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San Francisco Fed Admits Bernanke Powerless To Fix Unemployment Problem

Tyler Durden's picture


That the fine economists at the San Fran Fed are known to spend good taxpayer money in order to solve such challenging white paper conundrums as whether water is wet, or whether a pound of air is heavier than a pound of lead (see here and here) has long been known. Furthermore, since the fine economists at said central planning establishment happen to, well, be economists, they without fail frame each problem in such a goal-seeked way that only allows for one explanation: typically the one that economics textbooks would prescribe as having been the explanation to begin with. Today, is in some ways a departure from the default assumptions. In a paper titled "Why is Unemployment Duration so Long", a question which simply requires a brief jog outside of one's ivory tower to obtain the answer, Rob Valleta and Katherin Kuang, manage to actually surprise us. And while we will suggest readers read the full paper attached below at their leisure, we cut straight to the conclusions, which has some troubling observations. Namely, they find that "the labor market has changed in ways that prevent the cyclical bounceback in the labor market that followed past recessions. The shift towards jobless recoveries probably reflects a reduction in temporary layoffs during cyclical downturns. Stricter market incentives to control costs in the face of stiff domestic and international competition may also be factors. In addition, anecdotal evidence suggests that recent employer reluctance to hire reflects an unusual degree of uncertainty about future growth in product demand and labor costs."

Oddly enough, this is actually a correct assessment: the mean reversion "model" no longer works as the entire system has now broken, and since the administration changes rules from one day to the next, companies are not only not investing in their future and spending capital for expansion, and hoarding cash, but have no interest in hiring: an observation that previously led to a surge in profit margins, yet one which as we pointed out over the weekend, has now peaked, and margins have begun rolling over, even as the rate of layoffs continues to be at abnromally high levels, meaning all the fat has now been cut out of the system. Yet it is the following conclusive statement that is most troubling: "These special factors are not readily addressed through conventional monetary or fiscal policies." And that is the proverbial "changeover" as the Fed has just acknowledged that both it, and Congress, are completely powerless at fixing the unemployment situation. In which case is it fair to finally demand that the Fed merely focus on just one mandate - that of controlling inflation, and leave the jobs question to the market, instead of making it worse with constant central planning tinkering which only makes it worse by the day?

Full note:

Why Is Unemployment Duration So Long?

By Rob Valletta and Katherine Kuang

During the recent recession, unemployment duration reached levels well above those of past downturns. Duration has continued to rise during the uneven economic recovery that began in mid-2009. Elevated duration reflects such factors as changes in survey measurement, the demographic characteristics of the unemployed, and the availability of extended unemployment benefits. But the key explanation is the severe and persistent weakness in aggregate demand for labor

Unemployment duration—the length of time that workers are unemployed—reached alarming levels during the recent recession and  showed little or no sign of easing through late 2011. The comparison between the recent downturn and the 1981-82 recession is particularly stark. Although the unemployment rate peaked at a higher level in the 1981–82 recession, the average duration of unemployment has been running much higher in the recent episode. Prolonged spells of unemployment cause substantial hardship. People who are unemployed for a long time struggle not only with a loss of financial well-being, but also with a likely deterioration of their re-employment prospects.

In this Economic Letter, we examine unemployment duration in detail, considering why it has been so high in the recent recession and recovery. Although changes in the measurement of duration and demographic characteristics of the unemployed have contributed to rising unemployment duration over the past few decades, the recent spike is due primarily to the combination of massive job losses and a subsequent recovery marked by weak job growth.

Measures of long-term unemployment

Estimates of unemployment duration are based on data from the Current Population Survey (CPS), a monthly poll of 60,000 households conducted by the U.S. Census Bureau for the Bureau of Labor Statistics (BLS). The CPS is the source of official labor force statistics, such as the unemployment rate. Individuals who are identified as unemployed—people without a job who are actively seeking one, or those on temporary layoff—are asked to report the number of weeks they have been unemployed.

The CPS duration measure has undergone several changes in the maximum recorded value allowed. In January 1994, the maximum was increased from 99 weeks to approximately 117 weeks. A further increase to a maximum of five years was introduced at the beginning of 2011. The 1994 survey changes also included a questionnaire adjustment that slightly raised measured unemployment duration for individuals who are unemployed in consecutive survey months (see Valletta 2011).

Figure 1
Measures of unemployment duration

Measures of unemployment duration

Note: Data are seasonally adjusted. Percent of long-term unemployed is the number unemployed for more than six months as a share of the labor force.

Sources: BLS and authors' calculations

Figure 1 plots three series based on reported unemployment duration from the CPS: average duration; median duration; and the incidence of long-term unemployment, that is, the number of workers unemployed for longer than six months expressed as a share of the labor force. All three series have reached unprecedented highs for the post-World War II period. Average and median duration reached levels about twice as high as their peaks in the early 1980s downturn, even though the peak unemployment rate in the earlier recession was 10.8% compared with 10.1% in the 2007–09 recession. Similarly, the long-term unemployed as a percentage of the labor force reached a high of about 4.4% in mid-2010 and hovered around 4% during much of 2011, well above the high of 2.6% in the early 1980s. Since early 2010, the long-term unemployed have consistently accounted for about 40–45% of all unemployed individuals.

The increase in average duration in 2011 partly reflects the impact of the recent measurement change, which raised the average duration of unemployment by about three weeks as of June 2011 (see U.S. BLS 2011). However, three weeks is small relative to the elevated average duration noted above. This suggests that factors affecting the labor market itself, not changes in measurement, are primarily responsible for the increase in unemployment duration over the past few years.

Sources of rising duration

The changing demographic characteristics of the labor force are one potential source of rising unemployment duration. For example, workers under the age of 24 tend to experience short unemployment durations despite high unemployment rates because they frequently move in and out of the labor force. The substantial decline in the labor force share of young workers over the past three decades caused unemployment duration to rise independent of economic conditions. Aaronson, Mazumder, and Schechter (2010) assessed the contribution of changes in age and other workforce characteristics, concluding they could account for only a small portion of the higher duration observed in 2009 compared with the early 1980s recession.

Another factor that may help explain the recent surge in duration is the extension of unemployment insurance (UI) benefits from the normal 26 weeks to a maximum of 99 weeks for most eligible workers. This program was authorized from late 2009 through 2011, and recently extended for several additional months into 2012. However, estimates from Aaronson et al. and other research (see Daly et al. 2011 and Rothstein 2011) suggest that the contribution of extended UI to prolonged durations has been modest.

Figure 2
Nonfarm employment relative to pre-recession peak

Nonfarm employment relative to pre-recession peak

Sources: BLS and authors' calculations.

The limited impact of workforce characteristics and extended UI suggests that other factors bear primary responsibility for the recent spike in unemployment duration. The most obvious one is the severity and persistence of employment losses compared with past recessions. Figure 2 shows employment patterns during and after the last four U.S. recessions, in each case measured relative to the pre-recession employment peak. At the recent employment trough in early 2010, employment was down 6.3%, compared with a cumulative decline of less than half that during the early 1980s. Moreover, employment has recovered little following the trough, growing on net by less than two percentage points through late 2011. That’s about 10 percentage points below the growth path from the early 1980s recession.

It is likely that the recent pattern of massive job losses and a weak jobs recovery is the primary explanation for elevated unemployment duration. The contribution of these elements can be examined more formally by performing a regression, a standard statistical technique for measuring the relationships among variable factors. We follow the approach of Aaronson et al. (2010), who calculate the extent to which rising duration can be explained by changes in characteristics of the workforce. We extend their approach by incorporating measures of cumulative employment losses. For each month of CPS data on individual unemployment duration, we calculate the percentage change in payroll employment relative to the pre-recession peak and include it as an explanatory variable in our statistical exercise. We use payroll employment for each individual’s state of residence for this calculation (see Valletta 2011). The data used are for periods covering the latest recession and its aftermath, and the corresponding periods from the early 1980s recession. These are matched by counting months forward from the pre-recession employment peak. The recent duration data are adjusted for the 1994 and 2011 changes in survey measurement.

