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Re: US jobs aren't just 'lost' - they are dead...
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martin
Oct 7, 2009, 3:05:39 PM10/7/09
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On Oct 7, 11:51 am, aw...@blackhole.nyx.net (arthur wouk) wrote:
> shortened to remove unrelated material:
>
> The Daily Reckoning
> Tuesday, October 06, 2009
>
> US jobs aren't just 'lost' - they are dead...
> by Bill Bonner
> London, England
>
> Where have all the jobs gone
> long time passing
> Where have all the jobs gone
> long time ago
> Where have all the jobs gone
> Gone to graveyards everyone
> When will they ever return
> Oh when will they ever return
>
> - Sung to the tune of "Where Have All the Flowers Gone?"
>
> "Many lost jobs in US will never come back..." says The Wall Street
> Journal.
>
> Need we explain why? Because they're not lost, waiting to be
> rediscovered. They're not missing in action, to be repatriated after
> the fighting stops. Instead, they're dead. Gone forever.
>
> There have been 7.2 million jobs lost since recession began. Many of
> these jobs were Bubble Age jobs. Millions of people, for example,
> earned their money in 'housing.' They were putting up houses in the
> sand states...or building granite countertops...or selling, flipping,
> financing the houses. Those jobs are gone forever. Never again in our
> lifetimes are we likely to see such an explosion in the housing
> industry. Sure, people will still build houses...and do all the other
> work involved in the traditional housing industry. But it will be only
> a fraction of the industry it was in the 2002-2007 period.
>
> There were also all the jobs involved in selling things to people who
> didn't need them and couldn't afford them. Labor was needed at every
> step of the way - manufacturing (perhaps in China), shipping, stocking,
> retailing, fixing, and financing the stuff.
>
> And don't forget all that mall space...and all the trucks...and all the
> other things that supported the over-consumption of the Bubble Age.
>
> And now the Bubble Age is over. It will not come back, no matter how
> much cash and credit the feds pump into the system. (Not that they
> can't make things worse...in a BIGGER bubble...but that is not yet in
> sight.)
>
> In The Wall Street Journal yesterday was an item about Las Vegas. The
> casinos are folding up their expansion plans, says the WSJ.
>
> But the big news yesterday was that the service industries are growing
> again...at least that's what the latest figures show. This news so
> delighted investors that they bid up Dow stocks 112 points. Oil rose
> above $70. Gold posted a $13 gain.
>
> Don't get too excited about that rise in the service sector. Everything
> bounces...even dead jobs. Dead jobs bounce; they still don't get up.
> After months of decline, it may be true that the service industries
> have had a rebound, but don't expect them to begin recovering the
> stamina and strength of the bubble years. A few more people may have
> gotten jobs serving drinks in Detroit's bars last month, but it is not
> likely to turn into a durable recovery of the job market,
>
> In the 1990s, the US economy added 2.15 million new jobs every year. It
> needed to add at least 1.5 million or so just to remain at full
> employment - that is, with about 5% of the workforce unemployed at any
> time.
>
> To put that number in perspective, this year the economy as LOST 2.5
> million jobs, just in the last six months. Those jobs aren't coming
> back. As we keep saying, this is a depression. It is a major
> correction, in which the economy needs to find new jobs...because it
> can't continue to do what it has been doing.
>
> New jobs are typically created by new businesses - small businesses
> that are growing. Big businesses already have all the market share
> they're going to get. They also typically have all the employees they
> need. Then, when hard times come, they discover that they don't need
> all that they have, so they cut back.
>
> Job cuts from large businesses is what you expect in a recession. But
> this time it is different. This time, big businesses have let people go
> by the million. But small business has not been hiring them either. So
> not only is unemployment growing...the trend shows no signs of coming
> to an end.
>
> Economists are reconciled to high unemployment levels for a long time.
> The head of the IMF says unemployment might peak out in 8 to 12 months.
> Even if that were true, it will be a very long time before the job
> market recovers. Just do the math.
>
> We'll keep it simple. The economy needs, say, 1.5 million new jobs per
> year. Instead, over the last two years, it lost 7.5 million. Now, it
> has to stop losing jobs...let's just say that happens a year from now.
> By then, the total of jobs lost may be near 10 million. Plus, there are
> the new jobs it needed - but never got - over that 3 year period.
> That's another 4.5 million. So, the total will be about 14.5 million
> jobs down. Then, let us say, because we are in a generous and
> optimistic mood, that the economy then begins creating jobs again...at
> the rate it did during the '90s. What ho! After five years, that still
> leaves the economy more than 10 million jobs short, doesn't it?
>
> In order to get back to full employment, the economy has to surprise us
> on the upside. It has not merely to return to the growth levels of the
> '90s...it has to surpass them. It needs to grow so fast it creates 3
> million jobs per year. And even then, it would take nearly 10 years to
> get back to full employment.
>
> Pretty grim, huh?
