More cowboy capitalism

[fintstone]

Mankiw's Magic
Larry Kudlow
January 9, 2005

Friday’s job report shows that White House economist Greg Mankiw was very nearly right when he projected almost a year ago that jobs could rise by 2.6 million in 2004. Of course, he was widely ridiculed inside Washington after making this statement, and at one point even the White House turned its back on the Harvard professor’s estimate.

But the Labor Department’s latest employment release shows the yearly gain for nonfarm payrolls coming in at 2.3 million. That’s close enough for government work. It’s also the best jobs performance in five years.

Why so good? The labor market responded powerfully to lower personal tax rates. As workers were able to keep more of what they earned, the unemployment rate declined from 6.3 percent to 5.4 percent. A full 2.5 million jobs were added since August 2003.

Mainstream economists continue to scoff at the economic power of lower marginal tax rates. But once again a supply-side experiment worked. For all of 2004, nonfarm job additions averaged just under 200,000 per month. At this rate, 2005 will be another banner year for employment and economic growth.

A recent study by the Atlanta Federal Reserve estimates that only 98,000 new jobs per month are required to keep unemployment under control. The reason? Labor-force participation has declined somewhat as more students remain in school, more workers take early retirement, and more moms stay home to have kids and attend to child care.

With this study in mind, it is possible that this year’s unemployment rate could dip below 5 percent. Outside of the bubble economy of the late 1990s, this would mark the lowest unemployment rate since 1973. Declining unemployment also signifies lower federal spending on unemployment benefits and other small-scale entitlement payouts.

Additionally, at 5 percent or lower unemployment, the 4 percent growth rate of the economy will spur a flood of new individual tax collections at lower tax rates. Hence, another economic surprise of 2005 will be a pronounced decline in the federal budget deficit. As stock market appreciation throws off more tax collections from investor dividends and capital gains, even at these lower tax rates the budget deficit will decline even more.

America’s cowboy capitalism, to borrow Europe’s derisive term, is hatching yet another economic boom.

[Superman]

As I've said before, statistics do not lie, but researchers certainly do. This "Labor" department should change its name to the Department of Industry. Dubya's war on working men and women began with in a week of taking office four years ago.

So, 2.3m folks found jobs. How many folks lost jobs? How much is the average pay rate for these new jobs, and what was the pay rate for the jobs that went away? In fact, what is the average pay for all US jobs now, and what was it six years ago? What is the level of unemployment now, and then? And how many people are not counted among the unemployed now because they are no longer actively looking for work? And what was this figure five years ago?

Sounds like somebody (Larry Kudlow, I guess and Fint, of course) is still singing the praises of "supply-side" economics. Anybody really understand this fantasy? Besides Dubya's dad, who called it "Voodoo Economics?"

Well, the waitresses still need to be fed this crap as long as they are going to accept it and vote for idiots like Dubya.

[red ufo]

Ya, that probably the exact number of illegals that came over and took over factory and construction jobs.

We can't have 3-4 million NEW illegals coming here and not find work.

[Don 944 LA]

lots of openings in the bullet stopping department ...

[hardflex]

how many of those were government jobs?

[Mike(dat's me)]

Don't be haters...

[Dantilla]

Okay, Superman, I guess we better just assume that it's all bad news.
You ask lots of leading questions, but have no answers.

[fintstone]

Originally posted by Superman
.....
So, 2.3m folks found jobs. How many folks lost jobs? ...

It really doesn't matter if some jobs were lost in 2004 if the net for the year is 2.3 million more employed than before...now does it?

[ubiquity0]

Originally posted by fintstone
It really doesn't matter if some jobs were lost in 2004 if the net for the year is 2.3 million more employed than before...now does it?

True- the stats reflect net gain. However net job gain isn't the same as net employment gain (1.7 million).

"Total employment, at 140.2 million in December, was little changed over the
month but was 1.7 million higher than a year earlier. The proportion of the
working-age population that was employed (the employment-population ratio) was
62.4 percent in December, about the same as a year earlier. Both the civilian
labor force, at 148.2 million in December, and the labor force participation
rate, at 66.0 percent, were about unchanged from the previous month."

"Over the year, the number of persons who held more than one job increased
by 574,000 to 7.8 million, not seasonally adjusted. These multiple jobholders
represented 5.6 percent of total employment in December."

Unemployment dropped overall in 2004 by 1/4 million:
December '03: 8,399,000
December '04: 8,047,000

Also interesting:
"The number of persons who work part time for economic reasons, at 4.5 mil-
lion, was about unchanged in December but was down by 308,000 over the year.
This category includes persons who indicated that they would like to work full
time but were working part time because their hours had been cut back or be-
cause they were unable to find full-time jobs."

(http://www.bls.gov/news.release/empsit.nr0.htm)

[widebody911]

Originally posted by fintstone
It really doesn't matter if some jobs were lost in 2004 if the net for the year is 2.3 million more employed than before...now does it?

-1 factory job @ 50k
+1 walmart job @ 10k
+1 startbucks job @ 10k
= +1 net job increase

(I *personally* know people for whom this is the case)

Go W!

[M.D. Holloway]

Open question - maybe it should be a poll. Does anyone know of anyone who has zero income that is capable of working? Granted, some (most) are engaged in jobs that are not a dream but who is actually "unemployed", that is, without any income at all?

Now - take that number and compare it to all the people that you know that do work.

Ya, I that so...

[widebody911]

Originally posted by LubeMaster77
Open question - maybe it should be a poll. Does anyone know of anyone who has zero income that is capable of working? Granted, some (most) are engaged in jobs that are not a dream but who is actually "unemployed", that is, without any income at all?

Me!

