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Dec. Nonfarm Payrolls: +200K vs. consensus of +155K, +100K (revised) prior. Unemployment 8.5% vs...

Dec. Nonfarm Payrolls: +200K vs. consensus of +155K, +100K (revised) prior. Unemployment 8.5% vs 8.7% expected. Avg. hourly earnings +0.2% to $23.24. Workweek +0.1 hour to 34.4 hours.
Comments (86)
  • I am better than any of these analyst. I am patting my back. My prediction of $192K was the best.
    6 Jan 2012, 08:33 AM Reply Like
  • Great numbers, President Obama's policies are real winners.
    6 Jan 2012, 08:33 AM Reply Like
  • I blame Bush for Obama's failure.


    Bush's average unemployment rate of 5% during his term is an unfair comparison.
    6 Jan 2012, 08:57 AM Reply Like
  • Agreed, imagine how well off the economy would be in the Tea Party hadn't played so many games of brinksmanship with the debt ceiling this past summer. Republicans are willing to hurt the lives of common Americans if it means making Obama look bad.


    McConnell said it himself.
    6 Jan 2012, 09:37 AM Reply Like
  • DNC talking points = inability to form an accurate thought or opinion.
    6 Jan 2012, 09:47 AM Reply Like
  • Considering you haven't provided any sort of thought or opinion at all, I'd say DNC talking points are ahead of you.
    6 Jan 2012, 10:09 AM Reply Like
  • While Bush's legacy is obviously a huge part of the cause of recent economic woes, it seems the far bigger problem is the far right's clearly stated and expertly executed strategy to take back the White House at any expense ... not just shamefully hurting the lives of common Americans, but more importantly in the long run, severely damaging the strength and future of the nation as whole. So we all know the problem ... the question is, what's the solution!!??
    6 Jan 2012, 10:58 AM Reply Like
  • Dag


    Fire Obama - he doesn't deserve reelection.
    6 Jan 2012, 11:04 AM Reply Like
  • Basically Bush inherited a booming economy, ran up a massive deficit by going to war to profit his friends, stripped the wealth from the middle class to benefit the rich, ran up unemployment to 8%, then handed this off to Obama.


    But wait that's Obama's fault somehow. And the concept of stimulus, which Bush loved by the way, is a bad idea when Obama likes it, but brilliant when Bush likes it.


    I'm not saying Obama is a great president, but Bush ran this country completely into the ground.
    6 Jan 2012, 11:55 AM Reply Like
  • Bush unemployment at start: 4%. Bush unemployment at end: 8%.


    Obama unemployment at start: 8%. Obama unemployment at end of first term: 8%?


    You might convince me he's not done the best job possible, but trying to say Bush did anything other than ruin the country is ludicrous.
    6 Jan 2012, 12:06 PM Reply Like
  • If Santorum or any of the current GOP candidates (except for Romney) miraculously get elected as president, I'll be on the first flight out to Canada.
    6 Jan 2012, 12:17 PM Reply Like
  • Which of Bush's policies, specifically?
    6 Jan 2012, 12:18 PM Reply Like
  • Sheik,


    I guess you got your math education from a Liberal Arts School (how does 2 +2 make you feel?) and your economic education from a leaflet at an Obamabot convention.


    You forgot to mention Darth Cheney, the House of Saud, Haliburton, being in bed with oil companies, he was a Global Warming Denier, he "lied and people died), giant deficits (as opposed to the humongous deficits of the current regime), he knew about 9/11 before it happened, he caused house prices worldwide to crash, and he stole the election from Gore.


    I am sure you have a few more that you would add to the list.


    Obama is the worst President of my generation which includes Carter, and man I never thought I would be saying that.
    6 Jan 2012, 12:20 PM Reply Like
  • ..and if Barry wins (miraculously) you will stay in a fast developing 3rd world country with massive debt, food stamps and jobs (see todays report) that includes the pharse 'Would you like that supersized'?
    6 Jan 2012, 12:23 PM Reply Like
  • Fighting an unfunded war in Iraq and approving an unfunded expansion of Medicare, all while lowering taxes. He absolutely blew up our deficit and strangled our economy.


    Bush = unprecedented expansion of big government
    6 Jan 2012, 12:24 PM Reply Like
  • Which president has created the most debt than all presidents before him combined? Put down the Hopium pipe and get out of momma's basement a little more often. And if you are college educated..sue them for malpractice.
    6 Jan 2012, 12:30 PM Reply Like
  • I think the actual question is how does 8-4 vs. 8.5-8 make you feel? Maybe you graduated magna cum laude from a top tier engineering school while I merely gratuated cum laude, but to me it looks like Bush did a pretty shitty job.


