Why Does What We Hear Not Match What We Feel?

[Gaspar]

"The official unemployment rate isn't telling the whole truth. What the government calls "the unemployed" is not what American workers think of as the unemployed. To be unemployed in the eyes of the government, a worker must not have a job and have searched for work at some point within the previous month. If a worker gives up looking for a job for more than a month, that worker is no longer counted as unemployed. What this means is that, during periods of prolonged unemployment, the official unemployment rate will decline over time simply because the government stops counting unemployed people who know they don't have a chance at a job until the economy turns around.

The reason the unemployment rate has remained stubbornly fixed at such a high level is that our political leaders—even after four years of conducting the most expensive economic experiment in human history—still don't know what it is that makes an economy grow. They could have saved us a tremendous amount of pain plus several trillion dollars in wasted money if they had simply asked a few economists who didn't have a vested interest in telling them what they wanted to hear."

http://www.usnews.com/opinion/blogs/economic-intelligence/2012/04/03/why-it-doesnt-feel-like-the-economy-is-getting-better

Depressions and mass unemployment are not caused by the free market but by government interference in the economy. – Ludwig von Mises

[Hoss]

"The official unemployment rate isn't telling the whole truth. What the government calls "the unemployed" is not what American workers think of as the unemployed. To be unemployed in the eyes of the government, a worker must not have a job and have searched for work at some point within the previous month. If a worker gives up looking for a job for more than a month, that worker is no longer counted as unemployed. What this means is that, during periods of prolonged unemployment, the official unemployment rate will decline over time simply because the government stops counting unemployed people who know they don't have a chance at a job until the economy turns around.

The reason the unemployment rate has remained stubbornly fixed at such a high level is that our political leaders—even after four years of conducting the most expensive economic experiment in human history—still don't know what it is that makes an economy grow. They could have saved us a tremendous amount of pain plus several trillion dollars in wasted money if they had simply asked a few economists who didn't have a vested interest in telling them what they wanted to hear."

http://www.usnews.com/opinion/blogs/economic-intelligence/2012/04/03/why-it-doesnt-feel-like-the-economy-is-getting-better

Depressions and mass unemployment are not caused by the free market but by government interference in the economy. – Ludwig von Mises

Really?  Can you not correlate the current 'recession' to the huge bubble in 2008?  Which was mainly caused by lack of regulation?

Boggles the mind sometimes.

Awaiting your colorized font filled reply.

[Gaspar]

Really?  Can you not correlate the current 'recession' to the huge bubble in 2008?  Which was mainly caused by lack of regulation?

Boggles the mind sometimes.

Awaiting your colorized font filled reply.

Oh, I get it.  We're just getting back to normal, right?

[Hoss]

Oh, I get it.  We're just getting back to normal, right?

Do you or do you not agree with my assessment?

Is it any wonder people question your credibility around here?

[Gaspar]

Do you or do you not agree with my assessment?

Is it any wonder people question your credibility around here?

We have gone over this before, again and again, and you should be aware of my opinion.

Bubbles don't happen, they are created.  They are not a product of the free market, they are a product of manipulation.

The moment our government demanded that lenders finance people with no proven ability to repay, the door was opened, and the rats scurried in fueled by government backed debt.  Politicians rejoiced because it represented the largest single vote purchase in history.  Congress was warned 17 times over almost a decade that it was a bubble with devastating consequences, but they chose to kick the can.

Regardless of the result, there is no precedent for continued levels of unemployment this high.  That is due to a continued worship of poor economic policy that continues to encourage uncertainty through the demonization of the free-market and failure to recognize small business as the impetus for job growth.

Green

[RecycleMichael]

That last year of Bush really sucked. It is a good thing Obama was able to turn that around in his second year.

[Ed W]

Prior to the establishment of government regulations on the markets, we had the celebrated Depression of 1893:

The Depression of 1893 was one of the worst in American history with the unemployment rate exceeding ten percent for half a decade. This article describes economic developments in the decades leading up to the depression; the performance of the economy during the 1890s; domestic and international causes of the depression; and political and social responses to the depression.

The Depression of 1893 can be seen as a watershed event in American history. It was accompanied by violent strikes, the climax of the Populist and free silver political crusades, the creation of a new political balance, the continuing transformation of the country's economy, major changes in national policy, and far-reaching social and intellectual developments. Business contraction shaped the decade that ushered out the nineteenth century.

http://eh.net/encyclopedia/article/whitten.panic.1893

The robber barons who sat atop our economy through the Gilded Age would have been jailed for their manipulations in more recent times.  Their excesses lead directly to the election of Teddy Roosevelt and brought about progressive reforms that are still with us.

So in one sense, perhaps we should be applauding the 1% and their efforts to both disenfranchise us and eliminate the middle class.  People who have no voice and nothing to lose are more likely to take up torches and pitchforks, and knock down the walls of those "gated communities."

