I think the trial payments are very misleading to say the least. I do understand why people call it a scam and in some scenarios i do agree with it. The issue that concerns me is when a homeowners is automatically put on a trial payment for 31% of his/her income and that payment is so low that it makes the homeowner feel overjoyed but in reality to obtain that payment the interest rate would have to be -2.5% yes negative 2.5%. I see this all the time working for a HUD APPROVED COUNSELING AGENCY in Brooklyn NY.
I saw an article with the usual headline "those jobs are not coming back" and then an almost "get over it" as if there is nothing the United States can do.
This is B.S., they could do something about it by reforming these bad trade deals.
Andrews seems to make the case that since the difference between the Unemployed Non-Farm employees and Unemployed Civilian Workforce measures of unemployment are related by a factor similar to that of modern U3 and U6 then they must be decent analogs. The difference factor between the U4 and U6 data from 1994 to 2010 is 1.68. Why does Andrews not assume that the two historical values are analogs for these modern values? In addition, U6 is not a measure of unemployment. It includes individuals who settle for part time work due to economic reasons. A true measure based on data provided by the Bureau of Labor and Statistics is not possible due to the fact that data about workers who have been discouraged for over a year are not recorded. The BLS data can however be used to compute what is essentially a U5.5. This includes all individuals who are available for and want to work but do not currently have a job. This value showed december unemployment and 13%.
our various gov. stats will not, refuse to demand data on offshore outsourced jobs, production offshore as well as workers based on citizenship status (to capture guest workers).....so this is an exceptional point that even with GDP we have a percentage of data that really isn't domestic.
If you see any research into this topic (I've covered a few papers on this on EP) it's really worth writing up a post on it...
for garbage in equals garbage out, skewed raw data upon which so many other calculations are based....
sometimes I flip it on almost for a good laugh but he's produced a (cough, cough) "documentary" and it seems now he is trying to link the term Progressive to the massive Genocides of Stalin, Mao, as well as the Holocaust to the term Progressive.
Unreal. Of course before that they did a survey where only 65% of respondents guess that the Am. revolution happened in the 1770's.
I agree with the gist of what Prof. Taylor says, although I also agree with the underlying weakness pointed in in the Wikipedia article.
The largest underlying weakness is understanding the underlying reason for the change in the economic description from Gross National Product (GNP), to Gross Domestic Product (GDP).
When over half (really the majority) of trade transacted by American-based multinationals was occurring offshore, it was decided that the GNP numbers couldn't accurately measure it (especially as so much of it is either corporate intra-trade -- moving those pencils back and forth, on paper, to increase their prices and decrease taxation -- and/or transfer pricing; same principle at work -- both for "profit laundering" purposes).
That terminology change indicates the other underlying weakness.
His leadoff statement about the clownish media (although he directs it at the populace at large) paying sole attention to this underwear bomber incident certainly is on target.
But then, if the media didn't concentrate on that and a bunch of other superfluous drivel, instead of of questioning why the Dorgan Amendment was voted down (Isn't breaking the pharmaceutical industry's price-fixing cartel a GOOD THING?), and what this health insurance legislation is really about, and....hey...what's up with the economy????
And those damning e-mails against Treasury Clown Geithner?
And all the variances within BLS reports? And the Fed officially buying back 80 percent of those Treasuries (and unofficially, perhaps, funneling those mysterious trillions they refuse to acknowledge to various central banks so they can purchase the remaining 20 percent of those Treasuries)?
Seems like most concerned Americans would wonder what ever became of all those toxic assets, and why do they keep churning out those infinite number of credit derivatives and credit default swaps?
you hit the nail on the head. Every day or at least for a 24 hour news cycle, someone picks something trivial and then beats it into the ground. I would say, for example, Sarah Palin is trivial. I often make up my own joke on these things in the fine print on the Sunday Morning Comics because you've hit the nail on the head, the entire cable news, the papers plus the blogosphere run on these fictional issues...meanwhile the real threat and you've named it, ecoterroism or the war against the U.S. working people and the national economy, is the real issue
and so often these things happen, never to be mentions on cable news or in the press. They are too busy with bubble boy or Michael Jackson or whatever the distraction du jour is.
