US Economy added no jobs in August

[DaveShack]

IMO the actual problem here is that we're saturated in terms of things people can buy. When every individual (or at least a high percentage) already has a cell phone, computer, TV, refrigerator, car (down to the age who can drive), game system, etc -- there is nothing left to sell people. And because everyone went into debt to get all those things, we're individually all spent out.

We could be selling all these things to the expanding economies, except that we offshored all the means of production a long time ago. Not only did we go into debt for our cushy lifestyle, but we shipped all that money overseas and created a billion overseas jobs in the process. Now it's coming back to bite us, big time.

The cure might actually be something that we'd normally panic at the mention of. What we really need might be some serious inflation -- as long as it inflates both wages and prices, but doesn't inflate the debt. And we need the next big thing^TM that business is willing to spend R&D on and consumers are willing to buy. And this time, make it illegal to export the jobs.

 

[Cutlass]

Boondoggles are not our way out of this.

Why build a boondoggle when there are millions of investment projects begging for capital?

 

[Tani Coyote]

Why build a boondoggle when there are millions of investment projects begging for capital?

Never mind, weapons are the best boondoggle of all - you use them once, they're gone. At least, the ammo is. But the planes, tanks, etc. need replacement too. It's money in a hole, pure and simple.

...and it was what dragged us out of the Depression.

So, why not big spend on stuff that'll actually be useful down the road?

High-Speed rail has benefits over plane and car travel over medium distances.

Renewable energy... well, that should sell easily enough. My mother says that's one area she hates the Republican Party(Despite being a strong conservative herself) in - their lack of willingness to embrace sustainable energy rather than "Drill baby, drill!"

Oil will last us maybe a few more centuries?

Solar, hydrogen, wind will last until the planet is destroyed, which likely won't happen for MILLIONS of years. Sounds like a more savvy investment, especially as oil prices are shooting up. Hydrogen is the best power source, pure and simple. We can use it for power, we can use it for transportation... the possibilities are endless. It says a lot we've made good use of it for war but not for peace.

 

[DaveShack]

Renewable energy... well, that should sell easily enough. My mother says that's one area she hates the Republican Party(Despite being a strong conservative herself) in - their lack of willingness to embrace sustainable energy rather than "Drill baby, drill!"

Drilling or not drilling is not an energy policy decision. It is strictly environmental, with the environmentalists on the don't drill side and business interests on the drill side.

Business is quite capable of going on its own to where the biggest profits are, if left to its own devices. If the people want to buy alternative, and it's possible to make a profit on it, then business will want to sell it. And as long as the consumer is not buying or there is no profit, business is not going to be interested in selling it.

 

[GamezRule]

And when the oil's all gone and we never bothered to invest in a renewable infrastructure, where will we be?

 

[amadeus]

And when the oil's all gone and we never bothered to invest in a renewable infrastructure, where will we be?

Where will we be during a gradual, global slowdown of oil production? Or are we operating on the silliest of hypothesis, where one day we wake up and all the wells are dry?

 

[Agent Cooper]

And when the oil's all gone and we never bothered to invest in a renewable infrastructure, where will we be?

At the mercy of those nations that bothered to develop commercial fusion power, invest in renewable energy along the bumpy road and hydrogen powered cars?

In all seriousness, Vestas CEO Ditlev Engel once asked while interviewed, how come they had no US competitors in the global markets for windpower technology. He couldn't figure it out. He estimated that the most fierce competition (besides the players already present) they would encounter in the near future would emerge from - yep, you guessed it, China.

 

[DaveShack]

Once it's apparent there is sufficient profit, the industry will be climbing over each other for the privilege of building that infrastructure, with no need for public money at all. Ever wonder how many people are employed by the wireless industry trying to get their competing 3G and 4G networks up?

