Unemployment Duration

[cypherdoc]

Cut spending now and you'll have a disaster. Wait for the system to collapse, and you'll have an enormous catastrophe.

emotionally this sounds correct.  but unfortunately we live in a system that is allowing large, corrupt dinosaur-institutions such as Citibank, BAC, JPM, GS, MS to feed off the rest of the productive economy.  we are slowly being turned into debt slaves to prop up these bad actors.  the facilitators have been Wall St and the captured politicians.  unfortunately it will take a disaster to wipe these punks off the map.  i myself am ready for this (i think) and want it to happen so we as a nation can get back to honest work.  i also think that most Americans would be better off

a good argument for this is the depression of 1921 which took a short 2 yrs to complete itself b/c the gov't and the Fed got OUT OF THE WAY.

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[logansryche]

How do you mine with no money?  How do you pay for your mining equipment?  Your electricity? 

Folks find ways.. look at me for example. I have no job because of a back injury and all I get are food stamps every month but I can still afford to mine. True, it's cpu mining and the equipment is older so it generates hashes slower, but it's still mining and I don't pay for electricity either. Your rants about unemployment equaling no mining is null.

[CurbsideProphet]

There is some true to this, specially in (and I believe only related to) the banking system. The banking system is a government created oligopolly and the government has regulated the amount and type of leverage they can achive. This has lead to a unsustainable situation. If we allow the market to correct it through the natural method (bankruptcy) the correction would be very quick, but also very brutal, with a lot of people loosing their savings, etc... I dont think this would be true in any other sector, IMO only the banking sector needs some kind of special solution. There are two sensible options.

1. What sweden did in the 90's. Its a government managed bankruptcy process. The government takes care of the banks for a while, so it can guarantee the deposits, but (and this is very important) completely wipes out the shareholders and the debtors. Both groups gave their money to a badly managed company so they deserve to loose their money. After a while, the government sells the banks to the private sector to recover part of the price of saving the banks. The BIG difference to what it is being done now, is that now we are rescuing the banks, including the shareholders and the debtors. The present "solution" is insane, its pure robbery by the plutocracy.

2. End the monpolly on money by removing legal tender laws, allowing to pay taxes in any currency, etc... By doing this you allow competing currencies and a competing financial system around these new currencies. This would allow for new investment to happen, that is now blocked because the banking system is bankrupt. Also, as the USD loses marketshare it would devaluate making the USD denominated debt easier to pay helping to solve the debt crisis much quicker.

I preffer the second solution as its better long term (the first solution does not change the present monetary system), but given what we have now the first solution would be very welcome. You can imagine we wont get any of both, we will keep saving the plutocrats through taxes and inflation, and will suffer stagflation for years until all the debt is wipped out and the capital structure has recover.

Great post.  I think your first solution is most plausible.  However, with the spiderweb of credit default swaps, I don't know if an orderly wipeout can be achieved. 

[cypherdoc]

how many quadrillion of CDS do we have?  and don't tell me net net its much smaller and therefore insignificant.  Jim Rickards disputes this argument quite nicely.

[miscreanity]

Great post.  I think your first solution is most plausible.  However, with the spiderweb of credit default swaps, I don't know if an orderly wipeout can be achieved. 

It can't. Even before the debt ceiling was raised, it was impossible for the US to pay down the debt without both massive cuts in services and increases in revenue from taxation. Now, it's so far beyond the point of no return that the problems will accelerate. We have yet to approach terminal velocity.

The rest of the developed world isn't far behind, as the goal of the US is to make sure that it brings everyone down with it. With every nation at the bottom of the barrel, the US will lose less dominance than if it were to fall by itself. This will soon turn into a free-for-all; every nation for itself.

how many quadrillion of CDS do we have?  and don't tell me net net its much smaller and therefore insignificant.  Jim Rickards disputes this argument quite nicely.

According to the BIS, approximately USD$600 trillion worth of derivatives. Prior to their recent revision of these numbers, that was more than double - USD$1.4 quadrillion. Governments and the banking system are in the process of monetizing these instruments in the hopes of revaluing the global economy before it catastrophically deflates.

[johnyj]

Great chart, just showed how high our productivity is: No need to get new worker for 40 weeks or more. Maybe cut some more during this period

[cypherdoc]

Great chart, just showed how high our productivity is: No need to get new worker for 40 weeks or more. Maybe cut some more during this period

i've decided you're a shill plant.  you promote the status quo at every opportunity.  you've not changed my mind one bit.  in fact, thank you for extending my favorite threads in the Economics section to view my opinions and outlook.

[johnyj]

Great chart, just showed how high our productivity is: No need to get new worker for 40 weeks or more. Maybe cut some more during this period

i've decided you're a shill plant.  you promote the status quo at every opportunity.  you've not changed my mind one bit.  in fact, thank you for extending my favorite threads in the Economics section to view my opinions and outlook.

