Speaking with Marketwatch’s Rex Nutting, I learned yet another incredible datapoint: Over the past decade, the U.S. private-sector has lost 203,000 jobs.

That’s right: Zero job growth for 10 years.

In the 1940s, we created 10 million jobs. In the 1990s, we added 19 million new jobs. Even during the much-maligned 1970s, we added almost 16 million jobs.

The 2000s might be zero. Some economy, huh?

The government has created 2.1 million jobs over that period — primarily teachers. And, that’s the weakest government job growth in nearly two decades.

Happy Labor Day!

all employess private industry

Category: Data Analysis, Employment

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

96 Responses to “Total 10 Year Job Gains: Negative 203k”

  1. aitrader says:

    And during the decade population increased by some 7% if memory serves. If we adjust those figures to account for all of those new workers without work things look even worse.

  2. Bruce in Tn says:

    This is slightly OT, but it is too delicious not to post and have Barry remove it.

    Here are two people, in the private sector, who are currently employed, who are taking advantage of the 8000k tax credit before it goes away. I am thinking a little economic education in high school might be an excellent addition to the California student diet…….

    http://money.cnn.com/galleries/2009/real_estate/0908/gallery.first_time_homebuyers/3.html

    What I bought with my $8,000 tax credit

    Location: San Carlos, Calf.
    Property: 3 bed, 2 bath, 1,600 s.f.
    Price: $750,000

    ….He’s a crane operator and she is a hairdresser….Obamanomics has allowed these two lovebirds to start with the house of their dreams..

    Life is strange, eh, cvienne?

  3. apabuwal says:

    When I compare this chart to the USD Index Chart, they look nearly identical. Could this be a coincidence?

    http://www.chartsrus.com/chart.php?image=http://www.sharelynx.com/chartstemp/free/chartind1CRUvoi.php?ticker=FUTDX

  4. bubba says:

    hmm. and thought fiscal conservative supply siders were FOR tax cuts…i guess not unless the tax cuts skew in their favor. ya learn something new everyday.

  5. VennData says:

    I don’ have the ten-year numbers, but here are the five-year numbers from China: 51-million jobs created.

    http://english.peopledaily.com.cn/90001/90776/90882/6407129.html

    Which may seem like a lot but is only 3 1/2 percent of their total population. So maybe 5-6% of their work age population.

  6. dblwyo says:

    To aitrader’s point not only has private job creation been abysmal but when you adjust for population, labor force and productivity growth it’s been downtrending for a long time. Calculated risk estimates that we need 170K jobs/month to breakeven; my estimate is 147K. On that more conservative estimate we entered this recession -2 million jobs in the hole and are now -10 million in the hole.

    Think about that – it’ll keep getting worse for at least another year if not more, population will keep growing so when we start to get a real recovery (defined as positive growth in GDP first followed by positive growth in Employment) we’ll probably be looking at needing 12+ million new jobs just to get back to breakeven.

    What event do you see on the horizon that makes you think that’s feasible?

  7. constantnormal says:

    But but but … who is going to be paying for my Social Security?

    And if I can’t get Social Security and have to get a job in retirement (my previous retirement savings having suddenly taken a turn for the worst), where is that job going to come from?

    I’m looking all around, and I can only see one way out …

    I need a bailout.

    Thank God that I live in a Bailout Nation, where I can count on a benevolent and competent government to see me through this vale of misery.

  8. call me ahab says:

    is this a great country or what-

    think of the productivity- and profit margins-

    awesome-

    jobs are over-rated anyway

  9. Winston Munn says:

    @Bruce
    Two people with jobs buying a house worth $1.2 million for $750.000 is better than one person with no job buying a $750,000 house for $1.2 million.

  10. dougc says:

    2 words ” free trade “

  11. Transor Z says:

    I’m going to go with The Bubble being the cause. Added nothing intrinsic to US manufacturing or tech and translated to service jobs in retail, customer support. The skim went into the pockets of execs in finance. To the extent that profits went into RE and equities, they lost some but I’ll take 40 or 50 cents (post-tax, post-crash) on my windfall dollars any day.

  12. godly says:

    that is sad. I did some posting on germany economy today. My thesis is that europe will absolutely displace US dollar from its pedestal. It is already underway and once the US bank run begins, we should see a complete fall of the $ to euro.

    Check out the http://investingcontrarian.com/?p=97

    I will keep posting more analysis as I get time. You can subscribe to get updated on latest. My focus will be emerging economy and europe.

  13. Onlooker from Troy says:

    Winston

    OK, so you’re saying we’ve made progress since ’06? Is that your point? That’s not a high bar. And relatively good doesn’t make absolutely good. And that house isn’t worth 1.2M; it’s worth what you can get.

    I don’t get your post. It’s not in your character here, as far as I know.

    That example is just illustrative of the fact that we’re continuing some of the same stupidity and insanity that brought us to this point. That’s another personal disaster just waiting to happen.

  14. going broke says:

    Does this chart account for the ??? million illegal aliens in our country?

  15. Onlooker from Troy says:

    On topic. It’s the most clear example of the misallocation of capital and resources caused by a giant bubble and immense amounts of irresponsible, short sighted, and greedy behavior we’ve seen in a long time.

    Great work America.

  16. Onlooker from Troy says:

    Bruce

    The govt is working as hard as they can to feed more stupid pills to John & Jane Q. Public. These two folks gobbled them up; although I’m sure they didn’t lack in that department already.

  17. [...] “Over the past decade, the U.S. private-sector has lost 203,000 jobs.”  (Big Picture) [...]

  18. Bruce in Tn says:

    Winston:

    Well, the delicious part is it is an FHA loan, no 20% down….
    And, did you calculate the interest payment at 5,5%?….I did….
    They aren’t even married yet, you bought the house before you even found out you could live as a married couple?…..
    If this goes bust, more taxpayer dreck…with the FHA loan…
    How many crane operators have been laid off during the great recession? Could you, like, rent a year and see if your job doesn’t disappear, and that you like her cooking?

    ….Just too many things to list…gotta go cut the pasture today….

    ..later.

  19. Winston Munn says:

    Onlooker,

    Good point but I meant it as a reply to the following statement: “Obamanomics has allowed these two lovebirds to start with the house of their dreams..”