The results of this exercise indicate that changes in workforce characteristics and cumulative employment losses largely explain the excess unemployment duration of recent years compared with the early 1980s. For example, 15.7 extra weeks of unemployment duration are observed for the 12 months ending in August 2011 compared with the corresponding period ending in January 1985. Of that, slightly over a fourth, or 4.1 weeks, is accounted for by changes in workforce characteristics. Nearly a half, 7.5 weeks, is accounted for by the greater extent and persistence of employment losses in the recent recession. The remaining unexplained portion of about 4.1 weeks is only slightly larger than the estimated 3.5-week effect of extended UI discussed in Daly et al. (2011).

These results strongly suggest that weak labor demand plays a key role in prolonged unemployment duration. But they do not directly disprove explanations related to the supply of labor, such as mismatches between worker skills and employer skill needs. Mismatches may cause available jobs to go unfilled and thereby hold down employment growth. In this case, our variable measuring cumulative employment losses reflects labor supply frictions as well as weak demand.

Figure 3
Ratio of unemployment to vacancies

Ratio of unemployment to vacancies

Sources: BLS and authors' calculations.

We can separate supply and demand factors by incorporating a direct measure of labor demand into the analysis to replace our employment growth measure. Our direct measure of labor demand is job vacancies, essentially the hiring employers want to do rather than the hiring they actually do. The number of job vacancies is available in the BLS Job Openings and Labor Turnover Survey (JOLTS) data available for months beginning in December 2001 (see Valletta 2005 for a method of estimating the number of vacancies for prior periods). We use the ratio of the number of unemployed individuals to the total number of job vacancies at the national level to measure labor market tightness or net demand. The higher the ratio, the weaker is the demand for labor relative to available supply.

Figure 3 displays the series. After reaching a post–World War II peak close to 7 in 2009, the ratio has declined somewhat. But, through July 2011, it has been only slightly below the peak reached in 1982. When this variable replaces cumulative employment declines in our statistical analysis, the results suggest an even larger role for weak aggregate labor demand. The ratio of the total number of unemployed workers to job vacancies accounts for about 11.5 weeks of the 15.7 extra weeks of duration in 2010–11, explaining virtually all the increase in duration when workforce characteristics are also taken into account.

Conclusions and implications

The analyses discussed here suggest that weak labor demand is the primary explanation for prolonged unemployment duration observed in the recent recession and recovery. The weak recovery of employment is similar to the jobless recoveries that followed the 1990–91 and 2001 recessions. This suggests that the labor market has changed in ways that prevent the cyclical bounceback in the labor market that followed past recessions. The shift towards jobless recoveries probably reflects a reduction in temporary layoffs during cyclical downturns. Stricter market incentives to control costs in the face of stiff domestic and international competition may also be factors. In addition, anecdotal evidence suggests that recent employer reluctance to hire reflects an unusual degree of uncertainty about future growth in product demand and labor costs. These special factors are not readily addressed through conventional monetary or fiscal policies. But such policies may be able to offset the central obstacle of weak aggregate demand.


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Mon, 01/30/2012 - 15:57 | 2110569 ZeroPoint
ZeroPoint's picture

Meanwhile, Obama trumpets his latest free trade agreement with third world hellhole Vietnam.


Mon, 01/30/2012 - 15:59 | 2110583 Clueless Economist
Clueless Economist's picture

Why should we be worried about the Fed's inability to bring the unemployment rate down, when President Obama has a "lasar like focus" on jobs?


Mon, 01/30/2012 - 16:01 | 2110591 wanklord
wanklord's picture

What’s all the uproar?
It seems that most of Americans never bothered themselves to learn living within their means, save some money, plan for the future, get a decent education and avoid credit at all.

The blame must be placed specifically on the so-called Baby Boomers, a failed generation who really enjoyed the prosperity of the 50s and 60s; instead, they focused all of their deprived intellect in experimenting with all types of drugs and having very promiscuous sexual lives. These people have done nothing for this country and now they are so scared of potentially not being able to collect their government entitlements (paradoxically, they are the majority).

Therefore, America as a broken society is now paying the consequences of its own greed, lack of common sense and stupidity.

Someone said that Americans are just a bunch of stupid animals easy to manipulate and subdue. The sooner the US economy collapses the better, so the ignorant populace will finally learn NOT to live beyond their means – and stop blaming the government, since they don’t give a crap about people’s grievances.

Mon, 01/30/2012 - 16:03 | 2110601 VelvetHog
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Mon, 01/30/2012 - 16:06 | 2110616 brewing
brewing's picture


Mon, 01/30/2012 - 16:17 | 2110663 Manthong
Manthong's picture

There is plenty of work to do..

throwing Solyndra glass tubes into the dumpster.


Mon, 01/30/2012 - 16:27 | 2110706 macholatte
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As President Obama crafts a reelection income equality message aimed at punishing the rich and rewarding the poor, his own government finds that the 46 million living below the so-called “poverty line” live and spend pretty much like everyone else.

Says Rasmussen, “About 40 million Americans are officially defined as living below the poverty line. Yet most of those have adequate levels of food, shelter, clothing and medical care. Sixty-three percent of American adults believe such a family is not living in poverty,” he writes. “Only 16 percent believe that a family is living in poverty if it has two color televisions, cable or satellite TV, a DVD player, and a VCR, but that’s what the average family living in poverty has as defined by the U.S. government,” he adds.

Mon, 01/30/2012 - 17:30 | 2110946 The Big Ching-aso
The Big Ching-aso's picture



They may be powerless to fix unemployment but there's no phucking doubt about it they're damn good at increasing it.

Mon, 01/30/2012 - 18:06 | 2111065 economics1996
economics1996's picture

These rich Yids want to kill 6.8 billion and live the Star Trek life style.  Unemployment and an affirmative action dolt are the first step.

Wed, 02/01/2012 - 09:53 | 2116006 Chuck Walla
Chuck Walla's picture

The desperate vote for those who promise cash aid or some kind of relief.  Il Duce cannot get re-elected unless he buys the votes.  He cannot "guide" a revolution without a revolutionary situation. Lenin explains this quite clearly in his writings. 

Mon, 01/30/2012 - 16:10 | 2110639 battle axe
battle axe's picture

Well aren't we just a ray of sunshine....

Mon, 01/30/2012 - 16:19 | 2110677 eatthebanksters
eatthebanksters's picture

Fuck you asshole...I had saved and was living well within my means with a conservative investment strategy and low leverage...all my investments were unfortunately in real estate.   I did'nt lose everything but lost enough that I am hurting. I'm a highly educated 55 year old male that can't find work (and I have no problem working hard) so I am creating a new business out of what I have left.  Unfortunately between government ineptness and corruption in the public and private sectors, many were taken advantage of so that a few might benefit.  Don't worry, America is full of guys and gals like me...we'll get it sorted out, kick out the fuckers that messed things up and become an economic power's the American way.  

Sounds like you're projecting your sad life onto us...keep whining bitch, at least we do something about it.

Mon, 01/30/2012 - 16:29 | 2110705 oddjob
oddjob's picture

I think you have underestimated the colossal mistep of your generation and the coming consequences.

Mon, 01/30/2012 - 18:02 | 2111058 economics1996
economics1996's picture

I am just a old fart just wanting this shit to go hot so I can get some payback.

Mon, 01/30/2012 - 18:38 | 2111139 JW n FL
JW n FL's picture



to tar and feather.. or not to tar and feather... this is the question.

Mon, 01/30/2012 - 21:20 | 2111452 Raging Debate
Raging Debate's picture

That's the spirit! Some humor in framing the argument to boot!

Mon, 01/30/2012 - 18:25 | 2111106 donsluck
donsluck's picture

I beg to differ. The problems really came to a head when the US administration and congress conspired, against almost all public input, to a $700 billion giveaway to the banks as Bush departed, and as continued by Obama.