>
> Well, don't worry about it. It won't be like that. It will be worse.
>
> "Uh...Bill...what do you mean, 'worse'?"
>
> Glad you asked.
>
> In the typical post-war recession, jobs are lost...then they are
> recovered when the economy gets on its feet again. But this happened in
> the credit expansion of the '45-'07 period. Each recession was just a
> pause, when the economy was catching its breath. Then, it was off
> again...in the same direction - up the mountain of credit.
>
> This time, it's not a typical post-war recession. It's something
> different. Now, we've reached the peak. We're coming down the other
> side...wheee! Look out below!
>
> Now we don't need all those people building houses, stocking the
> shelves and selling things. We don't need such a big financial industry
> either. Now, people want to get rid of credit, not get more.
>
> And the businesses that were goosed up in the credit bubble are now
> deflating fast. They're not just taking a break. They're lining up the
> jobs and shooting them in the back of the head. Those jobs are gone.
> (See below...)
>
> In a 'normal' recession, jobs reappear because the economy continues in
> the same direction. In a depression, it changes course. Debts are paid
> off. Spending goes down, more or less permanently. The economy actually
> contracts...until consumer debt is once again down at an acceptable
> level...or a new model for growth can be found.
>
> The Wall Street Journal mentions a statistician who was making $100,000
> a year. He too is a victim of depression. His job has been outsourced
> to India. Businesses, with less revenue coming in the door, must cut
> costs in whatever way they can. Labor is the single biggest item on
> most firms' ledgers. They will reduce it however they can. And once the
> change is made, there is little chance that the job will come back.
>
> It is a little like a battle. In an attack, troops often get separated.
> They are 'lost' - for a while. Then, the winning side is able to
> recover its missing troops as it advances. But the losing side gives up
> its troops forever. They are stuck behind enemy lines and cannot rejoin
> their units.
>
> We are now on the losing side of a credit battle. Having gained so much
> ground, and so many jobs, in the advance, the United States is now
> giving them up.
>
> Bill Bonner
> The Daily Reckoning
>
> --
>
> "be wary of mathematicians..especially when they speak the truth."
> --sT. Augustine
> to email me, delete blackhole. from my return address
> shortened to remove unrelated material:
>
> The Daily Reckoning
> Tuesday, October 06, 2009
>
> US jobs aren't just 'lost' - they are dead...
> by Bill Bonner
> London, England
>
> Where have all the jobs gone
> long time passing
> Where have all the jobs gone
> long time ago
> Where have all the jobs gone
> Gone to graveyards everyone
> When will they ever return
> Oh when will they ever return
>
> - Sung to the tune of "Where Have All the Flowers Gone?"
>
> "Many lost jobs in US will never come back..." says The Wall Street
> Journal.
>
> Need we explain why? Because they're not lost, waiting to be
> rediscovered. They're not missing in action, to be repatriated after
> the fighting stops. Instead, they're dead. Gone forever.
>
> There have been 7.2 million jobs lost since recession began. Many of
> these jobs were Bubble Age jobs. Millions of people, for example,
> earned their money in 'housing.' They were putting up houses in the
> sand states...or building granite countertops...or selling, flipping,
> financing the houses. Those jobs are gone forever. Never again in our
> lifetimes are we likely to see such an explosion in the housing
> industry. Sure, people will still build houses...and do all the other
> work involved in the traditional housing industry. But it will be only
> a fraction of the industry it was in the 2002-2007 period.
>
> There were also all the jobs involved in selling things to people who
> didn't need them and couldn't afford them. Labor was needed at every
> step of the way - manufacturing (perhaps in China), shipping, stocking,
> retailing, fixing, and financing the stuff.
>
> And don't forget all that mall space...and all the trucks...and all the
> other things that supported the over-consumption of the Bubble Age.
>
> And now the Bubble Age is over. It will not come back, no matter how
> much cash and credit the feds pump into the system. (Not that they
> can't make things worse...in a BIGGER bubble...but that is not yet in
> sight.)
>
> In The Wall Street Journal yesterday was an item about Las Vegas. The
> casinos are folding up their expansion plans, says the WSJ.
>
> But the big news yesterday was that the service industries are growing
> again...at least that's what the latest figures show. This news so
> delighted investors that they bid up Dow stocks 112 points. Oil rose
> above $70. Gold posted a $13 gain.
>
> Don't get too excited about that rise in the service sector. Everything
> bounces...even dead jobs. Dead jobs bounce; they still don't get up.
> After months of decline, it may be true that the service industries
> have had a rebound, but don't expect them to begin recovering the
> stamina and strength of the bubble years. A few more people may have
> gotten jobs serving drinks in Detroit's bars last month, but it is not
> likely to turn into a durable recovery of the job market,
>
> In the 1990s, the US economy added 2.15 million new jobs every year. It
> needed to add at least 1.5 million or so just to remain at full
> employment - that is, with about 5% of the workforce unemployed at any
> time.
