Trade Gap Widens

[ThaSaltCracka]

web page (http://www.msnbc.msn.com/id/5694670/)

U.S. trade deficit widens, hitting a record

Biggest exports drop in three years, record imports reported

Updated: 11:44 a.m. ET Aug. 13, 2004WASHINGTON - The U.S. trade deficit widened much more than expected in June, hitting a record $55.8 billion as the biggest drop in exports in nearly three years combined with record imports, the government said on Friday.


Wall Street economists had expected the deficit to widen, but looked for a gap of just $47 billion. In its report, the Commerce Department also revised May’s trade shortfall to $46.9 billion from the previously reported $46.0 billion.

The department said exports fell 4.3 percent to $92.8 billion in June, the biggest decline since September 2001 and the weakest performance since February.

At the same time, imports climbed 3.3 percent to an all-time high of $148.6 billion, partly reflecting a run-up in oil prices.

Crude oil prices hit $33.76 a barrel, according to the department’s measure, the highest price since March 1982. The quantity of crude imported also rose to a record level.

While other recent data had led economists to expect an upward revision to the government’s measure of second-quarter economic growth, the trade data was likely to lead them to lower their sights.

In its first snapshot of the second quarter, the government said U.S. gross domestic product advanced at a 3 percent annual rate, a sharp slowdown from the swift 4.5 percent pace at the start of the year.

The trade report showed the politically sensitive trade gap with China widened to a record $14.2 billion as exports eased and imports soared to an all-time high. U.S. manufacturers and labor groups complain that Beijing’s policy of holding the value of its currency, the yuan, steady against the dollar has given it an unfair trade advantage.

The Bush administration has claimed it is making progress getting China to move toward a more flexible currency regime, but Democrats want to ratchet up the pressure with a trade investigation.

The report also showed the U.S. trade gap with Mexico reached a record.

For the first half of the year, the trade gap came in at $287.7 billion, putting it well ahead of the same period last year and on track to break last year’s record $496.5 billion.

_________________________________________________
Okay to be honest with you I am still learning in regards to the economy. So maybe some of the more economic minded people can elborate some more on this for me, but a few things caught my eye here.

First of all, my understanding was that the Bush admin had a silent policy of trying to lower the value of our dollar, which would make our goods more attractive to foreign markets, however this does not seem to be occuring, as apparent by the widdening of the trade deficit.

Also the fed has been raising interest rates because they are worried inflation is to low(thus the value of our dollar against certain currency has decreased), and the economy is expanding to much. If they were worried about this, wouldn't it be correct to assume that our trade deficit should have decreased? serious question here, because I am little confused.

Another thing, the article also said that GDP grew at 3%, which may seem like a lot, but in fact thats nothing. Thats were it should be, anything below that is a recession, and anything above that is essentially growth. This is down 1.5% from the begining of the year. This does not sound like an economy that is turning around to me.

Adios where are you??? /images/graemlins/grin.gif

[eLROY]

[ QUOTE ]
This does not sound like an economy that is turning around to me.

[/ QUOTE ]
Some suggestions:

1) Don't bother trying to understand macroeconomics unless you are going to make a career out of it. And then, don't assume you have learned to understand it, until you have actually made money trading on your theories for a lot of years. I have never heard or read an economist who actually understands global economics. The only evidence I have that someone somewhere understands economics, or at least that the sum of their actions accurately reflects economic data, is that market prices move in the direction they should when new data comes to light. At most, people in certain positions learn certain parts of the global economy very well over limited periods, but nobody can keep up with the whole thing. And even people who recognize isolated rules or patterns need not understand those patterns, what drives the patterns, or what the change would be if certain inputs, conditions, or properties of the system were adjusted.

2) As long as you don't understand economics, keep it simple. Just look at the simplest measures of whether the economy is doing better or worse. Even these don't work very well, since you don't know where they "should" be, and historical comparisons are not very relevant. And certainly don't try to hypothesize what impact different one-time actions by the Fed or the President will have on the economy, with your limited understanding. Economic events arise at the local level, like covalent bonds, they are not arranged top down like dolls in a doll house. You can't apply simple rules A + B = C. Even Alan Greenspan has made some serious errors recently which I won't go into, and which he hasn't openly admitted to. But I mention it as an example of how the whole system is obvious in light of new experience when it's already over, but it is very difficult to predict things like the Japanese slowdown beforehand, when our monetary systems and cultures have never been the same in the past.

