Reduce employment rate by firing people.

[quote name='SpazX']I'm gonna work for the government...[/quote]

Yeah, DC keeps growing. It's actually creating quite the traffic crisis.
 
I was kind of under the impression that you know a recession is taking hold when equal numbers of people are being canned *and* leaving the workforce (respectively).

I'm really hoping this one doesn't get too ugly but the winds seem to be getting stronger.
 
It looks like another interest rate cut is coming. The DOW is under 12,000.

I'm hoping to get my house sold before the market tanks in this area.

I've already found 3 houses in the area I'm moving to that are bigger and cheaper.
 
[quote name='fatherofcaitlyn']http://news.yahoo.com/s/ap/20080307/ap_on_bi_go_ec_fi/economy

Then, why bother with an unemployment rate?[/QUOTE]

The unemployment rate is an imperfect measure primarily because it omits people who aren't actively looking for work; currently, there is a great amount of pessimism over the direction of the economy, and people don't feel like they stand a chance at getting hired anywhere right now. So, simply put, they aren't looking for work, and the unemployment rate tumbles.

There's a decent theoretical reason why the unemployment rate is calculated this way, as you only really want to count as "unemployed" those adults who *want* to work in the first place.

Paul Krugman showed another measure of employment/economic quality recently, which is the ratio of employed adults to overall adults - it's also imperfect, but since you would expect that ratio to stay much more stable, a huge drop in that (which we have experienced since 2001) indicated a poor economy.

Remember, after all, the recovery after the 2001 recession was called a "jobless recovery" (there's another term for it I can't think of at the moment) because, while the economy bounced back, few people recovered the jobs they lost.

On another note, I think every economist and financial speculator worth a shit is really thinking this right now, but too scared to say it: we're headed for a depression.
 
[quote name='mykevermin']On another note, I think every economist and financial speculator worth a shit is really thinking this right now, but too scared to say it: we're headed for a depression.[/QUOTE]
I just feel sorry for the peeps that don't realize how fast it's going to unwind on them.

And no matter how you slice it, it's going to suck for the next president.
 
Can anyone sum up, without bias, why our economy sucks right now? I don't understand economic cycles, nor do I pretend to.

It's tough to find an explanation for the economically ignorant that isn't just "Bush sucks, so does his war." I know a couple people here are daytraders, and surely quite a few of you have taken economics in college -- what's the deal?
 
[quote name='Koggit']Can anyone sum up, without bias, why our economy sucks right now? I don't understand economic cycles, nor do I pretend to.

It's tough to find an explanation for the economically ignorant that isn't just "Bush sucks, so does his war." I know a couple people here are daytraders, and surely quite a few of you have taken economics in college -- what's the deal?[/quote]

WOW. It's just that big to explain.

I'll take a crack at it, but mykevermin will most likely do a better job.

1. The government is spending itself into insolvency.

2. People are up to the noses in debt.

3. Foreign economies are growing faster or acting more responsibly than ours.

Here's a quaint way of looking at it:

1. The US government spends 200 billion dollars a year so that a steady supply of oil can reach India.

2. Jim, a software programmer making $80K a year, in the US decided to borrow $200K for a house with a $50K downpayment.

3. Generic Data Solutions, an IT firm in the India, offers Jim's employer to do Jim's work for $40K.

4. Jim loses his $80K job and replaces it with a $40K job and continues to live at his $80K a year lifestyle by tapping into his $50K of equity.

5. The US requires spending an additional 100 billion dollars a year so that a steady supply of oil can reach India by borrowing 100 billion dollars a year.

6. Repeat steps 2-4 but that Jim is replaced with a different name (thus a different person), the house is $300K, the downpayment is $20K, and the person gains a government job making $60K a year or a private sector job making $50K a year.

7. The US government can no longer borrow money.

8. The US government cannot force India to pay for its steady supply of oil due to financial commitments with the Middle East.

How do you keep a steady supply of oil to India, everybody employed and not having to move down in house value?
 
FoC, you did a pretty solid job summarizing the major issues in points 1-3. There's some nuance to that, including the idea that the middle class blue collar job market is falling out almost entirely (as you suggest), wage stagnancy, and the need to continue to spend more money in order to grow the economy.

We need to spend more money, then, that we aren't earning in the first place. You can see where that's a major problem.

The housing crisis is currently the most clearly seen economic problem: because people aren't earning more than they were before, now that so many of these problematic loans (the term escapes me right now, and I'll be quite embarrassed when someone reminds me what they're called) come to term, and the monthly payments jump right up to a place where people can no longer afford them.

On top of that, consumer spending is down because of both real economic concerns ("I don't have the money to pay for Smash Bros. Brawl") and economic fears ("I shouldn't buy Brawl because the economy's headed into the shitter, so I better be prepared for the worst"). Those who continue to spend are far more likely to put their copy of Brawl onto a credit card than they were in the past, as we continue to accumulate debt.

The oil problem centers around how much of an impact that has on all kinds of goods. Anything that needs to be transported from a warehouse to retail, plane tickets, transporting supplies to farms - the mind just wanders realizing how much gasoline-based transport is the foundation of our economy rolling along as smoothly as possible. So, now that the price is, at the moment, about 200%+ of what it was 8 years ago, and looking to hit around 300% ($4+ per gallon as the predicted norm by summer), that can only make things more expensive.

So people aren't paying more just at the pump, but also at the grocery store - which is an unavoidable increase in expenses.

That's the very, very, very basic summary of it. I'd recommend poring over Paul Krugman's New York Times blog. He's brilliant and also says things in ways that are fairly intuitive to understand - with a few exceptions when he gets knee-deep into economist nerdspeak.
 
[quote name='JolietJake']I believe "ARM" or "adjustable rate mortgages" is the term you were looking for.[/quote]

That or Ninja.

EDIT: Ninja loans have very piss poor credit checks in them.
 
I'm going to throw my explanation in on this but I think FoC probably summed up most of my thoughts pretty succinctly.
Here are the issues: 1.Our jobs have been steadily going overseas what with NAFTA and these Free Trade policies instated. This includes giving China most favored trading nation status for one.
2.Even with most of the jobs going overseas there is still some wealth in the economy and at least one big Blue Collar industry left, that being the Automotive industry in Detroit. Now you have to look at how much GM is falling into the lap of big Oil. First no practical Hybrids. Look how GM has now lost to Toyota. Could this be because they're not selling actual CAR Hybrids that get better MPG?! I would argue this is deliberate and GM will eventually sell them. This will be AFTER they declare Bankruptcy and kill people's pensions and blame this and retirement benefits for the problem of profit. After this however they will have closed down most of the factories and moved the production off to China NOT Mexico then we will start to see REAL Hybrids or maybe electric cars.
Anyway on the wealth still in the economy, even a bit, that just wouldn't do so besides starting up the occupation in Iraq to help make Oil companies more money and protect Israel. Well this war was also about bankrupting America's economy from the start to pave the way to the Amero. Unfortunately few will mention or be said stating that the only way this could be fixed is by TAXING people to pay for it. Also stopping it to begin with would bring that money back as well as one starting to see the dollar raise.
2.Past all what was stated above with the Oil prices which WILL go down if the occupation ends though not spectacularly. The next step is buying TWO cars, both electric, one that gets around 25-40 miles in the $12-14K range to get groceries around your area. The other car would get over 100 mpc(miles per charge) which would get you to work but would not be spacially feasible to carry groceries or much supplies in.
Also as a temporary fix you can get a used Hybrid with a plug-in mod to get near 100 miles to the gallon I think it is. I would still advise getting those electric cars so you're not held by the balls of the Oil companies so to speak.
 
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