>
> To put that number in perspective, this year the economy as LOST 2.5
> million jobs, just in the last six months. Those jobs aren't coming
> back. As we keep saying, this is a depression. It is a major
> correction, in which the economy needs to find new jobs...because it
> can't continue to do what it has been doing.
>
> New jobs are typically created by new businesses - small businesses
> that are growing. Big businesses already have all the market share
> they're going to get. They also typically have all the employees they
> need. Then, when hard times come, they discover that they don't need
> all that they have, so they cut back.
>
> Job cuts from large businesses is what you expect in a recession. But
> this time it is different. This time, big businesses have let people go
> by the million. But small business has not been hiring them either. So
> not only is unemployment growing...the trend shows no signs of coming
> to an end.
>
> Economists are reconciled to high unemployment levels for a long time.
> The head of the IMF says unemployment might peak out in 8 to 12 months.
> Even if that were true, it will be a very long time before the job
> market recovers. Just do the math.
>
> We'll keep it simple. The economy needs, say, 1.5 million new jobs per
> year. Instead, over the last two years, it lost 7.5 million. Now, it
> has to stop losing jobs...let's just say that happens a year from now.
> By then, the total of jobs lost may be near 10 million. Plus, there are
> the new jobs it needed - but never got - over that 3 year period.
> That's another 4.5 million. So, the total will be about 14.5 million
> jobs down. Then, let us say, because we are in a generous and
> optimistic mood, that the economy then begins creating jobs again...at
> the rate it did during the '90s. What ho! After five years, that still
> leaves the economy more than 10 million jobs short, doesn't it?
>
> In order to get back to full employment, the economy has to surprise us
> on the upside. It has not merely to return to the growth levels of the
> '90s...it has to surpass them. It needs to grow so fast it creates 3
> million jobs per year. And even then, it would take nearly 10 years to
> get back to full employment.
>
> Pretty grim, huh?
>
> Well, don't worry about it. It won't be like that. It will be worse.
>
> "Uh...Bill...what do you mean, 'worse'?"
>
> Glad you asked.
>
> In the typical post-war recession, jobs are lost...then they are
> recovered when the economy gets on its feet again. But this happened in
> the credit expansion of the '45-'07 period. Each recession was just a
> pause, when the economy was catching its breath. Then, it was off
> again...in the same direction - up the mountain of credit.
>
> This time, it's not a typical post-war recession. It's something
> different. Now, we've reached the peak. We're coming down the other
> side...wheee! Look out below!
>
> Now we don't need all those people building houses, stocking the
> shelves and selling things. We don't need such a big financial industry
> either. Now, people want to get rid of credit, not get more.
>
> And the businesses that were goosed up in the credit bubble are now
> deflating fast. They're not just taking a break. They're lining up the
> jobs and shooting them in the back of the head. Those jobs are gone.
> (See below...)
>
> In a 'normal' recession, jobs reappear because the economy continues in
> the same direction. In a depression, it changes course. Debts are paid
> off. Spending goes down, more or less permanently. The economy actually
> contracts...until consumer debt is once again down at an acceptable
> level...or a new model for growth can be found.
>
> The Wall Street Journal mentions a statistician who was making $100,000
> a year. He too is a victim of depression. His job has been outsourced
> to India. Businesses, with less revenue coming in the door, must cut
> costs in whatever way they can. Labor is the single biggest item on
> most firms' ledgers. They will reduce it however they can. And once the
> change is made, there is little chance that the job will come back.
>
> It is a little like a battle. In an attack, troops often get separated.
> They are 'lost' - for a while. Then, the winning side is able to
> recover its missing troops as it advances. But the losing side gives up
> its troops forever. They are stuck behind enemy lines and cannot rejoin
> their units.
>
> We are now on the losing side of a credit battle. Having gained so much
> ground, and so many jobs, in the advance, the United States is now
> giving them up.
>
> Bill Bonner
> The Daily Reckoning
>
> --
>
> "be wary of mathematicians..especially when they speak the truth."
> --sT. Augustine
> to email me, delete blackhole. from my return address
Some are suggesting a DOW of 6,500 by late December.
tt
Lawyerkill
Oct 7, 2009, 3:26:57 PM10/7/09
to
>
> - Show quoted text -
Some are suggesting Congress pass a law to make it legal to shoot
crossposters
AZDuffman
Oct 7, 2009, 3:55:54 PM10/7/09
to
I'll write mine to vote for it.
Sanders Kaufman
Oct 7, 2009, 10:11:22 PM10/7/09
to
"martin" <martin.s...@gmail.com> wrote in message
news:1c6c00f5-c08b-441b...@l35g2000vba.googlegroups.com...
news:1c6c00f5-c08b-441b...@l35g2000vba.googlegroups.com...
Those are the same folks who predicted that Sarah Palin would win, and who
celebrated when the US lost the Olympics.
I wouldn't take their predictions too seriously.
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