There is no fighting corruption at the highest levels, except through revolution (which I do not support!!!)

Tue, 01/31/2012 - 05:42 | 2112115 economics1996
economics1996's picture

1913, Federal Reserve.

Mon, 01/30/2012 - 17:30 | 2110765 hedgeless_horseman
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eatthebanksters says:

...a conservative investment strategy and low leverage...all my investments were unfortunately in real estate...



...I did'nt lose everything but lost enough that I am hurting. I'm a highly educated 55 year old male that can't find work...


...America is full of guys and gals like me.

Indeed, it is.

Mon, 01/30/2012 - 16:50 | 2110800 STS813
STS813's picture

If you're not already aware of the method and your real estate is owned in physical form (not REITs), enter this phrase in your search engine of choice: "cost segregation accelerated depreciation".  Please note; don't be fooled by firms or individuals stating they know the method, as there are only a handful of firms in the country who truly specialize in this field.  By choosing not to use a specialist, you could be exposed to substantial risk.  Do some research, go with a reputable firm and you may be able to salvage some of your net-worth, while retaining the rest of your real estate holdings.  The method isn't cheap, but the benefits far outweigh the cost.  With my previous career in CRE investment sales, I had a number of clients who benefited from this.... Good Luck!

Mon, 01/30/2012 - 16:56 | 2110815 Ruffcut
Ruffcut's picture

Become a economic power again?  All ponzi schemes come to an end.

Half of everything you have is leveraged ponzi bullshit.  Pensions, savings, investments, gold and pewter, ALL PREDICATED ON REAL GROWTH, THAT WAS NOT REAL AT ALL.

There is no reset button. The banksters have fucked it up, but good. When house flippers were cashing in on ponzi, it was someone elses debt, that is not being paid back. And to add insult to injury these assholes sold their ponzi debt as money good to any sucker they could find.

Empire again? My aching ass, hardly. Go to obobble and ask for more hopium to but on your soggy corn flakes.

Mon, 01/30/2012 - 17:16 | 2110894 Things that go bump
Things that go bump's picture

Sorry, but we won't rise again in your lifetime or mine.  People in our age bracket are going to die broke and before our time when the rug is pulled out. Then, in a few generations, when most living now are dead, they'll do it all over again to our grandchildren and great grandchildren.

Mon, 01/30/2012 - 17:49 | 2111021 Matt
Matt's picture

I'm not sure that putting all your money into real estate qualifies as a conservative investment strategy ...

Mon, 01/30/2012 - 18:10 | 2111072 economics1996
economics1996's picture

Real Estate was the "safe" investment until the Yid mother fucker Greenspan saw the new housing numbers in 2001-02.  Then he saw how much his fucked up wife hated Bush.  Then the mother fucker put 2 and 2 together.  Then we had 1% interest rates for 2003-04.  And the rest is history.  America stabbed in the back by fucking Yids.  Who would have thought it?

Mon, 01/30/2012 - 18:03 | 2111062 grid-b-gone
grid-b-gone's picture

The Boomers are the first generation to have paid into entitlement programs for their entire careers. They and their employers are the demographic that has paid 100% of Reagan's SS tax increase to "save" Social Security.

Many Boomers did not even vote or work until the 70's, so saying they partied it up in the 50's and 60's is a spurious connection to today's problems.

Boomers want to know where that lockbox is. 

The core problem began in 1913 and was expanded by FDR's programs.

Most of these progams are Ponzi in nature. The real winners were workers who only paid into the program for a few years and then collected (starting Jan 1940) while 16 were paying in for each receiving benefits.  

The plan really ran off the rails with the Republican Congressional and Executive sweep of this century. Instead of governing as fiscal conservatives, they threw a pork party, justifying it with Keynesian and Supply Side theory that excess spending somehow leads to greater demand.

Thus began the series of bubbles that have consumed much of the retained capital of the U.S.

Like eatthebanksters, I now understand that being a small business owner is one way to tap into pro-business benefits and escape the U.S. employee challenge that has to compete directly with labor worldwide.

Boomers are just as angry as the poster/ranter because we know we can't help our children as our WWII parents did, entitlements will be eroded, and job prospects will be limited for our children. 

I missed it personally, but yes, that period between the pill becoming legal and AIDS must have been awesome. Never saw that as a rant subject before. Boomers ruined that for you, too?

Mon, 01/30/2012 - 18:11 | 2111077 economics1996
economics1996's picture

Everyone thinks the Silent Generation and GI Generation are the baby boomers.

Mon, 01/30/2012 - 17:13 | 2110886 WillyGroper
WillyGroper's picture

>>>>>The blame must be placed specifically on the so-called Baby Boomers, a failed generation who really enjoyed the prosperity of the 50s and 60s; instead, they focused all of their deprived intellect in experimenting with all types of drugs and having very promiscuous sexual lives. 


Wanker, How many times are you going to post this crap? Did ur mother turn tricks at Woodstock with livestock to get paid for her meth addiction?

Mon, 01/30/2012 - 18:42 | 2111154 JW n FL
JW n FL's picture



in the past 30 - 40 years is when this shit too hold..

it took a decade of planning..

and a decade to execute...

but the executing parties of this cluster fuck are the baby boomers.

and thats the fact jack!

Mon, 01/30/2012 - 16:02 | 2110593 Careless Whisper
Careless Whisper's picture



The Careless Whisper Afternoon Update & Threadjacking Because Drudge Needs Help Today



Report Says Entertainment Industry Booming, Independant Artists Benefit From Internet

FL City Uses Scanners On Garbage Trucks To Monitor Residents Recycling

Colombian President Says Decriminalize Drugs To Bust Violent Drug Cartels

Catholic Church Refuses To Obey Obamacare; Won't Pay For Abortions

LA Sheriff's Captain Accused Of Helping Crips Drug Gang,0...

Detroit Accused Of Towing Random Cars To Boost Revenue|topnews|text|FRONTPAGE

NYC Government Protects Privacy Of Its Purchases By Sticking With Typewriters, Shuns Computers

Music VIDEO Of The Day; "Hot Couture" By Manila Luzon

Mon, 01/30/2012 - 16:04 | 2110611 falun bong
falun bong's picture

off-topic troll please go away

Mon, 01/30/2012 - 16:29 | 2110715 Careless Whisper
Careless Whisper's picture

I don't have to obey your Canadian censorship rules that you have been brainwashed into believing. If you don't like my posts, just scroll past them.

Mon, 01/30/2012 - 16:37 | 2110748 brewing
brewing's picture

let me correct that - just troll past them...

Mon, 01/30/2012 - 18:53 | 2111177 JW n FL
JW n FL's picture



Thank You!! for the GREAT!! Links!!

Keep Up!!the FANTASTIC!! Sharing of Information!!

signed, Christian Constitutionalist

Mon, 01/30/2012 - 16:07 | 2110623 Hugh G Rection
Hugh G Rection's picture

Not to worry. WW3 will create a million jobs.

Mon, 01/30/2012 - 17:18 | 2110903 Things that go bump
Things that go bump's picture

For morticians?

Mon, 01/30/2012 - 17:46 | 2111010 Sudden Debt
Sudden Debt's picture

No, as Sharks with freaking laser beams attached on their head trainers.


Mon, 01/30/2012 - 18:54 | 2111182 JW n FL
JW n FL's picture



Best one Liner I have seen in a GOOOOOOOODDDD LONGGGGGGGGG while!!


Mon, 01/30/2012 - 17:16 | 2110895 Liquid Courage
Liquid Courage's picture

"laser-like focus" ? A laser, of course has a very small focus, so I guess he's admitting that he "can't see the forest for the trees".

Then again, maybe he just wants to vaporize those pesky unemployed workers.

"I'm Barak Obama, and I approved this idiotic and inappropriate metaphor."

Mon, 01/30/2012 - 21:50 | 2111520 Raging Debate
Raging Debate's picture

Liquid, the quote was from the Austin Powers parody of Goldfinger, called Goldmember: Check out this video on YouTube:

If you haven't seen this move you might like it. Very funny.

