If the "rock solid" 61 year trend from January 1939 to January 2000 was still in place, then we would have 36 million more employed workers right now. That's what the chart shows.
What can the government possibly do to get us back on trend?
Keep in mind that there are roughly 15 million unemployed. Even if the Wizards of Wall Street used powerful arcane magic to put every single one of them to work, then we'd still be 21 million jobs short. Go figure.
Needless to say, we will never return to that red trend line. I don't see how we can even come close. First, we clearly cannot create 36 million jobs when we "only" have 15 million unemployed. Second, we haven't even been able to think up one new job over the last decade. Not one. Third, that exponential trend line continues to grow. The gap continues to widen.
Think about what I just wrote. I am saying that it is different this time. Those are the most dangerous words in all of investing. Unless someone can show me a few million miracles then I will stand by it though. It is different this time.
So now that we've nearly proven that we cannot return to that long-term employment trend, I bet we could find quite a few other long-term trends at risk too. For example, how well has the stock market performed since January 2000? Heck, for that matter how is it doing today?
August 11, 2010
Stocks retreat as Fed grows more cautious
NEW YORK (AP) -- Stocks and interest rates tumbled Wednesday as investors worldwide grew increasingly concerned about the health of the U.S. economy based on actions by the Federal Reserve.
Did I mention lately that I remain deflationary? Well, I am.
See Also:
Trend Line Disclaimer
Source Data:
St. Louis Fed: Total Nonfarm Payrolls: All Employees
Stag,
ReplyDeleteThat's some chart you have there. It makes me question whether impoverishing unemployed people with debt is really wealth creation.
Anyway, it's a good thing that we have a "student" of the Great Depression in charge of the Fed. Just ask Wall Streeters. They literally have tens of billions of reasons why keeping the depression off Wall St. and on Main St. is all that matters.
Cheers! A stiff upper lip and a pitchfork are all that Main Streeters need to weather a depression brought on by Wall St. financial fraud.
What changed the trend?
ReplyDelete1) Technology, i.e. the internet.
2) Imports /Outsourcing.
Now, just wait until the robots start getting better...
Yup. This is the wrong chart. A George Jetson economy with 90% leisure for everyone sounds pretty good to me!
ReplyDeleteThe problem is, of course, that the efficiency gains are flowing to the top 5% and the bottom 50% are completely screwed by the trends.
You've gotta be either a bona-fide wealth-creator, or a leech attached to someone who is, to prosper in this economy.
Real Estate is the preferred avenue of the latter category of course. It provided trillions in free money to parasites and ne'er-do-wells, 2002-2007.
mab,
ReplyDeleteI think this is the first exponential trend line chart where I could pretty much prove that the trend ended. Every other chart has pretty much just been a strong opinion.
1. The exponential trend in household debt creation appeared to come to an end.
2. The exponential trend in imports appeared to come to an end.
3. The exponential trend in employed Americans DID end though. No opinion necessary.
It is my goal to generate the scariest charts possible of course. I think it takes scary charts to represent our scary economy. Sigh.
Red A,
ReplyDeleteIn addition to your fine reasons, I would also add the words over at Market Ticker.
How Did The Word "Ponzi" Get Into The MSM?
All exponential growth functions - that is, "5% annual growth" - if projected out into the indefinite future - are Ponzi schemes.
IN EACH AND EVERY CASE.
The percentage increase dictates only when the Ponzi ultimately collapses. It does not, however, determine if it will collapse. That it will collapse is a mathematical certainty.
I would also add my own thoughts on exponential growth at about the time I started this bearish blog.
September 25, 2007
Exponential Growth and Immortality!
So how much money will we have made off of that penny in a million years?
Future Worth = $0.01 x 1.01^1000000 = $2.365 x 10^4319
I simply assumed that a saver started with a penny and could get a modest 1% real inflation adjusted return after taxes each year. That's all.
Seeing as how the 5-Year TIPS now yields MINUS 0.08% perhaps there was one small problem with my long-term assumptions though, lol. Sigh.
Troy,
ReplyDeleteI think your Jetsons commentary is spot on! I used a similar analogy back in 2009, in response to offering stimulus to help fund the creation of smart meters.
