I want to commend your attention to what I found to be an excellent op-ed by Edward Glaeser at Bloomberg (hat tip: Barry Ritholtz) on why we shouldn’t expect retail sales to fill in the gaping hole in employment:
But it isn’t hard to spot the larger trend in retail trade job creation. The attached figure shows the time path of job- creation rates for the economy as a whole and for retail trade in particular. The data comes from the Census Bureau’s Business Dynamics Database, which defines the job-creation rate as the employment growth at the establishment level divided by the average of old and new employment.
The lower line shows the job-creation rate for the economy as a whole, which dropped from about 20 percent in the late 1970s to 12 percent today. On average, the job-creation rate has declined by 1.4 percent per decade, which should scare anyone worried about our continuing ability to generate employment. The U.S. hasn’t been producing fewer jobs than it used to, at least until the recent recession, but the number of jobs created hasn’t increased with the overall size of the economy.
The top line shows the far steeper decline for retail trade. The 1970s and 1980s were a great growth period for this sector, as the U.S. moved from manufacturing to a service economy. When the economy roared back after the 1982 recession, the job-creation rate in retail trade boomed at more than 20 percent per year for each year from 1984 to 1988. The job- creation rate in retail has never again broken 20 percent, and the downward trend runs at 2.6 percentage points per decade.
I wouldn’t want to blame Amazon or Costco for this trend, and I am a big fan of both retailers. There is a lot to like about low prices and shopping over the Internet. But it shouldn’t surprise us that tremendous improvements in retail efficiency have been associated with diminished job growth in the e-tail sector.
However, let’s go down the roster. Retail isn’t likely to create millions of jobs for the reasons that Dr. Glaeser points out. The collapse of the housing bubble means that residential construction isn’t going to pick up the slack: existing inventories are just too great and the additional demand for houses on the part of speculators is probably gone for the foreseeable future. Non-residential construction is just about in the same fix. It’s had a bubble of its own.
Healthcare and education are dependent on government spending, productivity is declining in both, and both create fewer jobs per dollar spent than other sectors. That these sectors control the “commanding heights of the economy”, a phrase attributed to Lenin and adopted by British Fabian Socialists, is not good news for increasing employment or economic growth.
Manufacturing, farming, and mining have all accomplished increased production through substantially greater efficiencies. It will take sizeable increases in demand for their outputs for these sectors to start hiring. However, they along with energy production, are very likely to be our best hope.
The alternative is persistent unemployment which I don’t believe is good for the economy, for the mental and physical health of those who are unemployed, or for social cohesion.
The problem with an essay like this is what I call the “arrogance of current presence.” That is, the notion that we live in such a unique time that the endless stream of problems that mankind has faced throughout history have suddenly – out of the blue – become suddenly impossible to resolve. Anthro-Global Warming types suffer the same problem. “This is the singular moment.” Bull.
If there is anything unique or disproportionately prominant today, its the non-wartime level of intervention of government. Regulatory, spending and taxing activities have reached all time highs. And the successful are squarely in the sights of the Obama/Reid/Pelosi nexus – all for personal political gain, and not the general social welfare. All at a time when entrepreneurial activity is required in spades. Current public policy is the antithesis of what we need. Its a shame.
A certain frequent commenter has thrown in the towel, pitting the straw man notion of “Rayndian Fantasy” against socialism, basically declaring a huge fraction of the population as our national pets – dangerous animals, really, to be housed and given three squares a day at public expense lest they become unruly and terrorize the rest of us with rape and pillage.
It must be a sad existence to hold such a pessimistic worldview. Me? Fire the ringmasters, unleash the tigers, and we’ll be fine. Unfortunately, it seems to be becoming more accepted thought to become the Eloi.
Just for the record and if it isn’t clear from the post itself my view is that we need to be doing a lot more manufacturing, farming, mining, and energy production. I also think that the exporting countries, e.g. Germany, China, Japan, South Korea, need to be consuming considerably more. Not only will that enable their own economies to grow it will provide more opportunities for U. S. products. As long as the business plan for most major economies is growth via export to the U. S. they and we have a problem.
This does a good job of explaining why I feel so melancholy about this stuff. Because the chances of resurgent employment in manufacturing, farming, and mining strike me as vanishingly small.
More likely, I think we need to accept the fact that we’re never getting back to 5% unemployment and instead figure out how to live with it.
The alternative is persistent unemployment which I don’t believe is good for the economy, for the mental and physical health of those who are unemployed, or for social cohesion.
I think you mean persistent UNemployment.