The suffering out there isn't funny. Some stewards immersed in it adapting to the difficulties choose humor to deal with it though as it can be laugh or cry. For me it's a little of both.

Good luck and God bless all the Stewards and their Wards. The load is awful heavy but at least we got friggin sharks with friggin laser beams on their heads ;)

Mon, 01/30/2012 - 16:17 | 2110664 mattu13048
mattu13048's picture

That's what Armada Markets wrote in their latest weekly market forecast. The Fed is desperate. 6 years of ZIRP has brought us nothing. 

Mon, 01/30/2012 - 17:03 | 2110823 Poetic injustice
Poetic injustice's picture

To first poster:
Equal with equal, dontcha think?

Mon, 01/30/2012 - 16:09 | 2110570 ACP
ACP's picture

That's no excuse to not print money!

Besides, who says Bernanke's goal is to reduce unemployement?

Mon, 01/30/2012 - 16:09 | 2110633 Clueless Economist
Clueless Economist's picture

Yes, I agree fellow Keynseian, brilliant minds think alike!

The only solution to the debt problem, is more debt"

-Economics Nobel Winner, P Krugman  

Mon, 01/30/2012 - 16:48 | 2110783 Bunga Bunga
Bunga Bunga's picture

The ideas of those outstanding geniuses have been by no means understood by science, technology, politics and society so far. Applying their revolutionary ideas on medicine per instance would heal mankind from cancer: Organisms have simply to grow faster than their tumors. There will be a time when people learn, accept and apply the brilliant Keynesians rules in medicine, technology, physics, math, astronomy aso.

Mon, 01/30/2012 - 16:11 | 2110643 V in PA
V in PA's picture

That would make a great t-shirt. :)

Mon, 01/30/2012 - 15:57 | 2110572 lesterbegood
lesterbegood's picture

The Fed no longer has any power outside of the G5 countries and a few client states. By the way, has anyone checked the expiration date on the Feds corporate charter?

Mon, 01/30/2012 - 15:59 | 2110586 francis_sawyer
francis_sawyer's picture

By the way, has anyone checked the expiration date on the Feds corporate charter?

I'd be more interested in getting a roll call head count in "who's in" & & "who's out" in terms of renewing that charter before the elections...

I doubt we'll see that roll call anytime soon...

Mon, 01/30/2012 - 18:10 | 2111071 Debt-Is-Not-Money
Debt-Is-Not-Money's picture

You mean the 99 year charter that ends 12-21-2012?

Is that for real?

Doomsday for the Fed?

If this is real, what do you think they will do before then, and what's it likely to be?

Mon, 01/30/2012 - 18:24 | 2111098 lesterbegood
lesterbegood's picture





Upon the filing of the organization certificate with the Comptroller of the Currency a Federal reserve bank shall become a body corporate and as such, and in the name designated in such organization certificate, shall have power—

First. To adopt and use a corporate seal.

Second. To have succession after February 25, 1927, until dissolved by Act of Congress or until forfeiture of franchise for violation of law

Mon, 01/30/2012 - 15:57 | 2110573 francis_sawyer
francis_sawyer's picture

Why Is Unemployment Duration So Long?

Because the PAY is better... Go figure...

Mon, 01/30/2012 - 15:57 | 2110575 brewing
brewing's picture

long bread lines...

Mon, 01/30/2012 - 15:59 | 2110579 TruthInSunshine
TruthInSunshine's picture

Uh-oh. You all know what this means, right?


"These special factors are not readily addressed through conventional monetary or fiscal policies."


The Bernank is the basement of 33 Liberty, in white lab coat, attempting to successfully turn lead (or tungsten) into the most barbaric of relics.


Mon, 01/30/2012 - 21:29 | 2111463 lotsoffun
lotsoffun's picture

the bernak is empowered.  he doesn't even bother with lead, which has some use on it's own.  he hasn't revealed this yet - but being such a powerful economistic, alchemist genuis unknown to humanity before - he can actually turn shit into gold.  watch.  oh ye of such little faith.  the end isn't near - he has a plan.  mankind has progressed and ben shalom shall lead the way into a new world of peace and prosperity for all.  nobody has seen corzine lately, a man with large credentials - ceo of the goldman sachs, governor, senator from one of the wealthiest states in the wealthiest countrys to ever exist on earth.  corzine is working very closely with bernake.  the rumor is that corzine helped '1.2 billion dollars vaporize'.  but that is only for the uninformed.  his alchemism is being planned to return that 10 fold to the masses.  (sarcasm).



Mon, 01/30/2012 - 15:59 | 2110581 Cognitive Dissonance
Cognitive Dissonance's picture

"San Francisco Fed Admits Bernanke Powerless To Fix Unemployment Problem"

The joke is on you and me. He was never trying to fix anything other than the "one percenters" and their bankers and various support staff (think congress critters).

Mon, 01/30/2012 - 16:06 | 2110621 UGrev
UGrev's picture

I think the joke is even bigger than that. 
What happens when you win Monopoly and you have all the money? Money doesn't matter anymore... you pack up your shit and go home.

I have been getting the distinct feeling that this is one big attempt at eliminating inequality by eliminating that with which the perception of equality (in the liberal mind) is derived... MOOLA!.  

Mon, 01/30/2012 - 16:18 | 2110671 Dr. Engali
Dr. Engali's picture

Theoretically they could expand their balance sheet and buy everything.

Mon, 01/30/2012 - 16:22 | 2110681 Cognitive Dissonance
Cognitive Dissonance's picture

The only thing I have control over when I'm trying to expand is my waist line.

How does 55 sound to you? :>)

Mon, 01/30/2012 - 16:24 | 2110691 UGrev
UGrev's picture

with what? money that no one will accept? Seriously.. when you have all the money and no one else has any (as in enough) they start using other things as a means to purchase. Your money becomes useless to them. Go ahead.. expand your balance sheet into infinity. It would be like telling everyone that you're adding more dog shit to the giant pile of dog shit that you already have. No one will give a shit (pardon the pun) about it, or you and they will go about life without 'you're shitty money'. 

Mon, 01/30/2012 - 16:30 | 2110716 francis_sawyer
francis_sawyer's picture

Theoretically, Mila Kunis could come over to my house right now & beg me to have sex with her...

Mon, 01/30/2012 - 16:37 | 2110750 UGrev
UGrev's picture

People barter all the time when they don't have the cash for something. This will just be on a much, much larger scale.. 

Mon, 01/30/2012 - 17:16 | 2110892 francis_sawyer
francis_sawyer's picture

I have no doubt that they will continue to do that long into the future... With or without fractional reserve banking...

Mon, 01/30/2012 - 17:19 | 2110908 UGrev
UGrev's picture

I'm just speculating on scale at the moment, nothing more. In other words, I could title my post "When we returned to metal money...". 

Mon, 01/30/2012 - 18:19 | 2111094 grid-b-gone
grid-b-gone's picture

Exactly. The Fed's plan to drain liquidity at some point will look very much like a Monopoly game ending, except cash won't go back to the same little slots it came from when the game began.

Top-down liquidity add, bottom-up liquidity drain.

Mon, 01/30/2012 - 16:23 | 2110686 GottaBKiddn
GottaBKiddn's picture


The very idea that somehow the Fed Banking Complex would ever care enough about the unemployed to actually do something positive is ridiculous in the extreme. Congressional criminal complicity was necessary for it to have become one of the Fed's primary responsiblities, and simply a slap in the face of the working class from day one.

Mon, 01/30/2012 - 16:02 | 2110582 distopiandreamboy
distopiandreamboy's picture

So marginal cost of hiring new employees > marginal benefit of hiring new employees. And future marginal cost = ???

Mon, 01/30/2012 - 15:59 | 2110585 NotApplicable
NotApplicable's picture

That's an awful lot of words to say malinvestment.

