Monday, May 08, 2006


Bush's Job Creation Rate Lowest In Forty Years

In case you were wondering where this great recovery is that the GOP/Media Complex keeps talking about, Bonddad explains it for you. Short version: Unless you're in roughly the top 20%, you're being screwed.

The coop I belong to just went from monthly, to every other month to quarterly orders. And the people in it are mostly middle class.

The media and the economists aren't telling what is really going on out here. They're not seeing the trees on purpose.

What do you suppose would happen to an economist who issued an accurate report on the economic conditions of the middle class and below? Would they appear on any of the "market" programs on the TV or radio? Would they even get mentioned on PBS or NPR? They might have on Harley Shakin once in a blue moon but that's about it.

Economists are the court poets of the corporate oligarchs. They know the myths they are required to recite.
olvlzl, what's going on is actually very puzzling to economists. Brad DeLong, a Clinton Treasury official and now a Stanford professor does some very interesting posts on the Wile E. Coyotonomics of the Bush Administration.

The official statistics may be cooked but, if so, it's not clear how. Those show a long, slow deterioration for the middle class. The Bush era is not notably bad, though I think one could say it's the worst since the bottom of the Reagan recession.

One of the key black holes is productivity. If today I produce a widget selling for $1 for a cost of 80 cents, and tomorrow I produce it for 70 cents, I can (a) increase profits, (b) raise wages, and (c) cut prices. Even if I don't raise wages, you as a consumer benefit from lower prices.

Now, to some degree this is true. People love to point to personal computers, how prices have dropped even as functionality and maybe even quality has risen. But $10 extra spent on gas each week pretty well wipes out any savings due to Moore's Law.

I think the middle class squeeze is due to four involuntary factors:
1. The cost of education,
2. The cost of periods of unemployment,
3. The cost of medical insurance,
4. The marginal income of a two-income household (because a second worker requires a second car, a second set of work duds, etc.)

and two voluntary factors
1. Rising standards in square footage of homes, leading to increased operating costs.
2. An increase in gambling.

My SWAG is that 70% of the middle class squeeze comes from improper accounting for the first group of factors and 30% from the second factors.

Economists do tend to be more conservative than other academics. But in this case, even the liberals don't quite know what to make of things. I've posed questions on whether changes in standard of living are accurately measured to the liberal economists and never received an answer.
Thank you for your response, Charles.

Starting with a presumption of presumption on the part of social science in general and by economists in particular it doesn't surprise me that they might be puzzled. But so much of what they do seems intended to prop up theories favorable to the wealthy that would seem a good place to begin the corrections.

The enormous houses that I see going up seem to be related to the absurd credit market these days and to those idiotic home shows on TV. I've seen people who make a lower middle class income put those things up with jobs that won't support their borrowing. It's going to make the bubble in the South West seem like nothing when the one in the North East goes.

The gambling thing is getting out of hand. Poker on TV. It must be a sign of degeneracy when people will watch people play poker on TV. By comparison bowling is edifying. Though not golf.
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