US Employment History by Sector

 In the last half century US policies have profoundly changed the way Americans earn their daily bread.  This post quantifies a few of those changes.  The data comes from the US Bureau of Labor Statistics (BLS) Nonfarm labor payroll surveys.  Previous posts here and here summarize the difference between the  BLS "nonfarm" and BLS "total" labor reports.

 Chart 1:  Total "Nonfarm" US employment showing Government and Private sectors
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Measuring Unemployment and Job Growth

A Long Road Ahead .... NYTimes

Chart 1: *METHODOLOGY: Total nonfarm payroll employment, seasonally adjusted, is from the Current Employment Statistics survey. The employment-to-working- age-population ratio used, 59.36%, is the June 1990-Nov. 2007 average; the working-age population is based on the Current Population Survey, and is projected to grow at the 2000-10 average, 0.103% a month. Recovery job growth rates are based on the periods Jan. 1993-Dec. 1999 and Jan. 2004-Dec. 2006.

Seth W. Feaster/The New York Times 

Source: Bureau of Labor Statistics (projections calculated by The New York Times based on B.L.S. figures)
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US Employment and GDP

We are a nation of 308 million souls of which approximately 140 million or so are "employed" full time or part time.  Chart 1 shows some of the major categories the US Bureau of Labor uses to monitor America's labor situation  (Click for larger charts)

Chart 1 US Employment Categories

There’s Class Warfare, All Right,” Mr. Buffett said...

There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”

This is the first post in what I plan to be a series of posts on the history, status and immediate future of the welfare of average American citizens and households. 
I will start with two extracts -- the first from a conversation with Warren Buffet reported in the NYT, the second from "Sudden Debt", one of my favorite bloggers:

In a conversation with Mr Buffett  (NYT 2006)

BLS Employment Report Today

I will be publishing a series of "Unemployment 101" posts in the next few weeks.  Meanwhile here is data published today by the BLS with commentary from a few sources

From the Economist

TODAY, the Bureau of Labour Statistics released the last set of American employment numbers to come ahead of the November Congressional elections.

ProfessorBrad DeLong on Macroeconomics

 DeLong summarizes Jean Baptiste Say, JS Mill, Malthus and Niall Ferguson

Copied completely from Professor DeLongs site

 What Does Cutting-Edge Macroeconomics Tell Us About Economic Policy for the Recovery?

from Grasping Reality with Both Hands by Brad DeLong

 (Emhasis mine)

Let us start with one of the first economists, Jean-Baptiste Say.
Say wanted to be a technocrat, and was well on the way—special assistant to Girondist Party Finance Minister Etienne Claviere in the early days of the first French Republic. His patron was fired, purged, arrested, imprisoned, probably tortured, sentenced to the guillotine, which he cheated by committing suicide the day before his scheduled execution.

Myths de Jour, Krugman and Me

 Krugman has a piece which resonates.  My comments precede his oped below.

The mythology of the "invisible hand" of "free market competition" working in "an efficient market" was pushed when it was profitable for American corporations and banks.

Fifteen Non GDP Measures of US Economic Health

Most of my posts discuss US economic health.  I almost always use GDP growth as a measure, and will continue to do so.

Though GDP as a yardstick of economic health is deeply flawed, it is the only  measure universally recognized by politicians and economists, and is a not unreasonable measure of economic growth, albeit not economic health.  

Bloomberg--U.S. Home Prices Face 3-Year Drop as Inventory Surge Looms

  A variety of sources are quoted on US house price declines

Bloomberg

By John Gittelsohn and Kathleen M. Howley - Sep 15, 2010

The slide in U.S. home prices may have another three years to go as sellers add as many as 12 million more properties to the market.
Shadow inventory -- the supply of homes in default or foreclosure that may be offered for sale -- is preventing prices from bottoming after a 28 percent plunge from 2006, according to analysts from Moody’s Analytics Inc., Fannie Mae, Morgan Stanley and Barclays Plc. Those properties are in addition to houses that are vacant or that may soon be put on the market by owners.
“Whether it’s the sidelined, shadow or current inventory, the issue is there’s more supply than demand,” said Oliver Chang, a U.S. housing strategist with Morgan Stanley in San Francisco. “Once you reach a bottom, it will take three or four years for prices to begin to rise 1 or 2 percent a year.”

Iraq War Costs Exceed $3 Trillion

Stiglitz in the Washington Post

Writing in these pages in early 2008, we put the total cost to the United States of the Iraq war at $3 trillion. This price tag dwarfed previous estimates, including the Bush administration's 2003 projections of a $50 billion to $60 billion war.

