Authored by David Stockman via Contra Corner blog,
If you want to know why both Wall Street and Washington are so delusional about America’s baleful economic predicament, just consider this morsel from yesterday’s Wall Street Journal on the purportedly awesome November jobs report.
Wages rose just 2.5% from a year earlier in November – near the same lackluster pace maintained since late 2015, despite a much lower unemployment rate. But in a positive sign for Americans’ incomes, the average work week increased by about 6 minutes to 34.5 hours in November…. November marked the 86th straight month employers added to payrolls.
Whoopee!
Six whole minutes added to a work week that has been shrinking for decades owing to the relentlessly deteriorating quality mix of the “jobs” counted by the BLS establishment survey. In fact, even by that dubious measure, the work week is still shorter than it was at the December 2007 pre-crisis peak (33.8) and well below its 2000 peak level.
It is my sincere desire to provide readers of this site with the best unbiased information available, and a forum where it can be discussed openly, as our Founders intended. But it is not easy nor inexpensive to do so, especially when those who wish to prevent us from making the truth known, attack us without mercy on all fronts on a daily basis. So each time you visit the site, I would ask that you consider the value that you receive and have received from The Burning Platform and the community of which you are a vital part. I can't do it all alone, and I need your help and support to keep it alive. Please consider contributing an amount commensurate to the value that you receive from this site and community, or even by becoming a sustaining supporter through periodic contributions. [Burning Platform LLC - PO Box 1520 Kulpsville, PA 19443] or Paypal
-----------------------------------------------------
To donate via Stripe, click here.
-----------------------------------------------------
Use promo code ILMF2, and save up to 66% on all MyPillow purchases. (The Burning Platform benefits when you use this promo code.)
The reason isn’t hard to figure: The US economy is generating fewer and fewer goods producing jobs where the work week averages 40.5 hours and weekly pay equates to $58,400 annually and far more bar, hotel and restaurant jobs, where the work week averages just 26.1 hours and weekly pay equates to only $21,000 annually.
In other words, the ballyhooed headline averages are essentially meaningless noise because the BLS counts all jobs equal—-that is, a 10-hour per week gig at the minimum wage at McDonald’s weighs the same as a 45 hour per week (with overtime) job at the Caterpillar plant in Peoria that pays $80,000 annually in wages and benefits.
When the line is trending inexorably from the upper left to the lower right, of course, it means there are more of the former and fewer of the latter. Six more minutes of continuing worse—-is still bad.
As a matter of fact, the November report showed 20.199 million goods-producing jobs in manufacturing, construction and energy/mining, which did represent about a 2% improvement from prior year.
The real story, however is not about the short-term monthly or annual deltas being generating by an economy barely crawling forward. Rather, at 102 months, the current business cycle is exceedingly long in the tooth by historic standards (the longest expansion was just 118 months under the far more propitious circumstances of the 1990s).
In fact, what has been the weakest expansion in history by far may now be finally running out of gas.
During the last several weeks the pace of US treasury payroll tax collections has actually dropped sharply—and it is ultimately Uncle Sam’s collection box which gives the most accurate, concurrent reading on the state of the US economy. Some 20 million employers do not tend to send in withholding receipts for the kind of phantom seasonally maladjusted, imputed and trend-modeled jobs which populate the BLS reports.
Yet we we are not close to having recovered the 4.3 million goods producing jobs lost in the Great Recession; 40% of them are still AWOL—meaning they are not likely to be recovered before the next recession hits.
Stated differently, the US economy has been shedding high paying goods producing jobs ever since they peaked at 25 million way back in 1980. Indeed, we are still not even close to the 24.6 million figure which was posted at the turn of the century.
By contrast, the count of leisure and hospitality jobs( bars, hotels and restaurants), or what we have dubbed the “Bread and Circuses Economy” keeps growing steadily, thereby filling up the empty space where good jobs have vacated the BLS headline total.
Thus, when goods-producing jobs peaked at 25 million back in 1980, there were only 6.7 million jobs in leisure and hospitality. Today that sector employs 16.0 million part-time, low-pay workers or 2.4X the four decade ago level.
Yes, there is nothing wrong with these jobs or the workers who hold them, but the fact that they constitute a rapidly increasing share of the mix is powerful proof that the job market is not nearly as awesome as it is cracked up to be; and that the monthly BLS report is surely no measure at all of a rising standard of living in Flyover America.
The larger point is that the monthly jobs report is really neither a report on true labor market conditions or a proxy for genuine economic growth. The fact is, without sustained growth of full-time, full-pay “breadwinner” jobs there is no real economic recovery or progress.