But the whole thing is wrong. The only reason for all the unemployment is because us unemployed folks are a bunch of dirty hippies with bad attitudes. The jobs will magically appear if we would all just get haircuts, put on some clean clothes and think happy thoughts. (I have this on VERY good authority.)
More likely, I think we need to accept the fact that we’re never getting back to 5% unemployment and instead figure out how to live with it.
Maxwell, we’ll hit 5% UE-3 by the end of next summer. Obama and his whores at the BLS will just will us out of the workforce 0.4% at a time until we get there. (It’ll take about nine more months.) Then it will be “Happy days are hear again!” What the fuck, it’s not like anyone is going to actually call him on it.
HERE again, HERE again. Sigh. Just can’t spell anymore….
You know it’s funny you should make that analogy since I’ve been using it mentally for some time. The questions that people need to consider are who were the Eloi and who the Morlocks?
Reread the Time Machine for a book group 10-15 years ago; I distinctly remember being less fond of the Eloi that I previously recalled.
I think that some of the fondness you mention comes from so many never having read the book and the casting of Yvette Mimieux in the George Pal movie.
Could be; certainly I remember the movie. Also, as I mentioned in another thread, I think I’d read abbreviated versions of some of the Vernes/Wells books. Or I’ve become more conservative over time and more likely to see the Eloi as a bunch of free-riding complainers with expensive fine arts degrees and privileges, but with little to contribute to society.
Over 200 years ago mercantilism was seen as a bad thing…yet it is still so popular in so many places, even here in the U.S.
Hope and change you can believe in…be sure to vote, will definitely help! [/sarcasm]
“Regulatory, spending and taxing activities have reached all time highs.”
Those who do not know history, are doomed to sound silly. In the 50s and 60s, the price for transportation, airlines, trains and trucking was set by the government. The price of oil was regulated by the government. Beer was heavily regulated (we were down to about 50 brands in the states IIRC). Stockbrokers fees were set. Interest rates were set with maximums by the government. National banking was difficult. Commercial and investment banks were kept separate. Car companies and insurance companies were not allowed into the banking sector. (Need I go on?) Please make the case that we are more regulated now than then.
Taxes? Tax rates are clearly much lower than in the 50s and 60s. The amount of (federal) tax being collected now, as a percentage of GDP, is the lowest since the 60s or 70s (too lazy to look it up). Capital gains? Dividends?
Spending? Yes.
One out of three aint bad. Not everyone can be half a Meatloaf.
Steve
The questions that people need to consider are who were the Eloi and who the Morlocks?
Wouldn’t “Who? Whom?” be more to the point?
“The questions that people need to consider are who were the Eloi and who the Morlocks?”
Well, from my perspective, the “Eloi” really is a frame of mind. Hence, we have those perfectly willing to live a life on the dole. This is unfortunately an expanding group. And we have famous You Tube videos of people claiming that “Obama’s going to pay my mortgage/rent…….Obama’s going to pay my car payment. etc” You can even find people who claim that they, ahem, “work” for ADC – welfare. What a mindset we have created. Eloi indeed.
But then you have my favorite sparring partner, a certain MR. He’s a very successful person but has adopted a worldview that you are a callous sociopath unless you “care” like him and create Eloi to be clothed, sheltered in public housing and provided food like pet cats or dogs. If that’s “caring” count me out. Eloi enablers.
As for the Morlocks? Clearly the politicians and rentseekers who exchange the dollars to provide those oh-so-caring morsels in exchange for a lifetime of votes and political advantage.
At least they don’t eat the Eloi……………yet.
The solution is for everyone in the world to become virtuous net exporters. There will be a lot of pressure to lower prices while everyone becomes virtuous at the same time though, so we may as well just start paying everyone $0 right now instead of dragging out the process.
Or maybe countries with negative real borrowing rates should stop worrying about how to pay for a tax cut that would go a long way toward helping consumers deleverage faster.
steve –
Your “analysis” is wonting. You’ve conceded spending.
As I’ve pointed out numerous times – although I’ll go through the exercise again – taxes are not at all time lows. Because taxes as a fraction of GDP is a bogus statistic. US GDP has progressively been financed by taking on credit. So the denominator in your citation is financed. It is not directly correlated with income, or taxation.