Anyway, even if I told you why the dollar went down today, you would have no reason to believe me.

[Randy_Refeld]

Don't feel bad about not understanding all of that. I have an MA in econ and don't understand a lot of that stuff about macro/global econ. I do know that sending pieces of paper to another country and having that country send us goods can't be completely bad.

Randy Refeld

[adios]

[ QUOTE ]
First of all, my understanding was that the Bush admin had a silent policy of trying to lower the value of our dollar, which would make our goods more attractive to foreign markets, however this does not seem to be occuring, as apparent by the widdening of the trade deficit.

[/ QUOTE ]

I don't think that's exactly right. The Chineese peg their currency to the value of the US $. What the Bush administration apparently wants to see is the Chineese let their currency "float" on it's own believing that it would rise significantly against the US $. The Japaneese have intervened massively in the currency markets to try and keep the value of their currency from appreciating too much against the US $. Both China and Japan export a lot of goods to the USA so they would like to keep their currencies low to have that continue. At least that's my take from what I read. Therefore I think the Bush administration position is that the Chineese and Japaneese currencies are artificially low. Kerry has alluded to this as well so IMO be basically agrees with Bush but has stated that he would be more aggressive more or less in stopping this currency intervention. Here's the irony the Japaneese and the Chineese have been huge buyers of U.S. Treasury bonds so basically they're financing a major portion of the U.S. deficit. This results from buying US $ with the respective currencies and then using the US $ to buy Treasury bonds.

[ QUOTE ]
Also the fed has been raising interest rates because they are worried inflation is to low(thus the value of our dollar against certain currency has decreased), and the economy is expanding to much. If they were worried about this, wouldn't it be correct to assume that our trade deficit should have decreased? serious question here, because I am little confused.

[/ QUOTE ]

First of all the Fed controls interest rates for durations of less than 2 years, the bond market controls interest rates for 2 years and greater than 2 years. The Fed has embarked on a "tightening" cycle due to a stronger economy to head off excessive inflationary pressures. The Fed's main goal is price stability as they have target inflation rates of somewhere between 2% and 3%. Many are questioning whether or not the Fed should continue in it's tightening cycle because economic numbers such as non farm payroll growth is so lackluster recently. The April employment report saw a spike in jobs growth but the last two months have been bad. Since the April jobs report the bond market has had a good rally implying that the bond market sees a slower economy and thus less inflationary pressures.

I'm not sure why our trade deficit was higher than expected but stronger economic growth in the U.S to me implies a higher trade deficit not a lower one. Basically the U.S. consummes more than it produces and if the economy is stronger then more will be consummed thus a higher trade deficit.

[ QUOTE ]
Another thing, the article also said that GDP grew at 3%, which may seem like a lot, but in fact thats nothing.

[/ QUOTE ]

Real GDP growth of 3% (the growth minus inflation) is decent IMO.

[ QUOTE ]
Thats were it should be, anything below that is a recession, and anything above that is essentially growth.

[/ QUOTE ]

No a recession is considered to be 2 consecutive quarters of NEGATIVE GDP growth.

[ QUOTE ]
This is down 1.5% from the begining of the year. This does not sound like an economy that is turning around to me.

[/ QUOTE ]

GDP growth is decelerating. Higher oil prices IMO have something to with that. I posted some of my thoughts on the economy in the stock market forum. Essentially I agree with your conclusion here.

[ThaSaltCracka]

[ QUOTE ]
The Chineese peg their currency to the value of the US $.

[/ QUOTE ] Interesting, I just thought Japan did this, but oh well. Isn't this the key though to why our manufacturing sector has been faltering? If we are buying more imported goods and not selling exported goods this simply cannot be good for the overall US economy. I can see why both Bush and Kerry would like to change this, but I can also see why this may never happen in any sort of effective way, because as you alluded to Japan and China own a lot of US Bonds.

[ QUOTE ]
I'm not sure why our trade deficit was higher than expected but stronger economic growth in the U.S to me implies a higher trade deficit not a lower one. Basically the U.S. consummes more than it produces and if the economy is stronger then more will be consummed thus a higher trade deficit.