    That sounded to me like an ideologically-driven oversimplification, and I was only trying to point out how ludicrous the entire system has been, regardless of who held office.

  20. Onlooker from Troy says:

    Out of Work, Too Down to Search On, and Uncounted

    Really a pretty good article, albeit very depressing. Truth telling isn’t always pretty.

    quote: “If the unemployment rate were expanded to include all marginally attached workers, it would have been 11 percent in August. But even this figure is probably an undercount of the extent of the jobless problem in this country. There are about 1.4 million more people who are not in the labor force than when the recession began. Some of these are retirees, stay-at-home parents, people on disability and students. But it is also rather likely that many of these people have given up looking for work at least partly because of economic reasons as well.”

  21. Winston Munn says:

    Bruce,

    My point is that this idiocy is beyond any amount of Republican-Democrat blame. The longer we keep it within the realm of partisanship the longer we go without addressing the real cause.

  22. Onlooker from Troy says:

    People who dismiss UE as problem because, they say, “90% of people are still employed”, just completely lack an understanding of the dynamics at play in this situation. The effects on the entire job market of the larger UE at the margin are huge. It’s naive’ at least, and often arrogant, to think it’s not a huge problem. The effects go out in waves through (almost) the entire population. It’s very tough to keep forging on in the face of that, for those who are out of work. Even if they’re not devastated financially (spouse still works, plenty of savings, etc.).

  23. Onlooker from Troy says:

    Winston

    I agree with that point completely. It just inflames the situation and distracts us from making any real progress.

  24. franklin411 says:

    @constantnormal
    We’ve lived in a free market paradise since 2001, and look at what it has done to us. At what point does a meth user look himself in the mirror and realize that free market fundamentalism has killed before, and it will kill again if we go back on the junk?

    Frankly, while I agree with your sentiment that we must have new jobs, I don’t see anyone besides the President offering any kind of answer to that question. One side says that in order to recover, we must do less, not more. We must go back to free market fundamentalism, and magically it will work out much better for us this time around.

    The President says that we’re on an unsustainable course: we are a nation that produces nothing of value, but we consume everything. There are only three possible outcomes:

    1. Fundamentally change our economy so we produce goods again (Adam Smith would be proud!). This is the President’s aim, but it requires investment. It costs $$ to retool a factory, and a nation is no different. We must make up for decades of underinvestment in education, science, infrastructure. And meanwhile, we must not allow our people to starve to death while we wait for these new crops to bear fruit.

    2. Go back to the meth that got us here–free market fundamentalism. Somehow, we’re supposed to believe that the “free market” will do what it failed to do over the last 30 years: create sustainable growth.

    3. Cut spending to the bone, pay off the debt, and hope/pray that China/India don’t finish cleaning our clock while we’re stalled out for 30 years on budget austerity. Somehow, I think that expecting China and India to wait politely for us to get our house in order before they finish digesting us is going to work out well for us. It’ll work out great for them, though: we’ll be the world’s biggest empire, conquered without even firing a shot.

  25. Onlooker from Troy says:

    Pimco’s Tony Crescenzi: Structural Changes in the Economy Will Lead to Long-Term Job Losses

    quote: “Many job losses are occurring in industries with broken business models and jobs won’t return quickly. This will put downward pressure on wages …”

  26. SparkyVA says:

    But we created millions of jobs since 2000. Oh yea they were in other countries…

    Two ways to change that: resort to protectionism, or change the tax laws that drive capital out of our country. The obsession to tax the rich has backfired. The rich have found ways around the ill advised tax laws. Remember the rich can see the laws coming, plan a defense, and bribe the lawmakers to provide loopholes where needed. The best laws are not those which punish, but those that reward behavior beneficial to the common good.

  27. davossherman@gmail.com says:

    Super post!!!

    What concerns me is that chart and the underlying statistics are from the BS BLS. I’m quite confident that the real number is well south of 230k

  28. Marcus Aurelius says:

    franklin411:

    I’ll preface this by saying that I haven’t seen any conservatism from the Republicans since before I was a small kid (Goldwater, to be specific), and that generally, I see them as mean-spirited, authoritarian, selfish (not a good characteristic for leaders of democratically elected governments), and having low or no capacity for intellectual honesty.

    Furthermore, I believe there is no such thing as a “free market.” What we call a free market is controlled by a few and only serves to concentrate wealth among them. The ultimate state of freedom is anarchy (not to be confused with chaos), which requires strict self-regulation by all individuals in order to succeed — a requirement which is incompatible with a lust for wealth. Regulation, harsh penalties, and diligent enforcement must be the basis of any functional economy. For example (please forgive the hyperbole), if we remove regulations forbidding the armed robbery of banks (without encouraging armed robbery of them), I’m sure the economy would be red-hot within a month.

    That said, what we are seeing from Obama is typical of Democratic leadership: Reaffirmation of the Republican’s faux-conservative, failed policies. It’s not that I begrudge any attempt by government to forestall the foregone conclusion of years of low taxes/big budget policies (as nothing they try can change the inevitable) — what I’m peeved at is that they seem to have chosen the worst of all possible responses: more of the same.

    While (R) policies are clearly the disease, (D) policies are not the cure.

    Obama promised change and has failed to deliver (on numerous fronts – not just economic policy).

    Next!

  29. donna says:

    Bruce, I know a couple who are a hairdresser and flooring installer who live in a 650K house. Fortunately their aunt is loaning them about 5K a month to pay the mortgage, for now…. but seriously I don’t have a clue how people live that way. They must eat Top Ramen for breakfast lunch and dinner. But I doubt that, too. After all, said aunt and her husband got over 100K from their parents to buy their house, and those parents are also putting their grandkids through college. Something tells me this couple in San Carlos has some rich parents footing the bill.

  30. Winston Munn says:

    Taking the oft-quoted break even job creation figure of 150K per month, ten years of zero growth leaves a deficit of 18 million jobs.

    Sheriff Brody: “We’re gonna need a bigger boat.”

  31. donna says:

    I also have a friend in L.A. who is celebrating his third labor day without a job today. He lives in a crappy studio apartment that he can now barely afford, living mostly off the remnants of his 401K and the kindness of family and friends. His diet DOES consist of a lot of Top Ramen….