As I’ve pointed out repeatedly, personalize it. Your personal GDP is the sum total of your expenditures. You finance them just like the US government – income (analogy: taxes) and borrowing. If you go out tomorrow and buy a $10MM house – time financed with 80% debt – your GDP will rise dramatically. Your income to GDP ratio will fall dramatically. The taxes you pay as a ratio of your GDP will fall dramatically. Will you be able to go to your boss and say “hey!! my income to GDP ratio is at an alltime low – give me a raise!!” Good luck with that. Will you be able to go to the government and say “hey!! my taxes to GDP are at an all time low, tax me more”……….oh, wait, they will take it, and take your argument. But its bogus.
The only statistic that matters is taxes as a percentage of income. I don’t recall any relevant measures of taxes to income plus borrowing. And that’s for a reason. You can spend and be taxed on income. But you don’t get taxed on the debt you take on. And yet this is the case you attempt to make, steve. But its crap.
So when you look at taxes as a pct of income from 1950 to today you see about a 25% increase. Further, when you look at the increasing progressivity, you realize that the high earners are getting increasingly hosed, the low earners increasingly just on for the bennies but not the taxes, and with looming large expenditures………an untenable situation.
As for regulation, almost every regulation you cited was price regulation. If you want to make the case for price regulation don’t look at me, but look in the mirror and take a really deep breath before you get back to us with your case. As for the balance, just simply look at the number of pages. Just look at the volume. Look at the number of people employed to enforce and comply.
Good luck with that one, steve.
“Just for the record and if it isn’t clear from the post itself my view is that we need to be doing a lot more manufacturing, farming, mining, and energy production.”
Indeed. Woudth that our illustrious President rid himself of the greenie vote and do the right thing. But then again, wasn’t it Wayne Newton who sang “I like dreaming……”
” I also think that the exporting countries, e.g. Germany,”
Heh. As a side note. Hence, Germany simply cannot let the Euro fail. A strong, post Euro, German currency would devastate their economy. Velly, velly complicated…..
Table 8. Income tax. Also, if you look at table 5, you see that income at the top has nearly tripled while tax rates have dropped. The progressivity comes from increasing concentration of wealth at the top.
http://www.taxfoundation.org/news/show/250.html
State and local tax burdens have stayed pretty constant.
http://www.taxfoundation.org/taxdata/show/335.html
We know tax rates are down on capital gains and dividends. So, when I look at taxes as a percentage of income, I am not see seeing all time highs.
Query- If I say you can only do business in Illinois (a one line reg), or I say you can work in the rest of the country if you follow 10 pages of regulations, under which condition are you more regulated?
Steve
Well, from my perspective, the “Eloi†really is a frame of mind. Hence, we have those perfectly willing to live a life on the dole. This is unfortunately an expanding group.
Oh, bunk. There are lots of us that would much rather work than be on the dole. In fact, there are a lot of us who don’t actually get any government assistance at this point in time, in addition to having lost our jobs. (And in my wife’s case, her effective rate of pay has been cut because she hasn’t received a raise in years and doesn’t get the kind of hours she used to get – plus insurance costs keep going UP even though coverage continues to diminish.) There just aren’t enough jobs to go around, and your bitching about MR has pretty much nothing to do with anything. Nor does bitching about Obama, Reid & Pelosi. They certainly share some of the blame, but it was decades of bipartisan policy that got us here, not just these newcomers who’ve held power for at most five years.
Drew:
Your fear of the unemployed (is it untermenschen in your language?) is really weird. And you compound it with a parallel fear of liberals who will empower those morlocks to come after you and steal your Monte Cristos and Laphroaig. It’s funny because it reads a lot like a guilty conscience. If you’d pull your head out of Ayn Rand’s ridiculous rear end you’d probably be able to achieve a certain level of zen. As it is you have a case of self-induced panic as a consequence of having a head full of sophomoric pseudo-philosophy.
Chill, dude. I’m pretty sure Ice and I are not conspiring to lead you to the guillotine. Forgive yourself for doing well. I’m glad you’re doing well. But you’re not Atlas, you’re not carrying the world on your shoulders, we’re not all out to bring you down. The absolute worst I have in mind for you is a return to Clinton era tax rates. Did you do pretty well under those tax rates? Yeah, me, too. I don’t think it could be the coming apocalypse if we already survived it once and came out driving big German cars.
Chill, dude. I’m pretty sure Ice and I are not conspiring to lead you to the guillotine.
Speak for yourself. And in any event, what makes you think you shouldn’t go before Drew? You made a point of supporting the politician that got paid the most by Wall Street to do their bidding. And except for some weak rhetorical “flourishes” on his part Obama has done their bidding. You own that. “Radicalized” indeed, LMFAO!