Mon, 01/30/2012 - 16:01 | 2110594 Alcoholic Nativ...
Alcoholic Native American's picture

It's not the "market"'s job to create jobs, no more than it's a corporations job to create jobs.  Its job is to extract wealth.



Mon, 01/30/2012 - 16:17 | 2110666 Alcoholic Nativ...
Alcoholic Native American's picture

Why the downvotes?  Just speaking the truth guys.

Tue, 01/31/2012 - 01:56 | 2111975 Joseph Jones
Joseph Jones's picture

Bravo...+1 for you! 

Mon, 01/30/2012 - 16:25 | 2110693 francis_sawyer
francis_sawyer's picture

I think they missed your /sarc tag there...

In any case...

San Francisco Fed Admits Bernanke Powerless To Fix Unemployment Problem

I'll ask the obvious question (since nobody else has)... If the DUAL Mandate (of the FED are):

- Jobs

- & inflation targeting

and one, they are ADMITTEDLY powerless to fix (& the other they are doing a miserable job with save for printing numbers and fudging numbers like CPI or PCE deflators)...

Why the fuck do we need a FED?

Mon, 01/30/2012 - 16:29 | 2110710 Alcoholic Nativ...
Alcoholic Native American's picture

Someone has to buy government debt.  Or else even more jobs will be lost.

Mon, 01/30/2012 - 16:33 | 2110732 francis_sawyer
francis_sawyer's picture

Someone has to buy government debt. Or else even more jobs will be lost.

Only in the short term... That's the problem... It's like making the justification that "Oh... If I don't do more heroin, I'm going to go thru a painful withdrawl, & therefore my whole life will be worse, so I'd better just keep doing heroin"...

Mon, 01/30/2012 - 16:53 | 2110809 Cognitive Dissonance
Cognitive Dissonance's picture

Sounds good to me. I'll gladly pay you in 30 years for some heroin today. Where do I sign?

Mon, 01/30/2012 - 17:20 | 2110911 francis_sawyer
francis_sawyer's picture

Where do I sign?

Ha! :-)...

You sign on that dotted line right under the parts that says "I promise to be your bitch for 30 years"...

Mon, 01/30/2012 - 16:45 | 2110780 anonnn
anonnn's picture

"If the DUAL Mandate"...The paper mandate is jobs and inflation targetting. The physical mandate is something else.

Mon, 01/30/2012 - 21:21 | 2111453 lotsoffun
lotsoffun's picture

as i'm being told from fairly 'intelligent and informed wall street types' - "it would be a lot worse if it wasn't for bernake printing all this money" - well - i've got a pair - bring it on!  dump the fed.  let the bank be capitalists and lets see what they can do for themselves.  (oh - i forgot - LEGALLY)



Mon, 01/30/2012 - 16:29 | 2110713 Dr. Engali
Dr. Engali's picture

A rigged market extracts wealth. Free markets require failure as well as success. Failure frees up capital from malinvestment, the propping up of dead entities , and diverts it to new ideas and new opportunities.

Mon, 01/30/2012 - 16:43 | 2110763 Alcoholic Nativ...
Alcoholic Native American's picture

Yes, Yes, I'm sure if only free market capitalism were implemented right parasitic wealth extraction would not be it's primary objective!  BULLSHIT.   Capital chasing more capital is all the market is, if they can use capital to bribe the government to get bailed or turn a profit by living off its tit and it will do this and it has not necessarly failed.  Governments have failed, not capitalsm.  Thats what they get for hosting parasites.


New ideas and new extract wealth.

Mon, 01/30/2012 - 17:05 | 2110844 dwdollar
dwdollar's picture

NO. People have failed, not governments. Making sure a system is fair is the responsibility of the people. Government is just a means for lazy citizens to defer their civic responsibilities.

Mon, 01/30/2012 - 18:01 | 2111053 RiverRoad
RiverRoad's picture

Apparently capitalism morphs:  It seems a bit different today than it was in 1776.

Mon, 01/30/2012 - 16:02 | 2110595 Confused
Confused's picture

Now if they could only admit that suicide is the only honorable option left for the Fed members.......

Mon, 01/30/2012 - 16:19 | 2110673 Clueless Economist
Clueless Economist's picture

preferrably using the Japanese method

Mon, 01/30/2012 - 16:03 | 2110597 francis_sawyer
francis_sawyer's picture

Gee... On the Figure 2 chart it's gottem worse & worse with each new recession... I can't imagine why... Probably need to hire a few more PhD's & Nobel Prize winning economists to figure that one out...

My wild guess is that it'll come down to space aliens...

Mon, 01/30/2012 - 16:02 | 2110599 qussl3
qussl3's picture

Since when did policy effectiveness have anything to do with policy implementation?

Mon, 01/30/2012 - 16:06 | 2110622 HD
HD's picture

Wish I'd said that. +1

Mon, 01/30/2012 - 16:04 | 2110605 HD
HD's picture

Central Banks want to solve the problem from the top down - while the base crumbles beneath.

Mon, 01/30/2012 - 16:08 | 2110618 Temporalist
Temporalist's picture

Remember the days when the stimulus was going to take 12-18 months to take effect? Oh those were the days.


Sarkozy Says France to Impose Transactions Tax

Mon, 01/30/2012 - 19:04 | 2111187 JW n FL
JW n FL's picture



it is better than nothing!

we should be Hanging the Bankers... one and ALL! for Treason!

we should be hanging Washington DC for letting the Bankers Commit Treason!

We the People should be confiscating ALL! those monies from ALL! those people involved with derivatives!

We the People should be confiscating ALL! those off shore trusts!

but instead.. We the People are going to drool all over themselves while discussin abortion! (down at the Baptist / Evangelical Meth snorting off gay prostitutes nuttz center)

YOU CANT FIX STUPID! and neither can I! 

Mon, 01/30/2012 - 20:00 | 2111273 acetinker
acetinker's picture

Funny, it was all good on the way up.  Too many of us (me included I'm sad to say) participated in the fairy-land of cheap credit.  It takes two to tango- the banksters could not have created this situation alone.  It took millions of players (at varying levels of ignorance/complicity) to screw this pooch.  True, it is difficult to see the inherent flaws in the system (FED, Fractional Reserve) into which you were born- but not impossible.

The thing that really gets me is that right now, in twenty-fucking-twelve, there is rampant willful ignorance among the people of their monetary and banking systems.  How can one be apathethetic/disinterested about a topic that touches virtually every aspect of thier lives?  In-fucking-credible!

My point is this:  You can hang every known bankster and politician and nothing will change as long as the masses remain willfully ignorant.  It's not stupidity, it's willful ignorance that's the crux of the biscuit.


Mon, 01/30/2012 - 16:07 | 2110619 carbonmutant
carbonmutant's picture

"San Francisco Fed Admits Bernanke Powerless To Fix Unemployment Problem"

His upcoming unemployment problem or the public unemployment problem?

Mon, 01/30/2012 - 16:39 | 2110756 francis_sawyer
francis_sawyer's picture

To be fair... It's probably not a TOTAL loss... Here should be their new PR motto:

"The FED... Keeping hookers & coke dealers in Manhattan gainfully employed since 1913"

Mon, 01/30/2012 - 16:08 | 2110628 battle axe
battle axe's picture

A house in the woods, stocked with can foods, a lot of Scotch, and a huge amount of guns and ammo. Sorry, I was just day dreaming.

Mon, 01/30/2012 - 18:08 | 2111068 RiverRoad
RiverRoad's picture

That house in the woods.....uh uh.  That's why we had the housing collapse.

Mon, 01/30/2012 - 16:09 | 2110631 mayhem_korner
mayhem_korner's picture



An economic recovery marked by "severe and persistent weakness in the demand for labor."  Sounds legit.

'course we all know that if the CPI and employment numbers weren't fudged for political expediency, it would be (more) apparent to everyone with a pulse that there was never a recovery and things have in fact gotten worse in 2010 and 2011. 