  32. km4 says:

    Name an industry that can produce 1 million new, high-paying jobs over the next three years. You can’t, because there isn’t one. And that’s the problem.

    America needs good jobs, soon. We need 6.7 million just to replace losses from the current recession, then an additional 10 million to keep up with population growth and to spark demand over the next decade. In the 1990s the U.S. economy created a net 22 million jobs, or 2.2 million a year. But from 2000 to the end of 2007, the rate plunged to 900,000 a year. The pipeline is dry because the U.S. business model is broken.

    Of the roughly 130 million jobs in the U.S., only 20%, or 26 million, pay more than $60,000 a year. The other 80% pay an average of $33,000. That ratio is not a good foundation for a strong middle class and a prosperous society.

    http://www.businessweek.com/magazine/content/09_36/b4145036678131.htm?campaign_id=rss_tech

  33. librul says:

    Stay tuned to Rush, Hannity, etc…we’ll soon find out how this is Obama’s fault. The guy’s reach is incredible, isn’t it? How he was able to reach back in time to W’s administration and shrink jobs. Wattaman!

  34. librul says:

    KM4…
    “Of the roughly 130 million jobs in the U.S., only 20%, or 26 million, pay more than $60,000 a year. The other 80% pay an average of $33,000. That ratio is not a good foundation for a strong middle class and a prosperous society.”

    Yeah, but the rich are getting richer, so what’s your concern?

  35. wunsacon says:

    Brucie, I count 2 in 7 purchases in that link that are doomed to failure. Small sample size, yes. But, it’s feeding my confirmation bias. ;-)

  36. matt says:

    @ Marcus Aurelius: “I believe there is no such thing as a “free market.” What we call a free market is controlled by a few and only serves to concentrate wealth among them.”

    Be careful saying things like that here. Last time I said that, Barry responded with, “I’d love to debate this with you, but I have to return to planet earth.”

  37. Marcus Aurelius says:

    km4:

    As the middle class controls the political destiny of this country, I constantly wonder how they can be influenced to vote against their own self interests time and time again.

  38. karen says:

    Bruce/Winston.. hold it and wait a minute. how did that couple’s combined income qualify for that purchase price? even putting 50% down would be a stretch and we know that didn’t happen. clearly i’m estimating their income… some of the other vignettes were more realistic.. and the backup plan for his couple should their income get halved or they have a baby? I continue to maintain that 2 income families will be reduced to one income families going forward.. and those will be the fortunate ones. Competition will be stiff and exert downward pressure on wages.

  39. wunsacon says:

    F411, we didn’t have a truly free market. But, we had enough deregulation and regulatory capture to place us in an precarious state destined for failure. So, I can understand blaming those “free-market” *proponents* who either took or supported uncoordinated half steps without a holistic view and respect for the overall financial system.

    And since no one is showing me a holistic plan to migrate us from “here” to “there” (free market) without making serfs of nearly everyone, I don’t want to go down that road.

  40. wunsacon says:

    >> without making serfs of nearly everyone

    Hahaha! That’s funny…

    Okay, I mean “without making everyone even bigger serfs than they already are”.

  41. cvienne says:

    @Bruce/Donna

    Stories like that make me sick to my stomach… Not in a way that I begrudge anyone bounty if they are able to achieve it and maintain it, but for the simple likelihood that they WILL NOT…

    Who am I to say? I don’t know about anyone’s private circumstances. All I can do is act for myself (and possibly in the interest of my immediate family members.

    I bought the farm for that purpose. I sat down with a pen and paper and figured out the investment that I needed to make to get OFF THE GRID.

    - Self sustaining energy
    - Food
    - Relative peace of mind
    - Low property taxes

    I’m at the LOWEST POSSIBLE expense maintenance level (should things, in America, ever disintegrate to that level)… Yet should they, I would likely not even break stride with respect to what I enjoy in full abundance…

    I’ve even made room for stragglers in… But the first ones nominated would be my family…

    To some degree, my pursuits seem a little ‘tin foil hat’. But if things really do hit the fan in coming years, those Ferrari’s & Lamborghini’s are going to look pretty silly as planters…

  42. km4 says:

    @Marcus Aurelius Says: September 7th, 2009 at 12:29 pm
    >As the middle class controls the political destiny of this country, I constantly wonder how they can be influenced to vote against their own self interests time and time again.
    ******************************
    Since 2000 I have given this alot of thought and have come to the simple conclusion that the American middle class across-the-board is becoming dumber every decade. Reasons why include MSM consolidation since the 1980′s, complacency and laziness to understand the issues, chasing the BS American dream.

    That’s why I provided this article…
    http://www.businessweek.com/magazine/content/09_36/b4145036678131.htm?campaign_id=rss_tech

    How Science Can Create Millions of New Jobs
    Reigniting basic research can repair the broken U.S. business model and put Americans back to work

    Once more tibdit that I did not include above…

    In the past, when the U.S. exported high-paying jobs to low-wage countries, we replaced them with even greater numbers of high-paying jobs in industries whose inception could be traced back to science done decades earlier. The PC, Internet, and cellular industries, born in the 1980s and 1990s, more than offset the loss of high-paying jobs in consumer electronics, steel, and other sectors. But in recent years, outsourced software and manufacturing jobs have largely been replaced by millions of low-wage service jobs in fast-food, retail, and the like.

    The bad news: even if Science could Create Millions of New Jobs we no longer produce these types of graduates today ( and have not done so in significant numbers since the late 1970′s/early 1980′s )

    NET NET: America is FUBAR and most Americans should be recalibrating their dreams

  43. willid3 says:

    karen, best guess? maybe one of those mortgage brokers that helped get us in this mess are still doing business some how? i read some where that some of them had reopened shop doing FHA mortgages (leading to its mess next). and i am not really surprised that we are in a hole for private jobs. they have been to busy exporting those to do much else. it fits with the falling incomes that have been going on for a while. when you are trying to compete with the 3rd world on cost alone (which is all that has been happening), there is no way to do that in the US

  44. Marcus Aurelius says:

    km4:

    Thanks for the link. Discovery, via scientific research, is bound to result in new industries. There will be an argument as to whether that research should be privately or governmentally initiated. The discovery of petroleum and it’s subsequent refinement and the products derived from it were transformative to the late stages of the industrial revolution, but was largely privately funded. Some may disagree, but the publicly funded space race resulted in products and industries that were economically transformative — ushering us into the information age.

