This is not what leadership looks like

[erfalf]

Quantitative Easing

Natural cycles, high energy prices, there are plenty of reasons that manufacturing is returning.

In all fairness, we are just getting back to places equivalent to early 2009. We are still a far cry from anything like it was in early 2000's.

Personal opinion only, but I think many companies took the opportunity to shed some unneeded workforce when the recession came around, and as a result became more efficient therefore more profitable. That, in my opinion, is probably the biggest reason the stock market has been performing so well. Whether or not QE worked (which it seems to at first) they need to stop now. Most research points to diminishing returns and the more QE that occurs the higher chances of inflationary problems. The economy is taking a step forward, hopefully it doesn't take two back.

[nathanm]

Quantitative Easing

I would buy that explanation if it were actually pushing the value of the dollar down in any significant way.

erfalf, the folks who claim that QE is (significantly) inflationary are the same folks who have been predicting doom and gloom hyperinflation for over four years now. Their models are clearly lacking.

[Conan71]

Natural cycles, high energy prices, there are plenty of reasons that manufacturing is returning.

In all fairness, we are just getting back to places equivalent to early 2009. We are still a far cry from anything like it was in early 2000's.

Personal opinion only, but I think many companies took the opportunity to shed some unneeded workforce when the recession came around, and as a result became more efficient therefore more profitable. That, in my opinion, is probably the biggest reason the stock market has been performing so well. Whether or not QE worked (which it seems to at first) they need to stop now. Most research points to diminishing returns and the more QE that occurs the higher chances of inflationary problems. The economy is taking a step forward, hopefully it doesn't take two back.

Your personal opinion is backed by people I talk to daily who are in a position to create jobs...or not.  We've all learned to do more with less.  The go-getters and over-achievers all have great paying jobs.  Companies jettisoned a lot of dead wood and mediocre performers.  Companies are also carrying less inventory and their customers have gotten used to longer lead times, though that can eventually end up sending business elsewhere.  I had a long conversation today with a customer who is using another vendor for the bulk of their combustion systems and their lead times are starting to become problematic which means they may shift more business our way.  All fine and good as long as our partners don't get over-burdened and the cycle repeats itself.

[heironymouspasparagus]

Could it be possible that the Republicans are not the only ones willing to compromise?

Geez..you can't even remember two years ago.  Obama was the one who compromised - wrongly - on extending the Bush tax cuts.  Stupid thing to do at exactly the time when expiration would have been a good thing for our economy.  Except for the even better time about 2 years after they were first made.

[heironymouspasparagus]

Natural cycles, high energy prices, there are plenty of reasons that manufacturing is returning.

In all fairness, we are just getting back to places equivalent to early 2009. We are still a far cry from anything like it was in early 2000's.

Personal opinion only, but I think many companies took the opportunity to shed some unneeded workforce when the recession came around, and as a result became more efficient therefore more profitable. That, in my opinion, is probably the biggest reason the stock market has been performing so well. Whether or not QE worked (which it seems to at first) they need to stop now. Most research points to diminishing returns and the more QE that occurs the higher chances of inflationary problems. The economy is taking a step forward, hopefully it doesn't take two back.

Here is some help for your faulty memory...or lack of any sense of history - pick your favorite.  Pretty obvious that we have been above the "early 2000s" since at the very latest, Jan 2011.  And note how the growth rate has been over double what it was through the entire Bush term, in half the time.  That is a factor of 4 to 1 growth rate.  (I thought you studied business?  Doesn't that include rates of growth and stuff like that?).

Overall, we are still WAY too low on the curve, mostly due to the policies in place since the 60's (Jan 67 is the start of this graph) that have encouraged manufacturing to move overseas.  (Things like NAFTA - and no, I am not saying NAFTA was around in 1967.  One sided tariff/duty policies.)

Interesting how another huge drop occurred while we "enjoyed" the economic growth of the Reagan years.  And how the "oh, so terrible" economy of the Carter years was actually just about the same as that enjoyed during the Baby Bush lack of response to fix things during the '01 dump.  We were down a little bit from June 00 until Jan 01, when Bush took over.  Took him a full year to even start back up, then it mended much slower than the current event.

And also, see how noticeably less bad Carter's was than Reagan's.

http://www.crgraphs.com/2011/09/manufacturing-graphs.html

[heironymouspasparagus]

Natural cycles, high energy prices, there are plenty of reasons that manufacturing is returning.

Yeah, I know... I'm picking on you a little tiny bit here.  But not TOO much...  First, you just make it too easy.  Second, you don't even bother to look to the past.


Now, if you want a little more info about US economic history - here is an interesting overview.  This last recession, we lost economic activity from about $14 trillion GDP to about $13.5 GDP.  Virtually nothing in the overall scheme of things, but a fantastic excuse to dump people and make the remaining ones take up the slack.  Compared to some of the ones at the last of the 19th century, when economic activity dropped 30% to 40%, we had a non-event this time.  That somehow is being perpetuated as something 'catastrophic'.  Gee, I just wonder where THAT comes from....??

