Monday, December 20, 2010

I still say structural

From the Atlantic online: Today's report provides data for the major retailers through the third quarter. Net sales and profits have both increased year-over-year. Sales rose by 5.5%, and profits jumped by 7.5%.

During this 12-month period, however, the industry added just 80,000 jobs.This hiring increased the retail sector's labor force by just 0.6%. That isn't much compared to the 5.5% increase in sales.

So if revenues and are growing, why isn't hiring as quickly? It must not have to. Remember, over this period profits rose by 7.5%, an even larger margin. This means that most retailers didn't need to bring on more workers to satisfy the consumer demand that they experienced. Indeed, they made more money by hiring fewer of their workers back. In other words, they were likely overstaffed to begin with.

Technology and cultural changes in service expectation hadn't fully registered in retail (and I believe elsewhere) because of the stickiness of employment.

Tuesday, October 19, 2010

More on Structural Unemployment

Well, all the good folks are lining up against my argument that the current unemployment rate is likely to be structural, advocating more measures to expand demand through government actions (mainly fiscal). Let me reiterate my thought that absent permanent measures to increase the income of the bottom 80% (and for credentialing let me reveal that I am not a member of these four income quintiles), that no amount of temporary stimulation will work and the fiscal imbalances resulting from deficits that do not add truly productive capacity or prevent the erosion of current productive capacity (well chosen infrastructure and research; education and training that is aimed specifically at worker capacity, not the vague goal of throw-money-at-schools) will simply add to the problem down the line. The demand shortfall is not mainly a matter of the un- and underemployed in the current economy which can be remedied by employing them. It's a matter of the low current income and doubtful prospects of the higher numbers of people who currently do have jobs. Job insecurity would remain.

Further, I still believe that the bulk of value-added that would feed a higher level of demand would still fly overseas, for energy and manufacturing, would be used to build additional productive capacity or secure resources and to purchase through debt a call on any future productive power in this country. Finally, since I'm coming to appreciate money as signal, the conservative critique that temporarily ramping up the wattage sent indiscriminately down the wire risks distorts the economy that rises to meet it.

And the ironic point is that this doesn't even reflect what would be the true structural issue if people weren't thick as bricks: most of their money (like most of their lives) is pissed away on the hedonic treadmill. What if folks realized that even for ever-expandable leisure demand, that a $2.00 deck of cards and three good friends would give them as much pleasure as half their net discretionary expenditures. (Smaller houses, less and lower-food-chain meals, efficient cars, a limited but well-chosen wardrobe, and just less impulse-purchased crap would also). Now that would produce some serious structural unemployment.

Thursday, May 27, 2010

Have I Said This Before?

Over the past few weeks the evidence has been mounting that much of the current spike in unemployment is structural, despite its abruptness - the productivity numbers back this up. Companies are realizing latent gains from IT and a shift in cultural norms that allows a much lower level of human service in the services industry, with the downturn having dissolved some of the stickiness of employment,

Sooooo - next half-baked and more macro-ish theory: the current structure of the economy does not distribute income widely enough to sustain the domestic consumer demand upon which the economy demands, even with American's willingness to undersave for their future requirements, and even at the current level of interest rates, they do not have the means to acquire and service more debt. In addition, the wage differential with the developing countries is still so wide that an export-driven manufacturing economy doesn't seem likely, although Germany has managed it, albeit for a smaller base and with more support for industrial training.

Sunday, February 21, 2010


People's imaginations tend to be both material and conservative or historical. Thus when they think of money in its strictest sense, they picture bills and coins - and perhaps even gold bullion. They think "The United States of America" is the physical thing they've seen depicted on a map, with the addenda of Alaska and Hawaii, and informed by tales of the Founding Fathers. That both things are primarily abstractions, and in their more important senses verb-y rather than noun-ish distorts their understanding in particularly unfortunate ways.

One More Time

You have something broad and philosophical to say? Run it through Wittgenstein; run it through Nietzsche. if there's anything left, I'll look at it.

Friday, February 12, 2010

What I mean about creativity and economic divergence


Very impressive looking Korean plug-in car. Designed in Irvine, California by a few very bright, creative American boys and girls.

And where will the much more numerous industrious, skilled factory workers live who will, with the help of similarly brilliantly designed robots, assemble whatever comes of this concept?

Wednesday, February 03, 2010

Taking Gandhi from the Babies

Yo! Lefties! Quit fighting a losing battle for gun control. Arm yourselves and start making threatening noises about what you think would be worth pulling the triggers for. Also: get plenty of practice. Some of your opponents actually know how to use the things.

Saturday, January 30, 2010

From Lyle Deniston in SCOTUS blog:

The final briefs seeking to shape the Supreme Court’s coming decision on the reach of the Second Amendment’s protection of gun rights suggested Friday that states might be free to violate other parts of the Bill of Rights, if too narrow a view is taken of the constitutional liberties that state and local governments must respect. If gun rights are singled out as the only constitutional rights unshielded from states, counties, and cities, then no other rights are safe, according to the new briefs.

Like or loathe guns (and I do not do guns myself), I think the pro-gun briefs are right. The biggest mistake about Constitutional questions is a tendency of all sides to believe that all the document really says is: "Do good things. Do not do bad things."