Krugman -- "...It's all downhill from here"

NYT Sept 6th 
Krugman -- Delusions of Recovery

"  I’ve had a couple of conversations lately with people who follow politics and public affairs, but aren’t that close to the economic discussion — and I’ve discovered that there are two comforting delusions still out there.

Delusion #1 is that we’re on the road to recovery, just more slowly than we’d like; to be fair, the White House keeps saying this.
But it’s not at all true. GDP is growing below potential; employment, even if you focus just on private employment, is growing more slowly than the working-age population. If you ask how long it will take us to return to, say, 5 percent unemployment on the current track, the answer is forever.

Delusion #2 is the belief that the stimulus may yet do the trick, because there are still substantial funds unspent. I tried to deal with this last year. The level of GDP depends not on total funds spent, but on the rate at which funds are being spent, which has already peaked; GDP growth on the rate of change in the rate at which funds are being spent, which peaked last year. It’s all downhill from here. "

Emphasis mine

HRes 1553 -- War With Iran

See the end of my unemployment post.  I wrote that piece before I came across the article below from the mag Foreign Policy

Foreign Policy 
July 29 2010

"A game plan to draw the United States into a third war in the Middle East may be quietly unfolding before our eyes.

The Economist on Democratic Woes and Unemployment

From the Economist ... emphasis mine

The Democrats may not merely lose the House in November, but the Senate too. How did it go so wrong?

Jul 22nd 2010

....

Its Democratic masters say that the 111th Congress has been bold, busy
and effective. Since starting work in the middle of an economic crisis
it has authorised $1 trillion or so of stimulus spending, steered GM and
Chrysler out of bankruptcy, pushed through health-care reform and
overhauled financial regulation
....

Unemployment -- A First Look.

From Calculated Risk, -- job losses in the current recession compared with other post WWII recessions. 

Housing, Another Drag on US Growth

Several economists believe house prices have bottomed and will now begin a slow rise.
 I think they are nuts.

Here is a chart of their current forecast.

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The Mosque

Energy and US Economic Growth

I wanted to take a brief break from talking about debt as a drag on US economic growth.  

So... here are a few words and a few pictures about oil, an even more fundamental limitation than US debt, on world and US economic growth. 

Chart 1: Chart from an EIA Energy Conference in April 2009 from a presentation by Sweetnam
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NYT Reporting 2010Q2 GDP growth may be 1.2%

From NYT


August 11, 2010, 11:11 am

2nd Quarter G.D.P. May Be Revised Even Lower

Source: Bureau of Economic Analysis, via Haver Analytics 

US Borrowing, Debt and Growth Part 1

Below is a picture (Chart 1), for the last three decades, of the total amount of money Americans borrow each year.  The credit is provided, primarily by American banks for

1. American households, 
2. American businesses, 
3. American banks, 
4. Various branches of American government.

By far the majority of credit is provided to the "private" that is the "non government" sector, which are the first three sectors above.

Contrary to much of Main Stream Media and politician noise, private borrowing and private debt has been our primary borrowing and debt problem.  It has not been government borrowing and government debt.

It was only in the last couple of years (since Q4 2008) that the Bush administration, with the complete agreement of the incoming Obama administration, and the Federal Reserve, that the US federal government (USG) bailed out the private banking system, and thus took on the responsibility for redeeming private debt.

Thus did we middle class Americans have the excretions of bankers and conniving politicians dropped on our unwitting heads.

The USG got involved because the world credit "suddenly" froze and bank lending ceased.

In less than two years, Americans changed from borrowing about $4.5trillion per year to borrowing less than nothing -- whatever that means.  (More on that in later posts).

What does that signify?  Sound and Fury Signifying Nothing?  Just a Bump in the Road of  Perpetual Economic Growth?  A Harbinger of Economic Doom?

You will find my answer at the end of this piece.

This post is the first of a bunch of wonkish, but hopefully commonsense and easily understandable posts on the subjects of American borrowing, American debt and American economic growth (US GDP).

Chart 1.  Total US annual borrowing.  Data from the Fed Flow of Funds Table D2
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Job Cuts and Profits

Companies Wringing Huge Profits From Job Cuts - NYTimes.com

July 25, 2010
Industries Find Surging Profits in Deeper Cuts
By NELSON D. SCHWARTZ

By most measures, Harley-Davidson has been having a rough ride.

Motorcycle sales are falling in 2010, as they have for each of the last three years. The company does not expect a turnaround anytime soon.