    Too bad we’ve dumbed-down as a country. I’d be willing to bet that fully half of all Americans can’t explain why Intelligent Design is not science. Our future hegemony will be based on brawn, not brains.

  45. [...] This is not a jobless recovery, it isa  jobless economy.  The amount of job growth since 200o is essentially zero. [...]

  46. Marcus Aurelius says:

    Here’s a little glimpse of what high unemployment will wreak:

    http://www.nytimes.com/2009/09/06/education/06homeless.html

    Is this a great country, or what?

  47. Nashid says:

    @franklin411:

    “Obama promised change and has failed to deliver (on numerous fronts – not just economic policy).”

    Yeah, a whole 8 months in offices and he has yet to deliver the changed you wanted. Give me a break! Talk about a stupid and impatient population.

  48. skysurfer says:

    @f411

    I am so tired of the “free market” failed line. It isn’t just you, so don’t take this personally. A deregulated market without any enforcement of the remaining rules failed. Just as true individual freedom comes with personal responsiblity, so does market freedom. Regulation and oversight in a market are akin to laws and enforcement in society. What would happend to society if there were no enforcement of the laws? A breakdown in society. So it stands to reason that markets stopped functioning without proper oversight and enforcement. Then lets add in the moral hazard of the Bailout Nation we have become and it becomes a real mess. I suppose in an era where personal responsiblity and ethics are relative, the government does need to step in. But a truly free market would empose this more efficently and fairly as those that made bad decisions would be wiped out with productive assets being given to those that would use the assets properly. Capitalism didn’t fail. It wasn’t even tried. Materialism fueled by easy money is what failed. The government is just shielding us from the consequences of our bad choices. This is only prolonging the inevitable.

  49. rootless_cosmopolitan says:

    wunsacon,

    only that the libertarian dream of “real free markets” where everything works fine once state and regulations have been eliminated, is just fantasy land. There has never been such a thing, and there will never be such a thing. It contradicts the nature of capitalism.

    Franklin411,

    “The President says that we’re on an unsustainable course: we are a nation that produces nothing of value, but we consume everything. There are only three possible outcomes:”

    You are delusional or you just invent something what fits best into your argument. I consider Obama way more intelligent than saying such a nonsense that you want to attribute to him. If you want to prove me incorrect you will have to bring a source for a quote where Obama is supposed to have said something like that.

    “1. Fundamentally change our economy so we produce goods again (Adam Smith would be proud!). This is the President’s aim, but it requires investment. It costs $$ to retool a factory, and a nation is no different. We must make up for decades of underinvestment in education, science, infrastructure. And meanwhile, we must not allow our people to starve to death while we wait for these new crops to bear fruit.”

    Here we go again with the empty slogans. Not that education, science, infrastructure weren’t good causes for a country into which investments shouldn’t be directed, but to portray this as a “possible outcome” that will solve your problems you would have to explain how this is supposed to be achieved presuming this is still capitalism where investments in businesses are primarily done for the purpose to make money for the owners/investors, but where a private debt load that has already reached 300% to US GDP (just calculate the total interest payments required on this debt), chokes households and businesses in the US economy.

    How are you going to finance these investments? There are two possible ways to finance this. 1. Increasing tax revenues, i.e., higher taxes, or diverting existing spending of existing taxes to other causes, 2. Taking on more debt to the existing debt, i.e., promising a higher fraction of future national income to the creditors. And since you seems to argue for second, about what increase to what ratio of government debt to US GDP over what time scale are we talking here? 100%, 200%, 300%? To be reached in 10 years? Or over what time? Japan tried something similar. They helped the banks to hide their debt problem, like the Obama-administration does now, and they did a lot of deficit spending. The ratio of Japan’s government debt to GDP has almost reached 200% now. Has it helped them a lot? And Japan is an export country with highly competitive products they sell all over the world.

    Wishful thinking, empty slogans and refusing to see reality won’t provide any “possible outcome” for you and your “nation”.

    rc

  50. Onlooker from Troy says:

    donna
    “Something tells me this couple in San Carlos has some rich parents footing the bill.”

    Yes, or it’s likely an accident waiting to happen. But it not, and you’re correct, then we just subsidized the purchase of an expensive home by a couple who did not need our help. Nice.

  51. FrancoisT says:

    “quote: “Many job losses are occurring in industries with broken business models and jobs won’t return quickly. This will put downward pressure on wages …”

    If asset and services prices had the decency to follow in tandem with wages, that wouldn’t be such a problem.

    But for some reasons, it is not happening. So, I guess a multiple rabbit punch to the solar plexus of the economy manifested as massive bankruptcies, budget shortfalls, massive cuts in pensions and services, increased homelessness and civil unrest shall be necessary to initiate real change.

    What kind of change? Well, there is a high probability that it won’t be the kind that would be good for the people at large.

  52. Onlooker from Troy says:

    Bruce et al

    Karl did a post on the CNN story last week

    http://market-ticker.org/archives/1399-Making-Foreclosures-One-At-A-Time.html

    His conclusion: “So let’s add it up.

    I have three impending disasters, with one certain enough that I’ll give you 5:1 odds on it, and the other two even money.”

  53. aitrader says:

    @cvienne

    To some degree, my pursuits seem a little ‘tin foil hat’. But if things really do hit the fan in coming years, those Ferrari’s & Lamborghini’s are going to look pretty silly as planters…

    I went that route as well up North of the 60th parallel where we have a little 20 acre farm. In one sense it’s an extreme insurance policy. But practically speaking it’s a summer hang out for family and friends. I always hope for the best and plan for the worst but the reality is the odds of needing to live out your years on an isolated doomstead are remote to the infinitesimal. The world changes slowly with a series of whines & whimpers and even the ‘fall’ of Rome took 200 years.

    On the bright side I’ve lost 25 pounds in 6 months and we’re just gettin’ started. :-)

  54. rootless_cosmopolitan says:

    skysurfer,

    “…But a truly free market would empose this more efficently and fairly as those that made bad decisions would be wiped out with productive assets being given to those that would use the assets properly…”

    This is religion. Free-market-religion. Why is it religion? Because these kinds of statements, in this case about how fine “truly free markets” would work, are neither empirically falsifiable, nor are they provable. Like it is with every religious believe system.

    rc

  55. FrancoisT says:

    @rootless_cosmopolitan Says

    The level of debt in this country is unsustainable. Hence, part of it will have to be repudiated. Whether some people like it or not is absolutely irrelevant.

