Posts Tagged ‘unemployment’
Seems like every month there is something released in the press talking about how social networking is taking over the world. It’s the greatest revolution since the dawn of the Internet. Of course, the Internet was supposed to be running everything by now, right? Stanley Kubrick had us on the moon, finding the Monolith… or SkyNet was taking over the world. Take your pick. Either way, we ended up with the iPod in 2001 instead of a second sun or a machine revolution.
So, we need something else to sink our sensationalist teeth into. Enter Zucker: The Man and his Social Network. Facebook is exploding in numbers. Everyone is on Facebook. We need to reorganize our entire lives because our grandma friend requested us and Tom from MySpace keeps friend requesting us because he wasn’t automatically added to our friend list! God forbid the boss friend requested you on Facebook either (although that was very unlikely given that people over 40 don’t use Facebook).
Of course, we have plenty of time for all this social networking because nobody has jobs! Comscore says email usage is down and social networking is up among teens. Besides those who hold a doctorate degree in mathematics, I can’t think of another demographic that has a higher level of unemployment than teenagers! This isn’t a dig at teenagers, it’s just an observation of fact. Teenagers don’t really have 9-5 jobs, and they certainly won’t get an office job if they know how to use Facebook but don’t know how to use a spreadsheet and attach it to an email.
Ultimately, the point I’m trying to make here is that there is an eerie correlation between the unemployment rate and the rise of social networking. I’m not saying that social networking causes unemployment. I’m saying that unemployment causes social networking. Traffic on Linked-in has shot up big time because people are trying to network with long lost friends from the pre-dotcom bubble to find jobs. Traffic on Facebook has shot up because there’s plenty of time to spend stalking your friends and hoping to find something to do with your abundance of free time because you haven’t had a job for 15 months.
It’s going to be 6-9 months before things start moving into recovery, and they are going to get much worse over the next 3 months. And that is a best case scenario. Why is this recession going to be so long and so severe? Simple, we denied it was happening for almost an entire year!
Remember, according to our government our economy was fundamentally strong just 3 months ago. That wasn’t the case then. That wasn’t even the case a year ago.
Recessions are fairly simple to recover from if they are dealt with responsibly. Ignoring it for 12 months just dug us a deeper hole. It would be like ignoring a broken leg for 12 months. Your leg would take longer to heal and would probably heal incorrectly (i.e. via $700 billion government bailout = $15 billion automobile industry bailout).
Not long ago, I wrote a blog about the most idiotic economic political scam of the 2008 election year. Today, I read to stories about our economy that rank up there with the “gas tax vacation”.
The first story was about how the Fed has adjusted it’s estimates for 2008:
- Economic growth of 0.3 – 1.2%, instead of 1.3 – 2%
- Unemployment rate 5.5 – 5.7%, instead of 5.2 – 5.5%
Good thing they are still running those antiquated economic formulas to give us these otherwise worthless numbers. An added bonus is that the Fed also adjusted their inflation estimate upwards.
There really should be no surprise here folks. Bernanke just needs to start reading my blog to get better guidance on economic policy. I’ve written about energy-based inflation before. Of course, I even wrote about it years before that in a paper for an upper division economics course I was taking in college. The professor said it was an unrealistic theory.
Why I keep talking about this college professor is because that is what economists are learning in college (not all colleges, of course). Our economists are morons because they were trained to be morons!
Meanwhile, back in the world of ridiculous economic news for May 21, 2008… The other bit of economic news that really got me chuckling today was the news about the oil executives going before Congress again. How many times are we going to have to watch the same FAKE political interrogation? This is a political SCAM. The oil companies are pulling an Enron. Only, the goal is not to get California to sign a ridiculous long-term energy contract… The goal is to get the United States to open land restrictions in Alaska, the Rocky Mountains, and/or the Pacific Ocean so the oil companies can go drilling for oil. Enron is small potatoes compared to this scam.
Bernanke’s rookie year was a bit rough for the nation. His second year hasn’t had much success either. However, it appears that he is coming out of the textbook world of economics and into the real world. Yes, the world where living, breathing humans with names actually lose their jobs and houses rather than his previous world where there is a % increase in unemployment.
My favorite quote from Bernanke was the following:
To be useful, a fiscal stimulus package should be implemented quickly and structured so that its effects on aggregate spending are felt as much as possible within the next 12 months or so.
Clearly, this is in stark contrast to his molasses monetary policy, which consists of waiting. And waiting. And waiting some more. Essentially paralyzed by inflationary fears.
What is interesting about Bernanke’s leadership in the FED is that it puts much more control of the economy into the hands of the Federal government as opposed to our central bank. This is a scary notion. Political winds change, shift, dwindle in a relatively short period. The result is much more sporadic economic conditions and less economic stability. If not offset by consistent Federal Reserve Policy, the US Economy will be severely upset by fiscal policy.
Bernanke has recently indicated that the FED is looking to take aggressive action, indicating to many that a half point cut in interest rates should be expected at the end of this month. Provided that the FED does indeed shift from the monetary drip policy to at least a trickle as indicated, the US economy might be able to shed off some of the damage we can anticipate from the recent change in China’s labor law.