    And you're saying he wasn't in bed with oil companies? Haliburton didn't profit immensely from the war? He didn't try to tell Chirac we needed his aid in the war because of "Gog and Magog"?
    6 Jan 2012, 01:09 PM Reply Like
  • Sheik,


    "Gog and Magog"?"


    LOL! :)


    I knew I missed something. I wonder if you understand how funny you actually are. It's a hoot!


    Like I said, your math sucks. Calculating the "average" unemployment rate under Bush has already been done and it was less than 5%. I could explain how its done but I am afraid your eyes would glaze over.


    It felt great to have a boom economy under Bush - most of my friends were pretty happy and rich.


    The economy started turning down when Nancy Reid and Harry Pelosi took over Congress in 2006 - no coincidence there.


    President Obama proved that the fact that he was inexperienced was in no way an impediment in his skillful ability to take a bad situation and make it much, much worse. Absolute veto-proof majorities in both houses for two years of his Presidency so Repubs have nothing to do with the disaster that is currently unfolding with this country's fiscal future and the mess he has made. Just imagine how bad it will be with 4 more years of his ideas.


    On a positive note, he did the lower the temperature of the earth and the levels of the oceans so at least he kept two major campaign promises.
    6 Jan 2012, 01:38 PM Reply Like
  • They are solid numbers.
    6 Jan 2012, 02:03 PM Reply Like
  • Obama will be re-elected.
    6 Jan 2012, 02:07 PM Reply Like
  • I didn't say average, so maybe your eyes were already glazed over when you saw 8-4?


    The point is Clinton handed Bush 4% unemployment. Bush then handed Obama 8% umemployment.


    If we get a new president this year, Obama will likely be handing him 8%.


    Not stellar by any means, but certainly holding steady is a lot better than doubling unemployment which is what Bush did.


    Yes that's right, BUSH DOUBLED UNEMPLOYMENT.


    You can pretend not to understand math or throw around insults, but that's the simple fact.
    6 Jan 2012, 05:11 PM Reply Like
  • Sheik,


    Exactly my point. Your analysis is biased by political tendentiousness.


    It's called a business cycle - Bush got a recession from Clinton as well.


    Remember the dotcom meltdown and 9/11? I certainly do.


    Starting from a lower base, 4%, means that full employment was already in place. The slack today is far greater and his "solutions" have made everything worse.


    Unemployment was 7.8% at the start of Obama's term and should be at less than 6% according to his stimulus plan projections as shown on this link:


    Measuring his policies by his own standards it is obvious that his performance on things economic has been a miserable failure.


    I think Bush was a terrible President on spending as well but this President makes Bush's spending look bushleague by comparison.


    $1.6 trillion dollar deficits for as far as the eye can see is a terrifying prospect and he has offered nothing in terms of Leadership to address this issue.


    Sorry but this President makes Bush look like a genius.
    7 Jan 2012, 01:25 PM Reply Like
  • Wis,


    I've seen that graph before many times. I'm not going to be an apologist for the Obama administration, but what isn't mentioned is that this was an early projection of the economic hole. This administration's biggest mistake? The hole was MUCH deeper and more intractable than the early estimates. I give the current administration poor marks for communication, as they gave the impression (wrongly) this was more fixable than it initially appeared to be.


    As for deficits, there's enough blame to go all around. #1 on my list: Alan Greenspan. I fault Greenspan for signing onto the 1st and 2nd round of tax cuts from the previous administration. That imprimatur gave all the political cover that was needed. Everyone forgets that a certain principal of the previous government said, "Reagan showed deficits don't matter". Enough said.


    According to the latest data I've seen from the CBO and NYT, the biggest chunk of the future debt is due to the 2001-2009 administration. The big, long-term macro worry is the revenue-expenditures gap. Right now: expenditures 24%, revenues 15-16% of GDP. So we have both a revenue AND spending problem. Particularly troubling is the revenue side. We've seen 24% expenditures before on a few occasions, but the last time we had so little revenue coming in as a function of GDP was in the late 1940s. By the way, that time period also represented the 2nd worst unemployment rate (this one being the worst) post-WW2. Of course, if Obama's administration or a potential new administration cannot find a political path to expenditures and revenues being both in the area of 20-21% of GDP, it won't matter what we think.


    20-21% of GDP is doable--both from the revenue and expenditures side if we can get some growth and a sizable reduction in the rate of expenditures. Simpson-Bowles would be a good place to start. Obama missed a major opportunity in not strongly supporting that plan.


    As always, we are our own worst enemies.
    7 Jan 2012, 04:29 PM Reply Like
  • Yes, I do actually agree, Bush got a recession from Clinton.