“Healthcare and education are dependent on government spending, productivity is declining in both, and both create fewer jobs per dollar spent than other sectors. ”
I think it is hard for sectors to have declining productivity and at the same time create few jobs. Are you saying that fewer workers are being paid more to do less work in these sectors?
In healthcare I think we should have more nurses to do things that are currently reserved by law for doctors. With the aging population I think employment will still grow in this sector.
The baby boomers are entering their retirement years. If Obamacare takes effect in 2014 many boomers under 65 will probably retire since they will have better access to health insurance.
The U.S. economy has added over 1.5 million jobs this year.
The last year a Republican was in charge, it lost 3.6 million jobs.
No, I’m comparing the implications with respect to jobs of additional spending in healthcare and education to more spending in other sectors.
Ice:
It wounds your perfect sense of victimization to find me on the same side as you.
As for my vote, you either voted for McCain or Obama or didn’t vote at all, in which case, no matter how you cut it, you’ve got the same “ownership” I do. We all do. It’s kind of what the whole democracy thing is about.
You Michael if you were such a Maoist you’d do so much better with your comments.
Really, what is it with you ascribing dubious political associations for people? Is it arrogance?
Wow…talk about post hoc ergo propter hoc.
So if I smoke cigars, work half a day, and drink whisky I can be a successful author too?
steve –
http://hotair.com/archives/2011/12/08/former-obama-donor-declares-regulations-are-killing-jobs/
There are something like 400,000 filers making over $1MM per year. The average is about $2.7MM. The currently proposed surtax is 3.35% on the excess. If my trusty HP hasn’t failed me that’s about $22B in revenue.
Its pissing in the ocean. And that tells me that the tax increases won’t stop there, and/or its just a feel good but impotent political stunt. Spending is the issue.
Get real, folks, or at least semi-numerate.
It wounds your perfect sense of victimization to find me on the same side as you.
michael, how is a putative socialist who votes for the interests of the BIG BANKS possibly on the same side as someone who believes we should end Medicare, Social Security, break up all the large banks (and most of the other large institutions) and thinks the leadership of the country should all be tried for treason? (Let the few who are innocent prove it in court.) We are not on the same side. You are on the side of the machine, and want the machine to get more power to fuck over more people – especially people that you don’t like, which includes me. I’m against large systems as a matter of philosophy – they run people over without thought. You’re in favor of large systems BECAUSE they run over people without thought. There is no convergence of thought here, and certainly no convergence of action. You are the enemy.
And by the way, you slimy piece of amphibian shit, we don’t live in a democracy. Not that you’ve ever let a little thing like facts get in the way of an argument. Typical high-V low-Q behavior. (Which I had better explain means that you are just a literate idiot, but an idiot nonetheless.)
O_O
Damn….
@Drew- I am trying to expand our practice into New Jersey. The regulations are killing me. However, that does not mean they are the worst ever. I am just responding to your first comment.
“Regulatory, spending and taxing activities have reached all time highs”
I think they were much worse in the 50s, 60s and 70s (regulations). I also think taxes, as a percentage of income, are down also.
Steve
Steve V., _I_ am radicalized. Someone that thinks we need to keep voting for the assholes in charge so that someone can continue to feel good about himself is NOT radicalized.
@Icepick
“We are not on the same side. You are on the side of the machine, and want the machine to get more power to fuck over more people – especially people that you don’t like, which includes me. I’m against large systems as a matter of philosophy – they run people over without thought. You’re in favor of large systems BECAUSE they run over people without thought. ”
Sir, this is way out of line. Because someone doesn’t hold the same views you do does not make them the enemy. Because Michael continues to hope that sufficient reforms can be achieved within the existing system does not make him a wannabe oligarch. I happen to agree with you to some extent that the only way the system can truly change is through a controlled demolition, but that just makes Michael someone for me to PERSUADE to my position. What you wrote will do nothing other than alienate.
I don’t generally agree with Drew or Steve Verdon, and all of us have let the rhetoric fly at one time or another, but we HAVE had what I think are reasonable exchanges which nudged us into rethinking certain positions, at least a little. Learn the lesson I’m still teaching myself: you’d be surprised how much you can accomplish with a calm, patient approach.
It is why I like Dave’s blog. OTB has good articles, but sadly the ability to have an interesting discussion is limited. Like the recent one on MMT. I don’t agree with it, but I’m willing to look at it, consider it, etc. And knowing that is Ben’s point of reference does help at least since we wont be talking past each other quite so much…well hopefully.
And yeah, I share some of Icepick’s views. I find myself not liking large systems either.
