Final Concert: San Diego Symphony
Garrett Harris 10:39 p.m., May 24
Private sector employers added only 71,000 jobs in July, according to Labor Department numbers released this morning (Aug. 6). That's three straight months of anemic private job growth, portending a weakening economy. Overall, the economy lost 131,000 jobs in July, mostly because 143,000 temporary census jobs ended. Even worse, the number of private job gains for June was revised down to 31,000 from 83,000. The unemployment rate remained at 9.5% and the underemployment rate, including unemployed who have given up looking for work and those working part-time who would prefer to work full-time, stayed at 16.5%.
Stock market futures dropped sharply at the news. However, that could change. Economists believe the Federal Reserve may be forced to resume quantitative easing, or the purchase of long-term paper to drive long rates down artificially. Those rates are already down to levels not seen for decades. The Fed is already loaning short-term money to banks at effectively 0%. Stocks often react more to liquidity than the state of the economy.
Comments
Founder Aug. 6, 2:35 p.m.
I think we are getting ready for yet another "drop" in the National economy and it will be larger than expected if the "rest" of the Summers financial news is as bad as it is now!
Fall and Winter are just around the corner, and if things don't get better fast then the USA will have a bleak XMAS as folks try and pay inflated heating bills.
San Diego itself will, by that time, have suffered through another very expensive Ballot Barrage and folks will still still be wondering if the City is Really in debt or Really, Really, in debt after spending so much time (and Money) trying to pass a 1/2 percent tax increase that will do nothing to solve our larger problems of fiscal abuse.
I wanted to get an idea of what the cost of the City's Debt Obligation* is per day is not counting any Redevelopment Agency costs and here is what I came up with: ....................................................................... FY 2011 General Obligation Bonds..................................................... 2 Million General Fund Backed Lease-Revenue Obligation Bonds.. 49 Million Wastewater System Obligations ........................................ 103 Million Water System Obligations.................................................... 65 Million
Total (Rounded Off).......................................................... 219 Million
So $219,000,000 ÷ 365 = $600,000 PER DAY and that's a rough estimate!
Attention: Accounting folks, perhaps you can provide us a more accurate number! * http://www.sandiego.gov/fm/proposed/pdf/2011/vol_1/08_debt_obligations.pdf
Visduh Aug. 6, 7:12 p.m.
Can't say there is any real surprise in all this. As you've pointed out Don, along with many others, this Wall Street rebound has not led to a Main Street rebound at all. In fact, a real bounce in new hires, sales, profits would result in the Fed cutting back on the interest-free lending, and that would mean stocks would fall. This current disconnect of the economy and the prices of financial assets will have to end before the economy gets going again. And I also think it will require a whole new set of economic policies, some involving pain, probably due to a change of administration in Washington.
dbauder Aug. 6, 9:22 p.m.
Response to post #1: Consumers are definitely cutting back -- spending less and saving more. Long term, that's good. Short term, it brings pain. Best, Don Bauder
dbauder Aug. 6, 9:24 p.m.
Response to post #2: If the economy really started to grow stoutly, inflation would take off. That's why the leadership, both the Fed and the government, actually prefers a very slow rebound, although the voters aren't told that. Best, Don Bauder
refriedgringo Aug. 6, 9:53 p.m.
@ #4: You nailed it. Makes me wonder about just how much this "economic recovery" is going to be controlled, now that there's an enormous money supply flooding everything.
Founder Aug. 7, 10:30 a.m.
Reply to #5 and the slower the better is also a big WIN for the Ultra Wealthy as more folks continue to drop out of the middle class and enter the poor class; and the shopping spree continues for those with money...
dbauder Aug. 7, 2:50 p.m.
Response to post #5: Bernanke says publicly that he wants the banks to loan out money more generously. But it's my understanding the Fed is warning banks to be conservative. The reason is that if the economy started to grow stoutly, inflation would erupt. The 1970s would look like a picnic. All the money that has been created is lying on the ground like gasoline. All it takes for an explosion is a match. A V-shaped recovery would be that spark. Bernanke is talking out of both sides of his mouth. He's not the first Fed chairman to do so. Best, Don Bauder
dbauder Aug. 7, 2:54 p.m.
Response to post #6: The worsening income and wealth inequity is a major social problem. One day, the people will storm the Bastille, figuratively. It is an economic problem, too. The ultra-wealthy will wake up at some point and wonder where their markets went. They will have no one to blame but themselves for the destruction of the middle class. Best, Don Bauder
SurfPuppy619 Aug. 7, 7:27 p.m.
I know how to fix the economy.
Start putting a 100% tariff on all goods imported into the US.
We would shut down imports-forcing us to make our own goods-thereby building OUR MANUFACTURING BASE, AND BUILDING OWN economy instead of China, India or Korea.
Would we be in a trade war?? Yep, and we would be the big winner in it b/c we are the largest consumer nation in the world.
Our exports are a drop in the bucket compared to our imports.
Ponzi Aug. 7, 9:22 p.m.
US companies are hiring thousands of people right now.
In China, India and other countries.
refriedgringo Aug. 7, 9:31 p.m.
"Start putting a 100% tariff on all goods imported into the US."
That computer you're typing away on would cost $5,000 dollars. Your car? $50,000. You can't simply tariff like that, SP. Imports are very important to the U.S. manufacturing base because the components are an important aspect to what the U.S. manufactures as an end product. Everything depends on everything else.