[/ QUOTE ] See this is inteteresting because you are right it would SEEM to imply a stronger economy, but at the same time, less capital stays in the US in this case. True, some may return back to the US in foreign investments, but the best case scenario would be US dollars staying in the US for a more immediate and direct flow back into the economy.

[ QUOTE ]
No a recession is considered to be 2 consecutive quarters of NEGATIVE GDP growth.

[/ QUOTE ] Your right about the two quarters thing, but I thought if it was two quarters below 3%.

This seems like an economy with irregular spurts, but nothing seems conclusive, other than the fact that its not getting better.

[MMMMMM]

Not to nitpick, SaltCracka, but you seem to be jumping to some conclusions in this post.


"This seems like an economy with irregular spurts, but nothing seems conclusive, other than the fact that its not getting better."

I don't believe it is at all conclusive that it the U.S. economy is not getting better. Recent economic data contains many mixed signals.

Employment is rising although recently more slowly than projected.

[Taxman]

Employment is rising so slowly that it might as well be staying the same. Furthermore, aren't most of these rising employment numbers largely coming from low wage jobs (if I'm wrong here, it doesn't really matter because the numbers are so low)? Even if the economy is getting better, it's clearly not improving quickly by any stretch.

[riverflush]

elROY...it is possible to understand global economics, certainly not down to an A+B=C level - but on a trend basis for sure. To simply say it's "too difficult to follow" is selling yourself (and many economists) short. We have concrete ways to measure and compare economic data from country to country on the world market.

I think the emphasis on the NYSE and NASDAQ in the U.S. has really clouded the general public's view of the "economy". Instead of looking at the real indicators, many get hung up on watching the numbers scroll across the bottom of the screen on CNBC and think they understand what's going on. Many people can tell you that the NYSE has lost 10% of its value in the past 3 months, but they couldn't give you an answer to what GDP is.

BTW - all this talk of unemployment is way overplayed by those jousting for political office. The current unemployment rate of 5.6% is actually lower than the average rate of the 70s, 80s, and 90s. The first three years under Clinton (93-95) showed an unemployment rate of 6.2%, with a higher inflation rate (2.6 vs. 1.9), and lower non-farm productivity growth (0.5% vs 4.1%) than the first three years under GWB.

Also...we are currently experiencing the highest homeownership rate in U.S. history (68.5%) - which is a strong indicator of personal wealth.

So I'm not sure why all the "gloom-and-doom" scenarios seem to hold water...I guess it's just election-year politics. We had a (mild) recession and to show these strong numbers so quickly after is a positive sign, not a negative.

[Taxman]

Unemployment numbers reflect not the number of people without jobs, but in fact the number of people without jobs who are actively searching for one. I don't see how the number of unemployed people can be lower now than when there were millions more jobs several years ago. In a good economy more people are likely to actively and continually look for a job with a strong hope for success than in a poor economy. Home ownership may be up, but creditors are showing an increasingly strong willingness to loan large amounts of money and while I can't prove this, I would guess personal debt is probably at or near an all time high.

I am not a doomsayer and I do think we are very slowly recovering from a relatively (but not insignificantly) mild downturn. I also think that the current administration is doing a much worse job than it could be to turn things around. This does not necessarily mean that Kerry can do better, but I can't imagine him doing a whole lot worse. Besides, since it's always the former administration's work that causes current problems/successes, if the economy were to turn around faster under Kerry, the Republicans would be able to continue their tradition of blaming Clinton and crediting Bush(jr.)(oh, and Reagan too /images/graemlins/grin.gif)

Of course we will have our staggering national debt to cope with at some point, but that's no big deal... Feel free to prove me wrong, but from where I stand, our "recovery" has been quite uninspiring.

[riverflush]

[ QUOTE ]
Feel free to prove me wrong, but from where I stand, our "recovery" has been quite uninspiring.

[/ QUOTE ]

I would argue that the recession itself was very mild and WAY overplayed in our media (which likes to trump up crisis so they have something to do). Unemployment at its worst during the last 3 years was 6.2%, which is still much better than the mid-7's of the early Clinton-era. 8 years ago, the current 5.6% was considered excellent:

http://www.cnn.com/US/9607/05/jobless/

Now, I'm really going to upset some people with my next statement: Some job loss can actually be good for the economy .

