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A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55%. Looks like the good folks at the BLS heard us: it appears that the people not in the labor force exploded by an unprecedented record 1.2 million. No, that’s not a typo: 1.2 million people dropped out of the labor force in one month! So as the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million. Which means that the civilian labor force tumbled to a fresh 30 year low of 63.7% as the BLS is seriously planning on eliminating nearly half of the available labor pool from the unemployment calculation. As for the quality of jobs, as withholding taxes roll over Year over year, it can only mean that the US is replacing high paying FIRE jobs with low paying construction and manufacturing. So much for the improvement.
An engineer at a silicon valley firm sent me this video about “planned obsolesence” yesterday, he said it was all true, to keep growth plugging along he cannot design for resilience , why are engineers believing this propoganda?
http://www.youtube.com/watch?v=0bxzU1HFC7Q Anyways the video talks about Bernard London during the 1929 depression having the government force “planned obsolesence” on all products so that they would expire and thus LABOR would have to be hired to build new stuff as a way to fight unemployment. The government was to destroy all products after the expiration date. So if I bought a Mosler MT900 car and it was only certified for 5 years of use, after 5 years it would be destroyed by the government and someone could work and build me a new one. Or maybe I had a double hulled super yacht that only had a 1 year expiration date, just think of the JOBS we could produce with this plan, wow those guys like eccles and Bernard London had some vision back in the day didn’t they?
Have you considered this option Warren? Forcing “planned obsolescense” on the citizens so that we can help the unemployment situation? It is a novel idea for helping our masses of unemployed no?
Hey I just googled the paper, he sounds like Warren from 1932, the more things change, the more they stay the same, one of the paragraphs from the above paper:
However, modern technology and the whole adventure of applying creative science to
business have so tremendously increased the productivity of our factories and our fields that
the essential economic problem has become one of organizing buyers rather than of
stimulating producers. The essential and bitter irony of the present depression lies in the
fact that millions of persons are deprived of a satisfactory standard of living at a time when
the granaries and warehouses of the world are overstuffed with surplus supplies, which have
so broken the price level as to make new production unattractive and unprofitable.
Primarily, this country and other countries are suffering from disturbed human relationships.
Factories, warehouses, and fields are still intact and are ready to produce in unlimited
quantities, but the urge to go ahead has been paralyzed by a decline in buying power. The
existing troubles are man-made, and the remedies must be man-conceived and man-executed.
In the present inadequate economic organization of society, far too much is staked on the
unpredictable whims and caprices of the consumer. Changing habits of consumption have
destroyed property values and opportunities for employment. The welfare of society has
been left to pure chance and accident.
Seems that if we don’t make the products/services obsolete fast enough, we make our descendants obsolete. Decisions, decisions.
“To hibernate, die, or innovate .. yea, those are the questions.
Whether ’tis nobler in the aggregate to suffer,
The slings and arrows of outrageous output gaps
Or to take fiscal arms against a sea of DTs,
and by opposing, imMERS them?”
Where’s Shakesdrear when we no longer need him? Underemployed? Paying off his student loans? Or in some Austerity Gulag in eastern Europe? Only your drone operator knows.
If you are looking for signs of an improving economy, the participation rate is only of secondary concern.
The participation rate can be driven down by people retiring, moving back to Mexico, going Galt, or what have you. And it can also go down with an increase in population.
Those are social and political issues, and may very well be important in that context.
But if jobs are actually increasing, that is a very good thing no matter how you look at it. And because of the above mentioned factors, the number of people working can actually increase at the same time the participation rate (and unemployment rate), go in the wrong direction.
Found in an Internet gutter but the source appears to be reliable.
Someone finally went after Ron Paul and the libertarian clowns. Well some of them may be actually not funny clowns but Neo-Nazi.
“The nationalist American Third Position Party (A3P) pursued a “bridging tactic” with the Ron Paul Revolution movement that support the Republican candidate for the White House, according to emails hacked by Anonymous.”
Calculated risk argues that the participation rate did not fall by that amount, rather is is due to….
“With the 2010 population controls, the “not in labor force” appeared to have increased by 1.2 million in January, and the working age population jumped 1.7 million. That didn’t happen last month; the numbers changed because of the new population estimate. This does suggests there are 1.2 million more people out of the labor force than we originally thought, but that is because the working age population is larger than previously estimated.
As the BLS points out, without the population change the “not in labor force” actually declined.
A couple other key points:
1) The decline in the participation rate was entirely due to the population change.
2) The employment-population ration would have increased 0.3 (good news) without the population change.
But the population estimate DID change, being upwardly revised which surely puts something of a dampener on the jobs figure, better though they seem.
“The central irony of financial crisis is while it is caused by too much confidence, too much borrowing and lending and too much spending, it can only be resolved with more confidence, more borrowing and lending, and more spending.”
Larry Summers October 23, 2011
http://www.zerohedge.com/contributed/larry-summers-blows-it-tv In this video Larry Summers says people are working a longer week. I have seen where schools are talking about shortening the week by 1 or 2 days to help with thier financial situation. This will give LESS education to our kids, that can’t be good long term. However Larry Summers has to be one of the most global visionary economists that America has: http://www.whirledbank.org/ourwords/summers.html In this document he was talking about global solutions to pollution markets, far ahead of warren or anyone else even thinking about the idea, and do not forget that Summers was INSTRUMENTAL in holding back the winklevoss twins at Harvard while Zuckerman went forward with facebook.