Serious?  I am always enjoyed reading your threads anyway

I'm not speculating, more an investor and hope the economy will find a way out of this mess, but first I have to list all the facts

[cypherdoc]

Great chart, just showed how high our productivity is: No need to get new worker for 40 weeks or more. Maybe cut some more during this period

i've decided you're a shill plant.  you promote the status quo at every opportunity.  you've not changed my mind one bit.  in fact, thank you for extending my favorite threads in the Economics section to view my opinions and outlook.

Serious?  I am always enjoyed reading your threads anyway

I'm not speculating, more an investor and hope the economy will find a way out of this mess, but first I have to list all the facts

for you to look at that Employment Recession chart and cheer that it is somehow evidence that all is good and we need more of that is beyond me.  as if this is supposed to be a positive when all the evidence indicates its a negative.  i mean the whole world is up in arms about whats happening b/c of the status quo and you're happy about it.

[johnyj]

for you to look at that Employment Recession chart and cheer that it is somehow evidence that all is good and we need more of that is beyond me.  as if this is supposed to be a positive when all the evidence indicates its a negative.  i mean the whole world is up in arms about whats happening b/c of the status quo and you're happy about it.

Well, I'm happy because I think I found the fact that really match my theory: we do not need more people to work.

As my other post indicated, from 10 years ago I have been asking this question around all the economic forums: "If robots are used widely, will almost everyone lose their job?" And even today there are few can give a systematic approach to this problem

I heard in one of the minority economy theories, they think high jobless rate is a natual part of mordern society, so it is not a problem as long as social wellfare system is strong enough. I don't recall the name of that guy...

[cypherdoc]

for you to look at that Employment Recession chart and cheer that it is somehow evidence that all is good and we need more of that is beyond me.  as if this is supposed to be a positive when all the evidence indicates its a negative.  i mean the whole world is up in arms about whats happening b/c of the status quo and you're happy about it.

Well, I'm happy because I think I found the fact that really match my theory: we do not need more people to work.

As my other post indicated, from 10 years ago I have been asking this question around all the economic forums: "If robots are use widely, will almost everyone lost their job?" And even today there are few can give a systematic approach to this problem

I heard in one of the minority economy theories, they think high jobless rate is a natual part of mordern society, so it is not a problem as long as social wellfare system is strong enough. I don't recall the name of that guy...

well we agree to disagree.  i think the large inflationary ramp we've had since 1971 when going off the gold std for good has contributed to massive population increases based on debt.  yes we've had more technological improvements which has helped compensate for this but we've hit the ceiling.  masses of ppl are now being left behind and the unemployment rate and labor non par rates are net negative indicators IMO.

[johnyj]

Like logansryche in #22 pointed out, you can live a basic life with food stamps and other necessities and still mining BTCs

Of course many people have raised their living standard and it will be painful for them to move to a lower living standard, and their sense of identity also get hurt

So I think the social wellfare level should be increased, not decreased like what the government is doing now. With an increased social wellfare, people feel safe and have money to raise their living standard, and high unemployment is not a problem anymore, but just a sign that the society is very rich so that many people do not need to work

It just feel so strange that we have enough technology but still not able to fullfill everyone's need because of the limitation of today's monetary system

[miscreanity]

Like logansryche in #22 pointed out, you can live a basic life with food stamps and other necessities and still mining BTCs

Of course many people have raised their living standard and it will be painful for them to move to a lower living standard, and their sense of identity also get hurt

So I think the social wellfare level should be increased, not decreased like what the government is doing now. With an increased social wellfare, people feel safe and have money to raise their living standard, and high unemployment is not a problem anymore, but just a sign that the society is very rich so that many people do not need to work

It just feel so strange that we have enough technology but still not able to fullfill everyone's need because of the limitation of today's monetary system

It will be painful indeed. Many will grow angry and resentful, resorting to violence because they do not understand what's happening - the effects will spill over to those whose living standards have not taken a substantial hit. It's a dangerous cascade effect.

What automation, methods and technologies currently exist that will allow for sustaining such a large population? Where will the resources necessary for welfare come from? Why should people be supported at the expense of others? What you advocate is forced servitude without a sufficient system in place to facilitate that without human slavery. Robots still cannot do much. Be patient; don't propose additional suffering in the meantime.

New technologies and techniques open new fields of employment to be filled by those leaving declining fields (horse-drawn carriage makers gave way to automobile manufacturing; employees likewise shifted). High unemployment is a sign of stagnation, regardless of whether a society is rich or not.

[alan2here]

High levels of employment are not necessarily good. I shall explain.

There is ofc more to the world than food but I'm using just food production as a demand for a simplified example. If more food is grown everyone gets enough food, otherwise there is not enough food. So regardless of the economy the thing that matters to peoples quality of life is that enough food is grown not that everyone is employed or has enough money, if everyone has less money and there is the same amount of food then the food distribution should be about the same. If less people are employed but the same ammount of food is produced thats good, even if it makes it difficult financially, for example how to justify paying people who arn't working.