I think I started EP when I saw over on dailykos the 101 posts on whether Obama's photo had been retouched to make him look darker and that was racist as if darker complexion is racist. That was enough for me!
I've said this for some time, the real recession started with the mass exodus of jobs due to both the China PNTR (started operating in 2000) and massive offshore outsourcing (on steroids, in every corporate "plan" starting in 2000)
and the housing bubble simply masked those effects by overinflating the residential real estate, construction jobs.
Made the unemployment rate look ok and oh yeah, the only way to see the massive labor arbitrage in tech jobs is to
1. count the H-1B and L-1 Visas in the country for they are counted as "workers" thus depressing the unemployment rate for STEM, plus:
2. the total number of jobs in those occupation sectors, which are lower.
Arguing about the mindless "thousand points of confusion" they keep throwing at us (Is the prez for nat'l security or against?....Should amnesty be granted to undocumented workers recruited by corporations?... Is Corporate Leader Reid a racist?.......) is really simply a time-wasting and energy-consuming event they want us to be involved with.
The crucial point is wage suppression and a tax structure which has been restructured, at least beginning in 1966 (really before that), to favor the extremely wealthy and transfer monies from the working and middle classes to them.
Why 1966? Because the Revenue Act of 1914 established the financial transaction tax, which lasted until 1966 and was briefly doubled by FDR during The Great Depression. Further, we have a series of tax changes in the Nixon, Reagan, Bush, Clinton, Bush and now Obama Administrations; all favoring the super-wealthy and stealing from the working people.
We've recently witnessed this stupid incident of that guy burning off his organ while feebly attempting to blow up an inbound airliner to Detroit. The crucial factor, to address what Mr. Oak previously mentioned, was that the majority of the American intel community has been (most expensively) privatized, thus acting far more incompentently at far greater pricing to the citizenry.
What should be focused on is the how and why of the suppression of wages: the disconnection between the minimum wage (which sets the standard for most wages above it in the next three tiers or so) and the productivity levels, which occurred during the George H.W. Bush administration.
There has been a continuum of these anti-worker (and by that I mean everyone making a standard salary below a quarter of a mil) activities dating back from the Johnson Administration.
And all this useless political babble does is make us forget and neglect that card choice which this administration promised to support and appears to have deep-sixed; and any real health reform, which this administration promised to support and has deep-sixed, and on and on and on......
(And now -- with this newest health insurance/health insurance industry subsidization -- they will add another tax on the wages of union workers when they are individually taxed on their health insurance policies.)
Forget those nattering nabobs, and please let us all focus on the econo-terrorism against us.
If you do happen on this book, while all of it is worthy of reading, please immediately turn to pp. 181-182, paying close attention to the first paragraph on p. 182.
Evidently there was a stealth provision in the 2009 stimulus bill which allowed PE firms to purchase their own debt back (which they had taken out on a leveraged loan) at discounted prices and allows them to defer paying taxes on the profit realized (on the difference of the discounted buyback) for five years.
This is yet another tax giveaway/profit maker for the private equity firms, ostensibly removing risk from the banks, but it is really far more involved than that.
They buy back those leveraged loans with yet another leveraged loan from the same originating banks, so they not only realize a profit on the buyback at discount, a profit from not having to be taxed (assuming they ever will be) for at least five years, but it should work out that if the LBO'ed company they originally purchased goes bankrupt, they own the entire thing at an enormous discount, thanks to the way they worked it.
But hold on....these layers of leveraged loans are correlated to existing economic conditions, so should the private equity firms run into trouble (per a number of predictions) then the fallout will be exponentially greater....and of course, all those writeoffs -- by the banks and the private equiteers -- will be transferred onto the national tax base, i.e., we the humble tax paying public.
CR has this post Bubbles and Employment that implicitly supports the argument about flawed macroeconomic policy.
The overlay of the unemployment rate on the graph (green) suggests that asset bubbles push down the unemployment rate, and then when the bubbles burst, the unemployment rate increases significantly. There are other factors too, but the bursting of the bubble probably leads to higher sustained unemployment because many workers have non-transferable skills and need to acquire a new skill set.