The graph on this link shows how the Federal Reserve System has been a major influence in moderating the massive economic swings we endured through most of our history.  Not perfect, but MUCH better.

http://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States

[Red Arrow]

Here is some help for your faulty memory...or lack of any sense of history - pick your favorite.  Pretty obvious that we have been above the "early 2000s" since at the very latest, Jan 2011.  And note how the growth rate has been over double what it was through the entire Bush term, in half the time.  That is a factor of 4 to 1 growth rate.  (I thought you studied business?  Doesn't that include rates of growth and stuff like that?).

Overall, we are still WAY too low on the curve, mostly due to the policies in place since the 60's (Jan 67 is the start of this graph) that have encouraged manufacturing to move overseas.  (Things like NAFTA - and no, I am not saying NAFTA was around in 1967.  One sided tariff/duty policies.)

Interesting how another huge drop occurred while we "enjoyed" the economic growth of the Reagan years.  And how the "oh, so terrible" economy of the Carter years was actually just about the same as that enjoyed during the Baby Bush lack of response to fix things during the '01 dump.  We were down a little bit from June 00 until Jan 01, when Bush took over.  Took him a full year to even start back up, then it mended much slower than the current event.

And also, see how noticeably less bad Carter's was than Reagan's.

http://www.crgraphs.com/2011/09/manufacturing-graphs.html

Are you looking at Capacity utilization or Production?

[heironymouspasparagus]

And we also went off the gold standard, so that had an impact in smoothing out some of the rough edges.

[Red Arrow]

And we also went off the gold standard, so that had an impact in smoothing out some of the rough edges.

Remember $35/oz(troy) Gold?

[heironymouspasparagus]

Are you looking at Capacity utilization or Production?

Dam good question - and one that I must admit puzzles me a little bit from time to time when I look at these things.  Gotta read some of the explanations for the graphs.  This link goes to that discussion.  They are talking about mine production and utility production when referring to Total Industry, and then they break out manufacturing as a separate line.  Don't know where they put things like refining the ore to make copper, silver, gold, etc.  I would probably consider that manufacturing, but don't know how they look at it.  Oil production versus refining into product might be split the same way, but I can't tell - not enough granularity to the data.

Is the manufacture of batteries strictly manufacturing, or is it the recycling process split from the actual building of batteries?  There are things hidden here, but the overall activity is the point they are trying to show.  And when capacity utilization is fluctuating, chart 2 shows that industrial production is almost continuously increasing showing the magic of increased productivity.  Since it references the previous peak, chart 4 can be slightly distorting, but shows we are actually increasing rapidly...only 6% down now.

http://www.calculatedriskblog.com/2012/08/industrial-production-increased-06-in.html


Huge amount of information there - housing is one of particular interest to our little corner of the world.  And it still sucks.

Chart 2 in Employment graphs shows how brutal this recession has been compared to the other post WWII recessions - and we are still down 3.5%.

[heironymouspasparagus]

Remember $35/oz(troy) Gold?

Yeah...I was around for that.  Not.

I did come across a double eagle that was in beautiful, near mint condition (early 20's IIRC) and I passed it up because it was priced too high at $210.  Seems like they are about $1800 today.  Saint Gaudens was the most beautiful coin ever made, I think.

[cynical]

Remember $35/oz(troy) Gold?

Not really, because in real terms gold hasn't been worth $35 an ounce in the lives of the parents and probably the grandparents of anyone on this forum. Gold is a commodity and has been for eons, the international supply of which is and has been controlled to a large extent by such friendly places as the Republic of South Africa and the Soviet Union/Russia. In a global economy (don't Republicans support that?) pegging the value of a currency to any commodity in production, however scarce, is futile. That is why not a single legitimate economist, liberal or conservative, advocates a return to the gold standard.

Over the past thirty-five years beginning with Carter's appointment of Paul Volcker as Fed Chair, monetarism (connecting money supply to the quantity of good and services being produced) has been amazingly successful in controlling inflation in spite of the volatility of energy prices. Note that because the American Dollar is the monetary lingua franca of much of the world, it is a serious challenge to even estimate the money supply. This considered, the Fed has done a tremendous job of holding down inflation, though at the expense of domestic economic growth.

[nathanm]

Yeah, some might say that the Fed has done a bit too good of a job holding down inflation. It's definitely not uncommon to see economists pine for 4% or so for a few years to help hasten along the demise of the debt overhang.

[Red Arrow]

Not really, because in real terms gold hasn't been worth $35 an ounce in the lives of the parents and probably the grandparents of anyone on this forum.

You must be really young to include grandparents.

The Bretton Woods System, enacted in 1946 created a system of fixed exchange rates that allowed governments to sell their gold to the United States treasury at the price of $35/ounce. "The Bretton Woods system ended on August 15, 1971, when President Richard Nixon ended trading of gold at the fixed price of $35/ounce.

http://economics.about.com/cs/money/a/gold_standard.htm

(Emphasis mine)

[erfalf]

I would buy that explanation if it were actually pushing the value of the dollar down in any significant way.

erfalf, the folks who claim that QE is (significantly) inflationary are the same folks who have been predicting doom and gloom hyperinflation for over four years now. Their models are clearly lacking.

I'm not saying QE is inherently going to lead to inflation, but there is generally a consensus that too much QE leads to diminishing returns which could lead to inflationary pressures mounting up. No doom and gloom, just precaution.