    What's your point?


    You're the one who wants to compare shifts in unemployment percentages like they're the gospel. I don't quite buy it, but it's your game we're playing.


    You're basically saying it's easier to take unemployment from 8% to 4% than it is from 4% to 8%.


    I'm super impressed with Bush now, you make it seem so hard to double unemployment.
    11 Jan 2012, 08:02 PM Reply Like
  • Sheik,


    "What's your point?"


    I thought I made that obvious. Obama's economic policies and performance are a miserable failure measured by his own standards and he doesn't deserve re-election.
    11 Jan 2012, 10:53 PM Reply Like
  • Oh you made that part obvious, but context clues my friend! I think it's pretty apparent I was referring to your "it's what you inherit" game.


    Oh man Bush inherited a recession and 8 years later had managed to not only not fix it, but to double unemployment. He is awesome!


    Obama inherited a recession and 4 years later he managed to not fix it. He is the worst ever!


    Also maybe note: if we measured politicians by their own standards, they're all miserable failures. Mission accomplished! No new taxes! Starve the beast! Weapons of mass destruction! Etc, etc.


    I guess my point is whether he deserves re-election or not is certainly debatable, but your own methods of measurement certainly don't make him "teh worst evar", so maybe you're the one with a bias?
    12 Jan 2012, 12:53 PM Reply Like
  • Huge Numbers, best since the recession started. LMAO at the doomers!!!


    No recession, no teabaggers. Obama relection secured!!! This is a day for Americans to cheer!


    Unemployment Rate collapses to lowest rate,!!
    6 Jan 2012, 08:36 AM Reply Like


    Look at those 3 charts and get back to me. This is an over 10 yr trend that continues….we are at 1983 levels with a 2012 sized population. There is no recovery.
    6 Jan 2012, 08:57 AM Reply Like
  • We are not in the 80's with boomers at their prime. Today, we are loosing ~200K/mo to retirement of the same boomers.
    6 Jan 2012, 09:11 AM Reply Like
  • Best of the worst. New unemployment claims (four week moving average) was listed as 373,250 a day ago. So while 200,000 jobs
    were created 1.493 million new filings for unemployment were made.
    Should this new number encourage people who dropped from the "actively seeking" rolls to return, the reduction in the "unemployed" rate may be very temporary. Better than the past three years, but no time for celebration yet.
    6 Jan 2012, 09:36 AM Reply Like
  • Incorrect. Those charts apply only to the work age population.
    6 Jan 2012, 12:35 PM Reply Like
  • Rally continues!
    6 Jan 2012, 08:37 AM Reply Like
  • Terrible numbers.
    NSA participation rate declines again
    NSA size of labor force declines again
    NSA employment to population ratio declines again.
    NSA Not In Labor Force increases by 455,000!
    That is another +400,000 gone from the labor force…almost 900,000 in 2 months.


    The denominator keeps getting smaller.
    6 Jan 2012, 08:45 AM Reply Like
  • At least someone can read past the headlines! There are record numbers of people who can't file for unemployment anymore since they're past the 99-week limit. Many have given up. The not in labor force number is staggering. Put all this together, and the hidden unemployment is still stubbornly high, probably somewhere in the high teens.


    This 200K number should make for some decent trading opportunities, but let's not fool ourselves about the actual state of the economy.
    6 Jan 2012, 09:01 AM Reply Like
  • Oh exactly…short term trades are excellent….it's the long term disaster that everyone continues to ignore. We are at 1983 levels of employment and declining. Even when the economy was supposedly humming along it wasn't enough….that is the part no one wishes to look at. Eventually the shrinking number of those in workforce vs the growing number of those not will become too much. This is made clear by the ever growing size of the debt. Q4 debt grew by $420+ Bil
    6 Jan 2012, 09:07 AM Reply Like
  • Market doesn't seem to be impress with the numbers; I wonder if Trimtabs is more accurate in their job picture.
    6 Jan 2012, 09:35 AM Reply Like
  • Papaswamp-


    We are in the midst of a "new" economy. No policy could steer us towards it or away from it. Demographics and technology are driving the thing we call the economy. This has happened in the past and will continue to happen. How can manufacturing return to what it was in the past? It can't and will never. No ideology will solve this "problem". But we will endure, as we have in the past.
    6 Jan 2012, 10:00 AM Reply Like
  • you are looking at the wrong thing. you just don't get it. you really don't.


    demographics are pulling the labor force down and will do so for the next 10 years at least until the echo boomers really start to join in.


    unemployment rate is the last number to look at it. if you want to understand what is happening it just does not matter. it really does not. way too much noise in it. the only thing it relates to is the political cycle.


    look at employment, look at work week, look at earnings - these do matter but not as much as the new filings that we get every Thursday morning - the 4 week average of that index is THE number to look at and will be for at least 12 months.