 

[Camikaze]

'The industry', as such, doesn't strike me as being all the good at taking into account long-term interests, though (and why should they be? There motive is to produce a profit for their shareholders, not for their shareholders' children). Renewable energy is the way of the future, but business may not decide to invest in it or may not view it as profitable until we hit another oil crisis, for instance. Renewable energy does seem to be the next big thing^TM that you were mentioning, with the problem for the US being that China is leading the way. If it is going to work to America's advantage, and if business is not able to take into account the long-term interest, then what is required to get it kick-started?

I agree with you that to drill or not drill is more of an environmental issue rather than an economic one (and this is why China is still building a coal-based power station every week, as well as accelerating their development in renewable energy), but if you're choosing the 'drill' option, it's insufficient to not supplement that with long-term planning for what comes after the drilling. It's insufficient to get there before asking, 'what next?' There needs to be a consideration of energy policy alongside the decision of whether to drill or not, because it's contrary to America's national interest to fall behind in this area, as it is currently doing (which is why the US military favours renewable development in the short term, rather than leaving it until later when it's too late).

 

[Tani Coyote]

Drilling or not drilling is not an energy policy decision. It is strictly environmental, with the environmentalists on the don't drill side and business interests on the drill side.

No, it is very much as much an energy decision. The GOP frequently proposes using our own oil for energy independence. The Democrats propose renewable and/or green energy as a means for energy independence.

Both want it, but they can't decide how to do it. Which is why the status quo remains. And indeed, it makes sense: the GOP has friends in business, and the Democrats have friends in environmentalists.

Business is quite capable of going on its own to where the biggest profits are, if left to its own devices. If the people want to buy alternative, and it's possible to make a profit on it, then business will want to sell it. And as long as the consumer is not buying or there is no profit, business is not going to be interested in selling it.

So why not make it easier for businesses to go there, by subsidising the research?

Plus, imagine all the jobs that could be created by this new infrastructure. It's an investment, not a hole in the ground. Contrary to popular belief, not all government spending is inherently wasteful. If the government could build something that generates a 5-10% annual return... I think that's a good idea. The common people certainly aren't spending their money wisely.

It's easy to demonise deficits because no one looks at externalities. Let's say the highways run a deficit even with the petrol tax. Would we propose getting rid of them? No way in heck, because of how much economic good they generate, which in turn makes the highways pay for themselves.

 

[Leoreth]

Don't know if that was meant seriously, but considering military spending as a good investment is the pinnacle of the broken window fallacy.

And it's not even necessary to think about these things. The US can spend billions on infrastructure and get something actually useful out of the deal besides the economic stimulus. Especially things like new power lines beg for heavy funding, and that would even be true without a recession that requires stimuli. How a nation which considers itself first among the developed world can live with regular blackouts is beyond me.

 

[Algeroth]

The hole in GDP:

I'm wondering, don't you have one with 1984-2011 trend as well as with 2008-2011 trend in single picture?

 

[Tani Coyote]

Don't know if that was meant seriously, but considering military spending as a good investment is the pinnacle of the broken window fallacy.

This must have been directed at someone else, because I long ago said it's ridiculous to justify military spending but not social as "stimulating the economy."

And it's not even necessary to think about these things. The US can spend billions on infrastructure and get something actually useful out of the deal besides the economic stimulus. Especially things like new power lines beg for heavy funding, and that would even be true without a recession that requires stimuli. How a nation which considers itself first among the developed world can live with regular blackouts is beyond me.

Oh, yes, these would be useful during a recession or boom. But during a recession it logically will carry an additional bonus of more jobs.

Costs/benefits change with time and location, after all. It'd probably be miles cheaper to build renewable energy in the Third World, but where does that benefit us?

That said... it does seem like there'd be an argument there to use the undeveloped nations as a "testing ground" for these kinds of projects. We can still conduct our research and development there, but much more cheaply.

 

[Ayatollah So]

MV=PQ is AD.

A big part of the problem, it seems to me, is to get the M into hands that will impart some V. In some politically and/or legally possible way.

Obama is the perfect guy to rally the public, he just won't.

The "won't" is exactly why he's not the guy. Tragic flaw, in an anti-hubris kinda way.