Home » Posts tagged 'contracorner' (Page 7)
Tag Archives: contracorner
Krugman’s Dopey Diatribe Deifying The Public Debt
Krugman’s Dopey Diatribe Deifying The Public Debt
Actually, dopey does not even begin to describe Paul Krugman’s latest spot of tommyrot. But least it appear that the good professor is being caricaturized, here are his own words. In a world drowning in government debt what we desperately need, by golly, is more of the same:
That is, there’s a reasonable argument to be made that part of what ails the world economy right now is that governments aren’t deep enough in debt.
Yes, indeed. There is currently about $60 trillion of public debt outstanding on a worldwide basis compared to less than $20 trillion at the turn of the century. But somehow this isn’t enough, even though the gain in public debt——-from the US to Europe, Japan, China, Brazil and the rest of the debt saturated EM world—–actually exceeds the $35 billion growth of global GDP during the last 15 years.
But rather than explain why economic growth in most of the world is slowing to a crawl despite this unprecedented eruption of public debt, Krugman chose to smack down one of his patented strawmen. Noting that Rand Paul had lamented that 1835 was the last time the US was “debt free”, the Nobel prize winner offered up a big fat non sequitir:
Wags quickly noted that the U.S. economy has, on the whole, done pretty well these past 180 years, suggesting that having the government owe the private sector money might not be all that bad a thing. The British government, by the way, has been in debt for more than three centuries, an era spanning the Industrial Revolution, victory over Napoleon, and more.
Neither Rand Paul nor any other fiscal conservative ever said that public debt per se would freeze economic growth or technological progress hard in the horse and boggy age. The question is one of degree and of whether at today’s unprecedented public debt levels we get economic growth—–even at a tepid rate—–in spite of rather than because of soaring government debt.
…click on the above link to read the rest of the article…
Can Kickers United—–Why It’s Getting Downright Hazardous Out There
Can Kickers United—–Why It’s Getting Downright Hazardous Out There
It’s getting downright hazardous out there, and not just because the robo-machines were slamming the “sell” key today. The real danger comes from the loose assemblage of official institutions which claim to be running the world.
They might better be referred to as “can kickers united.” It is now blindly obvious that they have lapsed into empty ritualism, contrivance and double-talk in the face of a global economy and financial system that is becoming more unstable and incendiary by the day.
Who in their right mind would pile $95 billion of new debt on the busted remnants of Greece? Likewise, how can Japan possibly consider enacting still another round of fiscal stimulus when it already has one quadrillion yen of debt? And what geniuses are trying to fix the bankrupt finances of China’s local governments by swapping trillions of crushing bank loans for equivalent mountains of new municipal bonds?
Turning to the the home front it is more of the same. By what rational calculus can it be said, as the Fed did in its meeting minutes, that 80 months of free money has not quite yet done the job? And that is exactly what these mountebanks had to say:
The Committee concluded that, although it had seen further progress, the economic conditions warranting an increase in the target range for the federal funds rate had not yet been met.Members generally agreed that additional information on the outlook would be necessary before deciding to implement an increase in the target range.
Say again! We are now 74 months into a so-called “recovery” cycle that is well longer than the post-war average, yet the Fed is still manning the emergency fire hoses:
Even its own research department at the St. Louis Fed has just confessed that the whole rigmarole of QE and ZIRP has had no favorable impact on the main street economy.
…click on the above link to read the rest of the article…
The Wall Street Ponzi At Work——The Stock Pumping Swindle Behind Four Retail Zombies
The Wall Street Ponzi At Work——The Stock Pumping Swindle Behind Four Retail Zombies
In the nearby column Jim Quinn debunks Wall Street’s latest claim that the American consumer is bounding back. He points out that on an inflation-adjusted basis retail sales are barely higher than they were a year ago, and, for that matter, are still only 4% greater in real terms than they were way back in November 2007.
That’s right. Nearly eight years and $3.5 trillion of Fed money printing later, yet the vaunted American consumer is struggling to stay above the flat line, not shopping up a storm.
And there is no mystery as to why. After a 40-year borrowing spree culminating in the final mortgage credit blow-off on the eve of the great financial crisis, the US household sector had reached peak debt. It was tapped out with $13 trillion of mortgages, credit cards, auto, student and other loans —–a colossal financial burden that amounted to nearly 220% of wage and salary income or nearly triple the leverage ratio that had prevailed before 1971.