    Anyone but Obama. Anyone.


    Numbers are good despite the administration's efforts to destroy and derail. Don't fall for the spin.


    4 more years of the Redistributionist in Chief and you will be living in Spain but with worse weather and food.


    6 Jan 2012, 10:14 AM Reply Like
  • Very well said ... clearly, with today's global economy, the days of a single world "superpower" are in the past ... we just seem to be in denial since we're on the short end of that shift. When faced with any challenge in life, denial often amounts to a self-inflicted death blow ... we face reality or be consumed by it ... there are no other choices.
    6 Jan 2012, 11:04 AM Reply Like
  • We just had three people announce their retirement this week - one who finally turned the towel in at 72. And we are only a company of 40 people!! What we will miss are their expertise - but glad to open our doors to new hires.
    6 Jan 2012, 12:01 PM Reply Like
  • Numbers apply only to work age people. It does not include retirees. The impact to the social systems as well as fewer workers supporting an increasing size of not working does have an impact.
    6 Jan 2012, 12:45 PM Reply Like
  • Doc,
    Here is what should worry everyone …especially about the participation rate which counts only work age people.


    Demographically the US is getting older and baby boomers are retiring. Additionally US population growth is slowing dramatically….thus fewer people are in the work age population BUT participation rate continues to decline. In otherwords…even though there are fewer work age people to compete for jobs, the number of work age people actually participating in the employment pool continues to decline. This makes the situation twice as bad. There are close to 87 Million work age people NOT working. There are approximately 3.2 million job openings…see the problem? The Not In Labor Force population continues to accelerate beyond the job creation level…escape velocity if you will.
    6 Jan 2012, 11:32 PM Reply Like
  • Well that means food stamps usage should be dropping by the millions right......we'll see....its an election year I do not trust any government number now.....and come on..200,000 is not a recovery....its a sustainer number
    6 Jan 2012, 08:52 AM Reply Like
  • Does the jump in transportation jobs include the 20,000 temp workers that Fedex hired in Dec? Not sure if UPS hire temps as well in Dec.
    6 Jan 2012, 09:16 AM Reply Like
  • The number of persons employed part time for economic reasons (sometimes
    referred to as involuntary part-time workers) declined by 371,000 to 8.1
    million in December. These individuals were working part time because their
    hours had been cut back or because they were unable to find a full-time job.
    (See table A-8.)
    6 Jan 2012, 09:27 AM Reply Like
  • So, my grandchild may get a job spreading the special sauce at McDonalds. He sure isn't going to work for financials, Alcoa, Boeing,
    or even Best Buy. Get a grip on those glasses of kool-aid politicos.
    6 Jan 2012, 09:34 AM Reply Like
  • Your grandchild will definitely have trouble getting a factory job.


    Engineering and the sciences however, no problem. Every friend I know in biotech or software has a job.
    6 Jan 2012, 11:58 AM Reply Like
  • This market is crazy and no one knows what's going to happen! I feel like I'm at the roulette table right now. Red or black? No one knows what's going to happen and if you think you do than you are in denial. So might as well spin the ball and place your bets haha
    6 Jan 2012, 09:52 AM Reply Like
  • Maybe that is something in that report that the market doesn't like. Now, take the report, look for it and project its meaning into the future.
    6 Jan 2012, 09:56 AM Reply Like
  • Let's not forget the spike in oil and dollar rally vs euro. There were obviously a lot of other events at the time, but look back to the days of 2008Q4: small dollar rally vs euro + record crude volatility brought on some serious pressure on US equities.


    Even though today is a small sample, it might be a microcosm of what happened back then and possibly a sign of things to come.
    6 Jan 2012, 10:15 AM Reply Like
  • The wolves of TRUTH have at last sunk their fangs into the flesh of the sheep of SPIN and HYPE.
    6 Jan 2012, 10:43 AM Reply Like
  • Ten,


    The SPIES of MEAT have eaten your FEET!
    6 Jan 2012, 11:06 AM Reply Like
  • It's sad that under "King" Obama. We can't even trust the unemployment numbers! ... We shouldn't be seeing folks, giving up looking, and thus no longer being counted within those numbers. Just wait until all of them temp holiday workers come to a close!


    Isn't it funny how Reagan inherited a supper mess from Jimmy Carter as well as inheriting a liberal Democrat controlled congress all through out his 8 years in office(so much for Obama's class class warfare nonsense!)....