    Of course there will be nasty consequences if we do that, but are we going to choke off any possibility of recovery for decades because of the creditors?

    Where do you think the term “Jubilee” come from and why it was customary? To avoid devastating civil unrest. More than one political regime lost it all by forgetting this simple lesson; do not push the people too far.

    Obviously, we’re not there yet. But t doesn’t mean it can’t happen. Imagine this recession lasting for another 2-3 years, with increases in income inequality continuing the present trend and a job market in the absolute pit for, say, 4-7 years. Add to that cauldron the extreme toxicity of the political discourse, the seemingly endless capacity of the elected representatives to ignore the true wishes and needs of the American people and we got the perfect mix of volatile elements needed for social unrest. Does anyone seriously think peace and domestic tranquility shall remain in these conditions?

    Faced with this scenario, I would bet the politicians would tell the creditors to stuff it.

  56. DuaneBidoux says:

    Barry doesn’t seem to account for the fact that just to stay even with employment we need about 150,000 new jobs every month. Looked at it that way it is impossible not to say that we have become dramatically poorer in the years under Bush.

    Maybe we shouldn’t be “partisan” but if this isn’t enough to conclude that rampant deregulation, tax cuts for the rich, and lettinng wealth accumulate in the top doesn’t work I don’t know what is. Supply side is a sham–we need markets BEFORE we create supply. And the income of average people has declined so radically that there is no room for the middle class to contribute.

    We must find a way (gasp!) of getting some of the wealth back down into the hands of average people or jobs will never be created. Even Ford, way back when, knew that if he didn’t pay his workers well (and if others didn’t do the same) there would be a very limited number of customers for his cars.

  57. Marcus Aurelius says:

    aitrader:

    The fall of the USSR only took about a year.

  58. FrancoisT says:

    To add to my last post:

    A example of “volatile element” can be seen here;
    http://crooksandliars.com/susie-madrak/over-one-million-our-schoolchildren-a

    I know some people who are sick enough to spin this situation by accusing little kids of “being lazy” but on planet earth, where decent people live…this shouldn’t fly for long.

  59. Onlooker from Troy says:

    FrancoisT

    Well said. We, collectively, are still a long way from coming to grips with this fundamental truth and acknowledging the end game. Denial is strong and enabled by economists who continue to say that the only way out is to continue to borrow (steal, really) to fend off the inevitable, which makes the end game more painful.

  60. Pat G. says:

    Lobbyist groups are hiring. LOL The number of lobbyists between ’98 and ’08 grew by more than 30%, or 10,661 to 14,830. The amount of money spent on lobbying during that time frame increase by more than 130%, from 1.44B to 3.30B. There’s gold in them thar hills. No wonder our politicians pay little if any attention to us EXCEPT to get our vote.

  61. DeDude says:

    It really doesn’t matter if the growth is in government services (education, police, jails, roads, bridges, etc.) or in making private consumables for self-indulgences (bigger cars, houses, fridges, TV’s). There is actually a strong argument for the idea that the former is a lot less destructive than the latter. People lived pretty well back in the 50′ies without all that self-indulgent crapyola (and the rich payed over 70% of their last earned $ in taxes).

  62. constantnormal says:

    @DeDude 2:46 pm

    “It really doesn’t matter if the growth is in government services … or in making private consumables”

    I would contend that it matters a great deal where the growth occurs. “Government services” have compounded growth (growth that occurs as a direct result of the products produced) that is much further out in time, compounding much more slowly than does growth that occurs by virtue of producing hard goods of any kind.

    Worst of all is the “growth” that occurs from pouring money into inefficient enterprises (government or private sector) that mostly waste the money, producing very little in the way of “bang for the economic buck”. In that category we have a great many government bureaucracies, and everybody’s favorite, the TBTF corporations that would not survive without the cash support (in the form of subsidies, tax breaks, and bailouts) from Uncle Sam.

    In those cases, I see very little difference between stimulating the TBTF blobs, and burning the cash on the White House lawn. In either case, all you are left with is a gaping loss in the national balance sheet.

  63. constantnormal says:

    Just think of the economic stimulus that would have been achieved if, instead of throwing the bailout money at the TBTF institutions, they had been allowed to reorganize through bankruptcy, wiping out the stock- and bond-holders (and thereby instilling some fear of failure in their peers that is sorely lacking at present), and legislatively re-instituting many of the fiscal firewalls that were removed that allowed the TBTF banks to implode, and distributing the same amount of bailout money to the people, by suspending the income tax for a year. It would have been a similar amount of money.

    What would have happened? One would like to think that a good many people would have used the income to pay down debt as fast as possible, seeing the coming layoffs and possibly avoiding many foreclosures. The whole character of the downturn might have been altered.

    But of course, we will never know, so this is all just idle speculation.

  64. call me ahab says:

    constant @ 3:16-

    good thoughts there

  65. madman130 says:

    Now the “green job” guy left the white house, jobs gonna be even harder to come by. Oh, the right wing media and internet!

  66. DeDude says:

    constantnormal;

    It seems to depend on what you define as compounded growth and bang for the economic buck. If you exclusively look at those terms in relations to GDP and without regards for sustainability then you are probably right. However, if you add the kind of non-economic values that most of us think are at least somewhat important then I don’t think private consumables are any better than government services.

    Many government services such as education, and infrastructure are actually essential for companies to get the workforce they need to be productive. The same with infrastructure. It may be better for the GDP to spend money on building a huge car factory that polute the nearby river, than to invest in cleaning up the pollution already in that river. But it is not better for quality of drinking water, cancer rates, and ability to use the river for recreation. The productivity of fire departments, police and correctional facilities may count less than the car factory, but is it realy better to let go of those services so that we can afford to aquire bigger more polluting luxury vehicles for our personal transportation.

    I would actually prefer a more livable and fair society even if it means that growth of GDP is sacrificed for growth in things that are not counted into the GDP. So that’s what I mean with the sentence: “it really doesn’t matter if the growth [of jobs] is in government services … or in making private consumables”.

