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Thread: Jobless Rate in US Falls to 5.9% in September, Payrolls Jump

  1. #561
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    Re: Jobless Rate in US Falls to 5.9% in September, Payrolls Jump

    Quote Originally Posted by imagep View Post
    To an extent, yes. However, there is no lack of companies willing to create things that people want, the profit motive is very powerful, and it exists regardless of anything else, as long as we allow private ownership of the means of production (and last time I checked, we do).

    Production is the natural result of demand. it's like almost automatically going to happen, as long as demand is realized. Someone orders something, and it's produced. someone purchases something off the shelf, and a replacement is produced.

    However, demand is created when people who want things have the means to actually purchase those things. Regardless of how much the owners of the means of production desire to produce, they will not produce more than their customers can actually afford to purchase. So customers with a buck in their pocket is a prerequisite for production to exist.

    If you made widgets, and you were only able to sell 100 widgets a day, would you produce any more than that? Would you desire to fill up warehouses with excess widgets?



    You are mixing two different types of demand.

    There is the demand for our daily bread so to say as with the food, shelter and clothing required to survive day to day.

    People will always buy these things and given the extra money, may buy them in a higher quality or after a shorter wear out time, but they will continue to buy them.

    What stimulates the economy is making something available that is so necessary that it forces people to find a way to buy it, but is not something being currently purchased. The PC is the best example because nobody had one and suddenly everybody had to have one.

    After the initial flood of sales, the continuing sales are baked in already and now the computer is more of a commodity like Grated Parmesan Cheese. I doubt that there a majority of homes in the USA that don't have both of these in-house and ready for use right now.

    How does a country grow jobs absent the societal "killer app" new product? A good first step is to stop actively blocking the efforts of job creators.

    After that, paying people to invest by cutting the depreciation schedules is a good move. If that doesn't work, matching dollar grants on a percent of investment in real assets.

    When a particular response to a particular policy causes a deficit inducing response from the private sector, change that policy. If companies are being encouraged to leave our country, why not reverse the policy that is providing the encouragement and replace it with a policy that encourages companies to move here? This is not rocket science.

    All that is needed is to abandon the get-evenism approach to punitive tax policies and punitive regulation and logically address what is happening in the real world.

    What's being tried right now is not working, has not worked and will not work to grow the economy. They are holding tight to the policy, though, so presumably, whatever it is that they are trying to achieve is being achieved.
    I am not of the mind that a man is either of science or of religion. At his best and his worst, man exists in the misty glimmering where the falling angel meets the rising ape. That he chooses a direction from that point defines him as human.

  2. #562
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    Re: Jobless Rate in US Falls to 5.9% in September, Payrolls Jump

    Quote Originally Posted by code1211 View Post
    ...

    What stimulates the economy is making something available the is so necessary that it forces people to find a way to buy it, but is not something being currently purchased. The PC is the best example because nobody had one and suddenly everybody had to have one....
    While that may have been true for the PC, generally these innovative new products are replacing other products. What we end up with is a shift in demand, much more so than the creation of additional demand. Yes, there is lot's of demand for smart phones that didn't exist before apple invented the iphone, however because of the smartphone, demand for calculators, computers, home phones, watches, clocks, notepads, stationary, pens, PDAs, pedometers, stand alone GPS systems, sterios, walkmen, flashlights, etc has declined. We simply shifted demand from one set of products to that new inovative product.

    The net increase in aggregate demand due to the smartphone is probably zero.

    Demand, for everything other than high end luxury products is limited by the worker-consumer class'es ability to purchase more. When incomes aren't increasing, the consumer class can't buy more, regardless of how cool or innovative new products are, they will just shift demand from current products to those new products, and our economy is no better off.

    That's the reason that it's important that incomes at every income level increase as fast our our per work hour productivity increases. If incomes don't increase just as fast, then we end up with demand lagging behind productivity, thus we have a weaker job market, more unemployment, even lower wages, lower business profits, more people on welfare, etc.
    Quote Originally Posted by ocean515 View Post
    ...I'm not interested in debating someone who is trolling for an argument....
    Quote Originally Posted by Papa bull View Post
    I see a big problem with the idea that whatever the majority wants is OK.

  3. #563
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    Re: Jobless Rate in US Falls to 5.9% in September, Payrolls Jump

    Quote Originally Posted by imagep View Post
    While that may have been true for the PC, generally these innovative new products are replacing other products. What we end up with is a shift in demand, much more so than the creation of additional demand. Yes, there is lot's of demand for smart phones that didn't exist before apple invented the iphone, however because of the smartphone, demand for calculators, computers, home phones, watches, clocks, notepads, stationary, pens, PDAs, pedometers, stand alone GPS systems, sterios, walkmen, flashlights, etc has declined. We simply shifted demand from one set of products to that new inovative product.

    The net increase in aggregate demand due to the smartphone is probably zero.

    Demand, for everything other than high end luxury products is limited by the worker-consumer class'es ability to purchase more. When incomes aren't increasing, the consumer class can't buy more, regardless of how cool or innovative new products are, they will just shift demand from current products to those new products, and our economy is no better off.

    That's the reason that it's important that incomes at every income level increase as fast our our per work hour productivity increases. If incomes don't increase just as fast, then we end up with demand lagging behind productivity, thus we have a weaker job market, more unemployment, even lower wages, lower business profits, more people on welfare, etc.


    Your observation about the shift of sales from one product to another is probably very accurate.

