The Shrinking Labor Force - More Important Than 7.8% Unemployment [View article]
Lawrence,
I loved this sentence of yours. It is so true:
"There is no point in blaming the recession. This process has been ongoing for forty years. The recessions merely let the tide out and trigger rounds of otherwise downward-sticky job-cuts."
It's not that the recession causes the job losses, it's that the job losses materialize during a recession and don't come back afterwards.
The Shrinking Labor Force - More Important Than 7.8% Unemployment [View article]
cplange1,
That is certainly a factor. After all, baby boomers have been reaching retirement age.
But there are other factors that are associated with the argument that I am making that the wages available are not as attractive as they formerly were:
1. Women leaving the workforce to spend time with their kids because their jobs don't pay enough to be more attractive.
2. More students going to school after testing the labor market.
3. Fewer immigrants entering our country.
4. Increasing use of means-tested government benefits (including welfare, food stamps, and disability).
The Shrinking Labor Force - More Important Than 7.8% Unemployment [View article]
Freddy,
All I did was model a line with one variable being the monthly change in jobs divided by total jobs and the other variable being the monthly change in the unemployment rate. The intercept, when I used jobs as the dependent variable, was the point where the change in the unemployment rate was zero. That intercept was the value I reported. My adjusted R-squared for the 1948 period to the present was .31 and my adjusted R-squared for the past 120 months was .34.
I thought that my 1948 value was in the right ballpark since I remember having read Peter Morici argue that 200,000 jobs per month was the normal number needed to reduce the unemployment rate.
Based upon your TRI model, what do you think the liklihood is that this year's unemployment rate numbers are legitimate?
The New Job And Trade Numbers Are Related [View article]
Wmarkw,
Thank you for pointing out that Chinese government does let in some American meat, but they also keep American meat out. The US Trade Office wrote in their end of 2011 report:
"In 2011, the principal targets of worrisome practices by China’s regulatory authorities were poultry, pork and beef products, where anticipated growth in U.S.exports of these products was again not realized. In particular, China continued to block the importation of U.S. beef and beef products, more than four years after these products had been declared safe to trade under international scientific guidelines. China also continued to maintain several unwarranted state-level Avian Influenza import bans on poultry. Additionally, China continued to maintain overly restrictive pathogen and residue standards for raw meat and poultry."
Another New Low For U.S.-China Trade [View article]
Ben Gee,
The US has not been behaving like a bully. During WW II it helped defend China. After WW II it assisted with China's recovery.
The Clinton administration gave China most-favored-nation status and assisted its entry to the WTO without requiring balanced trade.
The Bush administration helped the Chinese government sell its risky investments in Fanny Mae and Freddy Mac even though China was earning an interest premium due to that risk.
The Obama administration helped China gain power at the IMF without requiring that China stop violating IMF charter prohibitions against currency manipulation.
Meanwhile, China supports the most evil regimes in the world, those of Iran and North Korea. In fact, it is currently violating international sanctions against the import of Iranian oil.
Another New Low For U.S.-China Trade [View article]
Ben Gee,
You are correct that China did not become the biggest trading country in the world by restricting trade. It did so by practicing mercantilism.
Mercantilist countries maximize their trade surplus in order to reduce short-term consumption and increase their long-term consumption and long-term power.
China maximizes exports (except for exports of rare earths) and minimizes imports (except for imports of raw materials).
Another New Low For U.S.-China Trade [View article]
Ben Gee,
The following statement appeared in an end-of-2011 report from the US Trade Office:
"In 2011, the principal targets of worrisome practices by China’s regulatory authorities were poultry, pork and beef products, where anticipated growth in U.S.exports of these products was again not realized. In particular, China continued to block the importation of U.S. beef and beef products, more than four years after these products had been declared safe to trade under international scientific guidelines. China also continued to maintain several unwarranted state-level Avian Influenza import bans on poultry. Additionally, China continued to maintain overly restrictive pathogen and residue standards for raw meat and poultry."
Another New Low For U.S.-China Trade [View article]
Ben Gee,
There are other factors as well. For example, when the Chinese government buys yen, the Japanese government buys dollars, thus transferring the negative effect to the US.
Another New Low For U.S.-China Trade [View article]
Sleek,
Both Milton Friedman and Adam Smith missed the long-run vs. short-term dimension regarding mercantilist consumption (explained first by U. of Chicago economics Prof. Jacob Viner): In the short-run, mercantilism reduces the mercantilist country's consumption and increases its victim's consumption, but in the long-run the reverse is true.
Viner also explained the power dimension regarding mercantilism. In the long-run it increases the mercantilist government's power while bringing down the power of its victims.
But actually, Viner was late in his explanation of the power dimension of mercantilism. Over 2500 years ago, the author of Deuteronomy put it quite succinctly:
"And thou shalt lend unto many nations, but thou shalt not borrow; and thou shalt rule over many nations, but they shall not rull over thee" (15:6).
Another New Low For U.S.-China Trade [View article]
Ben Gee,
Why is China buying from Germany and Japan, but not the United States? Maybe because China is targeting the US, the rival for world power which promotes the democracy which the Chinese regime most fears.
Mercantilism And Free Trade Aren't The Only Alternatives [View article]
The scaled tariff is only permitted, under WTO rules, to a country that has an overall trade deficit. It would not interfere with three way trade that is balanced.
The Shrinking Labor Force - More Important Than 7.8% Unemployment [View article]
I loved this sentence of yours. It is so true:
"There is no point in blaming the recession. This process has been ongoing for forty years. The recessions merely let the tide out and trigger rounds of otherwise downward-sticky job-cuts."