    Touched on related items in a different debate earlier today:

    http://www.ritholtz.com/blog/2009/09/recession-job-losses-3-views/ – comment-212768

  67. aitrader says:

    @Marcus Aurelius

    The fall of the USSR only took about a year.

    Then we’re well prepared, aren’t we? If you can split a cord of wood to fire our hot tub ( http://www.aspaherrgard.se/eng/imgallery/aktiviteter/vedtunna.jpg ) then you’re welcome! Our annual crayfish is usually around August 21st.

  68. aitrader says:

    … crayfish party

    Jeesh Barry! Look, if you need a geek to stoke your code with an editor I’m offering my services…!!!

  69. the0ther says:

    totally fucked!

    i need a good heroin dealer. nothing else to do. unemployed since january. might as well just lay down and give up, learn to enjoy it. that’s where the heroin comes in…

  70. constantnormal says:

    @DeDude 3:47 pm

    We don’t disagree on the need for essential bedrock spending (education, infrastructure, R&D, etc) — that needs to be a part of any balanced budgetary scheme. I was just noting that for the short-term restart-the-heart stimulus, such an extreme short-term thing is most effectively used if one focuses it on areas of the economy where the velocity of the money is very high, in order to extract the maximum bang for the buck. Wall-papering the banksters balance sheets is what we have mostly done with the money, which makes me want to cry. National euthanasia.

    Once the heart is beating again, it’s important to stop goosing it with more money, and instead turn it toward things (like the items you noted) are essential for the longer-term health of the nation. Of course, thoughtful actions such as this require a conscious and coherent Congress (insert laugh track here). One of the design flaws in our system of government.

  71. Bruce in Tn says:

    Got about 50 acres cut before a shonuff lightning storm put the tractor in the barn.

    And Winston…when I say Obamanomics, this is just the latest loser in the White House. Until someone passes a balanced budget amendment, we are just kicking the can down the road. Until we have a president and congress who spend ONLY what they bring in…the disaster, IMO, cannot be averted…

    I do think, in the example I posted, the taxpayer will be on the hook for the FHA loan in less than a year….

  72. ya know,

    almost as bad as: “The ‘Free Market’ did it, ‘Deregulation’ is responsible for All our Illz..”–line of Tripe, is this:

    http://www.businessweek.com/magazine/content/09_36/b4145036678131.htm?campaign_id=rss_tech

    How Science Can Create Millions of New Jobs
    Reigniting basic research can repair the broken U.S. business model and put Americans back to work”
    –type of fancified Ignorance traipsing around as “the result of serious Inquiry and, thereby, a considerable Public Policy proposal.

    They, the Tripe and the Traipsing, are apiece. Both, nothing more than two different verses of the same Paean to the Command and Control Technocracy that has been methodically stifling our Economy for more than 60 years..

    Don’t misunderstand R&D is Great, even ‘the Government’ can play a role, but to, even, begin to believe that the wellspring of American Ingenuity has bee exhausted, and we ‘Need’ to ‘Invest more into “Reigniting basic research”‘ to “repair the broken U.S. business model and put Americans back to work” is so stump-humping stupid as to defy comprehension.

    LSS: if one wanted to “put Americans back to work”, they would, first, understand how inhospitable ‘our Governments’ are to such proposals. I’m not here to tell you that Bears(our Woodland friends) need a Shitting-license, but any Business(man/woman), who has done more than press Send, would well understand the Reality of the hyperbole..

    http://www.thefreedictionary.com/paean

  73. Wes Schott says:

    …here we go again

    …according to Bloomberg data, y-t-d issuance of agency (Fannie, Freddie, and Ginnie) MBS is already approaching $1.3 TN, compared to full year 2008’s $1.153 TN, 2007’s $1.148 TN, 2006’s $903bn, and 2005’s $958bn.

    …Meanwhile, the Federal Reserve is purchasing/monetizing about $25bn of agency MBS – on a weekly basis. As Mr. Dudley stated, “Part of the whole point of the agency mortgage-backed securities purchase program was to drive mortgage rates down to therefore make housing more affordable – to cushion the decline in the housing market. So I think it has been very effective.”

    http://www.prudentbear.com/index.php/creditbubblebulletinview?art_id=10269

  74. Onlooker from Troy says:

    constantnormal

    And debt for equity swaps for homeowners to alleviate the housing debt problem (as Hussman proposed) without as much of the chaotic fallout and moral hazard. But that also does not agree with the banking industry’s agenda and so did not happen.

  75. Groty says:

    GDP increased from $9.3 trillion in 1999 to $14.4 trillion last year. Of that, government increased $1.2 trillion. So business produced $3.8 trillion more with FEWER workers. Obviously, American worker productivity surged as business substituted technology for labor.

    The U.S. continues to have the largest manufacturing economy in the world. But manufacturing jobs have declined by about 5 million in the past 10 years as business substituted technology for labor. Those won’t ever come back. In addition, another 10% of the existing manufacturing jobs are expected to be lost by 2016. It’s easy to see why. Technology doesn’t call in sick. It doesn’t demand paid vacations. Employers don’t have to pay health insurance, worker’s compensation insurance, social security taxes, medicare taxes, or make pension contributions for software, robots and automated machines.

    The economics for business to continue to substitute technology for labor are powerful. That won’t be changed by presidential decree.

  76. Graveltongue says:

    Was the concept of technological unemployment just a passing consideration? Game over.

    http://www.raeng.org.uk/societygov/engineeringethics/pdf/Autonomous_Systems_Report_09.pdf

  77. Winston Munn says:

    @Bruce: “And Winston…when I say Obamanomics, this is just the latest loser in the White House.”

    Thanks for clarifying. I agree with that assessment. The only thing we do with our votes is to decide who wins American Presidential Idol. U.S. policy is set in corporate board rooms.

  78. willid3 says:

    mark, i think the point of that article was that for all of the myths about how free market was supposed to create jobs, the reality is that we have been using technology to do that for the better part of 4 decades. unfortunately we thought we could outsource that to private enterprise. but we forgot one thing. it (private enterprise) only looks at 3 month windows, nothing much further than that. so all it has done is perfect what already existed. and exported as many job as possible. with nothing to replace them unlike decades past. all of the basic research had been done by the government or under government contract. but the government stopped doing basic research and development. and now all those jobs that could have been created don’t exist. and won’t any time soon.