You can re-read that and then pick your jaw up from the floor. At times, an economy needs to shrink jobs to become more efficient. As we develop new technology we must replace old jobs with new jobs, often with a net loss. We eliminate certain jobs (Atari 2600 assembly line, anyone? picture tube assembly?) as we advance. In an economic downturn, even more pressure is put on companies to find ways to do more with less - and this leads to layoffs. Over time, this is actually good for the economy, as efficiency puts more product into the market more cheaply...which increases the buying power of us all. Eventually, new jobs are created when companies find new way of doing business, create new products and new services. It's a self-adjusting cycle.

Put more simply, we - as humans - find new stuff to do for a living. For example, the position of "web designer" didn't exist in 1993 - now you can earn $65,000-$200,000/yr in this profession.

Also - look at GDP growth over the past few years:

http://money.cnn.com/2004/01/30/news/economy/gdp/gdp_chart_4q2003_pre.gif

We came out of the recession in Q4 2001 , yet all you heard on CBS/NBC/ABC, etc. was how bad the economy was all throughout 2002 and 2003. GDP was good in 2002, and roaring in 2003. The 8.2% growth in Q3 2003 is the best in 20 years.

For some perspective on this, do a google on Canada's GDP - which is stuck at 0.3% growth.

[eLROY]

[ QUOTE ]
aren't most of these rising employment numbers largely coming from low wage jobs

[/ QUOTE ]
I don't know, you might want to ask the people whose job it is to make themselves useful. If somebody wants to make a higher wage, is he going to sit around waiting for John Edwards to reserve him a room in the welfare motel? Or is he going to work hard to develop a specialty? If you've got a problem with the wages people are earning, maybe you should tell them to their faces!

[Taxman]

You haven't really proven anything. Again, unemployment refers to people without jobs who are actively searching for one, meaning the percentage number doesn't mean much. Obviously unemployment is a necessary part of any successful economic system. That is a pretty basic idea. I doubt many web designers are making anything near 200,000 these days and I stand by my belief that average personal debt is quite high. I am extremely grateful that you deigned to explain that eventually new jobs are created though, because that was not an obvious point. All you've really done is spout off some right wing rhetoric about the "liberal" media and made a few references to individual numbers that couldn't possibly tell the whole tale by themselves. Obviously we have not been in some huge downswing, but our economy is not in especially great shape (relatively speaking) and our national debt is massive (bigger than expected even by the administration). All I'm saying is that your analysis appears to be flawed. A better explanation for why the economy is in fact doing well may exist, but not in your posts.

[Taxman]

If you're being serious, that was an absurd statement. I am in favor of all jobs, and I like most people have worked in my share of low paying jobs (still do in fact), but when you have highly qualified people with graduate degrees having to choose between a minimum wage job and no job, something is not quite right. Not that many people are on welfare and frankly I think that there are many areas of the government that are much more wasteful with money. You are changing the issue at hand. The economy is not doing as well as it could be and the middle/lower classes are feeling it the most (again I am aware that we are not in some sort of serious recession, but no one can deny that things aren't exactly booming). Kerry may or may not be a better option, but I doubt he'll be much worse. Hell maybe Bush's plans will come to fruition in the next couple months and I'll have to eat my words, but for now I don't see that happening.

[eLROY]

[ QUOTE ]
you have highly qualified people with graduate degrees having to choose between a minimum wage job and no job

[/ QUOTE ]
When you lie like that with a straight face, Taxman, it's no surprise people aren't inclined to risk you in any real positions.

[MMMMMM]

"but when you have highly qualified people with graduate degrees having to choose between a minimum wage job and no job, something is not quite right."

Forgive my bluntness in this post, the following is not directed especially at you but is what I believe in general:


Something is ALWAYS not quite right with EVERYTHING under the sun. The economy is less than optimal, some unemployment always exists, some people are underemployed, the world is too hot or too cold or too muggy, there are too many mosquitoes, the tastiest foods make you fat, and youth is wasted on the young.

All I can say is SO WHAT. That's the way it always has been and always will be: Imperfect.

Any highly qualified people who stay unemployed very long either aren't highly qualified, or aren't highly motivated, or else are unwilling to take a job for a while in sales or another field that will pay them considerably more than minimum wage. Or better yet still, maybe they could look for ways to become self-employed.

The world will never be perfect, and using perfection as a measuring stick is fruitless and frustrating--and a recipe for disaster when government is entrusted the task of trying to engineer perfection.

