PeakTrader.com

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PeakTrader:

What’s sad is the unemployed, in their 50s and 60s, who were willing and needed to work, because of high debt and low saving, were unable to find decent jobs. So, they chose Social Security and Disability benefits, after their Unemployment benefits ran out.

Five years into the recoverless recovery, workers remain unwilling to give up decent paying jobs.

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Also, I think, you’ll find compared to other recoveries, real GDP growth has been stronger than employment growth, although both have been weak, which means the employed labor force has been working harder in this recovery compared to prior recoveries.

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I think, the Obama Adminstration is not only responsible for the loss of trillions of dollars of output over the past few years, it’s also responsible for the prevention of trillions of dollars of output in the future, e.g. over the next 10 years.

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It’s amazing how people like Morganovich twist success into failure.

The U.S. created 17.6 million jobs from 1993-98. the country reached beyond full employment, and actual output exceeded potential output.

In 2001, we had a recession so mild that few jobs were lost, while per capita real GDP growth didn’t fall in 2001. “Only” 3.7 million jobs were created from 2001-06. However, they were on top of huge job gains in the ’90s and few job losses in the 2001 recession. The country was at full employment again by the mid-2000s with the unemployment rate at 4.5%.

We can thank the Greenspan Fed for the mild 2001 recession, the huge economic boom from 1995-00, and the steep rise in U.S. living standards in the 2001-07 expansion, along with the soft-landing in 1994.

We can also thank the Bush Administration for giving the Fed time to catch-up easing the money supply in 2001 and 2008 with timely tax cuts.

The only major mistake the Fed has made over the past 30 years is the Bernanke Fed restricting the money supply too long in 2007, which caused the recession initially, in Dec ’07. Also, I may add, the Obama Administration has been little or no help to the Fed.

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Ron, why do you believe there wasn’t prosperity from 1993-98?

It should be noted, in the mid-’90s, the Greenspan Fed believed the economy could expand at a faster rate than conventional wisdom.

It turns out, the Fed was correct.

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Some people also underestimate the Bernanke Fed, since Bernanke proved he wasn’t an inflation dove in 2007.

The Bernanke Fed believed the quantitative easings wouldn’t fuel inflation, while placing a floor on the recovery, and created new tools, e.g. interest rates on excess reserves and the ability to adjust the interest rate.

Here’s what Bob Brinker said about the Fed (Dec 2012):

“It’s only because the Federal Reserve has been active that we have any growth at all in the economy….The Federal Reserve is the only operation in Washington doing its job.

The only person that would criticize Ben Bernanke would be a person who is so clueless about monetary policy and (the) role of the Federal Reserve as to have nothing better than the lowest possible of education on the subject of economics….Anybody going after Ben Bernanke is a certified, documented fool….”

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http://www.aei-ideas.org/2013/05/jp-morgan-biggest-factor-in-the-declining-labor-force-participation-rate-is-aging-of-population-not-tough-economy/#comments

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PeakTrader:

Typically, when a firm becomes large enough, it means it was successful increasing the quantity and quality of output per unit of input and putting some competitors out of business to free-up limited resources. Therefore, the macroeconomy can expand.

However, firms have an obligation for the well-being of their employees, which should be viewed as an investment rather than an expense. Efficiency is the result of profit maximization. However, efficiency doesn’t disappear when the well-being of employees improves substantially, e.g. at the expense of profits.

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A friend in college started a lawnmowing and landscaping business (the same guy who started a window washing business and later sold his steady clientele). He got all his capital from his mom for free, who was worth around a million dollars.

He boasted one day he was making more per hour than his 15 Mexican employees combined (which can be viewed as profit and top management salary), who were basically making minimum wage (perhaps, there was an older Mexican supervising making a little more than minimum wage).

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http://www.aei-ideas.org/2013/05/quotation-of-the-day-milton-friedman-social-responsibility-of-business-is-pure-and-unadulterated-socialism/#comments

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