It's not that the recession causes the job losses, it's that the job losses materialize during a recession and don't come back afterwards.
Howard
The Shrinking Labor Force - More Important Than 7.8% Unemployment [View article]
That is certainly a factor. After all, baby boomers have been reaching retirement age.
But there are other factors that are associated with the argument that I am making that the wages available are not as attractive as they formerly were:
1. Women leaving the workforce to spend time with their kids because their jobs don't pay enough to be more attractive.
2. More students going to school after testing the labor market.
3. Fewer immigrants entering our country.
4. Increasing use of means-tested government benefits (including welfare, food stamps, and disability).
Howard
The Shrinking Labor Force - More Important Than 7.8% Unemployment [View article]
All I did was model a line with one variable being the monthly change in jobs divided by total jobs and the other variable being the monthly change in the unemployment rate. The intercept, when I used jobs as the dependent variable, was the point where the change in the unemployment rate was zero. That intercept was the value I reported. My adjusted R-squared for the 1948 period to the present was .31 and my adjusted R-squared for the past 120 months was .34.
I thought that my 1948 value was in the right ballpark since I remember having read Peter Morici argue that 200,000 jobs per month was the normal number needed to reduce the unemployment rate.
Based upon your TRI model, what do you think the liklihood is that this year's unemployment rate numbers are legitimate?
Howard
The New Job And Trade Numbers Are Related [View article]
Thank you for pointing out that Chinese government does let in some American meat, but they also keep American meat out. The US Trade Office wrote in their end of 2011 report:
"In 2011, the principal targets of worrisome practices by China’s regulatory authorities were poultry, pork and beef products, where anticipated growth in U.S.exports of these products was again not realized. In particular, China continued to block the importation of U.S. beef and beef products, more than four years after these products had been declared safe to trade under international scientific guidelines. China also continued to maintain several unwarranted state-level Avian Influenza import bans on poultry. Additionally, China continued to maintain overly restrictive pathogen and residue standards for raw meat and poultry."
The New Job And Trade Numbers Are Related [View article]
Another New Low For U.S.-China Trade [View article]
The US has not been behaving like a bully. During WW II it helped defend China. After WW II it assisted with China's recovery.
The Clinton administration gave China most-favored-nation status and assisted its entry to the WTO without requiring balanced trade.
The Bush administration helped the Chinese government sell its risky investments in Fanny Mae and Freddy Mac even though China was earning an interest premium due to that risk.
The Obama administration helped China gain power at the IMF without requiring that China stop violating IMF charter prohibitions against currency manipulation.
Meanwhile, China supports the most evil regimes in the world, those of Iran and North Korea. In fact, it is currently violating international sanctions against the import of Iranian oil.
Howard Richman
Another New Low For U.S.-China Trade [View article]
You are correct that China did not become the biggest trading country in the world by restricting trade. It did so by practicing mercantilism.
Mercantilist countries maximize their trade surplus in order to reduce short-term consumption and increase their long-term consumption and long-term power.
China maximizes exports (except for exports of rare earths) and minimizes imports (except for imports of raw materials).
Howard Richman
Another New Low For U.S.-China Trade [View article]
The following statement appeared in an end-of-2011 report from the US Trade Office:
"In 2011, the principal targets of worrisome practices by China’s regulatory authorities were poultry, pork and beef products, where anticipated growth in U.S.exports of these products was again not realized. In particular, China continued to block the importation of U.S. beef and beef products, more than four years after these products had been declared safe to trade under international scientific guidelines. China also continued to maintain several unwarranted state-level Avian Influenza import bans on poultry. Additionally, China continued to maintain overly restrictive pathogen and residue standards for raw meat and poultry."
You can read that report here:
http://1.usa.gov/OiZyth
Howard
Another New Low For U.S.-China Trade [View article]
There are other factors as well. For example, when the Chinese government buys yen, the Japanese government buys dollars, thus transferring the negative effect to the US.
Howard Richman
Another New Low For U.S.-China Trade [View article]
Another New Low For U.S.-China Trade [View article]
If the Chinese government wanted to let their people buy America products, they could start with the following four steps:
1. Eliminate their many tariffs on US products.
2. Add US products to government procurement catalogs.
3. Permit the importation of US meat.
4. Stop permitting the piracy of US software, CDs and DVDs while delaying sales of the legitimate products.
Howard Richman
Another New Low For U.S.-China Trade [View article]
Both Milton Friedman and Adam Smith missed the long-run vs. short-term dimension regarding mercantilist consumption (explained first by U. of Chicago economics Prof. Jacob Viner): In the short-run, mercantilism reduces the mercantilist country's consumption and increases its victim's consumption, but in the long-run the reverse is true.
Viner also explained the power dimension regarding mercantilism. In the long-run it increases the mercantilist government's power while bringing down the power of its victims.
But actually, Viner was late in his explanation of the power dimension of mercantilism. Over 2500 years ago, the author of Deuteronomy put it quite succinctly:
"And thou shalt lend unto many nations, but thou shalt not borrow; and thou shalt rule over many nations, but they shall not rull over thee" (15:6).
Another New Low For U.S.-China Trade [View article]
SAIC became GM's competitor, not just GM's partner, when it began producing GM knockoffs under its own brand. For more on this see:
http://bloom.bg/KBShny
Another New Low For U.S.-China Trade [View article]
Why is China buying from Germany and Japan, but not the United States? Maybe because China is targeting the US, the rival for world power which promotes the democracy which the Chinese regime most fears.
Howard
Mercantilism And Free Trade Aren't The Only Alternatives [View article]