Got food on the table? Great. Want more in life? Go get it.

Nobody should complain about jobs when anyone in America can go out and work for themselves. Know how to paint a little? Take out a cheap ad in a local newspaper and go to painting some local houses. Know how to mow lawns? Go mow some lawns. Know how to do anything? Chances are if you use a little creativity and chutzpah and get-up-and-go you can find a way to get paid for it at least part-time, then build up a clientele and referral business as you practice and learn and grow more expert at it.

Any of the above pay more than minimum wage.


"but no one can deny that things aren't exactly booming)."

Things usually aren't exactly booming. So what, again. The only thing is, this time there may be more long-term danger on the horizon if we don't get the budget deficit under control--that is far more important than the current modest unemployment rate.

As for unemployment, again, so what. It builds character because more than half of those unemployed are unemployed due to lazy habits which got them laid-off or fired in the first place. The economy needs some level of unemployment because without it business could not hire reasonably competent people over incompentent lazy dolts.

Next time you go into a fast-food joint and get someone who takes forever taking your order (not due to any disability), or go into a card room and get a dealer who barely manages to get out ten hands in a half-hour while jawboning the whole time, just remember: the establishment is forced to put up with these people who are wasting YOUR time. And why? Because these people know they won't get fired for being sluggards because the job market is fairly
soft. And if they do lose this job, well...pffft, there's another one right down the street.

Hate bad service, true incompetence, or service workers who just won't even try, even a little bit? Hate to be kept waiting for something that should take a few seconds but somehow they make it take minutes? Wish for a higher unmemployment rate, then.

And don't worry, in my life before I have worked in mimimum wage jobs and busted my hump at some things you would probably never have dreamt of doing. It built character then and I highly recommend it for anyone who has a problem with built-in laziness, as most us do. And if you get sick enough of being near-broke or always on a short bankroll, you might just learn to play better poker, too.

I used to complain to a friend of mine that I didn't have enough money and everything was aggravating and I wasn't winning enough. His dry answer to me was priceless: "So play better."

That is actually the answer to almost everything in life, when you think about it.

[Taxman]

Of course I am exagrerrating to a certain extent, but the point remains that if only low wage jobs (which generally have low qualification requirements) are being created, then the unemployed who are more qualified are left with tough choices and thus many of them have halted their job search for the time being, lowering unemployment numbers despite the lack of new jobs. You have provided no evidence yourself and resorted instead to absurd attacks implying that I have something against people with low paying jobs, which is completely off topic anyway. When you take a single sentence out of a whole response and make irrelevant comments about it, it's no suprise people aren't inclined to care what you have to say. I make no claims at being a great expert. I just ask others to better defend their own position and thus far they have failed. I have heard many good arguments from others on this board, but nothing but moving wind from your direction.

[Taxman]

Your comments are fully understandable and relevant to this thread and I actually largely agree with them. My problem is I see some people taking the opposite stance of the one I've presented which is just as irrelevant. I suppose that means we're all just blowing smoke in this thread. My comments were not meant as an expose on the Bush administration, but more as an argument against other's poorly supported positions. Have I backed my position up particularly well? not really, but as you've stated, it doesn't much matter. What matter's is that just as some on the left are predicting doomsday scenarios, some on the right are predicting the opposite. We need windbags like myself just to keep either side from getting too out of line. Now that I have finished inflating my own sense of self importance....

You make some good points. I just want to point out that a lot of people seem to assume that someone with my kind of views has lived a sheltered life, which seems a bit strange frankly. Nevertheless, I have worked for minimum wage at crappy jobs and I did learn something about discipline from it. Unfortunately, I unlearned a lot of that in college... I believe in the American way and I believe that people should work for their successes, but I also believe that many people are too quick to take on a jaded attitude about the world and fall into self serving dogmatic rituals. I may be a BS artist, but I do consider most sides of things, even when I seem to be taking a hard line stance. My problem as that most people seem to know as little about various topics as I do, so when they make arguments that don't seem logical to me, I tend to respond. I guess, I'm mostly just an argumentative jerk.

To a certain extent, I think jobs are a lot easier to find than most people think and that many of the unemployed simply refuse to do something different for a while, but that doesn't change the number of jobs out there, or the increasing level of personal and national debt. I believe that my pervious comments were well founded, but I do thank you for shifting our attention back on what really matters. Cheers.

