Cash Transfers vs. Quantitative Easing

Below are some excerpts from an excellent article at the Counsel for Foreign Affairs titled "Print Less but Transfer More: Why Central Banks Should Give Money Directly to the People" (It is followed by a few comments).

When America becomes the Next Emerging Market

More economic propaganda — this time, from a recent NBER study, which finds:

"Even before the Great Recession, U.S. employment growth was unimpressive. Between 2000 and 2007, the economy gave back the considerable gains in employment rates it had achieved during the 1990s, with major contractions in manufacturing employment being a prime contributor to the slump ... We find that the increase in U.S. imports from China, which accelerated after 2000, was a major force behind recent reductions in U.S. manufacturing employment and that, through input-output linkages [manufacturing supply lines] and other general equilibrium effects, it appears to have significantly suppressed overall U.S. job growth ... Our central estimates suggest net job losses of 2.0 to 2.4 million stemming from the rise in import competition from China over the period 1999 to 2011."

(This is total B.S.)

Baby Boomer Bashers

For the past several years (especially since the Great Recession) I've been seeing an uprising by some people who believe that older Americans (specifically, the "Baby Boomers") are to blame for most of the problems that younger Americans (such as the "Millennials") are having today.

Not so.

White House: "Boomers Reason for Declining Work Force"

A White House report released last month (July 2014) analyzed the labor force participation rate since late 2007 (when the Great Recession first began). And almost its entire 53-page report is dedicated to explaining that the main reason for a declining labor force was because of Baby Boomers dropping out or retiring, beginning in 2008 at the age 62. Even though those 55 and older make up a smaller share of the work force, the White House is saying they account for HALF of the drop in the labor force.

And the report also lays blame on the Baby Boomers as "a factor slowing growth of potential real GDP." What follows are a few excerpts from the White House report:

When Human Labor becomes Obsolete

An automation engineer might be one of the safest jobs of the future — designing software for robots with artificial intelligence and bots — to put everyone else out of work.

In a 2013 study by Carl Frey and Michael Osborne of the University of Oxford, they looked at 702 types of jobs in the United States and made judgments about whether there was a low, medium, or high risk that technology would displace workers in those jobs over the next 10 to 20 years. Their startling conclusions: 47 percent of total U.S. employees have a high risk of being displaced by technology, and 19 percent have a medium risk. That means that 66 percent of the U.S. workforce has a medium to high risk of job destruction. If they are only half right, the numbers are staggering.

Economic Propaganda and Wonkish Babble — Secular Stagnation?

Paul Krugman recently defined "secular stagnation" as an underlying change in the economy (such as slow growth in the working-age population) — and that it is not the same thing as a slow growing of economic potential, although that might also contribute to secular stagnation — by reducing investment demand [as opposed to consumer demand]. He says, "It’s a demand-side, not a supply-side concept".

Editor's Note: I'll attempt to translate this into a simple analogy:

Why a Basic Income will Eventually be Needed

Sometimes an entire region can have an economy dependent on one industry; and sometimes an entire town can be born of a single employer. And if the biggest job creator leaves town, so do most of the jobs. What happens to all those unemployed workers who were left behind? What happens after a factory closes (one that may have employed half the town) when the company's production is moved overseas for cheaper labor? Who would be left to spend money at the local grocer, the gas station, the barber shop or at the local tavern? How do all those unemployed workers sustain themselves if no other employers move to town and rehire them? An entire town that was born of a single employer can also die because of a single employer.

Some people call this creative destruction — creating excessive wealth for a few by destroying sustainable wealth for the many. That's why a Basic Income will eventually be needed. According to data from the Bureau of Labor Statistics, from the first quarter of 2001 to the end of 2012, the U.S. has lost 64,037 manufacturing facilities. It's no secret as to what happened to all these American jobs.

Why Private Equity Firms want to Export US Oil

Jeffery Bezo's Washington Post says the government should allow exports of U.S. crude oil:

The U.S. has become an energy powerhouse, with crude oil production leaping some 48 percent in the last few years. New technology is tapping oil-bearing shale formations in states such as North Dakota and Texas. Most of this product is light oil, which does not require heavy refining. Some of the most advanced refineries in the world are along the Gulf Coast , but that’s actually a problem: Their owners invested in expensive facilities suited to refining heavier crude, so there is a mismatch between the refining infrastructure and the type of crude flowing from U.S. wells. In the deeply interconnected global oil market, in which borders matter less than many people think, the obvious solution is to allow oil companies to ship the light crude to refineries suited for processing it, supporting U.S. profits and U.S. jobs in the process, and to tolerate imports of crude oil that U.S. refineries can handle.

When the article mentioned that this export nonsense is supported by the Council on Foreign Relations, we had to look to see who was on their board of directors. Below is a short list of some of their officers and directors , but it gives you an idea of the supposed "non-partisan" nature of their Board:

Beyond the Dreams of Avarice --- Nick Hanauer

Avarice is one of the Seven Deadly Sins --- It's an insatiable greed for riches; an inordinate, miserly desire to gain and hoard wealth.

In a 20 minute speech, the internet billionaire Nick Hanauer explains that his life is like most plutocrats. And he also says he has been obscenely rewarded for his efforts (video and highlights below).

Since Recession Ended, 11 Million more not in Work Force

All the jobs that were lost during the Great Recession weren't all recently recovered as the media and the politicians claim. All the job gains that occurred since the recession had ended were mostly new jobs to accommodate about 50% of all new entrants into the labor force (high school and college graduates), while the other 8.7 million original jobs lost during the recession were lost forever -- and those jobs represent the huge uptick of those unemployed who are no longer counted as part of the labor force since the recession ended. (L.A. Times: Economy has Recovered 8.7 Million Jobs Lost in the Great Recession)

* According to the Bureau of Labor Statistics, we have 11 million more working-age adults today who are COUNTED as "Not in Labor Force" than we did when the recession ended in June 2009 ---