    Yet, I don't ever recall seeing anythng like what we've been seeing under Obama during Reagan's TRUE recovery!
    6 Jan 2012, 11:24 AM Reply Like
  • Reagan was great!


    His successful ecomomic policy of cutting taxes because they'd "pay for themselves", then repeatedly raising them when it banrupted us?


    Or maybe you love when he sold arms to our enemies (treason) to finance a secret illegal war against the explicit instructions of congress?
    6 Jan 2012, 12:01 PM Reply Like
  • His true recovery did not occur until his second term. And he raised taxes more than Obama (who hasn't).
    6 Jan 2012, 12:06 PM Reply Like
  • I forgot, what was the tax rates in 1980 and what were they in 1988?
    6 Jan 2012, 12:17 PM Reply Like
  • and what are they now?
    6 Jan 2012, 07:27 PM Reply Like
  • Kids,


    Stop bickering in the playground! The numbers are the same numbers we've used to judge employment activity. You should be less worried about the import of these numbers as they are lagging economic indicators. I'd be more interested in things that are actionable. After all, actionable is where you make your money.
    6 Jan 2012, 11:42 AM Reply Like
  • lol Well said, Craig. This is a place to exchange ideas about how to make money, not argue politics ... apologies for my contribution to going down that road ... or should i say that slippery slope.
    6 Jan 2012, 12:01 PM Reply Like
  • DAG,


    Apology heartily accepted. I've been known to go down that road/slope too. We cannot change history, but as Santayana advised, we better learn from it.


    Let's go forward and make the future better. Let's keep our eyes on the prize as much as we can.
    6 Jan 2012, 12:50 PM Reply Like
  • Its not a "new" economy...Its a post-bubble world economy...and it will never be the same as it was before. Its the reason why labor, and home prices will continue to go lower. The 200K # are mostly seasonal jobs..that will expire in a few months...the real rate of unemployment is closer to 25%(right around 1933 levels)...


    Things are getting worse in this country..not better. Just because you create a job, doesn't mean it will be long lasting....Most of the jobs being created now will be gone a few months...
    6 Jan 2012, 03:55 PM Reply Like
  • Josh,


    I'm going to disagree with you. I do R&D at a F500 firm. We've been trying to hire like crazy (big emphasis on "trying"). Our biggest obstacle? Finding new recruits with the proper skill sets. I know it sounds crazy--after all, how could a PhD not have the proper skill sets?? Nonetheless it is true. We're finding we have to go the postdoc route to get what we need. Perhaps we're being picky, but I would say the overall PhD product ain't what it used to be.


    This is unfortunate, as it slows down what we need to do in terms of fundamental research and product development.
    6 Jan 2012, 04:51 PM Reply Like
  • The very basic fundamentals of the economy are finished. I disagree with Craig...There are lots of qualified workers out there...that just dont want to work..period. And good for them...I believe they are worth more then $7.50 an/hr...


    You are also missing the much MUCH bigger picture.... The economy overall is getting worse.. Its like one guy says: "Its a recession if your neighbor losses his home, but its a depression if you lose your's." And its so true... The rich have been very selfish.. Bush has screwed the middle class and Obama is doing the same.
    I dont blame people for not wanting to work...especially for some shitty wage and then get laid off a few months later anyway.


    Capitalism works well....only for the rich.
    6 Jan 2012, 06:17 PM Reply Like
  • Josh, we're not talking about $7.50/hr jobs here. We're talking in the ballpark of $100K to start. No prior work experience.


    Maybe people just aren't picking science anymore--too hard, you know? If that's true, how can you blame them? You can go out and get a JD in 3 years past college or a pharmacy degree in a couple and make multiples of what we make in a couple of professional years--and you can't tell me that is value-added. Mind you, I'm not cynical or begrudge those folks--I picked what I do because I love it. But on a societal basis, you get what you pay for.
    6 Jan 2012, 08:48 PM Reply Like
  • Also have to keep in mind..the population is continuing to grow and there aren't enough jobs for everybody and there wont be in the next 5 years....Some of these people are gonna have to leave the country or die off...especially the baby boomers...since they Fuc*ed this country up enough as it is...with buying homes they couldn't afford, and then using taxpayers dollars to bail them out. the bastards.
    6 Jan 2012, 06:22 PM Reply Like
  • I'm a boomer, and I can understand your frustrations. But I think what you are saying is not inconsistent with what I'm saying.


    I can tell you my firm is not alone. I can't tell you how many times I've heard from my network at other companies--"we've got openings, but the talent pool is missing". In the science / analytics / knowledge worker arena there are simply not enough good people.


    That tells me we have a skill-set mismatch in the population.
    6 Jan 2012, 10:05 PM Reply Like
  • To Shiek rattle enroll and optionmaniac.