[nathanm]

Prior to the establishment of government regulations on the markets, we had the celebrated Depression of 1893:

I prefer the panic of 1907 as an example, but I clearly don't need to tell you that panics, bubbles, and the whole thing existed long before government regulation was involved. Somehow during the zenith of the regulatory state we managed to go an unusually long time without any such events, but surely the regulations had nothing to do with it.

Gaspar, it continues to amaze me that you blame the 2000s bubble on regulation. Which regulations, pray tell, were responsible for hedge funds buying up toxic assets? Which regulations were responsible for the ratings agencies choosing to forgo any due diligence on the securities they were rating? Which regulations popped the securities at the heart of the bubble into existence? Why is it that the bubble didn't happen until after regulations on financial institutions were relaxed?

[we vs us]

I prefer the panic of 1907 as an example, but I clearly don't need to tell you that panics, bubbles, and the whole thing existed long before government regulation was involved. Somehow during the zenith of the regulatory state we managed to go an unusually long time without any such events, but surely the regulations had nothing to do with it.

Gaspar, it continues to amaze me that you blame the 2000s bubble on regulation. Which regulations, pray tell, were responsible for hedge funds buying up toxic assets? Which regulations were responsible for the ratings agencies choosing to forgo any due diligence on the securities they were rating? Which regulations popped the securities at the heart of the bubble into existence? Why is it that the bubble didn't happen until after regulations on financial institutions were relaxed?

Oh oh oh, don't forget Glass-Steagall!

[erfalf]

I prefer the panic of 1907 as an example, but I clearly don't need to tell you that panics, bubbles, and the whole thing existed long before government regulation was involved. Somehow during the zenith of the regulatory state we managed to go an unusually long time without any such events, but surely the regulations had nothing to do with it.

Gaspar, it continues to amaze me that you blame the 2000s bubble on regulation. Which regulations, pray tell, were responsible for hedge funds buying up toxic assets? Which regulations were responsible for the ratings agencies choosing to forgo any due diligence on the securities they were rating? Which regulations popped the securities at the heart of the bubble into existence? Why is it that the bubble didn't happen until after regulations on financial institutions were relaxed?

I don't know about Gaspar, but I wouldn't blame it on regulation so much as bad policy.

I don't think you guys are necessarily arguing for more regulation. Obviously some regulation is needed. But I think you would agree that just adding more on top of bad regulations wouldn't be good either. The SEC for example is so deathly afraid to investigate anything, it would be pointless to add to it until it is strengthened or refocused.

[nathanm]

I don't know about Gaspar, but I wouldn't blame it on regulation so much as bad policy.

Ok, replace which regulation in my previous questions with "which policy". I really am interested in the answer, because I can't for the life of me figure out which policies (or regulations), other than the general trend of deregulation, that pushed hedge funds, banks, ratings agencies, and mortgage brokers to lie, cheat, and steal. At every step of the way, the federal regulators showed how toothless they were by responding to wrongdoing with small fines and little extra scrutiny.

You probably feel differently, but I think poor regulation happens when people who don't believe in what they're doing are placed in charge of regulators. At that point, it doesn't matter how well written or poorly written the laws and regulations are. This is my most fundamental disagreement with Republicans in general. Republicans who gain the Presidency tend to nominate people to head agencies who don't believe in government, much less the agency's mission. I think that's a recipe for disaster.

To be fair, Clinton was guilty of the same thing, at least in the SEC and other financial regulatory bodies.

[TulsaRufnex]

[TulsaRufnex]

[heironymouspasparagus]

The reason the unemployment rate has remained stubbornly fixed at such a high level is that our political leaders—even after four years of conducting the most expensive economic experiment in human history—still don't know what it is that makes an economy grow. They could have saved us a tremendous amount of pain plus several trillion dollars in wasted money if they had simply asked a few economists who didn't have a vested interest in telling them what they wanted to hear."

You keep going all "Shadows" on us...what's the deal with that??

That blue line has never been close to the red - else there would not be a million trained, degreed engineers in this country who have gotten out of the profession over the last 25 years or so, because they cannot find engineering jobs.  And that doesn't even include the ones who went to other fields to be sales/managers/etc.  Thereby losing our society the benefit of technical expertise that everyone keeps jawing about such a shortage of.

As for the second part of your "Shadows" moment - "still don't know what it that makes an economy grow" - well, you are still stuck back in June, 2009 - just before the economy started to grow at over twice the rate that it grew during the Bush regime, and now, when the deficit has been reduced by half of what it was in Bush Baby's last fiscal year.  Yeah, I can see how you would think double the growth and half the deficit would be an economic disaster for the US.  That's what Limbaugh/Hannity/O'Reilly and Romney keep saying, too.  Wow!  Wouldn't it be refreshing if those guys would actually tell the truth - just once!!

[Conan71]

Still visiting the meme pages, eh Ruf?