We all know how stupid the u3 unemployment statistic is, and we also all know that u6 unemployment sits firmly above 16%. John Williams says that when we include long term discouraged workers, the percentage is around 22. But here is my question:
Should we count the long term discouraged workers? They have been unemployed for at least a year with no meaningful effort. Why should we count them?
Also, why are manufacturing jobs going up?
Thanks in advance for enlightening me.
They have been unemployed for at least a year with no meaningful effort. Why should we count them?
Because it stems from their (realistic) expectations that this deranged economy has no place for them.
About jobs going up, emphasis added by me:
My humble blog
It's easy to refute an argument if you first misrepresent it. William Keizer
Here's more from the same place, from Dec 7, 2010:
Job openings in the U.S. rose in October for the first time in three months, a sign gains in payrolls will accelerate in early 2011... This proves two things. Bernanke is clueless when it comes to forecasting, since as was obvious in his 60 Minutes interview, his projection of "years" of high employment was done based on a simple projection of the then current tend. Second, he has no clue as to how powerful monetary policy is in turning around (in a manipulated fashion) the economy. This October number is just from his decision to reinvest MBS proceeds, when QE2 data starts to hit, the economy will look like its on steroids. He may even be hailed as a hero. When the inflation hits a few months later, people will want him locked up in Guantanamo.
There is deep stuff going on here. The Keynesian are right that printing money increases demand [= ability to buy], hence more jobs are created to meet the increased demand.
However, nothing comes for free. Usually when you have money to spend, it is because you earned it by working somehow. Meaning you have contributed to the well being of the economy, producing. [I am talking about a productive job, of course.] So that even when you spend the money and consume, you are only consuming, in a sense, what you yourself have already produced.
But newly printed money means someone is getting to consume without having produced first. He is gobbling up things, creating scarcity. Which means, since supply of things decreases due to his consumption, prices will go up. That's one way of looking at why there is price inflation after money printing. More money chasing less resources spells disaster.
Another aspect of the jobs created by inflation is that they are often unproductive jobs. Like all the jobs "saved" by the bailouts of the banks and GM, and all govt jobs. Those bankers don't know how to run a bank, and GM doesn't know how to make cars, and govt jobs don't produce anything. Since the jobs do not generate profit [except for the profit of getting the govt handout], once the handouts stop, the jobs disappear as well.
Do you have deeper evidence for this?
Such as maybe jobs that can be linked to QE?
Nope, that's my best shot.
We should them because they are unemployed and we are measuring unemployment.