Tecnoligical redundancy has become particually relevent recently, seems to be usually overlooked but is very important. I think the big unimployment spike in this recession might be to do with it.

As I see it there is a chain of events in time that goes something like this:

*distant past*

1. Nearly everyone employed.

2. Water pipes replace carrying water. Combine Harvesters replace farmers. Eventually miners stop being relevent and that can be automated. ATM's replace tellers. Google, Wolfram Alpha, Excell etc... replace a load of stuff. etc... This is still going on, there are some real hurdles due to for example people not wanting to design themselves out of a job, even programmers!

3. Loads of pointless wasting time jobs to employ people, or people just don't get current tech and make things unbelievably obsifcated.

4. The Recession part of the economic cycle comes around and many of the waste of time jobs are dropped because they just cost money.

5. Loads of unemployment, however the part of that unemployment thats as a result of tecnoligical redundancy is good thing.

*present*

I think the graph in this threads starting post lends weight to this idea.

Should be now be insisting people get back to work? Or should be insisting things start getting done? ofc sometimes thease are related, like when people are needed to do things, but not always! High employment is the wrong goal.

I think the important places to improve right now are that software\hardware isn't compatible and modular enough, nearly all the work we do on software is duplicate, perhaps 99%, when do you ever program something totally new, it's just thats the things arn't designed well the view that code should run quickly as opposed to be well abstracted to people working competivly and not wanting to share, to just the bases of code and sepratly running programs themself, none of it was designed with today in mind. One of the other biggest sticking points is transport, it's verry inefficient, we need a system like the in the "Resource Based Economy", we are still on bucket and villege well with too much stuff, metaphorically we need pipes.

[BTC_Junkie]

i'm a big follower of Calculated Risk.  here's one of his graphs that puts things into perspective.

Very interesting graph, thanks for sharing it.

[BBanzai]

JEEZ LOUISE!!!!!! Everyone is talking about how crappy the job market is.  Noone is talking about making money by making stuff themselves and selling it to other people that make stuff.  Do you have no idea WHY we had (past tense)  the largest and healthiest economy in the world???  Make it yourself.

[BBanzai]

In theory, I have a deskjob.  In reality, aside from the problems I solve for my clients, I eat vegetables I planted in the Spring, I make tools out of wood, stones, and metal that I find when I'm not doing my "job".  I pay attention to what grows on the side of the roads I drive down, in case I need them later.  Civilization is all well and good until you realize that it was invented by slavers and thugs.  Very, very clever thugs.  Shut your TV off, its a form of control.  If you are afraid of current economic trends, remember that you were born naked and snotty.  Bad form when trying to wear an impressive tie to a meeting of course, but all those other suits were born naked and shitting themselves.  We get so distracted from what is real that we cower in fear before paper gods.  Be a man, be a woman; paper dolls are entertaining.  Not monsters.
Unless we let them be.

Sure, I'm stealing from the community when I snag some raspberries or woundwort from a vacant lot.  I'm damaging the environment when I turn a fallen tree into a serviceable bowl, I'm certainly seditious by jay walking outside of the prescribed pedestrian walkways....I was under the impression that bitcoinery was appealing to independent minds.  A rare and unspeakably valuable commodity those are.

[BBanzai]

"If more food is grown everyone gets enough food, otherwise there is not enough food"  Arrant nonsense.  Here in the U.S. we intentionally poison the edible "weeds" that sprout in our lawns because it is unseemly to live off of what grows for free.  Lawns, however, are very important for some reason.  There is always food enough for everyone, we have not been teaching our children to identify it properly.  And so they starve.

[Valalvax]

"If more food is grown everyone gets enough food, otherwise there is not enough food"  Arrant nonsense.  Here in the U.S. we intentionally poison the edible "weeds" that sprout in our lawns because it is unseemly to live off of what grows for free.  Lawns, however, are very important for some reason.  There is always food enough for everyone, we have not been teaching our children to identify it properly.  And so they starve.

What weeds are edible? Seriously, if it tastes good I'll let my lawn grow to look shitty for some free food

[Melbustus]

You want jobs? Cut government spending, let bankruptcies happen (no bailouts and no bullshit), basically take the short term bullet and after a bit you will see a real recovery, not this jobless, stock bubbly "recovery".

... It's just not as easy as let everything go to shit and then pick up the pieces afterward. ...

Why not? Indeed, it would be systemic. That's what needs to happen. There are and would still be deep pools of capital that would be employed as failed businesses get restructured or acquired for pennies on the dollar. Sure, you'd get some duration of absolute dislocation (huge bid/ask spreads on virtually everything), but once the shock wore off, people with cash would have a field day picking up cheap assets and businesses, and things would ultimately turn around quicker than what's happening now (and which will continue to play out for years/decades).