And we literally mean, no progress. With an update for November’s results, the chart below would show 72.8 million “breadwinner jobs” in goods production, the white collar professions, business management and support, transportation and distribution, FIRE (finance insurance and real estate) and full-time government jobs outside of schools.
As it happens, that is virtually the same number posted by the BLS back in January 2001 when Bill Clinton was packing his bags to vacate the Oval office. In short, three presidents later—all of whom have claimed undying devotion to good jobs and rising living standards—and there is hardly a single new breadwinner job.
The above chart does not bring the concept of awesome to mind. In fact, it reminds of the same kind of stagnation that is evident in all the key metrics for real economic progress. For instance, an economy flat-out can not grow without steady gains in industrial production, which includes energy extraction and all facets of goods manufacturing from automobiles to furniture clothes, shoes and canned soup.
But like in the case of “breadwinner jobs”, this so-called recovery has generated none of it. The index of industrial production stands at exactly the level of the pre-crisis peak a full decade ago.
There is a whole raft of these statistics, but the following graph leaves little to the imagination.
Notwithstanding the Fed’s whacko claim that it hasn’t generated enough inflation in recent years, the truth is that even by the BLS’ faulty measuring stick every single dollar of median household income gain has been eaten up by CPI inflation. Accordingly, there has been zero gain in real median household income for the entirety of this century!
What does our latest Oval Office occupant plan to do about this? Why nothing less than borrow $1.8 trillion from future taxpayers in order to enable corporations and other business to crank-out even bigger financial engineering distributions to shareholders in the form of dividends, stock buybacks and M&A deals.
This isn’t even “disruption” as per the Donald’s real job. It’s just dumb and fiscally irresponsible beyond measure – a message we have once again taken to the mainstream media in recent days.
“Gentlemen, we can rebuild him. We have the technology. We have the capability to make the world’s first bionic man. Steve Austin will be that man. Better than he was before. Better…stronger…faster.”
The six minute dollar man….
NAFTA bled off a lot of those high paying jobs!
Trump is trying to bring them back to America by changing NAFTA vehicle content but is getting push back from the car companies.
Yep
Importing H-1B workers has also kept the jobs not bled off lower in wages than they should be by increasing lower wage foreign workers competing with American workers for them at home.
All the new jobs, net, went to aliens. That has been true since 2001..Thank you, Bushes!
The salient point is this: If you continue to raise the price of everything, as if the customer can afford it, then expect the customer to actually afford it, you are in for a big disappointment. When you base the backing on many layers of loans on the backs of tax donkeys that cannot afford the payments, you are in for a big reset. That is just the facts of it. You can kick the can for a while, but with each kick, the exponential weight of the mismatch grows with each “crank” of the wheel.
The biggest thing that could be done, right now, to make the fall much less severe is to reign in the medical monopolies. This single act would make the Federal / Local debt levels sustainable for much longer. At least buying enough time to slowly fix a lot of the other inequities within the economy.
I saw the below comment over at patrick.net.
http://www.patrick.net/post/1312361/2017-12-09-merry-christmas-pat-net-bears-12-reasons-why-the-american-bears-failed-in-this-cycle
WineHorror
patrick.net #Economics
#housing #investing #politics #random more»
782,274 comments by 11,973 users; bob2356, WineHorror and 16 lurkers online now
new post
« prev Economics
▲
4
1
▼ Merry Christmas Pat.net Bears: 12 reasons why the American bears failed in this cycle
By Logan Mohtashami follow Logan Mohtashami 2017 Dec 9, 7:25am uncivil 225 views 34 comments watch quote share
1. Over 154,000,000 Americans working with the longest job expansion on record with consecutive months
2. Poverty as a % of total population has been falling …. not rising
3. Unemployment claims are really really low
4. Job openings are really really high
5. 96 Trillion dollars of net asset wealth and those with the biggest debt owns the biggest net assets, so don’t play that poor debt slavery card here
6. Both MMT and Gold bugs failed in this cycle miserably Warren Mosler and Peter Schifffy… failed their followers and Gold has acted poorly considering Kimmy has shot 20 missiles
7. DPI is rising
8. The dollar never collapsed folks in fact is still very elevated in this cycle
9. Inflation.. what inflation? and No Iwog we aren’t Japan yet
10. People aren’t as mad as the troll bots and people who hide behind fake names
11. Harry Dent is still a Jack ass but he has a lot company in this cycle
12. I get what you guys do here… and I can’t really talk much anymore… but I want you all to remember what I tell all my followers
The weak cry, they beg, they promote fear, death and destruction … but the American bears are a certain kind of lame pathetic troll bot creature …you forsaken your country for some oath to a cause that never existed
Always hide, always never show your real name, always be a Bear….