[Ray Zee]

i am still looking to pay 20 bucks an hour to a painter to paint my house and barns. and the same for a carpenter to work on rentals. where are all these qualified people working for 6 bucks an hour and not wanting 20. house cleaners are getting 15 to 18 an hour up here in montana.
but there is a large group of people complaining that you cant make a living here and there are only low wage jobs.
so they take the 7 and hour job that requires no thought or ambition and complain.

not to many mossys around our part of the country either.

[riverflush]

Taxman...a bunch of things:

1) What's with the "right-wing" comment? Seriously. Basic economics is not "right-wing". GDP growth is not "right-wing". Etc, etc.

2) Do you even understand GDP growth?

3) If unemployment numbers are unimportant, why cite them at all, ever ?

4. I know a web designer who makes over $200,000/yr. Of course, he runs his own site. One of my other college buddies works for a major university's alumni association designing their web presence - he makes around $70,000 (it's a private midwestern university).

5) I didn't call the media "liberal." I said they "need something to do." They need stories, often doing reports on topics they don't understand. For example: a 90 second story on outsourcing. How can you say anything substantive about outsourcing in 90 seconds? We live in a soundbite culture.


Understanding business, markets, the currency, technology trends, job numbers, etc. isn't a right or left-wing thing - it's just knowledge, available to all who want it.

[MMMMMM]

Thanks for the nice response, Taxman. And no I don't think you are an argumentative jerk. Cheers.

[Taxman]

[ QUOTE ]
What's with the "right-wing" comment? Seriously. Basic economics is not "right-wing". GDP growth is not "right-wing". Etc, etc

[/ QUOTE ]

The right wing comment was very clearly defined as referring to your implication of a liberal media. You implied it was liberal because you made comments that the media ignored giving information, which would prove that the Bush administration's policies are working quite well in helping the economy to recover. Many disagree with this, and most of those people are liberal. Many agree with it and most of them are conservative. Forgive me if I mad a false assumption.

[ QUOTE ]
Do you even understand GDP growth?


[/ QUOTE ]

Do you?

[ QUOTE ]
If unemployment numbers are unimportant, why cite them at all, ever?

[/ QUOTE ]

You obviously misunderstood my comments. They're not unimportant, but they don't always mean what people think they do

[ QUOTE ]
I know a web designer who makes over $200,000/yr. Of course, he runs his own site. One of my other college buddies works for a major university's alumni association designing their web presence - he makes around $70,000 (it's a private midwestern university).


[/ QUOTE ]

One guy makes 200,000 so it must be common? Another makes 70,000 so all web designers must make that much? I'm sure it can still be a relatively lucrative profession, but not nearly as much as it was during the dot com boom.

[ QUOTE ]
They need stories, often doing reports on topics they don't understand. For example: a 90 second story on outsourcing. How can you say anything substantive about outsourcing in 90 seconds? We live in a soundbite culture.


[/ QUOTE ]

Agreed.

[ QUOTE ]
Understanding business, markets, the currency, technology trends, job numbers, etc. isn't a right or left-wing thing - it's just knowledge, available to all who want it.

[/ QUOTE ]

Agreed.

Since you claim to know a lot about economic models, I would like to hear your opinion the rapidly inflating levels of our national debt and (in my opinion) personal debt. Are hese things a non factor? Does unemployment and GDP growth define everything there is to know about our economy?

[Taxman]

/images/graemlins/wink.gif

[MMMMMM]

Yes, a gal who lives nearby gets $50 for a 3-hour apartment cleaning but she gets it done in about 2.5 hours after the first time so she is really getting $50 for 2.5 hours on repeat business. She does houses in the neighborhood too and sets mostly her own hours and seems to be doing fine. She was actually singing and humming the other day while working.

By the way, what are "mossys"?

[Ray Zee]

mosquito

[Zeno]

I feel like tossing a few pitchs. First, rise and fall of unemployment is usually quoted as a payroll parameter only. There is also a measure of unemployement by household which would catch people that are doing odd jobs, or self-employed etc that would not show up on the payroll side of the unemployment equation. I am sure I will be corrected if this is inaccurate.

I think, according to the government at least, I have been unemployed since July of last year. Yet I have been working more or less steady since that time.