So, as is evident from the graph above, we are now in a completely different economic ball game than the consumer debt binge cycle that culminated in 2008. Households are deleveraging out of necessity, and that means that consumer spending is tethered to the tepid growth of national output and wage income.
Yet sell side economists and the financial press are so desperate for factoids that confirm the Keynesian “recovery” narrative——that is, the false claim that the US economy has been successfully lifted out of a growth rut by mega-injections of fiscal and monetary “stimulus”—— that they get just plain giddy about Washington’s seasonally maladjusted, endlessly revised monthly data squiggles.
Thus, in response to the 0.6% gain in July retail sales, The Wall Street Journal’s headline proclaimed, “In a Show of Confidence, Americans Boost Spending”.
…click on the above link to read the rest of the article…
The Great China Ponzi—-An Economic And Financial Trainwreck Which Will Rattle The World
The Great China Ponzi—-An Economic And Financial Trainwreck Which Will Rattle The World
There is an economic and financial trainwreck rumbling through the world economy. Namely, the Great China Ponzi. In all of economic history there has never been anything like it. It is only a matter of time before it ends in a spectacular collapse, leaving the global financial bubble of the last two decades in shambles.
But here’s the Wall Street meme that is stupendously wrong and that engenders blind complacency with respect to the impending upheaval. To wit, the same folks who brought you the myth of the BRICs miracle would now have you believe that China is undergoing a difficult but doable transition——-from an economy driven by booming exports and monumental fixed asset investment to one based on steady as she goes US-style consumption and services.
There may well be some bumps and grinds along the way, we are cautioned, such as the recent stock market and currency turmoil. But do not be troubled—–the great locomotive of the world economy will come out the other side better and stronger. That’s because the wise, pragmatic and powerful leaders and economic managers who deftly guide China’s version of capitalism have the capacity to make it all happen.
No they don’t!
China is not a clone-in-the-making of America’s $18 trillion consume till you drop economy—-even if that model were stable and sustainable, which it is not. China is actually sui generis—–a historical freak accident that has no destination other than a crash landing.
It’s leaders are neither wise nor deft economic managers. In fact, they are a bunch of communist party political hacks who have an iron grip on state power because China is a crude dictatorship. But their grasp of the fundamentals of economic law and sound finance can not even be described as negligible; it’s non-existent.
…click on the above link to read the rest of the article…
Birinyi’s S&P 3200 Call——Bull From A 30-Year Bull
Birinyi’s S&P 3200 Call——Bull From A 30-Year Bull
When stock market guru Laszlo Birinyi told bubblevision today that S&P 3200 would be reached by 2017, his argument was essentially to keep on keeping on:
“What we’re really trying to tell people is stay with it, don’t let the bad news shake you out…There’s no reason we can’t keep on going,” he said.
That got me to thinking about when I first ran into Birinyi at Salomon Brothers way back in 1986. He was then a relatively underpaid numbers cruncher in the equity research department who was adept at making the bull case. Nigh onto 30 years later he has become a rich man crunching the numbers and still making the bull case.
Indeed, I don’t ever recall when he wasn’t making the case to be long equities, and as the chart below shows, you didn’t actually have to crunch the numbers to get there. Just riding the bull from 200 in January 1986 to today’s approximate 2100 on the S&P 500 index computes to a 8.4%CAGR and a 10% annual gain with dividends.
Even when you take the inflation out of it, this 30-year run is something close to awesome. But, alas, that’s my point. It’s too awesome.
In inflation-adjusted terms, the S&P 500 index rose by 6.2% per annum over the last three decades. That compares to just a 2.2% annual advance for real GDP, meaning that the market has risen nearly 3X faster than national output in real terms.
You don’t have to be a math genius to realize that a few more decades of that kind of huge annual spread, and the stock market capitalization would be several hundred times larger than GDP.
Likewise, you don’t have to be a PhD in quantitative historical research to recognize that the last three decades are utterly unique. If you run the clock backwards by 30 years from the January 1986 starting point, for instance, you get a totally different picture.
…click on the above link to read the rest of the article…
Pop Goes The Alpha ( Natural Resources)
Pop Goes The Alpha ( Natural Resources)
If you want a cogent metaphor for the central bank enabled crack-up boom now underway on a global basis, look no further than today’s scheduled chapter 11 filling of met coal supplier Alpha Natural Resources (ANRZ). After becoming a public company in 2005, its market cap soared from practically nothing to $11 billion exactly four years ago. Now it’s back at the zero bound.