Don’t forget you all live and will die in this country … and so will your kids and grand kids
This is America.. Merry Christmas
#Economics #Politics #AmericanBearsAreLame
#Demographics
Oh … by the way.. why don’t you guys ever talk about how the robots aren’t being hired in this cycle … no love for the robots out a job this Christmas
1 mell ignore (1) 2017 Dec 9, 8:33am ↑ like (2) ↓ dislike (1) uncivil quote
You forgot the most important reason for the economic success: MAGA!
Merry Christmas!
#MAGA
2 Quigley ignore (0) 2017 Dec 9, 8:47am ↑ like (2) ↓ dislike (0) uncivil quote
Any idiot could see that we’ve been on the way up for a while now. The economy is pumping along and both business and consumers are confident that it will get even better under Trump’s benevolent rule. They can scream and cry and claim that the sky is falling and Hitler has been reborn in our POTUS, but they can’t deny that the economy continues to improve in every way.
God bless America!
3 BorderPatrol ignore (0) 2017 Dec 9, 9:37am ↑ like (0) ↓ dislike (0) uncivil quote
where are you going to vacation next?
4 Goran_K ignore (0) 2017 Dec 9, 9:40am ↑ like (2) ↓ dislike (1) uncivil quote
Trump’s election has had the exact opposite effect of what leftist economist like Krugman were predicting.
5 HEYYOU ignore (4) 2017 Dec 9, 10:14am ↑ like (0) ↓ dislike (0) uncivil quote
http://www.usadebtclock.com/
6 HEYYOU ignore (4) 2017 Dec 9, 10:19am ↑ like (0) ↓ dislike (0) uncivil quote
http://www.kctv5.com/story/36976446/1-in-5-americans-has-no-net-worth-or-less
7 Logan Mohtashami ignore (0) 2017 Dec 9, 10:30am ↑ like (0) ↓ dislike (0) uncivil quote
mell says
#MAGA
Be mindful job growth slowed in 2017 like it did in 2016 and 2015
GDP growth is looking to be at 2.6% total in 2017
8 Ceffer ignore (1) 2017 Dec 9, 11:13am ↑ like (1) ↓ dislike (0) uncivil quote
This is way too much common sense. Now, back to our regular programming. IMPEACH TRUMP!
9 HEYYOU ignore (4) 2017 Dec 9, 11:13am ↑ like (0) ↓ dislike (1) uncivil quote
http://market-ticker.org/akcs-www?post=232650
10 anon_d06f9 ignore (1) 2017 Dec 9, 11:40am ↑ like (0) ↓ dislike (0) uncivil quote
Merry Christmas Logan – Glad to see you back giving our bears a good fisting.
Interestingly many of our remaining bears are also trump supporters, so they now want to claim that the same economy the shat upon for the last 6-7 years of obama is now suddenly “great” now that Trump is in the oval office.
Best to you & yours this holiday season.
11 anon_c1d53 ignore (0) 2017 Dec 9, 11:41am ↑ like (0) ↓ dislike (1) uncivil quote
Eventually the bears will be right. When that happens, don’t forget to stop by and explain why it happened.
12 Logan Mohtashami ignore (0) 2017 Dec 9, 2:30pm ↑ like (0) ↓ dislike (0) uncivil quote
anon_c1d53 says
When that happens, don’t forget to stop by and explain why it happened.
1. Over investment thesis
2. Fed is fighting inflation
We are going to get an inversion next year 1.56% – 2.62% 10 year channel is in place, one small sell off and oil dropping and you got your inversion in 2018
13 anon_1c9a4 ignore (0) 2017 Dec 9, 2:36pm ↑ like (0) ↓ dislike (0) uncivil quote
HEYYOU says
http://www.usadebtclock.com/
Perfect example of a permabear. Hey you, per your debt clock website please. Point to:
A. a period where the debt clock showed positive signs for the economy and
B when that positive period happened during your lifetime.
Alternatively, you could respond that there has never been a positive looking economic picture in your lifetime.
14 mell ignore (1) 2017 Dec 9, 2:41pm ↑ like (0) ↓ dislike (0) uncivil quote
anon_c1d53 says
Eventually the bears will be right. When that happens, don’t forget to stop by and explain why it happened.
@Patrick this comment shows you dislike this though I never clicked on it. Must be a bug.
