Saturday, April 5, 2014

The Sarcasm Report v.189

April 5, 2014
Calculated Risk: WSJ Employment Graph ignores Demographics, Needs Correction

The dashed line assumes that this ratio stayed constant since January 2008 - and seems to suggest that there should be 7.2 million more private sector jobs today.

This is nonsense. This ignores the decline in the participation rate due to demographics.

Speaking of ignoring demographics...

Click to enlarge.

Over the past 4 years:

1. As seen in the black line, the economy has added a whopping 5.3 million jobs for those aged 65 years and older. Keep in mind that many of the jobs "added" are simply due to people reaching age 65 and continuing to work. But still, it is a staggering number.

2. As seen in the red line, the economy has added a mere 1.7 million jobs for everyone else. It's not quite as bad as it looks though. Each person aged 64 who turns 65 but continues to work, basically destroys a potential job for this group (which needs to be offset by jobs added elsewhere). But still, it is a meager number of jobs added just the same.

And why should we care?

Investopedia: Working Age Population Definition

Each region may have a different range of ages, but typically the ages of 20 to 65 are used.

Somebody better point this definition out to those 65 years and older, for they have become our economy's employment growth engine. This poses a serious problem for those coming out of college saddled with heavy student loan debt.

To sum this up, I most certainly do not see the "nonsense" that Calculated Risk sees. There are currently 19.6 million total unemployed plus all marginally attached workers plus total employed part time for economic reasons. Does 7.2 million really seem so far out of line when seen in this context? We could debate the particulars no doubt, but my closing argument would be, "Nonsense my @$$!"

Perhaps the future's so bright some gotta apply shades of rose-colored lipstick to this economy's pig? As you can probably guess, it certainly won't be me.

Source Data:
St. Louis Fed: Custom Chart


Troy said...

yeah I posted 73.5% of age 15-64 population vs PAYEMS in CR's latest thread, showing we're 12M jobs in the hole now.

in DSR news, this guy:

can teach SystemSoft Alpha a thing or two about pretty hexes.

Stagflationary Mark said...


can teach SystemSoft Alpha a thing or two about pretty hexes.


Mr Slippery said...

I started preparing a comment in the CR thread showing the spike in 55+ workers vs population, but ended up discarding it. No amount of data will change his bull-minded (perhaps bull headed) view.

Up until last year, when they changed the definition, the CBO showed a huge output gap that was not closing. They instead chose to define it away.

I wonder what CR thinks is making kids stay in school longer? They love racking up student loan debt? I suspect the permanent economic damage caused by the mortgage fraud recession.

(FYI, I vote for even more sarcasm in this post, can there ever be enough?)

EconomicDisconnect said...

Bill McBride changed years ago. Set aside his support for bailouts and handouts, he sees everything now with rose colored bull turd glasses. He's become a joke really, just a place for a comments thread to run 24 hours.

Troy said...

Here's another of his maps. I first saw this ~10 years ago.

Stagflationary Mark said...

Mr Slippery,

I wonder what CR thinks is making kids stay in school longer?

My girlfriend is back in school. She'll turn 44 years old this year. All the cool kids are doing it.

Well, that, and the fact that she's worked a grand total of 3 hours so far this year. It's been some time since my last update to you about it. They practically swore on a stack of bibles she'd be starting work yesterday though (after the 3 hour orientation meeting months ago). In fact, they even told her not to call to double check. That's how sure they were.

Didn't happen. Something "unexpectedly" came up yet again. She got a call telling her not to show up.

She's going to start work this coming week for sure though! 30 hours! It's already been approved by HR and they are willing to make an exception (normally it is a 15 hour limit during training). Of course, I remain somewhat skeptical. Her first day of real work has been postponed more times than I've got fingers and toes (no exaggeration and I'm not missing any of them).

I wish I could add some sarcasm to this story, but the reality makes it so hard! It already reads like something out of "The Onion", lol. Sigh.

Troy said...

oops, try this

Stagflationary Mark said...


I think he's leading a group of brave investors on the "Nothing Bad Can Possibly Happen with ZIRP in Place" and "The Fed Is All Powerful and No Unintended Consequences Are Possible" warpath.

We'll see how that works out over the long-term, lol. Sigh.

Stagflationary Mark said...


I really, really wish someone would bring games of that caliber to the PS3.

And if they brought them to the PS4, I'd buy both the games and the console.

Rob Dawg said...

You've seen me absolutely bury this claim for years now. I give up. He isn't just not listening he's being obstinate in the face of overwhelming daa.

Stagflationary Mark said...

Rob Dawg,

I know. I've all but given up.

It's probably for the best anyway. I could lose what's left of my sanity in those comment threads.

When I turned bearish in 2004, it took so long for most people to see what seemed so clear to me. I watched the stock market set new highs in 2007. I saw people pointing to it as proof that all was well.

