Published: Friday, May 16 2014 12:00 a.m. MDT
We need to figure out what is different about the present economy against the
economy pre-2008. With the banking collapse of 2008 occasioned by that
industry's marketing of bogus mortgage backed securities, our economy has
changed in as yet undefined ways. What was the fundamental change in global
capitalism which occurred in 2008? If it can be identified we should fix that
before we try your suggestions, which you must know aren't going to fix
much of anything.
The implication here is that people voluntarily exiting the workforce is somehow
a new phenomena. What it is in fact is a new conservative talking point. Unemployment figures have always in one way or another not counted a
substantial number of people who either don't want to work, who can't
work, or who would like to work but can't find suitable employment. This doesn't mean we should ignore this fact and treat it as
unimportant, it simply means this is not new and when Regan's unemployment
numbers went to 5% there was then as now a substantial number of people not
counted who weren't working. If you try and compare the two
recessions it's very difficult because unemployment calculations have
changed a great deal from the 1950's to now, and even today you can look at
the phenomena in dozens of ways.Just be honest the issue has always
been here and always will be. Don't treat it, even implicitly as an Obama
Those of us who are fishermen know what happens when a wood chip floating down
stream approaches a "whirlpool". At first that wood chip starts to turn
towards the whirlpool, but eventually, it is sucked down into the whirlpool
where it cannot escape.American jobs have been floating towards a
whirlpool for more than a decade. Universities have been churning out skilled
"workers" who have no job prospects. The same thing happened back in
the late sixties and early seventies when "rocket scientists" were being
churned out by the Universities who thought that the boom years at NASA would
never end.The sad fact is that automation has made it possible for
machinery to replace workers. Foreign "programmers" are willing to
develop and program that automated equipment at a price point far below what an
American worker expects to receive. Corporate leaders are charged with the
responsibility to maximize profits. The end result is skilled American workers
can't find work and that Americans can no longer afford to buy anything
beyond the necessities.It may be too late. The "whirlpool"
may have destroyed America's economy.
Almost any fool can tell you why the unemployment rate is high, and likely to
remain so. It is consumer demand. We have killed consumer demand.
The consumer has no money to spend, especially at the lower end of the economic
spectrum. (Note Walmart's disappointing #'s. Their customer is
tapped out. And many of their customers use food stamps!)If you
want our economy to rise, you have to stimulate the ability of consumers to
spend. We may argue day and night about how to do this. However, since we are
a consumer spending economy (as opposed to a production one), that is the only
pragmatistferlifeYeah, but its the numbers of those not counted that
matters. Right now with food stamps at an all time high, an 800 thousand drop
in the labor force, labor participation rate at just 62%, employment to
population rate at just 59%, and no wage growth for those who are working, this
is definately a weak economy. Plus, many of the jobs that have been created are
low wage ones, not career type employment. Which, by the way may be the reason
so many are staying on food stamps and other public assistance. One can get
more doing that than working for 10 bucks an hour.
"Educational opportunities and mentoring programs could make it attractive
for employers to hire people who have mistakenly decided they are
unemployable."But there are already too many highly educated
workers who are being underpaid. Education is not a solution to our current
employment problems. A few years ago, I was in the Philippines. There, they had
far more educated workers than jobs. PhDs were driving taxis. What
we have in this country is a systemic mess that Republican supply-side economics
has made worse over the past 30+ years. Too much wealth is going to the top,
which leaves too little disposable income among the consumer classes to create
enough demand to entice corporations to hire. As wages began to
stagnate back in the 1980s, first women joined the workforce to help families
make ends meet, then both men and women started working two jobs, and finally
families accumulated consumer debt to hold up their end of the economic
equation. That ended in 2008 with the financial crash. Now we are simply seeing
the inevitable effects of supply-side (voodoo) economics. Unfortunately, the
Republicans keep repackaging and reselling the same ineffective ideas. Time for
some serious systemic overhaul.
Re: Mike Richards "The "whirlpool" may have destroyed
America's economy"So do we just take this? Do we let our
children and grand children rot economically? No! It's time to try some
socialism. It need not be the Soviet kind. There are other functioning
examples out there. If our capitalist economy has been destroyed
(42% believe capitalism doesn't work for them), then we must try something
Marx's theory in "Capital" predicts a time when capitalism becomes
so efficient that the demand for labor declines permanently. But, according to
Marx, since profits only come from the employment labor, the system will
experience a crisis of mass unemployment and collapsed profits. A pleasant
thought for you to consider.
Marxist,Your idea has been tried and it has failed - every time.
Unions demanded high wages for garment workers. Shirts are no
longer made in the United States. Garment workers lost their jobs. Unions demanded high wages for auto manufacturing. Cars are made overseas or
on automated assembly lines. Line workers lost their jobs.Just how
are you going to "force" a business to overpay its workers?