Firstly those who are in denial will blame the increases in productivity on technological advances. Part of this is true, but there is a hidden part, in that due to global supply chains and moving production offshore, some of that should not be attributed to U.S. productivity at all, because it's not U.S. wages/workers that are involved in that leg of production.
Secondly, we also have some of U.S. GDP being calculated that also should be attributed to other domestic GDPs because the final products and some of the production is actually going on in other countries.
Manufacturing sector I believe (last 10 years?) has gone from about 15% of the total economy to about 12% currently...
a dramatic shift. Also, high paying jobs are being targeted for labor arbitrage. There was a mass exodus to offshore outsource advanced R&D in pharmaceuticals. Advanced R&D often requires a PhD but at least a B.S. to even work in it. So here are top tier, the highest educated, being subject to labor arbitrage due to offshore outsourcing.
I.T. has been under the worst attack, with entire I.T. departments offshore outsourced and if corporations cannot do that, they use Indian body shops to supply foreign guest workers to do the work in the U.S.
Same is true in high paying engineering R&D. Corporations are using H-1B guest worker Visas as well as offshore outsourcing advanced R&D in all sorts of tech, again to wage repress, arbitrage and most importantly, technology transfer large projects offshore.
Great post and until we get some real action on these affects, I don't believe the U.S. economy has a prayer's chance of recovering.
Look, that entire campaign against Lou Dobbs is bogus. It's generated by a host of special interests who, regardless of any economic realities, want anyone to be shut down who is against "comprehensive immigration reform". Seriously. There are so many outrageous behavior from others, such as Keith Olbermann to Glenn Beck, Lou was tame by comparison. The real motivation to attack Lou was because he brought public attention to a host of issues they don't want people to look at.
Not only did Lou not blame illegals, few even realize he is for some amnesty!
I watched Lou Dobbs every day and there were a few stories that make me cringe, but for the most part, he had on a host of great economists, talked about trade, offshore outsourcing, the lack of labor support and had also a host of politicians to give them voice, such as Bernie Sanders, Peter Defazio, Marcy Kaptur....
So, firstly one needed to see the actual show, now the "jump on the bandwagon" because somebody wrote some crap in a blog that really isn't accurate.
You know how I am aware of this campaign to shut down every single person talking about this via personal attack? Because I was on a conference call demanding all journalists as well as bloggers do this personal attack as a campaign. Pretty amazing! I did not say anything on that conference call, but what I found disgusting was no one, not a single person questioned such an agenda.
I'm sorry but EP is not available for personal attack via some marching orders from a few special interest groups. No way, no how. If the facts bear up on a topic, hey great, but if they do not, no way I want to be some tool for some special interest group, even if that group is identified as left.
many people do when talking about this topic. I certainly don't deny the effects of undocumented workers on supply of labor but my opinion on addressing this matter is quite different than say a Lou Dobbs.
nobody here is blaming the workers, including illegals. Not blaming guest workers either. This is EP so as far as I'm concerned we indeed can look at these realities, mention these things without apologies. I also banned the name calling from the site 100% because it's so impossible to mention any of this. It is labor econ 101 frankly and I do not believe the rules on labor supply have changed for 4000 years because some special interest groups wish it so.
So, yes of course, with a 50% unemployment rate and so on, plus the active recruitment going on (same in India via H-1B visas) S. of the border, no surprise someone would act in their best interest given the limitations of opportunity. That's just assumed (by labor econ itself as well, people would act in their own self-interest).
The point really is the use of various techniques to wage repress and arbitrage. Right now you mention this and one gets name called on "other sites"....
but blaming someone for acting in their own best interest? I don't think that would go on here either, it's a Simpson "doh" of course they would, anybody would.
to provide for his/her family. Sure, they came here 'illegally' but I would do the same thing for my family if faced with those circumstances. But that aside, why did immigrants flock here - better wages than their home country and a relatively open border.
It was POLICY - in this case unwritten and implicit.
It's about time. Are Democrats finally getting it? No matter how much money Wall Street gives them they still have to be re-elected by constituents who are fed up with Wall Street.
Ahh, wishful thinking on my part. Move along - nothing to see here.
RebelCapitalist.com - Financial Information for the Rest of Us.