Mon, 01/30/2012 - 16:10 | 2110635 non_anon
non_anon's picture

oh noes, they can't fullfill their mandate.

Mon, 01/30/2012 - 16:11 | 2110644 Dr. Engali
Dr. Engali's picture

"San Francisco Fed Admits Bernanke Powerless To Fix Unemployment Problem"

Wow! Finally an admission that central planning is a failure. Now if we could get them to admit that gold is indeed money..

Mon, 01/30/2012 - 16:17 | 2110665 francis_sawyer
francis_sawyer's picture

"San Francisco Fed Admits Bernanke Powerless To Fix Unemployment Problem"


Mon, 01/30/2012 - 16:13 | 2110652 Dermasolarapate...
Dermasolarapaterraphatrima's picture



A government that has lots of nominal debt denominated in its own currency has an incentive to try to inflate it away to decrease the debt burden. If foreign creditors hold a significant share of the debt, the temptation to use inflation is greater, since they will bear some of the inflation tax.

Mon, 01/30/2012 - 16:13 | 2110655 W10321303
W10321303's picture

Does this mean the Empire is Dead? How much is the Permanent War Budget now? Do you mean you are advocating the end of never-ending procurement of WMDs? This analysis is lacking in specifics. Are you saying the Market should allow GOP predators to hide their wealth in off-shore tax havens and then cut benefits for sick old ladies? Which market are you referring to? The market for WMDs? The market for corporate lobbyists? The market for heart-attack inducing drugs? The labor market of the prison-industrial complex? All of this pseudo Market babble doesn't address the corrupt political system. It doesn't address monopoly corporatism. It is just as empty of content as any form of dialectic materialism or market determinism. THE MARKET is run by sociopaths who are in desperate need of therapy. Not to mention the total lack of rules that apply equally to ALL participants.

Mon, 01/30/2012 - 16:19 | 2110676 mayhem_korner
mayhem_korner's picture



Your passion is clear...your point, a bit less.  Are you trying to say something?  I mean, relevant to the post?

Mon, 01/30/2012 - 18:07 | 2111067 W10321303
W10321303's picture

Capitalism = Long-term investment that produces long-term value

Mon, 01/30/2012 - 16:22 | 2110683 Alcoholic Nativ...
Alcoholic Native American's picture

Capital seeking more and more capital.  That's all the market is.  It's not there to create jobs, it's not there to increase the standard of living, it is there to extract wealth. 

The market is working perfectly. 


Mon, 01/30/2012 - 16:15 | 2110659 tony bonn
tony bonn's picture

unemployment is high and will remain high because that is the goal of the destruction results in lower living standards and hiring disincentives result in lower employment - as does a shrinking gdp....gdp has been shrinking incessantly for over a decade.....higher productivity without capital reinvestment yields lower employment until such time as said capital is fully depreciated and not replaced resulting in lower production meaning less employment...

all of this is courtesy of zirp.....there is no savings to fund new capital....

is the cash hoarding still a result of borrowing or does it represent free cash?

Mon, 01/30/2012 - 16:20 | 2110678 f16hoser
f16hoser's picture

Whoa, Whoa. High unemployment. In an election year. Oh the humanity....

Mon, 01/30/2012 - 16:23 | 2110689 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Bernanke admitted as much when he began targeting inflation as his sole mandate.

Mon, 01/30/2012 - 16:26 | 2110698 Chupacabra-322
Chupacabra-322's picture

"San Francisco Fed Admits Bernanke Powerless To Fix Unemployment Problem"

Jeez, Tyler.  You needed to write a whole article to come to that conclusion.  I could've told you that in one sentence and saved you the space. Plus, I would've thown in a Bernanke's a Doche comment as well.   

Mon, 01/30/2012 - 16:29 | 2110714 apu123
apu123's picture

They might not be able to help on unemployment but look at the miracle the PPT has been performing on the DOW.

Mon, 01/30/2012 - 16:31 | 2110720 The Iconoclast
The Iconoclast's picture

There's a major skills mismatch.  Badass Javascript coders can write their own ticket.  Shovel leaners, not so much.

Sure the business environment sucks.  The combination of a scary economic environment and scary governance environment keeps most businessess really cautious.  Romney will fix us up, though.  JOKE.

The elites have decided the game is elsewhere and are terminally looting the country through the intricate dance home value deflation and pension raping.  And I don't believe we'll be saved by our super skilled and diligent workforce.  They all died out years ago.  Lazy AND stupid are not the best work qualifications.  The lazy part will change when people get hungry enough, though.

Ron Paul is the only guy who will tell the truth.  The rest of them will pretend everything's great right up to the collapse.  Hence the full court press from TPTB to stop Paul.  Obama will probably get reelected, as unreal as that may seem.

In the meantime, try to protect what's yours, work on your skillz, and, you know, find ways to enjoy your life... just because everything's going to shit doesn't mean you shouldn't hug your wife and tell her how much you love her.

Tue, 01/31/2012 - 09:41 | 2112335 roadhazard
roadhazard's picture

There is only a mismatch in skills because all the factory work went out of the country.  It's blue collar middle class workers that move this country not the "high skill'ers". It is painfully obvious now. But you carry on with your "Java script" crap.

Wed, 02/01/2012 - 05:33 | 2115745 Clowns to the l...
Clowns to the left_ jokers to the right's picture

The manufacturing jobs leaving sure hasn't helped any. In '69 there were almost 19 million manufacturing jobs.The '69 recession hit, the jobs fell off but they rebounded back near 19 million. Another recession, another hit to the numbers but they rebounded again and in '79 they peaked at around 19.5 million when the labor force was around 100 million. So, almost 20% of the labor force worked in manufacturing. After the recessions of the early 80s, they came back, peaked at around 18 million and the number hasn't been back to 18 million plus since.

They basically took a dive off a cliff starting shortly before the dot com bubble burst, bounced off a rock and went sideways for awhile during the housing boom before landing at fewer than 12 million these days. The labor force today is what? Around 150, 155 million? So these days they represent less than 10 percent of workers. Some of that's outsourcing, some of it's automation, closures, takeovers or mergers but anyway you look at it, you're talking about over 7.5 million jobs that don't exist any longer and even regaining the ones that haven't reappeared yet would help.

Mon, 01/30/2012 - 16:38 | 2110723 anonnn
anonnn's picture

 "These special factors are not readily addressed through conventional monetary or fiscal policies."

...because monetary and financial policies have no fairness, aka justice, component?

Recall: Without fairness, there will be chaos.

Mon, 01/30/2012 - 16:38 | 2110752 GCT
GCT's picture

I am going to go out on the conspiracy limb here and I think after all of this administrations anti-business rhetoric, most business are waiting for him to exit before they start hiring again.  This shared sacrifice is only for the working stiffs these days.  Some small business friends would like to hire but are worried about all the healthcare issues and the taxes, so they will wait.  Just my two cents. 

Mon, 01/30/2012 - 16:41 | 2110764 cranky-old-geezer
cranky-old-geezer's picture



San Francisco Fed Admits Bernanke Powerless To Fix Unemployment Problem

Fixing unemployment never was the Fed's goal.  They're not even trying.  They don't care about it.

The "employment mandate" is what OTHER PEOPLE say ABOUT the Fed.

Fed's true goal is clear:  Loot the economy.  Loot the nation.  Loot the people. 

And give all that stolen wealth to the government and banks.

When you look at what has actually happened since '08, it's very clear Fed's real job is to loot the nation and give it to banks and the government.

Mon, 01/30/2012 - 18:18 | 2111092 RiverRoad
RiverRoad's picture

The Fed needs the factor of unemployment to preclude any chance of inflation.

Mon, 01/30/2012 - 16:57 | 2110817 Debugas
Debugas's picture

Bernanke's power is to lend money into existence but it is only the congress that can give-away money

So the Bernanke is powerless to push money into the system if nobody is willing to borrow, the congress on the other hand can simply spend without collecting obligations

Mon, 01/30/2012 - 17:02 | 2110833 Dr. Acula
Dr. Acula's picture

>These special factors are not readily addressed through conventional monetary or fiscal policies. But such policies may be able to offset the central obstacle of weak aggregate demand.