  79. willid3,

    for further, see: http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=technocracy+galbraith

    in general, and, in addition: http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=technocracy+galbraith+New+Industrial+State

    also, don’t forget about Veblen..

    past that, this: “all of the basic research had been done by the government or under government contract. but the government stopped doing basic research and development.”–construct, I’d love to see proven to any demonstrable degree.

    and, this: “(private enterprise) only looks at 3 month windows” is, yet, more spun floss to hinder one’s Vision..

  80. torrie-amos says:

    Groty, plus we have been using technology longer so are learning curve also was extropolating higher, combining that with less need for “assistance positions”…………being a good worker is no longer an advantage, one must possess specialized skills, which requires oh me oh my more work than usual.

  81. willid3 says:

    mark, not real impressed with your link.

  82. willid3,

    try an excerpt, or two:

    “…Galbraith as a New Dealish deputy director of the U.S. Office of Price Administration during World War II…”

    “…The elder Galbraith argued that the great scale of modern industry has created a “technocracy,” which runs the world with committees. Anyone who has worked in a large corporation or a large university knows the feeling. Galbraith argued that advertising manipulates demand in order to fit with technical necessities. Anyone who has lusted for an iPhone knows that feeling too. A new model of your father’s Oldsmobile was so very expensive to plan and took so very long to bring to market—ask Airbus today about all this—that the demand had to be guaranteed with elaborate provision years in advance for advertising and distribution.

    So let us adopt democratic socialism, said Galbraith. Let us concede that the new industrial state is one of massive corporations facing massive unions, under the benevolent and skillful regulation of massive governments. “The small competitive firm cannot afford the outlays that [modern, big-time] innovation demands,” he wrote. If modernity needs big corporate bureaucracies to do such big stuff, surely we need big governments to coordinate everything; the so-called free price system won’t do. “If the market is uncontrolled,” Galbraith wrote, “it will not know” when the new car will roll off the line or when a new drug will pass FDA approval.

    Rereading Galbraith long after his heyday, you’ll find that his zingers are still funny, his arch sneers at the conventional wisdom still amusing—until you realize that the zinging and the sneering are there to cover his tracks. “For a public official to be called an economic planner was less serious than to be charged with Communism or imaginative sexual proclivities,” he wrote, “but it reflected adversely nonetheless.” Or consider his summary of the conventional wisdom regarding work: “Leisure is something to be regarded with misgivings, especially in the lower income brackets.” Zing, zing.

    The problem is that the tracks Galbraith is covering over are light. His works, essentially updatings of the great economic sociologist Thorstein Veblen, never really faced intellectual opponents with evidence. Galbraith in 1967, like Veblen in 1915, merely ran ahead laughing. While Schumpeter always acknowledged the very best academic and political cases made by his socialist opponents, Galbraith confined himself to making merry of pamphlets from the National Association of Manufacturers…”

    from: http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=technocracy+galbraith+New+Industrial+State
    #4

  83. willid3,

    try an excerpt, or two..

    “…Galbraith as a New Dealish deputy director of the U.S. Office of Price Administration during World War II…”

    “…The elder Galbraith argued that the great scale of modern industry has created a “technocracy,” which runs the world with committees. Anyone who has worked in a large corporation or a large university knows the feeling. Galbraith argued that advertising manipulates demand in order to fit with technical necessities. Anyone who has lusted for an iPhone knows that feeling too. A new model of your father’s Oldsmobile was so very expensive to plan and took so very long to bring to market—ask Airbus today about all this—that the demand had to be guaranteed with elaborate provision years in advance for advertising and distribution.

    So let us adopt democratic s o c i a l i s m, said Galbraith. Let us concede that the new industrial state is one of massive corporations facing massive unions, under the benevolent and skillful regulation of massive governments. “The small competitive firm cannot afford the outlays that [modern, big-time] innovation demands,” he wrote. If modernity needs big corporate bureaucracies to do such big stuff, surely we need big governments to coordinate everything; the so-called free price system won’t do. “If the market is uncontrolled,” Galbraith wrote, “it will not know” when the new car will roll off the line or when a new drug will pass FDA approval.

    Rereading Galbraith long after his heyday, you’ll find that his zingers are still funny, his arch sneers at the conventional wisdom still amusing—until you realize that the zinging and the sneering are there to cover his tracks. “For a public official to be called an economic planner was less serious than to be charged with C o m m u n i s m or imaginative s e x u a l proclivities,” he wrote, “but it reflected adversely nonetheless.” Or consider his summary of the conventional wisdom regarding work: “Leisure is something to be regarded with misgivings, especially in the lower income brackets.” Zing, zing.

    The problem is that the tracks Galbraith is covering over are light. His works, essentially updatings of the great economic sociologist Thorstein Veblen, never really faced intellectual opponents with evidence. Galbraith in 1967, like Veblen in 1915, merely ran ahead laughing. While Schumpeter always acknowledged the very best academic and political cases made by his s o c i a l i s t opponents, Galbraith confined himself to making merry of pamphlets from the National Association of Manufacturers…”

    from: http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=technocracy+galbraith+New+Industrial+State
    #4

    also, WP’s suppression algos suck..

  84. Moss says:

    But just think of how many billionaires were created.
    That graph would surely be upward sloping until Sept 2008 that is.

  85. [...] first blush, I was inclined to call “Bullshit” on this piece from ritholtz.com that claims: Over the past decade, the U.S. private-sector has lost 203,000 [...]

  86. willid3 says:

    hm, take a look at these time lines.
    http://en.wikipedia.org/wiki/Timeline_of_historic_inventions
    http://en.wikipedia.org/wiki/Timeline_of_United_States_inventions

    as we got closer to 2000, the number of inventions slowed. and after 2000, it really slowed down even more.
    i do seem to recall that there were always a lot of folks who would complain about some study or other. which sounded silly on the surface, but turned out to trigger some major inventions because of some thing it found

    but we don’t do that. any more

  87. [...] a day of thankfulness that some workers do in fact have jobs. Our economy is losing jobs — over 203,000 jobs lost in the last 10 years — and those with jobs are making less money. Many people have been unemployed so long that [...]

