PeakTrader.com

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PeakTrader:

According to Chart Book: The Legacy of the Great Recession – Updated September 6, 2013

“…the economy has recovered only about 6.8 million of the 8.7 million jobs lost…still climbing out of the jobs hole created by the Great Recession.

Total nonfarm employment (private and government combined) has grown on average by 162,000 jobs a month in the past 42 months — a pace somewhat faster than population growth.”

http://www.cbpp.org/cms/index.cfm?fa=view&id=3252

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“Can the ongoing US labor market weakness be traced to the biggest loss of government jobs?”

It may be more appropriate to ask can the loss of government jobs be traced to the ongoing weak economy?

For example, people in California seem to be paying more for less government services.

They’re paying higher taxes, fees, fines, fares, tolls, etc., and the state and local governments are very aggressive in collecting money.

Many people in California have been told they owe money to the state and local governments, unless they can prove they don’t, and they’re not given much time to prove they don’t.

Even with spending cuts and revenue increases, many cities in California remain on the verge of bankruptcy.

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Perhaps, in California, the working poor are being driven away rather than the welfare poor:

“Who leads the charge out of California?

From 2005 to 2011, California lost 158 people with household incomes under $20,000 for every 100 who arrived, and 165 for every 100 people with household incomes between $20,000 and $40,000.

In contrast, just slightly more people with household incomes in the $100,000-$200,000 range left than came to California (103 out per 100 in), and California actually gained more people in the $200,000+ range than it lost (99 out per 100 in).

The rich aren’t leaving California, but the poor and the middle class are.”

http://www.forbes.com/sites/trulia/2013/02/12/jobs-arent-leaving-california-for-texas-but-people-are/

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The people who work in California are working much harder to support the people who don’t work.

I know, if I worked this hard in Colorado, which has a much younger and much healthier population, I’d be living three times better.

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I think, Dr Perry is partially correct. The weak economy has caused (involuntary) government job losses, which weaken the economy further. It’s a vicious cycle.

The weak economy is caused by getting rid of “too-big-to-fail,” while keeping the potential for moral hazard, more regulation in an overregulated economy, Peak Oil, no tax reform, a general uncertainty, profits rising to all-time highs relative to GDP, while real wages decline, relative to GDP, etc..

Consequently, expansionary fiscal policy and quantitative easing are less effective.

This “recovery” has been like placing one foot on the accelerator and the other foot on the brake.

There’s a “wall” of money available to boost economic growth sharply. There’s $2 trillion in excess reserves, held by banks, and much stronger balance sheets of U.S. corporations, including $2 trillion held in cash.

However, that money is basically frozen, because of uncertainty.

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Morganovich:

most of these jobs were lost in local and state governments.

such governments are required to maintain balanced budgets.

thus, these job losses are largely the result of lower tax revenues. but if these jobs had been maintained, that would have come at the cost of higher taxes which would have costs jobs elsewhere as consumers had less money to spend.

if we had not lost those government jobs, we would have lost private jobs instead.

they are not independent variables.

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PeakTrader:

Morganovich, however, if those goverrnment jobs weren’t lost, there would’ve been higher income, consumption, saving, and tax revenue from government workers, along with the multiplier effect supporting private jobs.

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Keith:

Peak you did not read one word of what Morgovich said.
Go back and read again and then reply to what he said.

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PeakTrader:

Keith, I read each word carefully. Read what he wrote carefully and read what I wrote carefully. Causality can work both ways.

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Marijuana medicine may become the centerpiece of Obamacare to take care of all your problems, including the ones from Obamanomics.

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PeakTrader:

It seems, political economists, e.g. Sowell, Williams, Krugman, etc. get a lot of attention. However, based on his work, Keynes was unbiased, and perhaps much less political. Yet, subject to so many political attacks, and praises, particularly by political economists.

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Although, the concepts derived from Keynes equations were well supported by the data, e.g. expansionary and contractionary fiscal policy causing smoother business cycles leading to faster economic growth, liquidity trap, paradox of thrift, sticky prices, etc., some people cling to unrealistic excuses to dismiss the equations and results.

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It should be noted, however, many of the NeoKeynesians twisted Keynes work for a political agenda, e.g. promote permanent big government.

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