Allegedly, withdrawing blood from one butt cheek and injecting it into the other can also help cure anemia.


Mon, 01/30/2012 - 17:08 | 2110853 jse111
jse111's picture

A sobering take on unemployment:

Mon, 01/30/2012 - 17:10 | 2110873 Moe Howard
Moe Howard's picture

Bookface better go public before there isn't a stock market.

Mon, 01/30/2012 - 17:11 | 2110877 snblitz
snblitz's picture

Markets are able to operate reasonable well under fairly oppresive rules. However, the key is that there have to be 'rules'. Long term horizon rules, on the order of 5+ years. At the moment there seem to be no rules.

Mon, 01/30/2012 - 17:13 | 2110888 css1971
css1971's picture

This is blindingly obvious. All of the jobs emigrated to China.

Mon, 01/30/2012 - 17:17 | 2110898 nuscorb
nuscorb's picture

Actually the Fed has the power to fix unemployment, all they have to do is to do absolutely nothing. Stop being the burden they are on every honest working person.

And if they want to feel even better about themselves, they can start exchanging value for value instead of stealing.

Mon, 01/30/2012 - 17:23 | 2110920 RiverRoad
RiverRoad's picture

So apparently the "Western Fed" and the N.Y. Fed are still at it.  Thought that fight was finished years ago with the N.Y. Fed being effectively "The Fed".  Please Tyler, could you give your readers some background here on the past Fed fights?

Mon, 01/30/2012 - 17:26 | 2110930 Debeachesand Je...
Debeachesand Jerseyshores's picture

"San Francisco Fed admits Bernanke powerless to fix unenployment problem".No Shit Sherlock,they ought to put that in the revise version of the Book of Revelations.

Mon, 01/30/2012 - 17:33 | 2110933 overmedicatedun...
overmedicatedundersexed's picture

gov policy via nafta cafta ala CFR to off shore millions of jobs, then cry it's big business fault! while making CEO of GE federal  jobs committee head (while GE ships thousands of more jobs off shore)..bailout GM while they build billion dollar new plants in Mexico and Asia. and keep the borders open so millions of illegals flood the country taking even more jobs.

anyone see the real enemy of our Country just look at DC.

Then only blame capitalists for UE in USA..the fed did not help, the CFR plan of the last 30 years has reached the point where American workers are to be paid in HK dollars. at HK rates.

it is no wonder that the FED is powerless in creating Jobs it is our national leadership who pushed us to this point.

to those who blame the working people of America are deeply wrong..the elite reptile vermin at the top have steared this course ...the most taxed and regulated economy in the world all hail the Davos NWO.

Mon, 01/30/2012 - 17:30 | 2110949 sgt_doom
sgt_doom's picture

Naaaah, this sounds like the same old BS to me!

What few citizens know, is that anyone can petition, or request, the FED undertake specific studies,

Both individually, and as a member of various political action groups, I/we have requested the Fed study the effects of long-term, exponentially increasing, offshoring of American jobs on the economy.

Each time, they wouldn't touch it!!!

Not surprising, as the banksters have long been behind the offshoring of all American jobs (BTW, we reached critical mass as of 1999, the same year when America became a net importer of tech services).

Which means since 1999, there has been ZERO NET NEW job creation --- losing more jobs than created, etc.

This is officially the fourt jobless recovery since 1990 (I believe it is really the sixth, but the Reagan administration really fudged their numbers --- see David Stockman's remarks on that matter).

Previous comments by Caviar Emptor explained the shrinking jobs base in a most excellent and cogent fashion.

With every so-called "restructuring" they restructure the jobs base downwards, and this time they have offshored so much of the production assets, and so much of the capital assets, only bad things can result for the majority of the working American public.

Mon, 01/30/2012 - 17:47 | 2111014 RiverRoad
RiverRoad's picture

You betcha there's no jobs out there; even a dolt could see that.  When you consider that 1) efficiency experts have for several decades been steadily and readily advising business on how to maximize their profits with fewer workers, 2) technology has been eliminating millions of jobs (how many live people do you talk to on the phone these days?), 3) the effects of outsourcing, and 4) virtually no jobs attrition (retirements) due to the economic collapse, have all been mightily contributing to the jobless recoveries then you realize why we are "doomed" on the job front.  Did we really have to wait for a paper from the San Fran Fed on that???  Now we are the new Europe....with the same rates of unemployment.  Duh.

Mon, 01/30/2012 - 18:10 | 2111075 W10321303
W10321303's picture

The Market = Short-term speculation that creates (?).....   Capitalism = Long-term investment that creates long-term Value and then they sell you something that you really want. Or you have something of REAL value that you really want, that has REAL value, long-term..... 

Mon, 01/30/2012 - 18:13 | 2111081 W10321303
W10321303's picture

How does Figure 1 correlate with the rate of mergers and acquisitions that started with 'supply side' policies started by Reagan when he suspended the anti-trust laws?

Mon, 01/30/2012 - 18:31 | 2111091 exartizo
exartizo's picture

"anecdotal evidence suggests that recent employer reluctance to hire reflects an unusual degree of uncertainty about future growth in product demand and labor costs"

Wrong. Employer reluctance to hire is based on uncertainty about government intervention, taxation, and stupidity.

Correction: No one is uncertain about government stupidity.

Mon, 01/30/2012 - 18:24 | 2111099 Heroic Couplet
Heroic Couplet's picture

ALLCongressional Republicans should be out looking for jobs. Bush tax cuts have been in place for 11 years. Where are the US jobs? Take Faux Noise, the ACORN pimp and prostitute, and show us where the tax cuts have created jobs.

Take Rupert Murdoch, Rush Limbaugh, Sarah Palin, Newt and Mtt, MItch McConnell, Boehner, Ron and Rand Paul and the rest of the Republican morons who show up in DC to collect lobbyist money. If you can't, you need to be called liars, to your face, voted out of office and kept out of office. 

Mon, 01/30/2012 - 18:31 | 2111118 Bob Sacamano
Bob Sacamano's picture

HC -- Agreed. Let the Bush tax cuts expire. 

Mon, 01/30/2012 - 18:29 | 2111114 Bob Sacamano
Bob Sacamano's picture

One big problem is the billion+ of people who will gladly work for one-tenth what the US worker makes (pay + benefits) -- plus they do not demand the same morass of US labor regulations around just hiring or firing someone much less other work place rules. 

And now most of the countries with those billion+ people have electricity widely available, some factories, etc, they are cranking up the productivity the past 10+ years.  They also have the benefit of skipping much of the learning curve since technology is very portable -- they do not need to retrace the industrialized world's steps to quickly catch up.  

International wage arbitrage is here and it will not be good for US employment or US pay rates.   The US has great difficulty in competing to overcome this huge pay differential in other countries.  The US has priced itself out of the world market.  Sure the US can cry "unfair," but it won't fix anything.  Becoming isolationist may make some feel better in principle, but there would still be very painful consequences.  

Coupled with the consumer debt financed consumption binge of the past 30-40 years (not to mention the government debt financed consumption binge of late), and it looks like economic winter will last much much longer. 

BHO cries for more redistribution and level outcomes.  He does not seem to realize it is happening already --- on a global basis.   


Mon, 01/30/2012 - 19:09 | 2111198 SKY85hawk
SKY85hawk's picture

Wow!  Sombody is actually listening to Harry Dent?

Tell Obama!  He can save himself a lot of aggravation by resigning early. 

Whoever becomes potus will wonder why they worked so hard to get a job paying 250K.

btw, why have they silenced the 'analysts' that have been predicting the "baby boom slump" since 1996ish?


It can't be that big gummmint can NOT solve this problem, huh?