ANRZ Market Cap data by YCharts
Yes, bankruptcies happen, and this is most surely a case of horrendous mismanagement. But the mismanagement at issue is that of the world’s central bank cartel.
The latter have insured that there will be thousands of such filings in the years ahead because since the mid-1990s the central banks has engulfed the global economy in an unsustainable credit based spending boom, while utterly disabling and falsifying the financial system that is supposed to price assets honestly, allocate capital efficiently and keep risk and greed in check.
Accordingly, the ANRZ stock bubble depicted above does not merely show that the boys, girls and robo-traders in the casino got way too rambunctious chasing the “BRICs will grow to the sky” tommyrot fed to them by Goldman Sachs. What was actually happening is that the central banks were feeding the world economy with so much phony liquidity and dirt cheap capital that for a time the physical economy seemed to be doing a veritable jack-and-the-beanstalk number.
In fact, the central banks generated a double-pumped boom——first in the form of a credit-fueled consumption spree in the DM economies that energized the great export machine of China and its satellite suppliers; and then after the DM consumption boom crashed in 2008-2009 and threatened to bring the export-mercantilism of China’s red capitalism crashing down on Beijing’s rulers, the PBOC unleashed an even more fantastic investment and infrastructure boom in China and the rest of the EM.
…click on the above link to read the rest of the article…
Fed Is Not Just Behind The Curve, It’s Driving The Bus Over The Cliff
Fed Is Not Just Behind The Curve, It’s Driving The Bus Over The Cliff
So the Fed didn’t raise rates again. And the timing of the rate increase will be data dependent. Ho hum.
There’s just one little problem. The inflation measures the Fed watches really don’t measure inflation. The Fed won’t see what its cronies in the government and economic establishment refuse to measure, which is that we’ve already long since passed the Fed’s 2% inflation target.
Every 3 months the US Census Bureau releases the results of its quarterly housing survey. We now know that rents rose by 6.2% year over year in the second quarter. But the fictitious number that the BLS uses to account for housing costs in the CPI, called Owner’s Equivalent Rent (OER), is only up by +2.9% year over year. The difference of 3.3% is known by the technical term: fudge factor. In this case, the BLS is undercounting the housing component of CPI by more than half.
Owner’s equivalent rent and actual renter’s rent account for 31% of the total weight of the CPI. Multiplying the weighting of this component by the 3.3% fudge factor cuts a full 1% off the headline CPI and 1.3% off core CPI. If rent were counted accurately, headline CPI would be 2.2%, year over year, not 1.2%. Core CPI (excluding food and energy) would be +3.1%, not 1.8%.
Since Core has lately been stronger than the headline number, the Fed has naturally shifted its focus away from Core. But it doesn’t matter. The Fed is behind the curve. Way behind.
Click to view chart from email
…click on the above link to read the rest of the article…
Eurozone Debt Just Keeps Rising—–What Austerity?
Eurozone Debt Just Keeps Rising—–What Austerity?
The eurozone is supposedly in a state of recovery. However, in spite of that recovery, public debt and debt-to GGP levels are still rising. Austerity is difficult to find in any realistic sense.
Please consider Eurozone Borrowing Rises to Record as Recovery Remains Weak.
The European Central Bank’s programme of quantitative easing has pushed down interest rates to ultra low levels, encouraging governments to borrow more in the early part of this year, despite turmoil in Greece.
Across countries that use the euro, average debt to gross domestic product reached 92.9 per cent in the first quarter of 2015, up from 92 per cent in the previous quarter and 91.9 per cent in the same period last year, according to figures from Eurostat, the EU’s statistical agency.
Greece remains the EU’s most indebted nation, with debt equal to 169 per cent of annual GDP, but Italy, Belgium, Cyprus and Portugal also carry government debt that exceeds 100 per cent of economic output.
The rise in debt comes despite a pickup in the pace of recovery in the eurozone, with the region’s economy expanding 0.4 per cent in the first quarter of this year — while the US saw a contraction.
Targets vs. Reality
The “Growth and Stability” pact on which the Eurozone was founded limits debt to 60% of GDP and deficits at no more than 3%.
Average Debt-to-GDP is 92.9% and rising.
Eurostat Data shows Ireland, Greece, Spain, France, Cyprus, Portugal, Belgium, Slovenia, and Finland all exceeded 3% budget deficit requirement in 2014.
France and Spain have been given warnings and extensions on numerous occasions.