15 FortWayne ignore (0) 2017 Dec 9, 2:42pm ↑ like (0) ↓ dislike (0) uncivil quote
If this is a boom cycle, I am afraid of the bust.
16 Patrick ignore (0) 2017 Dec 9, 3:04pm ↑ like (0) ↓ dislike (0) uncivil quote
mell says
anon_c1d53 says
Eventually the bears will be right. When that happens, don’t forget to stop by and explain why it happened.
Patrick this comment shows you dislike this though I never clicked on it. Must be a bug.
@mell it is possibly a bug, though I don’t see exactly how. Here’s the code for comment dislikes:
https://github.com/killelea/node.patrick.net/blob/master/node/patrick_net.js#L1347
17 anon_1c9a4 ignore (0) 2017 Dec 9, 3:12pm ↑ like (0) ↓ dislike (0) uncivil quote
anon_c1d53 says
Eventually the bears will be right. When that happens, don’t forget to stop by and explain why it happened.
In fairness to Logan, he was bearish A few years ago before he became bullish giving him for more credibility than most. If he does it right he will indeed be back and bearish when the permabears are indeed right.
18 lostand confused ignore (0) 2017 Dec 9, 3:39pm ↑ like (0) ↓ dislike (0) uncivil quote
What about sex robots??
19 Logan Mohtashami ignore (0) 2017 Dec 9, 3:48pm ↑ like (0) ↓ dislike (0) uncivil quote
anon_1c9a4 says
In fairness to Logan, he was bearish A few years ago
2011
2012
2013
2014
2015
2016
2017
Predictions for the year had Zero Recession calls or Great collapse theory calls in them, didn’t write before 10
2017 Prediction right here
Difference between a rate of growth model cycle vs a Recession call… or in this case… a massive amount of terrible macro economic calls about a collapse
Mostly Gold Bugs, Anti Central Bank People, MMT people and host of other economic cults that can’t read data worth squat
I felt bad for these people really after 2014 because they thought the world would end when QE purchases would no longer be happening…
Tragic error
20 Logan Mohtashami ignore (0) 2017 Dec 9, 3:51pm ↑ like (0) ↓ dislike (0) uncivil quote
Speaking of which… Don’t blame a lack of labor for the lack of construction in total housing starts…
Ghost theory: The lack of labor for construction
Even the Freddie Mac economist came aboard with my thesis
HOUSING CONSTRUCTION AND EMPLOYMENT TRENDS
http://lenkiefer.com/2017/11/28/housing-construction-and-employment/
21 Logan Mohtashami ignore (0) 2017 Dec 9, 3:53pm ↑ like (0) ↓ dislike (0) uncivil quote
Please don’t move the goal post with the balance sheet debate …. that has also been disproved
22 anon_c6781 ignore (0) 2017 Dec 9, 4:06pm ↑ like (0) ↓ dislike (0) uncivil quote
People with TDS should sell out of the stock market and buy gold, LOL.
23 Logan Mohtashami ignore (0) 2017 Dec 9, 4:08pm ↑ like (0) ↓ dislike (0) uncivil quote
Mid 2019.. expansion gets to that age…. we are all part of economic history… No time ever in U.S. history have we had the longest job expansion and longest economic expansion in the same cycle ….
and we are running into a better demographic patch in the next decade ….
We want to bury the American bears once and for all…. the extreme left and right have embarrassed themselves in this cycle…. we won’t ever let them off the hook! No way… not one time in the next 22 years.. We will never forget
24 Strategist ignore (0) 2017 Dec 9, 4:17pm ↑ like (0) ↓ dislike (0) uncivil quote
Logan Mohtashami says
Merry Christmas Pat.net Bears: 12 reasons why the American bears failed in this cycle
Stop boasting about the economy. You will upset the bears.
25 Logan Mohtashami ignore (0) 2017 Dec 9, 4:21pm ↑ like (0) ↓ dislike (0) uncivil quote
Strategist says
You will upset the bears.
I think they took Dr. Doom off the air for good because of his racist comments but he probably wanted to get off the air… he has been dead awful even for his standards
26 Strategist ignore (0) 2017 Dec 9, 4:25pm ↑ like (0) ↓ dislike (0) uncivil quote
Logan Mohtashami says
Strategist says
You will upset the bears.
I think they took Dr. Doom off the air for good because of his racist comments but he probably wanted to get off the air… he has been dead awful even for his standards
Very sad. It was so much fun laughing at him. What about Peter Schitt? Has he shot himself yet?