(Overpayment is the simple fact that every worker has a measurable value.
Paying a worker more than his value is overpaying that worker. ) No business
can compete if it overpays labor. Its products will become too expensive. Look at all the Countries in Central and South America where the
government tried to force wage or price controls. What happened? Uncontrolled
inflation happened - and the people suffered.Look at any
businessman's spreadsheet. GOVERNMENT is the greatest cause of forcing
businesses to go offshore. TAXES are lower in other countries. Businesses go
where their costs are lowest - if they want to stay in business.The
USSR failed. Force didn't work. China is a pseudo capitalistic economy.
Force didn't work.Force won't work in America.
"Force won't work in America." That depends on how bad things get
Not only has Marxism failed economically every time it has been tried, tens of
millions died last century because of it. There always has to be an
"allocator" who takes from the able and gives to the needful. The
allocators are always the best connected politically so it sets up a few people
who are more equal than others. Inevitably, dictatorship ensues where the
productive are punished most and the allocation happens at the end of a gun.The fact that some people in this country, knowing what we know, would
openly advocate this system makes me question their sanity and fear for my
We don't need phony numbers to tell us things are doing better - we can all
sense it - and it isn't happening at least for now. People dropping out of
the work force and no longer looking for work is a BAD thing but team Obama is
quick to recalculate the new unemployment numbers and tell everyone things are
getting better. People who are working - both those underemployed or those whose
taxes and health insurance premiums keep going up know the real story and it
isn't pretty. Team Obama can keep doing the silly dog and pony show but
it's all phony and people know it.
Actually Mr. Richards I pretty much agree with you. I would have a different
prescription and outlook however. I also pretty much agree with you that
employers won't overpay for work. The difference is that in the 50's,
60's and 70's employers weren't overpaying, even with unions.
America was the only place that could produce a good automobile, or a good
dishwasher, or good raw steel, etc. etc. That's what needs to happen again
(BTW that's what Germany has done). We need to develop industries that
"made in America" means exceptional products and quality. where we would definitely part ways is I think the government has not only a
role but a vital role in developing such industries. I agree with a
lot you say also happy.. It still holds true that reported unemployment numbers
have pretty much always only represented half those out of the workforce. The
trick is to re-build an economy that adds value, and you don't do that by
going back to practices of the 80's.
I applaud the D-News for this editorial, which is balanced and challenges both
the private sector and government to stimulate interest, job skills, etc.
We're all Americans, and we need to look out for each other, because if one
segment of our population suffers, the ripples are very corrosive.That said, I can report that in my sector of the economy, IT, employment has
recovered reasonably well, compared to 2009. The unemployment rate for IT in
Utah is about 2%, and is reflected in competition among companies for skilled
employees, salary increases, etc.I'm not sure we'll get
back to the sizzling days where highly skilled workers could command six figure
salaries, with ease, but the recovery for entry and mid-level jobs has been
Lets be realistic here. Since the end of 2009 about 9 million net jobs have
been added,in fact the total number of people employed is close to the all time
high before the recent recession. Also given the fact, a lot of the baby
boomers are now retiring, the opportunity for jobs is likely to improve even
more. I see the unemployment rate to continue to decrease as the strength of
the economy grows.
Patriot –“Obama is quick to recalculate the new
unemployment numbers and tell everyone things are getting better.”Unemployment is calculated the same way now as it has been for
decades.Those awful eight years of Republican malfeasance under GW
Bush certainly left its mark on the land.That, in conjunction, with
continual Republican obstructionism has inflicted enormous damage upon this
nation.Obama’s 2011 Jobs’ Bill would have had this
nation up and running with low unemployment. We would be getting national
infrastructure ship-shape and ready to help this nation compete internationally.
It would have been a solid investment, but NO, Republicans obstructed what would
have been enormous Progress, and a very needed application of good sense, a
quality that has become extinct in Republican circles.The Republican
propensity for destroying and obstructing is what now defines the Modern
Republican Party. It’s really too bad, isn’t it? . . . That the GOP,
the great, wonderful, progressive Party of Lincoln and TR . . . has devolved
into such a harmful entity.
You know, not but a short time ago the DN ran a piece about an increased number
of women were choosing to stay home and raise their families.... which is a good
choice women have they can make. But in doing so, you will lower the labor
participation rate. You can't have both. So my question is,
which is it we really want. Do we ant the labor rates to go back to the point
where a dual income household is the norm, and there for high labor
participation rates, or do we want stay at home moms.
I got laid off from a job where I was making $2000 a week. The industry I was in
got hit hard during the past few years. I hear people say I should
just take any job even if it is a $10 an hour job. Why should I do that? I
rather just stay at home with my kids and the state can keep their unemployment.
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