jimojimo

One Scary Unemployment Chart

Don't put much weight in the unemployment %. It is not a straight calculation of the # of willing-working-aged people without jobs over the # of willing-working-aged people.

That number is probably around 15% right now. It's my understanding--and I'm open to correction--that they calc. using # active unemployment claims as the factor.

So the millions of unemployed who became unemployed over 26 weeks ago (the typical limit of most states' claims) are not counted even if they're still unemployed.

I can't stress enough that the answer is not just 'spend more'. We've got to (and I'm talking specifically about the problem vis-a-vis America) spend in ways that keep the money circulating here in this country.

So again--buying that flat-screen, that Toyota (even if it's assembled in Kentucky the bulk of the cash goes to Japan) , or that sofa--sends more money overseas than it does here. It's like driving a car with a worn clutch--we can give it more gas (spend more) and the engine sounds loud but the traction is not enough to get us going.

So the answer is not simple and not quick. We need to lift as many barriers as we can off of our industries--OR--if we're going to be all 'green' and make it more expensive to manufuacture here--then we need to tariff Chine, et. al. to a level that brings our green-encumbered plants onto a competetive field.

And if China doesn't want to pay the tariff--then they can have their plants inspected and fined constantly for every little penny-ante thing that ours get fined for, and let them see if they can still build a sofa for $40 and sell it here for $400.
--Jim

One Scary Unemployment Chart

What about all those countries who default on our loans to them?

Imagine not paying the service on all that paper in China.

I'm not sayin', I'm just sayin'.

:)))

One Scary Unemployment Chart

Anil,
What you're suggesting may indeed happen, but it shouldn't be legislated.

Housing prices are correcting and it will be possible (when credit loosens) for an average single-income family to afford a house. Not a McMansion, but a livable house. Who *really* needs a 4-bed 3-car garage house, which had been considered a 'starter' home for many in the last 10 years.

My parents and my 5 siblings grew up in a 3-bedroom (with an extra bedroom in the basement) 2-bath, 1-car garage house. And it wasn't a 'starter', it was the one we moved to when my dad moved up to management (mom was typical stay-at-home). We were happy and never thought "why can't we have a bigger house". That's the way it was. I think we'll see a general return to that.

As I implied before, I don't see where our wealth as a nation is coming from in the future. We don't do the 'value-added' manufacturing that we used to. We just take the relatively minor cut at the retail end of the product chain, and---WHOOPEE---if we're lucky--we get thrown a bone and do final-assembly of Toyota's and Honda's--still a small chunk of the total value-added in a car.

Where's the world-leading wealth going to come from in the USA?

Sadly, that question is rhetorical.
--Jim

One Scary Unemployment Chart

We never *really* came out of the 2001 recession...we just borrowed more and faked our way through. Now that the bulk of the money that was floating around for the past 8 years or so has been found to be artifically pumped up housing value, it's time to pay the piper.

As far as job growth, we can't really thrive in this "Service Economy".

Because what that really means is that we're happy to be Wal-Mart greeters, Best-Buy 'associates' and burger flippers. We won't grow just by selling stuff manufactured elsewhere.

It's time to tarrif China and whomever else manufactures under conditions we've legislated as 'unfit'. If we choose to hamper our businesses by requiring OSHA and EPA compliance, and all the other govt. regulations that put us at a severe manufacturing disadvantage, then we should level the field with tariffs. Trade war? Bring it. China needs our market more than we need theirs.

GM: Charging Forward with the Volt?

I for one think it's worth investing in the backbone of the new automotive energy--and that of course is the battery tech. Where the charging electricity originates--coal, nuclear, etc--that's another discussion--but the battery is the key.

If we look at the amount of oil we spend for automotive (Air transportation will have to rely on oil for the indefinite future) and ask ourselves if we'd rather have those future billions go to Canada, Venezuala, Iran, and Saudi Arabia OR...the USA in the form of battery/automotive technology instead of oil, I think the answer is simple. I'd rather see the US filled with wealthy "battery shieks" than send our money abroad making someone else rich.

It's worth our investment--and I don't care if it's my tax dollars going to fund a publicly traded company's R&D--I just want the energy technology of the future to come from the US, and not Japan, China, Korea, or the other ones who put their state dollars towards beating us to the punch on this. And I very much don't want the future to be oil. We've got to get it clear that oil is on it's way out.

If we're not careful, what will we have in the future as far as industry?

We've been ably to fake it by in the last 30 years in which our former backbone--manufacturin... shrunk. We've faked it by borrowing and selling our bad debt and now it's come home to roost and it's pretty scary to see that we don't really lead in a whole lot of industries.

If we're the leader in wal-mart greeters, does that entitle us to the "wealth" we think we have? I think the answer is clear now that we see that that wealth was false. We can't sustain this huge a country on flipping burgers and having big-box stores that are simply cash-funnels sending our money directly to China and Korea.

Whew...that was a fun rant.
-Jim

GM: Charging Forward with the Volt?

Given the employee base of GM--and add to that the supplier employee base--allowing GM to fail would have a greater long-term impact than the effect had we allowed [pick one] of the financial firms we bailed out to fail.

I understand the short-term effect posed by the intertwined risk-chain of the financial firms, but the long-term effect of the 6-figure job losses were GM (and/or Ford) to fail would be far more dangerous.

But let's face it--which high-level Treasury department (or any cabinet level department for that matter) employees are from the auto industry?None. How many are from the financial industry? Dozens.

Now do we understand why the banks were bailed out while GM has to beg?

Under Bush or McCain, GM would've been left to die. Under Obama, I believe they'll get a shot in the arm--enough to bridge this gap until the pent up demand brings customers back.
--Jim