    Why would people buy something more with the extra money? Why would the shift in sales from one product to a different product not also apply here? It seems likely that the extra money spending would manifest in a better grade of hamburger or steak as opposed to the lower grade of hamburger. Maybe going to Steak house instead of a Pancake house.

    If your idea is correct and will produce additional sales and therefore fire up the economy, why not allow projects like the Keystone Pipeline to employ people and thereby drive more money into the economy, increase the tax revenues and do so with no expense to government in any way?
    I am not of the mind that a man is either of science or of religion. At his best and his worst, man exists in the misty glimmering where the falling angel meets the rising ape. That he chooses a direction from that point defines him as human.

  4. #564
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    Re: Jobless Rate in US Falls to 5.9% in September, Payrolls Jump

    Quote Originally Posted by code1211 View Post
    Your observation about the shift of sales from one product to another is probably very accurate.

    Why would people buy something more with the extra money? Why would the shift in sales from one product to a different product not also apply here? It seems likely that the extra money spending would manifest in a better grade of hamburger or steak as opposed to the lower grade of hamburger. Maybe going to Steak house instead of a Pancake house.
    Sure, additional money in the hands of the consumer would result in upgrades of products.

    In some cases it would also result in the purchase of additional products. Unless one is uber rich, most of us have to make choices in how we spend our money. So maybe I have to make a choice this week between a new TV or new carpet in my bedroom. If I had more money (bigger paycheck), then maybe I could afford both.

    Other than increased demand, the only other thing that the worker-consumer class could do with bigger paychecks is to save and invest and certainly some of us would also do that.

    So now imagine an increase in spending combined with an increase in savings and investment. Is that not the perfect recipe for a great economy?

    That's why I am constantly advocating for middle class tax cuts. Reducing the rate of the bottom three income tax brackets by 5% could easily create a one or two percent increase in GDP (resulting in a "normal" 3+% growth rate), which would result in a sub 5% unemployment rate.

    If your idea is correct and will produce additional sales and therefore fire up the economy, why not allow projects like the Keystone Pipeline to employ people and thereby drive more money into the economy, increase the tax revenues and do so with no expense to government in any way?
    I'm all for the Keystone Pipeline, and I suspect that Obama will approve it before he leaves office as surely he doesn't want to go down in history as the POTUS that held up progress. However, I'm not convinced that it's going to create a lot of new jobs long term. Seems to me that it's more about making the transportation of the oil more efficient - meaning not having to rely as much on human labor to transport it.

    I'm also not real supportive of the idea that we should start exporting oil. Seems to me that long term, like generations from now, we may be better off if we use up other nations natural resources first, than to export all of ours.
    Quote Originally Posted by ocean515 View Post
    ...I'm not interested in debating someone who is trolling for an argument....
    Quote Originally Posted by Papa bull View Post
    I see a big problem with the idea that whatever the majority wants is OK.

  5. #565
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    Re: Jobless Rate in US Falls to 5.9% in September, Payrolls Jump

    Quote Originally Posted by imagep View Post
    Sure, additional money in the hands of the consumer would result in upgrades of products.

    In some cases it would also result in the purchase of additional products. Unless one is uber rich, most of us have to make choices in how we spend our money. So maybe I have to make a choice this week between a new TV or new carpet in my bedroom. If I had more money (bigger paycheck), then maybe I could afford both.

    Other than increased demand, the only other thing that the worker-consumer class could do with bigger paychecks is to save and invest and certainly some of us would also do that.

    So now imagine an increase in spending combined with an increase in savings and investment. Is that not the perfect recipe for a great economy?

    That's why I am constantly advocating for middle class tax cuts. Reducing the rate of the bottom three income tax brackets by 5% could easily create a one or two percent increase in GDP (resulting in a "normal" 3+% growth rate), which would result in a sub 5% unemployment rate.



    I'm all for the Keystone Pipeline, and I suspect that Obama will approve it before he leaves office as surely he doesn't want to go down in history as the POTUS that held up progress. However, I'm not convinced that it's going to create a lot of new jobs long term. Seems to me that it's more about making the transportation of the oil more efficient - meaning not having to rely as much on human labor to transport it.

    I'm also not real supportive of the idea that we should start exporting oil. Seems to me that long term, like generations from now, we may be better off if we use up other nations natural resources first, than to export all of ours.



    Regarding saving our oil for a rainy day, I have no idea what the solution will be, but the sunset of the fossil fuel industry is quickly approaching and saving oil for the rainy day will be a labor spent unwisely.

    The blurb about the Fusion reactor is opening bell to the end of the fossil fuel age. They had a good run. It's ending. Destroying the economy to make it happen is just short sighted pessimism by backward looking ideologues. Solar will never power the take off of a 747. A fusion reactor the size of a pick up truck certainly could.

    Wealth redistribution schemes are all fated to fail. They always have and they always will. The way to bring wealth to the hands of those that need it is to create wealth. The way to create wealth is to create the desire in those that have the capital to use it.

    Everyone agrees that taxing something heavily, like cigarettes, will reduce smoking. Taxing the income of people that was created through investment also slows that activity. This is very basic stuff.

    Stopping the establishment of jobs, as is the case with Keystone, obviously stops the establishment of jobs. This administration has no desire to step on the toes of those that have bought it. They have every intention of continuing to accept the bribes and are striving to increase the price of their loyalty.

    When in the long history of economics has your prescription solved the problem. When has punishing the movers and the shakers produced more movement and more shaking?

    When has rewarding indolence produced harder work?
    I am not of the mind that a man is either of science or of religion. At his best and his worst, man exists in the misty glimmering where the falling angel meets the rising ape. That he chooses a direction from that point defines him as human.

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