Mon, 01/30/2012 - 19:42 | 2111240 dcb
dcb's picture

when one of these A-holes has the balls to write about how the fed increases unemployment, increases structural fragility, and increases income inequality then let me know.

the answer to all three is too much credit creation, and too low interst rates on savings!!!

income inequality: since the wealthy own the vast majority of assets, and cheap credit increaases asset prices and the real economy (in theory) the majority of that asset price increase is transmitted to the wealthy increasing inequality. in regards to salary the top 1% have incomes that are much more realted to the credt creation in society than others. (CEO, bankers.lobbyists) etc. they can keep up in income with the log credit growth, and tey have assets.

Since the majortiy have savings, low interst rates put them further behind the 8 ball, they decrease spending, that increases unemployment.

But that would mean economists have common sense and I have taken enough economics couses and done enough reading that even if you started wtih common sense they would make sure it is driven out of you by the time you graduate, or you say what you are suppossed to say even if you know it aint true.

As I have said to a number of well known economists, the problem with economics is that too many economists practice it. they would greatly benefit from people outside of their own field because they have myopia.


savings is what should be invested in the economy for growth, not log debt dreation and debt needs/must be stable ratio to gdp (nominal gdp)

Mon, 01/30/2012 - 21:07 | 2111422 lotsoffun
lotsoffun's picture

until one of these a-holes has the intelligence to say very simply - "stop shoppingg at wal-mart and starbucks and most other global brands, buying crap made in china with money you don't have buying things you don't need."


wal-mart and starbucks are SPECIFICALLY designed to DECREASE employment and put everyone else in the vicinity out of work. others with that plan are home depot and staples. if you want to see jobs created - buy you lumber and home needs at the local lumber yard, buy your stationary at the 'stationers'. buy coffee from mom and pop. buy your pants at the army and navy. and tell them that you demand they buy american made goods when possible.


fixed it. that simple. really is. really, really is. NOTHING ELSE WILL WORK.


on top of that - the following message - i think this is going to be my last post here ever. because - everyone wants to make it so complicated.  'peak oil' - blah blah.  once you go local again - so what - maybe you can't have oranges cheap in north dakota.  cabbages never hurt anyone.  you go local - doesn't matter if gas is $10 gallon.  you can get to work most days walking, bike, public transport.

self defence?  huge army?  we already learned the hard way in korea, vietnam, afgan, iraq.  bombing the crap doesn't defeat anybody.  with the arms that the general american public has - you think somebody can put boots on the ground here?  or can afford to?  or even really wants to?

our entire american system is designed around getting people to spend too much on what they don't need.  let's ease up - and our lives will actually be enriched.


message from the politicians - (we will never hear this).


'turn off the tv and video games. learn how to read and write and do arithmetic. this may make you employable. if you are employable, you will have self-esteem and will be better prepared to live a happy productive life, be a better family member whether as spouse or parent'.

Mon, 01/30/2012 - 19:58 | 2111271 Bay Area Guy
Bay Area Guy's picture

As a representative of the Baby Boomer Generation, I should take exception to your post JW, but in truth I agree with you 100%.  The boomer generation hasn't done jack for the country.  My generation is a greedy, unscrupulous generation that pretty much spoiled a lot of hard work that the WWII generation accomplished.  Frankly, if my generation had been in charge during WWII, I think the east coast would be speaking German and the west coast Japanese right now.  Or perhaps we'd be speaking Russian and would be one of the SSR's.  One thing's for sure, we never would have gotten to the moon and perhaps not even to space.  The iPhones and iPads and iPods that our spawns' generation have attached to their bodies 24/7 would likely not have been invented because the basics of most of what we take for granted today stem from space exploration and, as I said, that likely wouldn't ahve happened.  The generations following us haven't been very good either.  My generation has coddled their kids to such a degree that quite a few of them don't know the first thing about how to survive in the world, much less prosper.  And our spawn is now having kids of their own.  Until or unless this nation returns to a philosophy of personal responsibility, which frankly, I don't see ever happening, we're going to go further and further down the food chain.  When you compare the US to quite a few countries in Asia, we're already second world.  I forsee a time in the not to distant future that we'll be down to third world.

Tue, 01/31/2012 - 11:33 | 2112748 Mary Wilbur
Mary Wilbur's picture

Your problem is that you live in the Bay Area. I left in 1979 for the midwest and have never regretted it.  

Mon, 01/30/2012 - 22:23 | 2111583 dolph9
dolph9's picture

Who needs jobs when you have section 8 rent for your apartment, food stamps for your cheetos, and subsidized electricity for your World of Warcraft and internet porn?

The jobs and the gold are for the suckers, you and I.  The masses live on fiat money, and they persist and persist.  And when they finally want to die, some do gooder psychiatrist puts them on Prozac so they don't blow their brains out, and a cardiologist puts a stent in a coronary artery.

And now you have even more people persisting on this fiat scheme.

Tue, 01/31/2012 - 00:17 | 2111836 aaxiom
aaxiom's picture

"In which case is it fair to finally demand that the Fed merely focus on just one mandate - that of controlling inflation, and leave the jobs question to the market..."


The obvious niggle with this statement is that the Fed can't even do the "inflation" part right. What you mean to say is that government and all of the associated water carriers need to get the hell out of the way and allow markets to function. But that simply isn't what statists will do, so we can forget that idea.

The bottom line observation is that these people really aren't interested in solving these problems. Period. Left to chance, some of this insane decision-making would break in favor of the citizen some percentage of the time. Instead, it NEVER breaks in favor of the citizen, and inevitably makes the plight of the citizen much worse. My conclusion is that this is intentional, but that is simply speculation on my part -- but speculation with SOME basis as I see it.

Tue, 01/31/2012 - 03:56 | 2112052 scragbaker a ca...
scragbaker a cape cod clamdigger's picture

You are all a bunch of fucking pussys !  You yack yack yack your bullshit greavances in this comment section but LACK THE REAL BALLS FOR ACTION !  For if any of you had any REAL BALLS you would be at this moment organizing VERY LARGE GROUPS of PATRIOTS and you would be out in the streets with your swords and pitch forks hanging the polititions and bankers responsible for looting this country's citizens and our nations treasurey.  We no longer have a nation where honesty, hard work and thrift will give one a better life.  What we now have is a nation where the best odds of getting ahead lie in dishonesty, "cheating the system" (WHICH GROWS EVER MORE BURDENSOME) and scamming anyone you can.   I pray every day for a revolution before I get too old to join in the cause.  I am very well aware that I couild be labled an "enemy combatant" for posting this.  But fuck it - I am a USA NAVY veteran, highly educated and very hard working.  Here I am in my 50's and I am running harder and faster than ever before trying to keep my head above water.  I have not voted since Ross Perot lost the election (all Presidents since that election have proven to be ineffectual and liers)  and I turned off my TV set for good in 1996.  I would gladly and with honor give my life so that my children and my grand children may have the chance for a better life.  WHEN THE 'END GAME' FINALLY ARRIVES - A HYPERINFLATIONARY CRASH OF OUR NATION'S INCREASINGLY WORTHLESS CURRENCEY AND YOU PUSSYS CAN'T FIND A LOAF OF BREAD TO EAT MAYBE YOU'LL SET DOWN YOUR CELL PHONES AND IPADS, STOP WATCHING DANCING WITH THE STARS, TURN OFF HOWARD STERN, CARE LESS ABOUT THE SUPER BOWL THAN WHAT IS BEING STOLEN FROM YOU AND YOUR OFF SPRING AND GET THE BALLS TO ACTUALLY DO SOMETHING!        

Tue, 01/31/2012 - 08:31 | 2112202 dcb
dcb's picture

the military creates killers by the thousands with the training to do something, in fact if push came to shove I think they would kill the people. how secret service members and others who protect the elite live with themselves is beyind me. unless they are private security. by the same toke folks like assad, stalin, hitler all had security as well.

Tue, 01/31/2012 - 08:35 | 2112208 Ghordius
Ghordius's picture

swords and pitchforks? are a navy veteran of which age exactly? ;-)

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