And I agree with this. When I criticize Obama people almost automatically assume I wanted McCain. If McCain were elected I’d be slagging on him….mainly because I don’t think he’d do much that is substantively different than what Obama has done.
I don’t like our system anymore. I don’t like it because it has become corrupted by rent seeking which, in my opinion, is apolitical. It is about power and wealth and ideology is merely a convenient pretext for obtaining both.
Anyhow, I don’t think Michael is all that bad…he does like scotch after all, and sometimes his comments make me laugh.
Steve V., in 2008 I voted McCain for one reason. Well, one and a half. The half was because the guys that lived down the street from my Mom that bred and sold pit bulls for fighting (they had signs up in their front yard advertizing – amazingly the police COULD NOT figure it out; well, who thinks that police actually care about stopping cirme; or can read) put signs up in their front yard in support of Obama. The full reason was because the failed drug dealers that lived across the street from those dog breeders also put up signs in their yard in support of Obama. These were the same folks who had invaded my Mom’s house earlier that year looking for guns, drugs, cash and jewels – came prepared for violence. (Amazingly the police couldn’t crack the case despite an eye witness who told them who had done it – we got a crack police force here in Orange County. Those would be the guys in the small town of Windermere who covered up child molestation by one of the police chief’s good buddies for years – that took a lot of effort to keep secret as long as they did. The molester FINALLY abused someone whose parents had enough pull to break the case open. Child molestation rings aren’t just for Hollywood and college sports programs. But, you know, the police and the rich and powerful are our friends.)
So Obama had the support of dog fighters and home invaders. THAT got me to vote for McCain, and only that, as McCain was otherwise just about as excreable a person & politician as Obama.
@Ben – Michael and I have been at it for over five years now, at least since the first half of 2006, on various fora around the internet. Unfortunately we share some of the same reading habits and even have friends/friendly acquaintences in common. Over that time Michael has called me a Fascist, a racist, a closeted Klansman, stated that all racists want to shove Jews into ovens (and since I’m a racist….), and on and on and on. He’s made it clear he thinks of me as the enemy. I reciprocate, especially since Michael is in favor of absolute statism, so that the state can run over people he doesn’t like. I’ve got no reason to NOT think of him as the enemy. Give it a few years, though, and then get back to me. We’ll see if your opinion has changed.
Anyhow, I don’t think Michael is all that bad…he does like scotch after all, and sometimes his comments make me laugh.
An idiotic comment, Steve V. By that logic I could say Hitler wasn’t all that bad because he liked animals (I believe it was dogs in particular) and babies (Aryan babies, anyway). Hell, there’s even a quote of Adolf speaking fondly of chessplayers! All that is irrelevant, as is favotire potent potable. (And scotch? Really? That stuff is swill. One person I knew that drank scotch willingly did so because he hated the stuff – that way he nursed his drinks longer. Or he did until it killed his taste buds.)
Besides, Michael is of the tradition that people should only be judged on their politics. Fine. Should revolution come to these shores (I give it a slightly higher chance every month) he’s going to be in for a rude awakening when the sans-culottes determine that some rich, elitist snob of an author who supports the Establishment isn’t one of them.
“When I criticize Obama people almost automatically assume I wanted McCain. If McCain were elected I’d be slagging on him….mainly because I don’t think he’d do much that is substantively different than what Obama has done.”
I can’t argue with this. I just find accepting that my country may be too far gone to save repellant, even though with each passing year it appears more self-evident.
I do understand how Icepick can become angry. At times it can be hard to keep in mind that the person arguing with you isn’t necessarily the Enemy or a servant of the Enemy, and the internet being what it is makes flaring tempers that much easier to run with. I’m certainly guilty of it. I can be less than receptive to many libertarian ideas because I have kneejerk reactions, but I have to understand that they often think the same way about me. Our preconceptions can make it so difficult to see objectively that we twist each other’s arguments into a caricature we THINK represents their position. The irony is that we end up fighting each other instead of the powerful interests which have captured our government and society.
“Over that time Michael has called me a Fascist, a racist, a closeted Klansman, stated that all racists want to shove Jews into ovens (and since I’m a racist….), and on and on and on. He’s made it clear he thinks of me as the enemy. I reciprocate, especially since Michael is in favor of absolute statism, so that the state can run over people he doesn’t like. I’ve got no reason to NOT think of him as the enemy. Give it a few years, though, and then get back to me. We’ll see if your opinion has changed.”
The only reference I have is my own interactions with Michael via OTB, where he’s been quite civil, at least with me. That you guys have a history is certainly something I can’t speak to, but I take your response under advisement.