    Well, why don't you ask anyone who lived through the late 70's and early 80's. Ask them how wonderful it was.


    While you're at it, ask them how the 81 recession went!


    I'll say this again.


    See, LEADERSHIP has never been Obama's forte.


    That requires something called-WORK!


    He's made it clear in his Barbara Walters fluff interview, he doesn't like to WORK.


    Leadership is a lot of work....


    You know, that thing Reagan did to get us out of a super mess from Jimmy Carter and like I said,... all the while having to work with a Liberal Democrat controlled Congress his whole 8 years in office.


    But, Reagan had already proven to be a fixer while Governor of California. He had took over a super mess from Jerry Brown's dad. Which like father like father like son, Jerry Brown scewed back up when taking over from Reagan!


    Wow, how we miss the days of Reagan and his 21 million jobs created!


    Stephen Moore from The Wall Steet Journal wrote a piece back a few months ago. Called Obamanonics vs. Reaganomics


    I tell you...Mr Moore is right on target!




    The thing I would also add: Not only was the the economy shooting through the roof under Reagan. But we were seeing like 300,000 to 500,000 jobs created every month under Reagan's recovery!


    I tell this. Under "King" Obama. Get ready!


    The worse is yet to come!
    6 Jan 2012, 06:32 PM Reply Like
  • I think you missed the part where Reagan's "leadership" involved treason.
    6 Jan 2012, 06:40 PM Reply Like
  • History has a way of being portrayed in very rosy sunglasses and with a certain myopia.


    Reagan himself said that if the economy didn't improve in 1983 he was toast. Fortunately for him, Paul Volcker did his Fed squeeze early enough in his administration to allow the economy time to heal. That and, at the time, massive deficit spending that was being promulgated by Washington after Volcker put the squeeze on. It was GHW Bush who paid the price for the governmental deficit spending which occured during the previous administration. He was insightful enough and enough of a statesman to understand that raising taxes when he did might cost him the political support he needed in 1992. This was added upon by the next administration, which my memory reminds me had some questions with regard to their re-electability as well. Clinton was no sure thing in 1996, as he had to weather the tax increases and the recession of 1994. Nonetheless, what Bush and Clinton did, politically, made it possible to balance the budgets of the late 1990s. They brought revenues in line with rates-of-spending cuts.


    Yes, I remember those days well. I can tell you that what those administrations had to deal with are water off a duck's back compared to what happened 3 years ago. My friends and I were talking about economic Armageddon 3 years ago. No one was talking like that in the 70s and 80s.


    Mind you, I'm not here to support the current administration. However, we're missing the correct case study in history. The last time we had something like this was indeed the 1930s--not the early 80s. There was no liquidity crisis in 1979-1981. There was high inflation (not to be confused with hyperinflation) caused by 300-400% changes in energy pricing initiated by OPEC. From an economic standpoint, that is infinitely easier to deal with than deflation, which is what we've had coming since 1998 and with which we had to overcome in the 1930s. Anyone remember the Asian paper tigers and Russia in 1998? That was the casting call for what has happened to us in the last 3 years. The only way out of it back in the 1930s-early 40s was the massive infrastructure spending necessary to win WW2. That spending set up the infrastructure needed for geometric growth well into the 1970s.


    History, of course, does not exactly repeat itself. While post-WW2 government debt was over 100% of GDP, that money was used in no small part to build industrial infrastructure. Truman had to deal with those debt problems in the late-40s and was nearly defeated. In the current crisis, the debt we have is built upon not infrastructure spending but rather to cover the large gap between government revenues and government spending--an economic extension of what we did in the 1980s. We're at the historical extremes for both right now. We're currently spending at the federal level around 23-24% of GDP, while federal revenues are in the area of 15-16% of GDP. Both have to converge to a more reasonable number. We need revenues (taxes and economic growth) and spending cuts at the federal level. Both in the range of 20% of GDP would basically fix our debt mess. And therein lies the rub.


    We have not done as Santayana has advised us--so far. This is not about the failings of the President or Congress--it is about us as a nation. It is we who have to look in the mirror. Our government is a reflection of us. A metaphor. It is not about political ideology--it is about realizing and executing what needs to be done.


    Until recently we've had that kind of practical politics. Both major political parties have done the right thing in the past.