[bryanthompson]

Yeah, right. Look in the paper, man. Companies are desperate to find employees, nobody just wants to do the work. That's why we have so many illegals coming across the border that find jobs.

People lose their jobs all the time and find new work, it happens. So they might have had something better and now they have to work back up to it, big f'n deal. It's a fact of life, and if they really want the government to take care of everyone, well, there are countries that they can move to. Is it insensitive? Maybe, but it's just a fact of life.

[M.D. Holloway]

I got canned 6 years ago - had a new born and a mortgage, student loans and child support. That was on the Friday before labor day, that Saterday AM I went to an upscale resturant, asked to talk to the GM - asked if he was hiring servers - I told him " let me start today and I will promise you that I will require little training, work doubles everyday, gross more and have the greatest tip draw of any server, I'll give two weeks before I leave but I will leave.

Started that day - worked my tail off. I didn't have a choice. I have 4 degrees and a master black belt in six sigma, authored 38 articles and have 8 patent disclosures and I was waiting tables.

I'm not saying what I did was anything other than just bust'n my butt to earn my way. I could have taken compensation but I didn't. I don't think I'm any better than anyboby (well, maybe a few people), but the point I'm trying to make is that sometimes we have to swollow some pride and bust through it.

[RoninLB]

Originally posted by fintstone
Mankiw's Magic
Larry Kudlow
January 9, 2005

Friday’s job report shows that White House economist Greg Mankiw was very nearly right when he projected almost a year ago that jobs could rise by 2.6 million in 2004. Of course, he was widely ridiculed inside Washington after making this statement, and at one point even the White House turned its back on the Harvard professor’s estimate.

by last summer it was widly accepted that the tax infusion would be eaten by oil increases by August. Post August was a spending unknown, only an educated guess by most talking heads. As spending goes so does employment, generally.

Total employment #'s at the very start of Bush was not expected to be = again till this coming summer. I don't know what current expectations are? That is significant info on the condition of economic health imo.

White collar/ skilled employment contribute a significantly greater total tax contribution than blue collar employment. When the total employment's become = again the total tax collected comparisons will provide hard info on the "level" of quality jobs imo.

I think a significant part of the shock and awe of what's happening today, among many talking heads, is the cowboy issue of large trade deficits being good or bad for the economy. Bush's position is obviously that deficits are good if managed properly. People must have $ to spend to create deficits. People must have jobs in order to spend. Examine those Developed countries that have balanced or surplus trade #'s. Pay attention to their employment growth.

enjoy.

[Dantilla]

Several years ago I was working for a construction company that went belly up. My job disappeared.

I was worried.

An older, successful friend of mine said "If you're truly good at what you do, you'll never be hurting for work."

Before I had a chance to collect a single dime of unemployment, I got a phone call with a job offer, and was working again in a couple of days.

Another friend had his sales position "eliminated" less than a year ago. Seems he is so good, he was making more money than the higher-ups, who didn't like paying him that much.

He was worried.

He also had such a reputation in his industry that two of his ex-competitors made him job offers as soon as they learned he was available. He was working again in a couple of weeks.

I have come to believe that if you are truly good at what you do, you'll never be hurting for work.

[bluebullet]

Originally posted by widebody911
-1 factory job @ 50k
+1 walmart job @ 10k
+1 startbucks job @ 10k
= +1 net job increase

(I *personally* know people for whom this is the case)

Go W!

Exactly what I was going to say. Sure, we got 2.5million jobs added, but how many of them were some local BS job that only pays 10k a year? Im sure plenty of immigrants got jobs at that new wendys or that new mcdonalds that just opened up. Heck the one right around the corner from me is all spanish. I cant understand a word they say sometimes cuse english is so broken, and they always screw the order up. A year ago when it was a little more in order (see: caucasians and afro-americans) I never had a prob and drive thru was always quick.

Heck I cant even get a job in the airlines! That nice degree in Avionics is doing me **** right now. If anyone is hiring, they want me for baggage person. F that. I didnt spend $45k on a college tuition to be someone who can get that job out of high school. I busted my ass for a year and a half studying for my FCC license. I got it and now what? Nothing.

I want to know how many jobs were created this year that were 50k or more. because as we all know, you cannot survive on 10k a year. You would work all the time, and take public trans to work, and have no social life or money for it.

Heck, if this job I have now ever goes belly up, I have enough experience in mechanics and wrench time to get me a nice job at a Porsche Dealership or local aftermarket P-car shop. A week or two of training and some guidelines on how to pull a 911 motor and I should be set

[Superman]

Ahhh, the "rest of the story."

Yep, Dubya is going to go down as the most brilliant leader in human history. That is, assuming his master plan finds a way to turn all this around. The entire world will be beyond surprize, they'll be in shock. Again, if all this turns around.

[mikester]

Originally posted by LubeMaster77
I got canned 6 years ago - had a new born and a mortgage, student loans and child support. That was on the Friday before labor day, that Saterday AM I went to an upscale resturant, asked to talk to the GM - asked if he was hiring servers - I told him " let me start today and I will promise you that I will require little training, work doubles everyday, gross more and have the greatest tip draw of any server, I'll give two weeks before I leave but I will leave.

Started that day - worked my tail off. I didn't have a choice. I have 4 degrees and a master black belt in six sigma, authored 38 articles and have 8 patent disclosures and I was waiting tables.

I'm not saying what I did was anything other than just bust'n my butt to earn my way. I could have taken compensation but I didn't. I don't think I'm any better than anyboby (well, maybe a few people), but the point I'm trying to make is that sometimes we have to swollow some pride and bust through it.

Extremely Respectable.

[SLO-BOB]

This is a test...............