Good grief. Didn't anyone watch Battlestar Galactica? ;)

If you believe in the gods, then you believe in the cycle of time that we are all playing our parts in a story that is told again, and again, and again throughout eternity. - President Roslin

For what it is worth, it feels just like 2007 to me. The denial of any cracks in our economy is simply breathtaking again.

Troy said...

I've found a new hobby!

Virtual aerial tourism in Google Earth!

("flying" over the 3D map at around 10,000 feet I'd guess)

I first wanted to check out the Kursk battlefield (I've done this before) then decided since I had all night I'd "fly" down to the Crimea for the helluva it.

The Sea of Azov went pretty fast so I decided to cross the Black Sea into Turkey. Man what a mountainous place, and pretty much a wasteland. Ugly, too.

Next stop, Egypt! Crossing the W Med at around 5,000 MPH was pretty zen. Hitting the delta, I decided to fly on to Cairo, then just follow the Nile for the helluva it again (From all the villages in the delta I could see Egypt has WAY too many people, but I knew that). Lake Aswan -- then the desert was awesome (I was taking notes for my mapping module, since I want something of a Dune-ish feel to my war game).

^ heck yeah!

At the edge of the desert I hit Khartoum. Kinda scary, all those people in the middle of nowhere.

Past Khartoum the ground got greenish, as I was expecting. Still not much in the way of hills, the whole place seems rather played out and eroded.

Then, bam!

I had no idea this existed, green hills that rose like the cliffs of Na Pali on Kauai!

I missed Lake Victoria (didn't know where it was exactly) but followed Lake Tangyaka or whatever into Zambia, then Zimbabwe. Both of the places looked pretty depressing, bumpy scrub hills.

Hit the coast at Durban, the it was a quick flight along the S African coast to Cape Town.

Learned a lot in that hour!

I've also flown over Vietnam a bit, to get a sense of the battlefields and the how & why of the military geography (man what a bitch of country to defend from infiltration from Laos/Cambodia).

Luke The Debtor said...

"our economy's employment growth engine"

Good one.

Years ago, I read The Coming Generational Storm, but I don't remember the authors discussing how near-retirement age labor force participants (LFP) would be taking jobs from younger LFPs. Or perhaps, they are labor forced participants.

Troy said...

I don't think old working people necessarily 'take' a job from the young, since they still redirect their wages into the paycheck economy, creating jobs somewhere with this spending.

But hopefully when they retire they'll free up a job somewhere in the job-stack they're leaving.

There's also the issue of productivity, which falls off at 50-something. It might be better to pension off the 60yo and get fresher blood making more output.

As for the 2030s, we just need to raise taxes on the 1% and 0.1% a lot -- making them monetize the $2.7T currently in the SSTF, which was the Greenspan Deal of 1983.

We also need to slowly raise FICA 0.2% per year starting soon. On a $50,000/yr income this is only $2/week increase. Rents are going up many multiples of this (and it's my thesis/religion that the more payroll taxes we take, the slower rents will go up).

Medicare is another story, we need to double Medicare taxes soon and institute real cost controls / provider rerform. This is politically difficult to impossible, but so are the alternatives (other than just having Yellen print the trillions we need).

People talking about future fiscal crises when this exists:

need to think more about what that signifies.

Stagflationary Mark said...


I've found a new hobby!

That's just what I need, another productivity killing hobby, lol.

I don't think old working people necessarily 'take' a job from the young, since they still redirect their wages into the paycheck economy, creating jobs somewhere with this spending.

My main concern would be the older person in the entry level job who works because they have to work. That does take a job from a younger worker (not trying to blame the older worker for it though).

I just remember driving across the state to see my family last summer. I stopped at a McDonalds. The person behind the counter must have been in her 70s. She was very friendly. Hope she was there because she really wanted to be, but I have my doubts.

There's also the issue of productivity, which falls off at 50-something. It might be better to pension off the 60yo and get fresher blood making more output.

I'm 49. I'm on my last year! And then you throw new hobbies at me? You are so mean! Hahaha!

In all seriousness, if that fresher blood can't find a job early in life, then it could set a very bad precedent for their entire life.

Unemployment Rate Spread Between 16-19 and 55+

Other than the recent decline, there's nothing good about that chart. Sigh.

Stagflationary Mark said...

Luke the Debtor,

Years ago, I read The Coming Generational Storm...

I remember skimming that book at Barnes & Noble at about the time I turned permabearish. Go figure.


April 3, 2014
Liberty Media Will Sell Most of Its Investment in Barnes & Noble

Its traditional bookstores have remained more stable, though core comparable store sales are drifting lower. Barnes & Noble executives have said that the bookseller will close about 20 of its more than 600 stores each year for the next decade.