Okay, so we're on a doomsday dive toward massive roasted homestead territory. Millions are about to get spit out of the corporate back door. Millions, as in ... 15 millions. So what's with this 2.5 million jobs bit, Mistah Barracket?
Christ on a bagel, everywhere he goes, every time he speaks, its "2.5 million jobs... 2.5 million jobs..."
Fellow yankers, our nicely browned prez-elect drones on these days like.... a hypnotist, eh? "America, you're growing sleeepy... sleeeepy... sleeeepy."
I got two questions: first, where'd that number come from?. Second, and more importantly -- where in the fuck decent green and blue-skyed can that pissant of a job number hope to lead us to anyway?
Here's my guesses:
Barrack's magic job creation number came right out of Larry Summers' asshole. Without a shitload more, it will drive us and our economy to a tender spot where we're still only a short putt from the hellhole we're headed for right now.
By my calculations, between fiscal deficits and trade gap reductions, the nation's macro net demand-increasing effects will need to induce, as noted above, 15 million jobs -- which is well more than ten percent of what we have right now.
And that's figuring on a bare minimum spontaneous job slough-off process. The silk-hatters have visions, I suspect, of more like 20 million net sloughs, but that's another post.
Obviously we can't get anywhere near that on Obie's plans, at least as so far announced. Even given a few hidden ball tricks, we'll need in addition a freakishly huge shift in our trade balance, considering the present globe-wide simultaneous import contraction. Unless we act to counter it, a massive wave of feeblization is about to hit our export sector.
Recall that we had galloping exports last year and that kept our whole production system hovering over the abyss, instead of plunging into it. But now any job-inducing, net-trade-gap-closing, abyss-fall-rate-decelerating on the international front must come from (drum roll, please) import reduction.
Ya, I know, there's a big plus there. Look at oil. That oughta knock a couple hundred bills off the trade deficit all by itself. Fine. You just bought us maybe two million more jobs. Combined with Obie's green-thumb army, that still leaves, what, 10 million jobs to go.
They'll not come from any other sources of potential trade improvements -- except consider this: given no forex effects, we have only tumbling commodity prices. But this cuts both ways. Save oil, and we're confined by present policy to import reduction. That won't induce the needed weaker dollar. Recall the post-crisis "flight to safety" effect. The rush out of risky currencies and into the imperial dollar has raised dollar forex rates when they needed to go lower. The international credit/default paper catastrophe has reversed that lovely tailwind the falling dollar gave us into a strapping headwind.
Prove it, you say? Let's go to the textbooks.
Munch through any of 'em, and you'll find only two possible kinds of trade demand shifters, and thus gap changers: 1) Substitution effects, where changes in relative value between domestic and foreign prices change amounts of each bought.
Sorry, that's out. We ain't gonna shift from higher-price imports to lower-price domestics, not with a dollar heading back up toward capital-export heaven. Strong dollars obviously only make the domestics relatively more expensive. So that leaves only:
2) Income effects -- shifts that are the result of relative trade budgets. That here translates very nicely as "expenditure reductions". If those reductions, made on our side, outweigh the reductions on the foreign side -- if, in particular, we the many big fat ugly job- and credit-line deprived and wage-depleted American boobiators, cut our purchases of imports more than the fast income-sinking foreign hordes reduce their purchases of our exports -- then we'll create domestic jobs.
In brief: laying a ton of us off, freezing the comp of the rest of us, will indeed work. Putting us on short rations will cut our import demand, right along with everything else, and by routes circuitous put some of us back to work.
To put way too fine a point on it: we'll need to destroy 6 million jobs to gain back 2 million.
Yes, further hope of lift from trade balance improvements exists, shipmates, but it only exists as an easing of our entrained doom spiral.
(One of Father Smiff's sardonic Latin maxims oughta get tagged on here, don't you think?)
On the trade front, if we want gains of, say, another 8 million sustainable jobs, we'll need direct bold big-gubmint action. Just like on the fiscal front, we'll need an intentional return -- with a vengeance -- to a falling dollar. And as things are crumbling away now, world market-wise this won't happen unless Uncle makes it happen through a globe-wide exchange-rate realignment, which includes a serious and permanent dollar drop.
Part II to follow.
Comments (8)
Hmmm......
All the blogs nowadays are too deep for this economics-impaired, literature-degreed moron.
So, yeah, sure I agree.
Some questions, though---
1. massive govt. spending is now touted as the cure. Much is being made over FDR's return in 1937 to balanced budgets and the subsequent recession-within-the-depression. Is massive govt. spending akin to the New Deal still a possible remedy to our current meltdown?
2. Obama's stimulus plan. Too larded with business "incentives", and too skimpy on direct govt. involvement with needed infrastructure--mass transit for one--as opposed to roads/green energy needs. Agree or disagree?