Greece Sideshow
By any realistic measure, Greece is just a sideshow for what is to come.
Pater Tenebrarum at the Acting Man blog pinged me with this comment: “The true reason for the bust of Greece and other countries – apart from their truly atrocious socialist policies and abominable corruption – isfractional reserve banking. The euro has of course enabled an even bigger credit boom and bust than would have been the case otherwise, but it is not the fixed exchange rate that is at fault, it is the underlying economic policies and the monetary system as such.”
…click on the above link to read the rest of the article…
Central Banks Have Shot Their Wad——-Why The Casino Is In For A Rude Awakening, Part I
Central Banks Have Shot Their Wad——-Why The Casino Is In For A Rude Awakening, Part I
There has been a lot of chatter in recent days about the plunge in commodity prices—–capped off by this week’s slide of the Bloomberg commodity index to levels not seen since 2002. That epochal development is captured in the chart below, but most of the media gumming about the rapidly accelerating “commodity crunch” misses the essential point.
To wit, the central banks of the world have shot their wad. Accordingly, the 12-year round trip depicted in the chart is not about the end of some nebulous “commodity supercycle” that arrived from out of the blue after the turn of the century. Nor, most certainly, is it evidence of the Keynesians’ purported global shortage of “aggregate demand” that can be remedied by an even more extended spree of central bank monetary stimulus.
No, the Bloomberg Commodity index is a slow motion screen shot depicting the massive intrusion of worldwide central bankers into the global economic and financial system. Their unprecedented spree of money printing took the aggregate global central bank balance sheet from $3 trillion to $22 trillion over the last 15 years.
The consequence was a deep and systematic falsification of financial prices on a planet-wide scale. This unprecedented monetary shock generated a double-pumped economic boom—–first in the form of an artificial debt-fueled consumption spree and then a sequel of massive malinvestment.
Now comes the deflationary aftermath. Soon there will follow a plunge in corporate profits and collapsing prices among the vastly inflated risk asset classes which surfed on these phony booms.
So it is worth recounting how we got here. In the first phase, central banks engineered a massive wave of household borrowing and consumption/housing spending in the DM economies which, in turn, ignited an export manufacturing boom in China and among its caravan of EM suppliers. This China/EM export boom eventually over-taxed the world’s existing capacity to supply the raw materials required by a booming industrial economy—hydrocarbons, iron ore, met coal, aluminum, copper, nickel etc.
…click on the above link to read the rest of the article…
The Curse Of The Euro: Money Corrupted, Democracy Busted
The Curse Of The Euro: Money Corrupted, Democracy Busted
The preposterous Gong Show in Brussels over the weekend was the financial “Ben Tre” moment for the Euro and ECB. That is, it was the moment when the Germans—–imitating the American military on that ghastly morning in February 1968——set fire to the Eurozone in order to save it.
Some day history will judge good riddance……..but that get’s ahead of the story.
According to an American soldier’s first hand recollection of the Vietnam event, it was a Major Booris who infamously told reporter Peter Arnett, “It became necessary to destroy the town to save it”.
After the massacre of Greek democracy in the wee hours Monday morning, Angela Merkel said the same thing—even if her language was a tad less graphic:
It reflects the basic principles which we’ve followed in rescuing the euro. It now hinges on step-by-step implementation of what we agreed tonight.”
Now no one in their right mind could think that lending another $96 billion to an utterly bankrupt country makes any sense whatsoever. After all, the Greek economy has shrunk by 30% since 2008 and is wreathing under what is objectively a $400 billion public debt already in place today.
That figure follows from the fact that on top of Greece’s acknowledged $360 billion of general government debt there’s at least another $25 billion loan embedded in the ELA advances to the Greek banking system. The latter is deeply insolvent, meaning that some considerable portion of the $100 billion ELA currently outstanding is not an advance against good collateral in any plausible banking sense of the word, but merely a backdoor fiscal transfer from the ECB to keep Greece’s financial shipwreck afloat.
Likewise, as I demonstrated Friday, given the even deeper deep hole into which the Greek economy has tumbled during the last six months, the fiscal targets extracted from Greece under this weekend’s demarche are utterly ridiculous. Indeed, even if the targeted primary surpluses of 1,2,3 and 3.5% of GDP are miraculously reached through 2018, upwards of $15 billion of budget deficits after interest accruals would be incurred anyway, and a lot more than that if there are material budget shortfalls, which is a virtual certainty.