What has been the lowest 'offical' unemployment rate in the U.S in the last 20 years? 3%? 4%? Isn't there always going to be some unemployment? And 5 ot 5.5% or so is not that bad a number is it?

-Zeno

[Zeno]

[ QUOTE ]
am still looking to pay 20 bucks an hour to a painter to paint my house and barns. and the same for a carpenter to work on rentals.

[/ QUOTE ]

Why didn't you post this earlier – Hell, I could do that, the carpentry may be a stretch but I am a quick learner and can figure out how to do most things. Plus, even though it has been quite a few years, I can still do mechanic work, arc and acetylene welding, small metal fabrication work and other odd jobs. Plus garden and lawn work. I can still work 10 hrs a day like it was nothing - work does not scare me.

You lost out; I may have a six-mouth gig coming up which I cannot turn down if it comes through. If it falls flat, I’ll let you know. Hire a licensed carpenter but I could take care of the rest.

-Zeno

[Ray Zee]

actually a slightly higher unemployment rate is desired for the country as a whole. not those unemployed. too low and inflation pressure drivels in.

[playerfl]

"First of all, my understanding was that the Bush admin had a silent policy of trying to lower the value of our dollar, which would make our goods more attractive to foreign markets, however this does not seem to be occuring, as apparent by the widdening of the trade deficit."

you are correct about the weak dollar policy, even though they lied about having one. When you see this record trade deficit, just think how much worse it would have been if the dollar had not dropped so drastically.

Basically the weak dollar is the price to pay for avoiding a total economic collapse. People do not realize how close we were to a meldown in the 2001-2003 period. I think we have avoided the meltdown scenario, but there will be a lower standard of living for the middle class, if there even is a middle class.

[playerfl]

I'll take $20/hr to paint your barn, that is how much a software quality assurance analyst makes in florida. Before outsourcing it was $35/hr. Thats what people mean by not enough good jobs or being underemployed.

[playerfl]

A high unemployment rate is good if you don't have to work for a living because it hold prices down, as you state. This is good for wealthy people and retirees.

On the other hand, for the majority of the adult working population high unemployment means life is tougher.

[ThaSaltCracka]

[ QUOTE ]
Basically the weak dollar is the price to pay for avoiding a total economic collapse. People do not realize how close we were to a meldown in the 2001-2003 period. I think we have avoided the meltdown scenario,

[/ QUOTE ] Please elaborate.

[riverflush]

The recession of 2001 was very mild, yet people don't want to believe that.

They believe whatever they want to in order to support their myopic vision of the world. If times feel rough to them, they assume that times must be rough for all . It's why folks in Ohio (who legitimately lost a lot of old-school manufacturing jobs) feel a lot worse about the economy than folks in Florida.

I can march out statistics after statistics on 2+2 but I'm never going to convince those who refuse to budge off their stances. In the end it really doesn't matter, because the economy rolls on and there's nothing that the average guy in Illinois can do to change the tide (except personally work harder). Those who chose to live in a doom-and-gloom shadow (and there are many on 2+2) really are only selling themselves short, because their lack of optimism doesn't really affect anyone but them.

[Boris]

I'll do it for $20 bucks an hour. But I have to work slow to make sure I do a great job.

[playerfl]

I was talking about why it was milder overall than it would have been without easy monetary policy, which I think is fairly obvious to all who choose to see it.

Also, if you were in the IT field or manufacturing it wasn't minor at all. Its also obvious that lots of people who were not personally effected don't give a sh*t.

[ThaSaltCracka]

Dude, the IT was clearly operating with some EXCESSIVE capacity. That bubble was bound to break, and jobs were going to be lost for that entire industry to survive. Yeah a lot of jobs were lost there, but most of those jobs that were lost should have probably never been there in the first place. I agree with you in the manufacturing sector though.

[playerfl]

I was, and still am, in the IT field and there was and still is excess capacity, but there are other reasons besides just the stock bubble that I won't go into here.

[ThaSaltCracka]

why not?

[playerfl]

because its a different topic entirely and would take its own thread, and its pretty controversial, and there is a lot of bad information out there that people believe. Its a whole can of worms.

[Cyrus]

But them's the breaks, right ?



CBS Report (http://www.cbsnews.com/stories/2004/08/13/national/main635936.shtml)