    It's time to revive it--and it starts with us.
    6 Jan 2012, 09:43 PM Reply Like
  • Not until his second term - he was way down in the polls going into his third year - unemployment grew during his first term. (over 7%). Yeah, I lived through odd/even days for filling gas, lived through all the ups a downs since the 60's.
    11 Jan 2012, 07:44 AM Reply Like
  • Craig,


    Things wont change...Demographics are irrelevant in a post-bubble modern economy. So what!, your hiring..but can't find qualified people...In the bigger picture, it wont matter when 2015 comes around, and the US govt. debt bubble(which will be 135% debt to GDP..and counting) bursts. 50% unemployment, stocks/bonds/investments are finished. And home prices decline 90%.


    Your just looking at the current picture.... Its unsustainable pal. Nothing Obama or the current administration is doing will avoid the coming collapse. And where did it all start?
    Early 80's. when the US govt was racking up huge billion dollar they couldn't pay back...
    In the entire scheme of wont matter because everything that people have worked hard for the last 50 years or so, will vanish.


    It is not cyclical...Its a massive bubble that has already begun popping..and they are all linked to each other...
    7 Jan 2012, 03:01 PM Reply Like
  • +15.2 Tril.
    7 Jan 2012, 03:15 PM Reply Like
  • Josh, I have to admit to being a bit more optimistic--I'm not a "slash my wrists" kind of guy. If you were to tell me in late 2008-early 2009 that we were headed to absolute ruin, I would have been more in your camp. Thankfully we dodged that bullet--otherwise it would have been Great Depression: redux.


    Nonetheless, you are correct with regard to the origins of federal deficit spending, but it goes back to the late 60's. Guess what? That's about the time when the effects of all the infrastructure spending of the 1930s-40s started petering out.


    We received 30 years of sustained growth from the WW2 infrastructure building.


    Time to build again, but I don't know if we can pull it off.
    7 Jan 2012, 03:44 PM Reply Like
  • @craigwb…..after WW2 there were no other industrialized nations…they were in ruins. The US had zero competition globally…zero. Infrastucture was able to be built because manufacturing exploded and thus jobs….because no one else made what we made. These days, even the infrastructure is outsourced to overseas.
    7 Jan 2012, 04:10 PM Reply Like
  • Papa,


    Indeed you are right. Competition was non-existent, and we got fat, dumb and happy. Relatively unskilled staffing is gone. In our geographic area, there is a severe shortage of CNC-trained staff, and I've already discussed the difficulties at my firm in finding well-trained scientists.


    We undoubtedly short-cutted our post-WW2 advantage by basically saving Europe & Japan with the Marshall Plan. That cost over $100 billion in post-WW2 dollars (probably many trillions in current dollars), which enabled Europe to re-tool and rebuild much faster. Our security umbrella also allowed that to occur via NATO.


    Nonetheless, that was undoubtedly money well-spent. It's what we didn't do at home that's coming home to roost now.
    7 Jan 2012, 04:45 PM Reply Like
  • @craigwb….fair enough.
    7 Jan 2012, 09:43 PM Reply Like
  • We didnt dodge anything...They are just pro-longing the inevitable...which is a complete collapse of capitalism as we know it. And the bubble didn't start in the 60's..It started in the 80's...then ended w/ Clinton who actually balanced a budget...It wasn't until Bush Sr. and Bush Jr..who really Fuc*ed everybody up.


    They printed trillions of dollars to bail the banks out...My kid's money and my grand kid's money are all gone.... The middle class got sold out pal. We are the new NINJA generation..(No Income, No JOB, No assets)... and boomers are hanging on by continuing to work because they lost all there money in the crash of 08...


    One more point...Its true we had 30 years of growth post WWII...but we were not in a bubble then(it wasn't artifical)... the real racking up of debt took place in the 80's... look up the stats. Also, we will never have that kind of growth ever again...and if we wont be long lasting...just like in the next 4-5 years...


    Which is when I believe the USD bubble will burst..along with the US govt. debt bubble...Housing has already begun its descent...By 2015 70 million people will be on food stamps w/135% debt to GDP or MORE. So please don't tell me things are better...There not..There worse pal. Much MUCH worse... The M2 money supply has almost reach 10 Trillion, and the labor particiaption rate is continuing its downtrend...and will probably reach 1950 levels sooner then most think.
    7 Jan 2012, 05:33 PM Reply Like
  • I don't think anyone here is saying things are better. Far from it. But from where I stand I see an educational infrastructure not capable of training people for this economy. My biggest shock was discovering the paucity of talent--even at advanced graduate school levels. Granted, I'm looking at a small fishbowl, but one that is critically important for product innovation.


    That being said, you're right on almost all the points you've brought up. Especially the accumulation of debt starting in the 80's.