October 28, 2009
Capitalist/Socialist Utopia!
Let's start with the concept of borrowing money we don't have to fund programs which will eventually eliminate up to 47,000 jobs long-term. Surely that will help our economy. Right?
...
In science fiction, automation often shows a worker with little to do in a somewhat utopian environment. This is not science fiction though. Workers with little to do these days can't actually afford to buy a house and/or pay down years of accumulated debt. In sharp contrast, they are currently sitting at home collecting unemployment checks at a fraction of what they would normally be paid.
...
Jetsons or Lost in Space? You make the call.
I can't speak for others, but I'm guessing Lost in Space!!
"Danger Will Robinson, Danger!"
ReplyDeleteSorry, couldn't resist : )
watchtower,
ReplyDeleteDeja vu!
Good times, good times.
Mark, I always thought that we should use gov stimulus funds to build infrastructure that would give us a competitive advantage. for example, build geothermal/hydro/nucular (sp? j/k). Quebec did this years ago and made it favorable for Alcan to convert bauxite etc...
ReplyDeleteI guess we need to get rid of some corruption first.
remy,
ReplyDeleteAs seen in our once again rising trade deficit, our stimulus strategy is definitely helping us build infrastructure somewhere. That's something I guess.
"Cash for Imported Goods" programs for the win!
Sigh.
Mark... i did some googling... looks like my ideas were already implemented by the GOV, in Pakistan!!:
ReplyDeletehttp://www.speroforum.com/a/36773/PAKISTAN--UNITED-STATES---Islamabad-US-75-billion-in-aid-against-terrorism-and-Chinese-influence
"The US government has announced a US$ 7.5 billion aid package for Pakistan...including two hydroelectric dams. Ms Clinton stressed that the United States is concerned about the wellbeing of the Pakistani people, beyond the issue of extremism. Energy and health care are the stated priorities, including renovating three hospitals, in Karachi, Lahore and Jacobabad.
Clinton said the US, in addition to hydroelectricity, would also fund several solar and wind energy projects, to limit the import of the nuclear power deal between China and Pakistan, something that worries both Washington and New Delhi."
in summary, to fight terrorism, let's build hydro, solar and wind energy plants... while we are at it, let's fix hospitals and open a new industrial facility to help keep jobs out of the US, I mean... to reduce the risk of terrorism of course...
let's face it. Before outsourcing begins/continues, third world countries need infrastructure. Let the people of the USA pay for that infrastructure rather than the corporations themselves. Let the people assist in outsourcing their own jobs and keep wages in check.
remy,
ReplyDeleteAs an American taxpayer, I look forward to visiting our hydroelectric dams in Pakistan. This is wonderful news. Any word on whether or not we will be allowed to run copper wiring to where our textile jobs are? India is just across the border if memory serves. Win win!
"Let's start with the concept of borrowing money we don't have to fund programs which will eventually eliminate up to 47,000 jobs long-term. Surely that will help our economy. Right?"
ReplyDeleteSay in the far, far future, we are fabulously wealthy...but what about those dumb folks? I would guess make-work jobs.
Or, dumb people will start having fewer children, and smart people more. There is a trend in the USA for large families for rich folks.
Oh, and dumb but friendly people never need to worry. I think dumb assholes are the ones who should worry.
Where does the top curve come from?...exponential curve fitting, I'd guess. Seems like it *should* be a function of population growth.
ReplyDeleteDavid,
ReplyDeleteIt's an exponential curve fit of the data from 1939 to 2000 and then extrapolated further out.
It was actually growing faster than the population. Consider where part of the growth came from.
BLS: Current Employment Statistics
In 1964, 32% of the nonfarm payroll workers were women.
In 2000, 48% of the nonfarm payroll workers were women.
In 2010, 50% of the nonfarm payroll workers are women.
The trend of more and more adults in the household working has pretty much hit a wall.
There's still room for more growth, if more and more people within a household work more than one job. There's clearly a limit to that too though. There's only so many hours in a day.
Moonlighting in America: Strategies for Managing Working Multiple Jobs
Unfortunately, a certain group of American workers will always need to work multiple jobs just to sustain some basic standard of living...