Posted by sleepy | November 24, 2008 9:53 PM
Posted on November 24, 2008 21:53
so who's day will be more than saved
via competitive devaluation(s)
gosh o golly owen we b
past that straight to
system
failure austerity
y todos las
malaventuras
o pues
bien
Posted by Juan | November 25, 2008 12:31 AM
Posted on November 25, 2008 00:31
as to 2
we are in complete agreement
these trillion dollar bails
in fact are not even incentives
to job creating action
they're systemic insurance payments
for loses taken thru
voluntary acts of profiteering
as to 1
yes uncle can force feed us to freedom and prosperity
free us
from our mutual chains of private debt
and from our paralytic inaction
under the present spell poor profit prospects
and consequent corporate investment collapse
we need uncle to act and spend...like now man
massive spending on real stuff by uncle
and
by means of uncles credit line
plus
transfers back to jobblers
of huge hunks of 20 years of excessive
payroll tax receipts
and then He's gotta keep acting and spending
we got have
a full employment balance trade dollar
plus
a wealth tax
plus
a green clean self sufficient production machine
plus
a mark up cap and trade system
for the corporate sector
plus
single payer health
plus
a single insurer source
and single lender source
ie
hook all these financial systems directly to uncles still to be completed and rationalized
credit and insurance system
thru mandatory corporate premia payments
but that's for a future post
Posted by op | November 25, 2008 7:50 AM
Posted on November 25, 2008 07:50
"They'll not come from any other sources of potential trade improvements -- except consider this: given no forex effects, we have only tumbling commodity prices. But this cuts both ways. Save oil, and we're confined by present policy to import reduction. That won't induce the needed weaker dollar. Recall the post-crisis "flight to safety" effect. The rush out of risky currencies and into the imperial dollar has raised dollar forex rates when they needed to go lower. The international credit/default paper catastrophe has reversed that lovely tailwind the falling dollar gave us into a strapping headwind"
possibly the most brambled up passage
in living memory ...and i wrote it
get rewrite !!!!
"They'll (these 10 million sustainable jobs)not come from any other sources of potential trade improvements
consider this
tumbling commodity prices cut both ways
yes oil is dropping but likewise corn cotton rice hog meat are tumbling to eh ???
we/re spomtaneously adding back from oil yes but at the same time
spontaneously subtracting from our own agri exports....
beyond that-- unless uncle is prepared to induce a weaker dollar--we're confined by present policy to import reduction
-----spontaneous forex effects underway ??
Recall the post-crisis "flight to safety"
The rush out of risky currencies
and into the imperial dollar has raised dollar forex rates when they needed to continue to go lower.
The international credit/default paper catastrophe has reversed that lovely tailwind the falling dollar gave us into a strapping headwind----
Posted by op | November 25, 2008 8:13 AM
Posted on November 25, 2008 08:13
OP, please define "sustainable" ("On the trade front, if we want gains of, say, another 8 million sustainable jobs...").
Are you talkin' Steady State (SteadyState.org)?
I apologize if your written intentions and meanings are obvious to most but they are rarely clear to me.
Do you or do you not believe that Earth is an infinite ball of resource cheese?
"I think we are in the midst of this period where we are committing suicide on the planet and everybody is just using up all of our natural resources like a bunch of insane people. That’s what I worry about more than I worry about jazz."
- Sonny Rollins
That's what I worry about more than creating more unsustainable-by-definition business-as-usual jobs or "fixing" an economic model based on the myth of infinite growth on a finite planet.
It seems to me you're talkin' branches not roots.
And as far as oil goes, I'll stick with science instead of religion (a/k/a economics):
"Three out of five petroleum geologists surveyed believed that global oil production would 'peak' within 10 years." "...[M]ore than one in 10 petroleum geologists surveyed believe that the peak has already occurred but has been masked by delays and ambiguities in the international production data."
- gristmill.grist.org/story/2008/11/3/102836/827
---
"The problem is, of course, that not only is economics bankrupt but it has always been nothing more than politics in disguise ... economics is a form of brain damage."
- Hazel Henderson
"Consumption of resources is rising rapidly, biodiversity is plummeting and just about every measure shows humans affecting Earth on a vast scale. Most of us accept the need for a more sustainable way to live, by reducing carbon emissions, developing renewable technology and increasing energy efficiency.
"But are these efforts to save the planet doomed? A growing band of experts are looking at figures like these and arguing that personal carbon virtue and collective environmentalism are futile as long as our economic system is built on the assumption of growth. The science tells us that if we are serious about saving Earth, we must reshape our economy."
- How our economy is killing the Earth, New Scientist (10/16/2008)
Posted by MonkeyMuffins | November 25, 2008 8:19 AM
Posted on November 25, 2008 08:19
"so who's day will be more than saved
via competitive devaluation(s)"
a whole set of posts on this might clarify things here
being as it is my very speciality and all
let this suffice
the rebuilding of the existing
system of forex rate trade and payments regulation
must be by universal...
and by covert center metropole imposition
not collegial agreement
ie imperial dictat by velvet glove means
which is to say
by benign despotism
it must be
institutionally embodied
and perminently empowered
and world wide co ordinating
flexibly dynamic ..etc etc etc
in other words
a bretton woods II
that makes BW I
look like... the articles of confedreation
to its ...slaveholders more perfect union constitution
Posted by op | November 25, 2008 8:24 AM
Posted on November 25, 2008 08:24
"Do you or do you not believe that Earth is an infinite ball of resource cheese"
i have a faustian faith in innovation
so yes if cheese is the primal glem
i rely like a baby at mama's breast
on humanians ability to discover
benign substitutes as well as malign substitutes
for present resource reservoirs
under proper stress
institutions disolve or morph
including maybe even
the fambly
childhoods end ???
just scotch
the glory of my me me i
child birth
Posted by op | November 25, 2008 8:37 AM
Posted on November 25, 2008 08:37
should i hear cromerian
echoes or is tha
the scotch
Posted by Juan | November 26, 2008 10:47 PM
Posted on November 26, 2008 22:47