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"More Than 1 Million Jobs Added So Far This Year, Strongest 10-Month Gain in More Than 3 Years"

PeakTrader said...

Jobs crisis eases, but economy has long way to go
November 5, 2010

"After the severe 1981-82 recession, the economy generated 287,000 jobs a month in 1983 and 323,000 (a month) in 1984 (population was smaller then).

Some months were especially explosive: in September 1983, the economy created 1.1 million jobs. In February 1984, it was 479,000."

Government Reform to Spur Economic Growth:

1. Roll-back regulations substantially.

2. Make the Bush tax cuts permanent.

3. Cut spending and then cut taxes.

4. Give visas to millions of wealthy, high-income, and high-skilled immigrants.

5. Steer clear of the private sector whenever possible.

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More on the Reagan Recovery:

Economy too weak to generate jobs
May 28, 2010

"After the last severe recession in the early 1980s, (real) GDP grew at rates of 7 to 9 percent for five straight quarters and the unemployment rate dropped from 10.8 to 7.2 percent in 18 months."

Also:

During normal times, expansion in the 3 percent range would be considered healthy for the U.S. economy. But the country is coming out the worst recession since the Great Depression. So growth needs to be stronger — two or three times the current pace — to make a dent in the jobless rate.

Economists say it takes about 3 percent growth to create enough jobs just to keep up with the population increase. It would have to be about 5 percent for a full year just to drive the unemployment rate down 1 percentage point.

My comment: This weak recovery, over the past 16-months, was completely unnecessary, very expensive, and if the recovery doesn't pick-up substantially soon, it'll turn into a disaster with almost no options for a turnaround.

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PeakTrader said...

The goal should be to fully employ idle resources, including 15 million unemployed workers and $2 trillion in cash held by corporations. Idle resources are a waste.

The Obama Adminstration has done many positive things to promote growth. However, it has done many more negative things to prevent growth, which has also offset much of the positive efforts by the Fed.

Would Krugman do better?

Instead of giving Americans unemployment checks, the NeoKeynesians may prefer hard hats.

Giving 15 million unemployed Americans $50,000 a year hard hat jobs cost $750 billion a year.

The government would save on unemployment spending, collect more taxes, and produce value to society, along with promote a higher level of economic growth.

However, one problem is the $50,000 hard hat workers may produce only $20,000 of value to society, unlike the private sector where $50,000 workers produce more than $50,000 of value to society.

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Hydra said...

May produce only 20,000 dollars....where in the private sector they produce more than 50 k..............

Not necessarily. For either case.

Where is all the value Enron and worldcomm produced?

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PeakTrader said...

Hydra, in spite of some firms, e.g. Enron, WorldCom, and GM, the private sector creates a lot more capital than it destroys.

The public (or state) sector doesn't create much, if any, capital, but destroys lots of it. Yet, the U.S. economy creates an enormous amount of capital.

Paying workers $50,000 to produce $20,000 of output is common in the public sector, and perhaps at firms like Enron, WorldCom, and GM.

However, in the private sector, it doesn't make sense, for most firms, to pay workers more than the value they produce.

In the public sector, it would make more sense to destroy less capital than more.

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Hydra said...

Hydra, in spite of some firms, e.g. Enron, WorldCom, and GM, the private sector creates a lot more capital than it destroys.

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I don't deny that, but it is far from perfect, which was the general tenor of your comment.

Neither is all government spending wasteful. It is only that government gets stuck doing the jobs that PE cannot do for a profit. I believe it is wrong to assume that just because something cannot be done for a profit means it should not be done.

We can work to make government more efficient, but we don't get thee by baldly proclaiming that everything it does is corrupt and inefficient.

Yes, the US economy creates lots of capital, largely because other nations recognize the strength of our government and institutions. A lot of what we create, we are able to create because of protection and services the government provides (sometimes at a loss).

I don't think we have ana accurate view of what government creates and destroys vs what PE creates and destroys.

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PeakTrader said...

Hydra, my example above is just another example of the tremendous magnitude of government waste.

I gave two choices above (which can be measured) and the government picked the most inefficient and costly choice.

Also, 20 months ago, I provided another choice, i.e. a $5,000 tax refund for each of the 150 million workers at the time (or $750 billion), which would've created a V-shaped economic recovery.

A large tax cut would've been effective to spur growth by clearing the market of excess (private) assets and goods. It worked under Kennedy in '61, Reagan in '81, and Bush in '01.

At this point, the best thing government can do for society is downsize at a rapid rate.

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Ron H. said...

"It is only that government gets stuck doing the jobs that PE cannot do for a profit. I believe it is wrong to assume that just because something cannot be done for a profit means it should not be done."

Hydra, please listen carefully to this: When something is profitable, it is because it is something people want, and are willing to spend their money on. If it isn't something people want and are willing to spend their money on, the firm will not make a profit, and will soon go out of business. That's as it should be. Wasteful use of scarce resources restricts itself.

Government, on the other hand, can and does waste resources without end, as there is no equivalent measure of success as profit provides to the private sector.

Why do you believe people should be willing to pay for something done by government at a loss, that they aren't willing to spend their money on in the private sector?

I get the impression that you believe there are things people should be forced to spend their money on whether they want to or not, just because YOU think they're important. Who gets to decide what things are important?

In the private sector, people voting with their dollars determine what's important.

You're right, that some things are worth doing without hope of profit, but they're things we choose to do using our own money, without forcing others to help pay for them.