Or is typically messing with interest rate and term?
RebelCapitalist.com - Financial Information for the Rest of Us.
I think the trial payments are very misleading to say the least. I do understand why people call it a scam and in some scenarios i do agree with it. The issue that concerns me is when a homeowners is automatically put on a trial payment for 31% of his/her income and that payment is so low that it makes the homeowner feel overjoyed but in reality to obtain that payment the interest rate would have to be -2.5% yes negative 2.5%. I see this all the time working for a HUD APPROVED COUNSELING AGENCY in Brooklyn NY.
of a blow out December possibly.
I saw an article with the usual headline "those jobs are not coming back" and then an almost "get over it" as if there is nothing the United States can do.
This is B.S., they could do something about it by reforming these bad trade deals.
Andrews seems to make the case that since the difference between the Unemployed Non-Farm employees and Unemployed Civilian Workforce measures of unemployment are related by a factor similar to that of modern U3 and U6 then they must be decent analogs. The difference factor between the U4 and U6 data from 1994 to 2010 is 1.68. Why does Andrews not assume that the two historical values are analogs for these modern values? In addition, U6 is not a measure of unemployment. It includes individuals who settle for part time work due to economic reasons. A true measure based on data provided by the Bureau of Labor and Statistics is not possible due to the fact that data about workers who have been discouraged for over a year are not recorded. The BLS data can however be used to compute what is essentially a U5.5. This includes all individuals who are available for and want to work but do not currently have a job. This value showed december unemployment and 13%.
our various gov. stats will not, refuse to demand data on offshore outsourced jobs, production offshore as well as workers based on citizenship status (to capture guest workers).....so this is an exceptional point that even with GDP we have a percentage of data that really isn't domestic.
If you see any research into this topic (I've covered a few papers on this on EP) it's really worth writing up a post on it...
for garbage in equals garbage out, skewed raw data upon which so many other calculations are based....
sometimes I flip it on almost for a good laugh but he's produced a (cough, cough) "documentary" and it seems now he is trying to link the term Progressive to the massive Genocides of Stalin, Mao, as well as the Holocaust to the term Progressive.
Unreal. Of course before that they did a survey where only 65% of respondents guess that the Am. revolution happened in the 1770's.
Lots of flashy video techniques too.
I agree with the gist of what Prof. Taylor says, although I also agree with the underlying weakness pointed in in the Wikipedia article.
The largest underlying weakness is understanding the underlying reason for the change in the economic description from Gross National Product (GNP), to Gross Domestic Product (GDP).
When over half (really the majority) of trade transacted by American-based multinationals was occurring offshore, it was decided that the GNP numbers couldn't accurately measure it (especially as so much of it is either corporate intra-trade -- moving those pencils back and forth, on paper, to increase their prices and decrease taxation -- and/or transfer pricing; same principle at work -- both for "profit laundering" purposes).
That terminology change indicates the other underlying weakness.
His leadoff statement about the clownish media (although he directs it at the populace at large) paying sole attention to this underwear bomber incident certainly is on target.
But then, if the media didn't concentrate on that and a bunch of other superfluous drivel, instead of of questioning why the Dorgan Amendment was voted down (Isn't breaking the pharmaceutical industry's price-fixing cartel a GOOD THING?), and what this health insurance legislation is really about, and....hey...what's up with the economy????
And those damning e-mails against Treasury Clown Geithner?
And all the variances within BLS reports? And the Fed officially buying back 80 percent of those Treasuries (and unofficially, perhaps, funneling those mysterious trillions they refuse to acknowledge to various central banks so they can purchase the remaining 20 percent of those Treasuries)?
Seems like most concerned Americans would wonder what ever became of all those toxic assets, and why do they keep churning out those infinite number of credit derivatives and credit default swaps?
you hit the nail on the head. Every day or at least for a 24 hour news cycle, someone picks something trivial and then beats it into the ground. I would say, for example, Sarah Palin is trivial. I often make up my own joke on these things in the fine print on the Sunday Morning Comics because you've hit the nail on the head, the entire cable news, the papers plus the blogosphere run on these fictional issues...meanwhile the real threat and you've named it, ecoterroism or the war against the U.S. working people and the national economy, is the real issue
and so often these things happen, never to be mentions on cable news or in the press. They are too busy with bubble boy or Michael Jackson or whatever the distraction du jour is.