SurfPuppy619 Aug. 8, 7:55 a.m.
That computer you're typing away on would cost $5,000 dollars. Your car? $50,000. You can't simply tariff like that, SP. Imports are very important to the U.S. manufacturing base because the components are an important aspect to what the U.S. manufactures as an end product.
Refried;
Yes, we would pay MORE for products, I do not dispute that fact. BUT , the middle class would eb MAKING MORE, and even more important than that is the fact that the money would be STAYING within our own country-driving OUR economy and not China’s/
Face the facts, the country has gone into a decline the last 20-30 years, directly correlated with the exporting of our manufacturing base. Middle class wages have been flat since 2000, and most likely have declined during the last 18 months. The U-6 CA unemployment rate is 22%.
These are a direct result of exporting our job and tax base to China and others.
If we want to rebuild, if we want to dominate, if want to be great again, we need to build our manufacturing and tax base back up-otherwise China is keep growing and expanding, at our expense, until they really don't need us anymore-then they will stop buying our annual trillion dollar debts and drop the economic atom bond on us by selling the US debt they already own.
Ponzi Aug. 8, 8:02 a.m.
They also might pollute themselves into oblivion.
Founder Aug. 8, 9:19 a.m.
Regarding #12 & #13
Where China goes so does the USA, financially we are becoming the same; in fact, much of the Worlds economy is so interlinked that if one (think dominos) fails then many more will follow. The good news is that this financial inter dependance is probably doing more for World peace than all the Ambassadors and the UN put together; if the cost of starting a war does not make "sense" then the bean counters will probably out shout the war mongers...
In my mind, the USA is in the same situation as Great Britain was, when they lost the Revolutionary War; the once proud World Leader started their slide toward where they are today.
My suggested solution is to tax the Ultra rich and use 100% of that money to fund infrastructure repair work; which would create millions of good jobs and move our Country toward a Greener future... Of course for that to happen, our Congressional Leaders would have to "bite the hand that feeds them" and most would not DARE vote to tax their largest campaign donators, EVEN IF IT WOULD HELP OUR COUNTRY!
Greed is ruining the USA!
All of US need to ask daily, "Where are ALL the new Green Jobs"?
dbauder Aug. 8, 9:25 p.m.
Response to post #9: Look out. Economists are gunning for you. Heresy is not permitted in that profession. Best, Don Bauder
dbauder Aug. 8, 9:28 p.m.
Response to post #10: No doubt you have heard the story: a guy is depressed, can't get a job anywhere. He is desperately downcast. He calls the suicide prevention hotline. His call is shifted to a help desk in Pakistan. A delighted voice on the other end says, "Great. Can you drive a truck?" Best, Don Bauder
dbauder Aug. 8, 9:30 p.m.
Response to post #11: SP knows that. He was teasing. Best, Don Bauder
dbauder Aug. 8, 9:33 p.m.
Response to post #12: Maybe you weren't kidding. Most economists feel that the heavy tariffs were one of the major causes of the Great Depression. That said, you are correct that the shifting of our manufacturing base overseas in the last 25 years has been disastrous. Best, Don Bauder
dbauder Aug. 8, 9:35 p.m.
Response to post #13: That's already happening. Best, Don Bauder
dbauder Aug. 8, 9:39 p.m.
Response to post #14: Greed is our ruination -- true. We should put heavier taxes on the superrich -- true. Congress is unlikely to enact those taxes because of the reasons you cite: the pols are owned by the superrich. We need trade, but we must make it more equitable. Best, Don Bauder
Twister Aug. 10, 4:44 p.m.
We, the US, have not merely exported jobs, we have degraded our talent--especially at the industrial level. For example, as machinists die off, they are not replaced. You could say that doesn't matter because machining is "all" done by computer-machinists now, and what we need is not more machinists but more programmers and computer operators.
And, you might be right. That might be as good a GUESS as the first scenario. But we don't KNOW. At least I don't have solid statistics to back up my observations. But I do know that the information that older skilled workers have is not being passed along through our industrial complex as the journeymen take a hike, looking for "greeter" positions and anything they can get to preserve a few shreds of their dignity or slip into oblivion.
That's part of the pain we have, not the pain we would like to have, as any of our highly-paid (did I fail to say "skilled?") bean-counters will admonish us. Assuming that We, the US will actually force manufacturing and other honest work back to our territory, we will have to factor in the brain-drain that accompanied our job-drain and the cost of re-training along with re-tooling. One might say that would have a "stimulus" effect, but there would also be a lag-effect.
The devil continues to be in the details, tired (and tattered, and honored more in the breach than in the observance) though that aphorism may be, we still don't know them. Could it be that they lie in the realm of the leading-edge of a shifting bell curve that classical statistics considers insignificant and "un-shifty?"
So We, the US, might not slip (trip, dive) into a Depression, but I suggest that the longer we delay effectively combating the accelerating trends by rewarding the forces that forced the bubbles that gave us this legacy of confidence in a "recovery" (to what, exactly?), the balloon that is being puffed up by more and more hot air must be catastrophically be consumed thereby.
THAT depression will make the thirties look like a tea-party.
dbauder Aug. 10, 9:13 p.m.
Response to poset #21: The U.S. machine tool industry is ailing. Best, Don Bauder
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