…click on the above link to read the rest of the article…
URGENT WARNING: 6 Signs the Great Crash Is Upon Us!
URGENT WARNING: 6 Signs the Great Crash Is Upon Us!
The Greek default proves that all this endless quantitative easing idiocy couldn’t live up to the promises. It has proved unable to create sustainable long-term recoveries in highly indebted developed countries with poor demographic trends.
The Greek parliament caved into totally repulsive demands, as I said on Monday that it would. They did it out of stark fear of the chaos a Grexit would bring before free market forces resolved their trade and budget imbalances.
I don’t believe they did the right thing. From the looks of the discontent on the ground, many Greeks don’t either. Be that as it may, this can has been kicked just a little further down the road, yet again.
But the whole mess made investors nervous. As did the recent collapse of China’s stock market which just added to the growing concerns.
Investors are right to worry. I’ve been saying for years that the greatest trigger would be the bursting of the massive, unprecedented China bubble.
How can it not?!
Its stock market soared 159% in less than a year. It gained 30% in justtwo months!
Then its stocks took a nose dive, losing 35% in less than 30 days.
Understand that if China’s stock market had lost just 20%, it would have meant nothing. But, as I’ve always said, a drop of 30% to 40% in short order is a clear sign of a first wave down in a major bust. That’s why I’m always telling you to rather be safe than sorry. If you don’t follow a reliable, proven investment strategy – like any of our premium research services, from Boom & Bust, Cycle 9 Alert, Max Profit Alert, BioTech Intel Trader, Triple Play Strategy and Dent Digest Trader – waiting passively for that extra 1% or even 5% is like playing Russian Roulette.
…click on the above link to read the rest of the article…
The Curse Of The Euro: Money Corrupted, Democracy Busted
The Curse Of The Euro: Money Corrupted, Democracy Busted
The preposterous Gong Show in Brussels over the weekend was the financial “Ben Tre” moment for the Euro and ECB. That is, it was the moment when the Germans—–imitating the American military on that ghastly morning in February 1968——set fire to the Eurozone in order to save it.
Some day history will judge good riddance……..but that get’s ahead of the story.
According to an American soldier’s first hand recollection of the Vietnam event, it was a Major Booris who infamously told reporter Peter Arnett, “It became necessary to destroy the town to save it”.
After the massacre of Greek democracy in the wee hours Monday morning, Angela Merkel said the same thing—even if her language was a tad less graphic:
It reflects the basic principles which we’ve followed in rescuing the euro. It now hinges on step-by-step implementation of what we agreed tonight.”
Now no one in their right mind could think that lending another $96 billion to an utterly bankrupt country makes any sense whatsoever. After all, the Greek economy has shrunk by 30% since 2008 and is wreathing under what is objectively a $400 billion public debt already in place today.
That figure follows from the fact that on top of Greece’s acknowledged $360 billion of general government debt there’s at least another $25 billion loan embedded in the ELA advances to the Greek banking system. The latter is deeply insolvent, meaning that some considerable portion of the $100 billion ELA currently outstanding is not an advance against good collateral in any plausible banking sense of the word, but merely a backdoor fiscal transfer from the ECB to keep Greece’s financial shipwreck afloat.
Likewise, as I demonstrated Friday, given the even deeper deep hole into which the Greek economy has tumbled during the last six months, the fiscal targets extracted from Greece under this weekend’s demarche are utterly ridiculous.
…click on the above link to read the rest of the article…
German Establishment View On Tsipras/Troika Showdown
German Establishment View On Tsipras/Troika Showdown
Der Spiegel has a long analysis today on the fate of Greece and the Tsipras/EU pas de deux. The tone toward Tsipras seemed secretly admiring while outwardly scornful and hostile. He comes off ultimately as the bad guy who is completely and solely to blame for the worsening crisis, with Merkel and EU bureaucrats portrayed as earnest leaders who badly miscalculated the situation and misread Tsipras.
Spigel simplistically summarized the views of the two sides:
From the Greek perspective, the EU, German Chancellor Angela Merkel and the euro zone are all synonymous with poverty and exploitation. From the perspective of most European Union leaders, on the other hand, Greece is little more than a failed state governed by clientelism and nepotism, a country whose economy has little to offer aside from olive oil and beach bars.
Then it blamed the current Greek regime for exacerbating an already bad situation.