I think I started EP when I saw over on dailykos the 101 posts on whether Obama's photo had been retouched to make him look darker and that was racist as if darker complexion is racist. That was enough for me!
I've said this for some time, the real recession started with the mass exodus of jobs due to both the China PNTR (started operating in 2000) and massive offshore outsourcing (on steroids, in every corporate "plan" starting in 2000)
and the housing bubble simply masked those effects by overinflating the residential real estate, construction jobs.
Made the unemployment rate look ok and oh yeah, the only way to see the massive labor arbitrage in tech jobs is to
1. count the H-1B and L-1 Visas in the country for they are counted as "workers" thus depressing the unemployment rate for STEM, plus:
2. the total number of jobs in those occupation sectors, which are lower.
Arguing about the mindless "thousand points of confusion" they keep throwing at us (Is the prez for nat'l security or against?....Should amnesty be granted to undocumented workers recruited by corporations?... Is Corporate Leader Reid a racist?.......) is really simply a time-wasting and energy-consuming event they want us to be involved with.
The crucial point is wage suppression and a tax structure which has been restructured, at least beginning in 1966 (really before that), to favor the extremely wealthy and transfer monies from the working and middle classes to them.
Why 1966? Because the Revenue Act of 1914 established the financial transaction tax, which lasted until 1966 and was briefly doubled by FDR during The Great Depression. Further, we have a series of tax changes in the Nixon, Reagan, Bush, Clinton, Bush and now Obama Administrations; all favoring the super-wealthy and stealing from the working people.
We've recently witnessed this stupid incident of that guy burning off his organ while feebly attempting to blow up an inbound airliner to Detroit. The crucial factor, to address what Mr. Oak previously mentioned, was that the majority of the American intel community has been (most expensively) privatized, thus acting far more incompentently at far greater pricing to the citizenry.
What should be focused on is the how and why of the suppression of wages: the disconnection between the minimum wage (which sets the standard for most wages above it in the next three tiers or so) and the productivity levels, which occurred during the George H.W. Bush administration.
There has been a continuum of these anti-worker (and by that I mean everyone making a standard salary below a quarter of a mil) activities dating back from the Johnson Administration.
And all this useless political babble does is make us forget and neglect that card choice which this administration promised to support and appears to have deep-sixed; and any real health reform, which this administration promised to support and has deep-sixed, and on and on and on......
(And now -- with this newest health insurance/health insurance industry subsidization -- they will add another tax on the wages of union workers when they are individually taxed on their health insurance policies.)
Forget those nattering nabobs, and please let us all focus on the econo-terrorism against us.
If you do happen on this book, while all of it is worthy of reading, please immediately turn to pp. 181-182, paying close attention to the first paragraph on p. 182.
Evidently there was a stealth provision in the 2009 stimulus bill which allowed PE firms to purchase their own debt back (which they had taken out on a leveraged loan) at discounted prices and allows them to defer paying taxes on the profit realized (on the difference of the discounted buyback) for five years.
This is yet another tax giveaway/profit maker for the private equity firms, ostensibly removing risk from the banks, but it is really far more involved than that.
They buy back those leveraged loans with yet another leveraged loan from the same originating banks, so they not only realize a profit on the buyback at discount, a profit from not having to be taxed (assuming they ever will be) for at least five years, but it should work out that if the LBO'ed company they originally purchased goes bankrupt, they own the entire thing at an enormous discount, thanks to the way they worked it.
But hold on....these layers of leveraged loans are correlated to existing economic conditions, so should the private equity firms run into trouble (per a number of predictions) then the fallout will be exponentially greater....and of course, all those writeoffs -- by the banks and the private equiteers -- will be transferred onto the national tax base, i.e., we the humble tax paying public.
CR has this post Bubbles and Employment that implicitly supports the argument about flawed macroeconomic policy.
RebelCapitalist.com - Financial Information for the Rest of Us.
John F. Welch Technology Centre in Banglore, India - GE's second largest research facility.