Greenwald: What Collapsing Empire Looks Like

From Salon
Friday, Aug 6, 2010 12:07 ET

What collapsing empire looks like

By Glenn Greenwald

(updated below)

As we enter our ninth year of the War in Afghanistan with an escalated force, and continue to occupy Iraq indefinitely, and feed an endlessly growing Surveillance State, reports are emerging of the Deficit Commission hard at work planning how to cut Social Security, Medicare, and now even to freeze military pay.  But a new New York Times article today illustrates as vividly as anything else what a collapsing empire looks like, as it profiles just a few of the budget cuts which cities around the country are being forced to make.  This is a sampling of what one finds:

US Economic Growth -- Consensus and Limits

Image via Wikipedia

Chart1.  World and US GDP growth rate from US Dept of Agriculture Economic Research Service Source: "World Bank World Development Indicators, International Financial Statistics of the IMF, Global Insight, and Oxford Economic Forecasting, as well as estimated and projected values, developed by the Economic Research Service all converted to a 2005 base year" Data published November 2009.

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GDP Growth Rates, Debt and Tooth Fairies

Last Friday the Bureau of Economic Anaysis (a federal government bureau) issued their corrected GDP numbers for the last several years.  This post uses this updated data to begin the first of a few posts on Growth in a time of Debt.

Chart 1: BEA Quarterly Annualized Seasonally adjusted US GDP growth, 2005q1 thru 2010q2
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President Reagan's Budget Director Finds Religion

David Stockman is (was?) a staunch Republican.  He was director of the Office of Management and
Budget under President Reagan.  Below is his oped piece in the NYT.   It is a short and extremely accurate description of what four decades of living beyond our means and three decades of Reaganomics and subsequent Republican ethics and economics has wrought.  It is well worth reading.

Why the Bush Tax Cuts Should Expire

From the Washington Post -- Emphasis mine

Five Myths about the Bush Tax Cuts

By William G. Gale

Sunday, August 1, 2010

The cuts lowered tax rates across the board on income, dividends and
capital gains; eventually eliminated the estate tax; further lowered
burdens on married couples, parents and the working poor; and increased
tax credits for education and retirement savings. Obama's proposal would
extend most of these reductions, allowing only those for individuals
making more than $200,000 and families making more than $250,000 to
expire....

Drones and Deficit Spending..

Let's see now, what were we saying about increased increased US federal government expenditures and deficit spending under the Obama Administration?



From the BBC Urdu service

Since January 2009 nearly 2,500 people have been killed in Pakistan as a result of US drones and Islamic militant attacks. The graphics above show how Islamic militant strongholds in the border area close to Afghanistan have been targeted by US drone aircraft, while, at the same time, Islamic militants have carried out attacks across Pakistan.

Missile attacks by US drones in Pakistan's tribal areas have more than trebled under the Obama administration, research by the BBC Urdu service shows.

The Deficit-- It's Not Just Republicans....

It is not just cynical Republican and Corporate shills who are (supposedly) fighting increasing the current budget deficit and federal debt.  

Some generally anti Bush and highly respected economists have a problem with our government debt situation as well.  That is what makes the Republican bleating about deficits so dangerous.   "Serious people" are also concerned about deficits.

Two pieces -- Krugman and Hayes

Since this is a very low circulation non commercial blog, I am taking the liberty of sometimes posting complete articles, written by various authors, in their entirety with the appropriate attribution and link. 

Here is a Krugman piece from January 2009, 18 months ago, saying the stimulus should have been closer to $2trillion (The Obama Gap).  Below it is a piece by Christopher Hayes in July 2010 talking about Iraq and Deficits of Mass Destruction.

President Obama's Budget Deficit Problem

The US FY 2011 budget (published early 2010) was the first budget assembled by the Obama administration.  It was based on data available in the fall of 2009. 

TARP (approximately $700 billion, initially targeted at bank bailouts), had been passed by a Democratic Congress, and signed into law by President Bush in late 2008.  The incoming Obama administration agreed with TARP.  

What is “Deficit Spending”? -- TWODS Part 2

This post will make a lot more sense if you read at least some of the introductory comments in Part 1 here. 

Let’s begin by getting our terminology as close to every day language as we can.

The Federal Deficit

The federal government budget deficit/surplus is annual difference between the amount of money the federal government receives (receipts) from taxes and other sources, and the amount of money the federal government disburses (outlays).

The War on Deficit Spending “TWODS” – Part 1, Introduction

We are all being “spun” -- again.

The American PR machine is again in full throated roar.  This time the "War" is on “Deficit Spending”.  The war is being waged by forces which are probably unbeatable.

The techniques which worked so well in the lead up to the 2003 Iraq war are now being used again.  The con men and the financiers are the same.  The target as always, is the American voter.

Privatizing Social Security, and privatizing the delivery of medical care are TWODS goals.  The misdirection, the threatened dangers and the bogeymen are the imaginary perils of “Deficit Spending”.