    And we must have some kind of accommodation, especially by conservatives, regarding taxes. My local congressman (R) finally said he is walking away from the no-taxes pledge. That, I hope, is good news. However, when a political party's candidates for President say they would not accept even 9:1 spending cuts to taxation, you know the party is in trouble--and we along with it. That is just a fundamentally unserious position. (And that's about as far as I'm going to go though with regards to politics.)


    The predictions, though, I hope for all of us, are wrong.
    7 Jan 2012, 10:46 PM Reply Like
  • Also education and skills/ and all the other B.S...really is B.S...because nobody is going to set there standard of living under the poverty level with a Masters or PHD...It ain't happening... And most companies that are hiring...are hiring for less money!


    in order for the economy to grow, consumer spending has to grow...In order for consumer spending to grow..INCOME HAS TO GROW...otherwise go to capital one, discover, or AMEX and spend that way...get into debt..then file bankruptcy again, and again, and again... That is already happening trend...Would not be surprised if C.C. defaults rise in 1st and 2nd quarter of 2012..
    8 Jan 2012, 03:24 PM Reply Like
  • Josh,


    We have to start making things again in this country. That's where the "value-added" chain really multiplies. Guys like me can design products in the States but we need to get manufacturing jobs back. That's one of the ways we can get real income growth. It's no coincidence that middle class income started stagnating when manufacturing started leaving the country.
    8 Jan 2012, 03:39 PM Reply Like
  • Craig,


    As long as manufacturing is cheaper in China, manufacturing jobs WILL NOT COME BACK TO AMERICA... It is as simple as that. The great industrial nation that once WAS america is no longer.


    Most are living off savings, inheritance...The others are working for $7.50/hr....Just take a look at the Labor Not=in Force and Labor participation rates for the 4 years.....


    And CEO's are making there un-deserved 50 million dollar payouts each year...It is sickening.
    9 Jan 2012, 04:10 PM Reply Like
  • Josh,


    While I understand the sentiment, if what you're saying about manufacturing is true then Germany wouldn't be the export powerhouse it is. Their non-university training is one of the best in the world. Their industrial machinists and technicians get paid a very pretty euro because of their skill sets and productivity. There are measures we can take, and one of them is recognizing that university studies are NOT for everyone, and for us not to treat people who don't go to university like second-class citizens. Our vocational training in this country is not even third-rate.


    As for your other comments--ahh, yeah. I agree with them --especially the CEO stuff. Very few of them, in Morningstar-speak, are actual value creators. Kind of like journeyman baseball players. Bill Veeck said a long time ago: "I don't mind paying guys like Bob Feller their money--they earn it every day. What I can't stand is the high price of mediocrity". And with most of the CEOs I see and have met, well, let's just say they aren't in the mold of Bob Feller.
    10 Jan 2012, 08:04 PM Reply Like
  • Exactly…the education system in the US is broken and turning out masses with useless skills.
    11 Jan 2012, 06:37 AM Reply Like
  • Or are students not picking the right path? And companies choosing not to train? Had a Siemans employee tell me that the skills they were looking for were too narrow and too specific for someone coming out of a four year program (vibrational analysis). He learned it on the job, something his company isn't willing to deal with now. Most successful students I see now are ones who have done multiple internships - which prolongs the number of years till graduation - but is invaluable getting a job.
    11 Jan 2012, 07:50 AM Reply Like
  • Good question.


    To tell you the truth, in my area of expertise (materials physics), we are not necessarily interested in someone having the exact experience for a particular position. What we are interested in is how well they think.


    Now that sounds like it's in stark contrast to what I said above regarding training and education. On the contrary: thinking well takes a great deal of study, training, and a great deal of intellectual maturity. What we see coming out of grad school these days are people who have pursued very narrow topics and have not taken the appropriate steps from what they have done to critically assess the way they are doing things. That is somewhat understandable, as it is increasingly difficult to obtain funding for fundamental sciences (more applications-oriented these days) and US students do not want to spend 6-8 years in grad school. Nonetheless, it appears in this day and age that such critical thinking only occurs after you have done 1 or 2 postdoc assignments, and are forced to learn new areas of science.
    11 Jan 2012, 04:24 PM Reply Like
  • In 2015 or wont matter how well anybody thinks...Because the other 2 bubbles will already be bursting...
    Thats the USD bubble and the US Govt. Debt bubble...and they will trigger a multi-layer devaulation across the entire country and world of which we have never seen before in history... 2008 was just the beginning...Bubbles can't be what will see is very low growth and the labor participation rate will go even lower.... 2014 will be the threshold...between Total U.S. assets and total Debt... Our Total Debt will surpass our total assets...then we will be officially bankrupt as a nation.(according to our GDP and debt..we have already reached that point...but not with assets...just GDP)
    11 Jan 2012, 06:27 PM Reply Like
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