I wonder how many U.S. government contracts for various research being carried out in this facility.
RebelCapitalist.com - Financial Information for the Rest of Us.
Firstly those who are in denial will blame the increases in productivity on technological advances. Part of this is true, but there is a hidden part, in that due to global supply chains and moving production offshore, some of that should not be attributed to U.S. productivity at all, because it's not U.S. wages/workers that are involved in that leg of production.
Secondly, we also have some of U.S. GDP being calculated that also should be attributed to other domestic GDPs because the final products and some of the production is actually going on in other countries.
Manufacturing sector I believe (last 10 years?) has gone from about 15% of the total economy to about 12% currently...
a dramatic shift. Also, high paying jobs are being targeted for labor arbitrage. There was a mass exodus to offshore outsource advanced R&D in pharmaceuticals. Advanced R&D often requires a PhD but at least a B.S. to even work in it. So here are top tier, the highest educated, being subject to labor arbitrage due to offshore outsourcing.
I.T. has been under the worst attack, with entire I.T. departments offshore outsourced and if corporations cannot do that, they use Indian body shops to supply foreign guest workers to do the work in the U.S.
Same is true in high paying engineering R&D. Corporations are using H-1B guest worker Visas as well as offshore outsourcing advanced R&D in all sorts of tech, again to wage repress, arbitrage and most importantly, technology transfer large projects offshore.
Great post and until we get some real action on these affects, I don't believe the U.S. economy has a prayer's chance of recovering.
Look, that entire campaign against Lou Dobbs is bogus. It's generated by a host of special interests who, regardless of any economic realities, want anyone to be shut down who is against "comprehensive immigration reform". Seriously. There are so many outrageous behavior from others, such as Keith Olbermann to Glenn Beck, Lou was tame by comparison. The real motivation to attack Lou was because he brought public attention to a host of issues they don't want people to look at.
Not only did Lou not blame illegals, few even realize he is for some amnesty!
I watched Lou Dobbs every day and there were a few stories that make me cringe, but for the most part, he had on a host of great economists, talked about trade, offshore outsourcing, the lack of labor support and had also a host of politicians to give them voice, such as Bernie Sanders, Peter Defazio, Marcy Kaptur....
So, firstly one needed to see the actual show, now the "jump on the bandwagon" because somebody wrote some crap in a blog that really isn't accurate.
You know how I am aware of this campaign to shut down every single person talking about this via personal attack? Because I was on a conference call demanding all journalists as well as bloggers do this personal attack as a campaign. Pretty amazing! I did not say anything on that conference call, but what I found disgusting was no one, not a single person questioned such an agenda.
I'm sorry but EP is not available for personal attack via some marching orders from a few special interest groups. No way, no how. If the facts bear up on a topic, hey great, but if they do not, no way I want to be some tool for some special interest group, even if that group is identified as left.
many people do when talking about this topic. I certainly don't deny the effects of undocumented workers on supply of labor but my opinion on addressing this matter is quite different than say a Lou Dobbs.
RebelCapitalist.com - Financial Information for the Rest of Us.
nobody here is blaming the workers, including illegals. Not blaming guest workers either. This is EP so as far as I'm concerned we indeed can look at these realities, mention these things without apologies. I also banned the name calling from the site 100% because it's so impossible to mention any of this. It is labor econ 101 frankly and I do not believe the rules on labor supply have changed for 4000 years because some special interest groups wish it so.
So, yes of course, with a 50% unemployment rate and so on, plus the active recruitment going on (same in India via H-1B visas) S. of the border, no surprise someone would act in their best interest given the limitations of opportunity. That's just assumed (by labor econ itself as well, people would act in their own self-interest).
The point really is the use of various techniques to wage repress and arbitrage. Right now you mention this and one gets name called on "other sites"....
but blaming someone for acting in their own best interest? I don't think that would go on here either, it's a Simpson "doh" of course they would, anybody would.
to provide for his/her family. Sure, they came here 'illegally' but I would do the same thing for my family if faced with those circumstances. But that aside, why did immigrants flock here - better wages than their home country and a relatively open border.
It was POLICY - in this case unwritten and implicit.
RebelCapitalist.com - Financial Information for the Rest of Us.
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