27 Logan Mohtashami ignore (0) 2017 Dec 9, 4:27pm ↑ like (0) ↓ dislike (0) uncivil quote
Strategist says
Peter
Peter has a bigger problem now…. Bitty is much more popular than gold and does he really want to call for a crash in a big marketing way with Trump as President
28 bob2356 ignore (1) 2017 Dec 9, 4:38pm ↑ like (0) ↓ dislike (0) uncivil quote
Logan Mohtashami says
1. Over 154,000,000 Americans working with the longest job expansion on record with consecutive months
But, but, but I was told obama destroyed the economy. Was that not true somehow?
I’m not seeing anything about cheap energy here. Big economic expansions always seem to happen during cheap energy periods.
29 Logan Mohtashami ignore (0) 2017 Dec 9, 4:43pm ↑ like (0) ↓ dislike (0) uncivil quote
bob2356 says
But, but, but I was told obama destroyed the economy. Was that not true somehow?
Due to the nature of business cycles and the lack of omnipotent power …. Not much a sitting President can do about economic cycles, especially if the other party has the house and Senate.
A lot terrible conservative economic thinkers that just hated Obama… but they made the big mistake on betting against the country …
Cheap Energy, actually the only real hit we took in this cycle was when the dollar got strong, oil prices crashed and we saw lost economic output in those oil states, retail sales trend stayed its course even with oil prices high and low
Rig counts got thrashed but production of oil was still strong and now are producing more oil than ever
30 Logan Mohtashami ignore (0) 2017 Dec 9, 4:44pm ↑ like (0) ↓ dislike (0) uncivil quote
People forget or don’t know that a lot word trade & manufacturing moves around oil prices
31 APOCALYPSEFUCK_is_ADORABLE ignore (5) 2017 Dec 9, 4:45pm ↑ like (1) ↓ dislike (0) uncivil quote
I believe anything I read on the Internet from people who pay to speak at ‘investor conferences’ to defraud aged pensioners who are desperate for anything with yield.
32 Logan Mohtashami ignore (0) 2017 Dec 9, 4:45pm ↑ like (0) ↓ dislike (0) uncivil quote
Now that oil prices are up, exports are more important in other countries world growth has hit a 10 year high
With Globalism winning in 2017…. The Irony !!!!!!!!!!!!!!!!!!
33 Logan Mohtashami ignore (0) 2017 Dec 9, 4:51pm ↑ like (0) ↓ dislike (0) uncivil quote
APOCALYPSEFUCK_is_ADORABLE says
I believe anything I read on the Internet from people who pay to speak at ‘investor conferences’
You’re still mad about that old man…. tsk tsk…. Grumpy Kitty…. let me refresh it up with 2017 not 2016
34 Logan Mohtashami ignore (0) 2017 Dec 9, 4:59pm ↑ like (0) ↓ dislike (0) uncivil quote
In any case!
My last post on this thread …. Merry Christmas, Happy New Year, don’t forget all American bears since 1790 have failed, don’t join that group, recessions come and go. but we will recover because we have good demographics for a mature country!!!
Comment as WineHorror :
Choose File
Include Image
submit
users about suggestions source code contact
topics best comments comment jail old posts by year
10 reasons it’s a terrible time to buy
8 groups who lie about the housing market
37 bogus arguments about housing
get a free bumper sticker:
search…
top bottom home
I saw the following over at patrick.net.
http://www.patrick.net/post/1312361/2017-12-09-merry-christmas-pat-net-bears-12-reasons-why-the-american-bears-failed-in-this-cycle
SSDD and different POTUS ! The swamp thing circle jerk will only be interrupted by a few strokes and then business as usual Wall Street to K-Street to Capitol Street , wash rinse repeat ! As for our illustrious men and women of the people elected to represent us LMAO ! They get several terms in office at $130 K per year and all leave Office multi millionaires and laugh at us till the piss their pants or panties . Then they go to work for some blah blah federally funded bull shit job so their trough feeding continues OINK OINK
One of the questions that keeps coming up is why does Trump keep pushing the false numbers? In my opinion, if the President suddenly sees the truth and broadcasts over twitter that, indeed we are all screwed, the fallout will be predictable with a crash and chaos inevitably. (actually, he will be called a liar by the media and life will probably go on as usual).
Anyway, he is doing what he should be doing, keeping things stable to try to make the inevitable crash a little more easier to absorb. The variables are the never Trumper’s and the media who are desperately looking for something terrible to happen like a market crash, so they can justify their hatred of him, so it’s not so easy to navigate in these waters. In the best case scenario, I really don’t know if a soft landing is doable, the future is entirely up in the air; we’ll just have to wait and see.