  88. cvienne says:

    @MEH

    “I’m not here to tell you that Bears(our Woodland friends) need a Shitting-license, but any Business(man/woman), who has done more than press Send, would well understand the Reality of the hyperbole..”

    That reminds me… I’m the KING of mixed metaphors…

    Do bears shit in the woods?
    Is the pope a catholic?

    cvienne’s version:

    Does the pope shit in the woods?

  89. CTB says:

    Has anyone calculated what the CDS payout would have been for C, FNM, etc. had any of them actually gone bankrupt?

    My guess is that one of two things were at work:
    – The government took the bailout as the cheaper option
    – The government is hopelessly corrupt

    Although, it may be a combination of the two.

  90. Bruce in Tn says:

    http://www.marketwatch.com/story/hiring-plans-drop-to-record-low-manpower-2009-09-08

    Sep 8, 2009, 12:01 a.m. EST

    Job outlook hits worst-ever level

    Employers’ hiring plans at lowest point in Manpower survey’s history

    “A net -3% of employers said they’ll hire in the fourth quarter, down from -2% in the third quarter, on a seasonally adjusted basis, according to the Milwaukee-based firm’s survey of more than 28,000 employers. Before this year, the survey’s previous low point was a net 1% hiring outlook for the third quarter of 1982. “

  91. FrancoisT says:

    Mark E Hoffer

    “Don’t misunderstand R&D is Great, even ‘the Government’ can play a role, but to, even, begin to believe that the wellspring of American Ingenuity has bee exhausted, and we ‘Need’ to ‘Invest more into “Reigniting basic research”‘ to “repair the broken U.S. business model and put Americans back to work” is so stump-humping stupid as to defy comprehension.”

    Are you saying that the policies of our governments (State and Federal) have made the pursuit of R&D very difficult? I could subscribe to that…with some empirical proof.

    That said, I would contend that a very unhelpful factor is the short-termism of our corporate leaders for whom, yesterday afternoon is part of the last century.

  92. FrancoisT,

    see this: http://en.wikipedia.org/wiki/Timeline_of_United_States_inventions from willid3, above.

    I was, in that piece you excerpted, trying to convey that much of “what we need” (today) has already been Developed. And, the responsilibility for the bedraggled state of our Economy can be laid at the doorstep of ‘Public Policy’ decision-makers. for a simple instance, wonder why CNG isn’t a wide-spread choice for motive fuel apllications..
    ht tp://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=CNG+use+as+motive+fuel

    More broadly, to your point: “governments (State and Federal) have made the pursuit of R&D very difficult”, see: http://www.rdmag.com/tags/policy-and-industry for starters..

    note how Gov r&r warps the focus of R&D..

  93. DeDude says:

    Mark@4:25;

    “Don’t misunderstand R&D is Great, even ‘the Government’ can play a role, but to, even, begin to believe that the wellspring of American Ingenuity has bee exhausted, and we ‘Need’ to ‘Invest more into “Reigniting basic research”‘ to “repair the broken U.S. business model and put Americans back to work” is so stump-humping stupid as to defy comprehension.”

    The thing that defies comprehension is that you fail to understand the simple and correct point they are making. All major progress and new industries are based on basic science discoveries from decades before. The computer chip, cell phone, biomedical industry products etc. would not have existed without a solid basic science effort making the needed leaps in knowledge and understanding that allowed them to get started. Currently both government and industry have cut basic science efforts to focus on the applied translational things that bring a product within a few years. The consequence is obviously that the next generation equivalent of the “computer industry” or “biomedical industry” will not appear (in this country). Yes we can still play around and suck a little more on the basic insights created a few decades ago, but most of the juice has been sucked out of them already. Look at the pathetic afforts to get a cheap useful battery for electrical vehicles. We don’t have enough insights about the basic materials abilities and processes for storage of electrical energy, and no new leaps forward in that understanding has happened for decades, because only a handful of people were working on it until a few years ago. The targeted effort now initiated may well fail, because the next huge leap forward may have to come from some weird project looking at shining worms from the antarchtic seabed to create insights that could be applied in whole new class of bioorganic batteries with 200 fold higher energy density and self-replicating sustainability. The thing about basic science is that you can never predict where it will have its best applicability, so it cannot be targeted the way applied science can.

  94. TraderMark says:

    Bottom of this piece via BW I listed where the jobs have “gone from” and “gone to” the past decade

    http://www.fundmymutualfund.com/2009/08/no-new-normal-say-some-economists.html

    Bottom line, we are removing jobs that “make things” and replacing them with healthcare jobs (pseudo govt) and govt

    1/3rd of all work now is healthcare, govt or education (all government in the big scheme of things) and private enterprise is 2/3rds of jobs

    we’re heading to 50/50

    as others have said above, what is the next job creator outside of rebuilding even more homes? that was the big job creater (along with the financing of said houses) the past decade

    and when you tell me what the next big job creator is, my next question to you – is why would those jobs stay in the country? If they are not healthcare of government jobs they have no need to stay here

    Which is what people are missing out on

    Eventually I see a stage where Americans are like Eastern Europeans who moved to UK or Ireland for example to find work in the past decade – many here will just become part of the global workforce, chasing after jobs they once did here.

    IBM was the first co I’ve seen to offer relocation services to its workers to India – at Indian wages.

    I expect many more to come as the world flattens.

    Only advice is to get your child into government work because the taxpayers of America seem to have no limit in expanding govt.

  95. DeDude says:

    Tradermark; and that is exactly how it should be. There is a limit to how many things we can endulge ourselves with. You can only wear one pair of shoes and one set of clothes, only watch one TV screen at a time, and drive one vehicle at a time, occupy X square feet of space at a time etc. etc. – so how many do each of us realy need? At some point the continuesly growing wealth will have to be directed to something else than personal selfindulgence in ownership of things. When robots make all the things that anybody need nobody will have to work on manufacturing things. Maybe all that wealth and free time could be used to shorten hours worked per week or per lifetime. Or we could use it to create top quality health care (maybe even for all, if all those selfindulgent bastards could understand what a great country is and how to sustain it). Maybe people could spend more time with kids who need adult supervision and guidance. How about classes of 6-8 kids so nobody will be left behind and everybody get any and all help needed. If robots do all the boring manufacturing work there is still a lot of important things that people could use their time doing as a job.