker's picture

OK, so you're still mad.  I'll give a you a minute.  Feynman is your hero?  I thought it was Al Gore, please forgive me..

That motherfucker Feynman was queer as a three dollar bill and just as wrong about physics as he was about sexuality.

Nature is a bitch, Flak.  Learn it.

acetinker's picture

You say the hill's too steep climb,


You say you'd like to see me try,

Bye, bye,

You choose the place and I'll choose the time,

And I'll climb that hill in my own way,

Just wait awhile for the right day,

And as I rise above the treeline and the clouds,

I'll look down, hear the sounds of the things you said today.

acetinker's picture

An obscure reference to early Pink Floyd.  I didn't think you'd get it.

Flakmeister's picture

Obscured by Clouds...IIRC, excellent tune....

but the question still stands....

acetinker's picture

No.  'Fearless' from the album Meddle.  Pay special attention to the opening verse-

Fearlessly the idiot faced the crowd


That could be either one of us, no?  I think it's you, though.

Anusocracy's picture

We live in an end stage government created government run economy. Job creation is overwhelmed by job destruction.

Take away the reserve currency status and it will create jobs as prolifically as the Soviet Union did.

jimmytorpedo's picture

Banning farm equipment would result in 100% employment.

cynicalskeptic's picture

How about stopping the continued offshoring of jobs.  An endless pursuit of the cheapest possible labor costs (on an uneven playing field where some countyries allow their citizens to be employed in slave like conditions) has destroyed the West.  'Free Trade' hasbeen a disaster.  Some - like Perot - warned about the consequences.  Yet BOTH political parties in the US ocntinue to support these massive job losses.  How about requiring banks that received TARP money to BRING BACK all the DP and Systems jobs they offshored?  How about all the callcenter jobs they sent to India?  Instead they're now sending accounting jobs overseas as well.

We gutted manufacturing and now we're killing off office jobs.


Doesn't matter how cheaply Walmart sells crap from China if nobody is making any money to buy it.  Government can't support 99% of the population just so 0.01% can be multimillionaires.

maskone909's picture

end corporate offshore tax evasion.

end outsourcing of labor

boost manufacturing

this will bring us back to a 50's style boom economy


forgot to reinstate glass steagal

Flakmeister's picture

I only wish it was so simple...

But one things that could work is to impose a carbon based tax on imports as it takes advantage of lower carbon domestic NG supplies...

Coupled with the implementation of a revenue neutral carbon tax phased in while phasing out FICA and payroll taxes...

The import tax kicks high carbon chinese imports in the nut sack... 

Now junk away you troglodytes....

BigJim's picture

So, a kind of carbon-based Smoot-Hawley? Girlfriend, that is just soooo clever.

Flakmeister's picture

Pray tell, what is that different between what he said and a different version of Smoot-Hawley?

Besides, I have been told here many times that S-H made no differerence to the GD?

BigJim's picture

 Pray tell, what is that different between what he said and a different version of Smoot-Hawley?

SH was all about import tarifs. Maskone909 didn't say anything about tarriffs, YOU did. But I agree what 'he said' would be the same a 'different' version of Smoot Hawley, one that was enacted on another planet, the planet Non-sequitor, the one you appear to hail from.

Besides, I have been told here many times that S-H made no differerence to the GD?

Have you indeed? By whom, 'pray tell'?

Flakmeister's picture

Go troll someone else...

TheReplacement's picture

That could actually have a chance.  How can the left not support something that really enforces their warming war?

Flakmeister's picture

Damn straight it has a chance of working....

Fold in an end for  give away tax breaks for FF companies and use those funds to pay for a 21st century infrastructure and you might very well create a few millions quality jobs....

NidStyles's picture

We are troglodytes, but you are still pushing the old Empire should do this mantra. FFS you are a damn relic of Absolutist Europe circa 1800's. Tariffs restrict trade both ways, it's called Jingoism you retarded fly. 

Flakmeister's picture

So you are claiming that you now a free trading globalist? 

I'll give you a hint, that is what us got in this mess we are in now...

You guys may disagree with what I say, at least I am consistent and don't flipflop as the need arises like many here...


Anusocracy's picture

End corporate taxes.

End income taxes.

Manufacturing will boost itself.

Reinstate the intent of the Constitution.

Flakmeister's picture

Your comment is about as insightful  and useful as:

All Power to the Soviets!

BigJim's picture

Thought you might find this interesting, with your obsession for 'peer reviewed' climate science Argumentum ab auctoritate:

Flakmeister's picture

There is an important aspect of peer review publications that completely eludes you. It is all about how many times you are cited... 

There are lots of bullshit papers that never get cited, i.e. they are resigned to the dust bin of academic history...

Whereas serious papers become part of the foundation of the field, e.g.

So quit with the lame strawmen...

Lordflin's picture

It would be nice to see sound money somewhere on that list...

css1971's picture

Don't worry, Everyone can export their way out of debt!

Solon the Destroyer's picture

And the cost of imports and imported inputs won't change one bit!

Who the fuck teaches math to Washington Fink Tanks?  Krugman?  Union leaders?  The former mayor of Detroit?

XitSam's picture

I think Rickards was correct with what he said in Currency Wars, but that is only part of the global mess currently festering.

TheAnswerIs42's picture

And the US TBill rate will go where??


maskone909's picture

exactly!  what happens to incurred debts?  they will have to "re-allign" currencies a magnitude of times less value than they currently stand.  in anycase, this will push yields up dramatically to compensate for the lose in value of t-bills/bonds.  bunch of fuckin clowns



lets say i have 100 dollars of debt and there is 1000 dollars in existance with a exchange rate of 1usd to 10 yen,

now we make the peg rate the same 1:1 usd/yen

either the yen gains a shitload of value and american soverign debt becomes amazingly cheaper, or the opposite.  i really dont see the system being able to adjust to such a drastic change without massive debt write offs and some really hurt feelings.

Berspankme's picture

geez, there you go with that critical thinking again. Come on man it's easy

ZerOhead's picture


(After they finish buying every scrap of T-paper all the way down to municipal bonds on the market...)

Timmay's picture

How about we raise rates and then limit banks to just offering savings accounts and lending? Oh, and restore free markets so that the best products and ideas rise to the top (with bad bets/ideas collapsing and falling) with said lending from banks? Simple.

analyzer_66's picture

Great idea but the banks have already lobbies themselves into financial control of gubbmint with the fed as co-conspirator of keeping cheap money flowing downstream. Why would they ever want to change this unless the petrodollar is completely destroyed?

joego1's picture

They forgot to add the brains when they started up their think tank.

buzzsaw99's picture

globalist traitors have ruined this country. there's no going back now.

Spungo's picture

The dollar needs to be weaker? No problem. End the petrodollar and watch the value crash.

kito's picture

sadly, and i shudder to think, but nothing short of a decline in population in the u.s. is going to bring about a change for the country. the u.s. population has grown too large and too fat and happy based on 40 years of credit and debt driven growth coupled with a generous welfare state. no "miracle" of balancing the budget or ending currency manipulation is going to fix serious structural problems for this country. there would have to be a major reset and major fallout before any new, real, organic growth can begin. and it will happen, and there is no fix, despite every pundit postulating. it may be quick, or it may be a long slow decline, but its inevitable.......