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IAAE, so I'll address this: jobs are not being "displaced" or permanently "eliminated" right now. There's a simple, plausible explanation for all of this: 1. B
by achompas 15y ago
IAAE, so I'll address this: jobs are not being "displaced" or permanently "eliminated" right now. There's a simple, plausible explanation for all of this:
1. Businesses are hesitant to invest in capital.
2. The housing market is terrible right now--especially housing starts.
3. Jobs related to #2 and #3 generally go to lower-skilled workers. They're the ones who are struggling right now (with something like 16% unemployment for men without a HS diploma).
This isn't the end of the American economy, people. Demand is low for goods produced by low-skilled, American-based labor. Things will improve with time.
- sachinag 15y agoIt would improve faster if your bosses would engage in QE3 and started to inflate the economy. [Edit: that's an attack on the Board of Governors, certainly not you.]
- achompas 15y agoWell, they're not my bosses anymore. I'm moving into software and applied stats now. :) I'm torn about QE3. There's little evidence that businesses are waiting on it specifically to make capital expenditure decisions; it seems, from reading the Beige Book and other anecdotes that companies might be waiting for the other shoe to drop. QE3 would just adjust the shoe on the foot a bit.
- sachinag 15y agoWell, we could start charging the banks for carrying excess capital. I know, I know, everyone will start screaming about crappy balance sheets and all, but they're just sitting on boatloads of cash.
- steins 15y agoThe problem isn't cash, its capital goods, and flooding the system with cash will just cause damage to companies who are to small to move fast enough to acquire large amounts of the flood.
- achompas 15y agoElaborate? You're being vague, and from what I've seen we have no problems with the capital we produce.
- Estragon 15y agoWhatever its actual economic merit it seems obvious that there will be another QE3 as soon as the derivatives and bad loans still in play cause another liquidity crisis. My personal investment strategy is exactly in line with what you describe businesses doing: stay out of the market until there's another crunch which looks severe enough that the USG will feel forced to intervene. (And stay out of USD in the meantime.)
- entangld 15y agoIsn't a very large proportion of American labor unskilled? Real unemployment is always worse than the figure they give (when you account for people who stopped looking).
- achompas 15y agoI can't say how many workers have less than a HS degree. A trip to bls.gov would help, but I'm on an iPhone. I imagine the majority of American workers have a HS degree, at least.