But relations between the Greek government and its partners in the 18 euro-zone capitals are deeply impaired. The Greek economy’s slide has dangerously accelerated under the new government and Brussels has lost almost all of its trust in Athens.
The Spiegel team went on to heap a litany of blame on the Tsipras regime.
Tsipras’s leftist-nationalist government has not done much for the economy. In the six months since the election, Greek parliament has done little to simplify the tax code as promised or to streamline the country’s bureaucracy. Furthermore, the man in charge of promoting international business relations in the Foreign Ministry is a cousin of Prime Minister Alexis Tsipras. But instead of boosting exports, he has primarily drawn attention to himself with his rhetoric of class struggle and his chastisements of Europe.
They apparently had little difficulty finding Tsipras critics within Greece.
…click on the above link to read the rest of the article…
Why China’s Market Isn’t Fixed And The Global Bubble Will Keep Imploding
Why China’s Market Isn’t Fixed And The Global Bubble Will Keep Imploding
China’s stock market is purportedly all fixed and the last two day’s 10% bounce is just the beginning. Indeed, Goldman Sachs has already reiterated that the whole thing is on the level, and that the red chips will again be taking flight:
China’s biggest stock-market rout since 1992 has done nothing to erode the bullish outlook of Goldman Sachs Group Inc………Kinger Lau, the bank’s China strategist in Hong Kong, predicts the large-cap CSI 300 Index will rally 27 percent from Tuesday’s close over the next 12 months as government support measures boost investor confidence and monetary easing spurs economic growth. Leveraged positions aren’t big enough to trigger a market collapse, Lau says, and valuations have room to climb.
Right. The Chinese economy is in an obvious deepening swoon and the median company on the Shanghai exchange had a PE ratio of 60X before the recent break. But no matter. Not only does everything financial race the skyscrapers to the sky in the land of red capitalism, but valuation upside is apparently whatever the comrades in Beijing want it to be.
Says Goldman’s chief stock tout for China,“It’s not in a bubble yet.”.
Why? Because “China’s government has a lot of tools to support the market.”
To be sure, the confident Mr. Kinger Lau was still in diapers when Mr. Deng proclaimed that it was glorious to be rich. Or stated differently, when Deng set aside Mao’s mistaken maxim that power comes from the barrel of a gun in favor of the thoroughly modern notion that prosperity comes from the end of a red hot printing press.
Actually, that’s the heart of the matter. Mr. Lau and perhaps 50 million other Chinese punters believe that growth and wealth are gifts of the state. That is, they believe red capitalism works because the comrades in Beijing are always ready to inject “whatever it takes” by way of stimulus, guidance, controls, ever more debt and now, apparently, prison sentences, too, to keep the bubble expanding.
…click on the above link to read the rest of the article…
Economic Stagnation And The Global Bubble
Economic Stagnation And The Global Bubble
You’d think with all the “stimulus” from Washington over the fifteen years since the dotcom bust, American capitalism would be booming. It’s not. On the measures which count when it comes to sustainable growth and real wealth creation, the trends are slipping backwards — not leaping higher.
After a look at new jobs data in April, we find the number of breadwinner jobs in the US economy is still two million below where it was when Bill Clinton still had his hands on matters in the Oval Office. Since then we have had two presidents boasting about how many millions of jobs they have created and three Fed chairmen taking bows for deftly guiding the US economy toward the nirvana of “full employment.”
When you look under the hood, it’s actually worse. These “breadwinner jobs” are important because they’re the only sector of the payroll employment report where jobs generate enough annual wage income — about $50k — to actually support a family without public assistance.
Moreover, within the 70 million breadwinner jobs category, the highest paying jobs which add the most to national productivity and growth — goods production — have slipped backward even more dramatically. There were actually 21 percent fewer payroll jobs in manufacturing, construction and mining/energy production reported in April than existed in early 2000.
Now let’s look at productivity growth. If you don’t have it, incomes and living standard gains become a matter of brute labor hours thrown against the economy. In theory, of course, all the business cycle boosting and fine-tuning from fiscal and monetary policy, especially since the September 2008 crisis, should be lifting the actual GDP closer to its “potential” path, and thereby generating a robust rate of measured productivity growth.
Not so. Despite massive policy stimulus since the late 2007 peak, nonfinancial business productivity has grown at just 1.1 percent per annum. That is just half the 2.2 percent annual gain from 1953 until 2000. So Washington-engineered demand stimulus is self-evidently not pulling up productivity by its bootstraps.
…click on the above link to read the rest of the article…
