Dilbertnomics

Friday, February 4, 2011
Posted in category Economics

Dilbert tells the truth on unemployment, unlike the government.

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6 Responses to Dilbertnomics

  1. Iluvatar says:

    February 5th, 2011 at 12:16 pm

    I recently read a chilling statistic. Of the number of worker-aged people, only 47% are fully employed.

    Now, I don’t know what that number usually is during good times – but where that number is right now? oh my gawd…

    And to top it off, since the deleveraging process is bound to go off @ the speed of “ground” (i.e., @ a snail’s pace) since the Fed is owned by the private banks that DON’T want to absorb their losses (too big to fail, remember?), I think Helo Ben is quite correct when he states that unemployment will be structually high for quite some time.

    Thanks for that, Ben!

    To connect the dots here, the thread of logic that I am using is that once deleveraging picks and the HHs deleverage/destroy debt, they arrive at a point when they can begin to spend again w/o assuming more debt. Then demand begins to pick up, and Corps can begin to hire. Then unemployment begins to get tackled.

    The common retort I get for that thread is: “but the debt is too big to burn (like around 50% of the private debt level of $60 T by some estimates”.

    Wow! Did you see that!?!

    Goosebumps, man!

    Well, er, ok.

    Burn it anyway, and do it now!; we bounce @ `17.

  2. clark says:

    February 5th, 2011 at 10:32 pm

    “…once deleveraging picks and the HHs deleverage/destroy debt, they arrive at a point when they can begin to spend again w/o assuming more debt.”

    With wHAt savings, and with wHAt earnings?
    Don’t suppose rising prices will play a factor too?
    From speculation, from inflation, from increasing taxes and regulations, and changing demographics, such as the Boomers downsizing?

    One thing is for sure, without the massive availability of credit things won’t go back to the way they were before, and too many things depend on things going back to the way they were before.

    “Then demand begins to pick up”

    Demand all they want, but once again, with wHAt savings or earnings?

    And of course just forget about those on the other side of the play, the ones who were owed the debts and are now out.

    Did you say, “we bounce @ 2017″?

    Would that be the final dead cat bounce?

    Also, notice the MSM use of the word, unexpected.

    They don’t call it a crack-up-boom for nothing.

    Putt… putt… putt… (this is going to go on forever)… putt… putt… Crack!

  3. clark says:

    February 5th, 2011 at 10:40 pm

    Comment by rms
    2011-02-05 15:03:50

    A great comment from the Yahoo article:

    http://finance.yahoo.com/real-estate/article/111989/where-will-housing-bounce-back-most?mod=realestate-buy

    “Dream on with your speculations… housing prices will not rise again until the bloody revolution in this country has been concluded. Considering it hasn’t started yet I say there is a good chance it will happen long before the scumbag capitalists begin making jobs available once again! Hold on to your trillions… see how much comfort it gives you when we the people slit your throats!”

  4. Iluvatar says:

    February 9th, 2011 at 12:23 am

    Dude!

    Yes input & commodity prices are rising.

    And that is exactly WHY the Fed’s QE program is failing the HH’s – please see my answer to you 2 blogs back – or so.

    As HHs can deleverage (assuming they aren’t get slaughtered by food/energy prices), they get to a point where they can spend/SAVE.

    That is the deal and the connect the dots experiment: Reduced debt costs lead to spending/saving – that is kinda of a no-brainer @ the HH consumption level.

    The EARNINGS lead to SAVINGS (if it does not drain immediately into SPENDING); but it leads to a healthier HH sector, that can then drive demand up on CORPS who then choose to HIRE – which is what all this is truly about – unemployment.

    What we need to be careful about is “right-sizing” demand and investment: it needs to “pour” into the “right” areas – & that ain’t trivial (you want to buy another “Clunker” under the auto program? C’mon man!).

    But the issue is on the table.

    You can’t “re-start” an economy w/ housing in the toilet and HHs so leveraged up that they can not only can spend w/ their own money, they can not EVEN spend on BORROWED dollars.

    The HH sector has to be revived – AND the bubbles NEED to be STOPPED!

    And I see NONE of this happening.

    Last note: Hey Dude? Why are you picking on me? I am trying to be helpful – under the scope of trying to provide helpful inputs all I seem to get from you is caustic disagreement? Hey dude? If that is the case, can we simply agree to disagree – and move on?

    I am a saver and a fiscal conservative – I currently save over 30% of our family net income – and I ain’t rich. I have been a saver for about the past 35 years. And yet, now I am under extreme pressure due to this recession. Where did I go wrong???

    Dude, be careful who you “tee up” on. You might get someone who will “tee back”.

  5. clark says:

    February 10th, 2011 at 2:10 am

    I thought we were just discussing the issues, not picking on you. Was it caustic? I though it was just factual.

    I guess there’s really no need to continue.

  6. clark says:

    February 12th, 2011 at 12:58 am

    However; one thing I would like to add, in the off-hand chance someone else stumbles across this thread, is that housing Must be in the toilet, in fact, much much more housing needs to be in the toilet for the economy to turn around because housing prices need to become much much more affordable and way more in line with incomes.

    And you’re right, households can’t save when they are leveraged up and facing rising costs with stagnant wages, soo… they need to strategically default and start over, and without massive amounts of credit available to them they will have to live within their means, perhaps if they scrimp, they can save.

    As noted in Karen’s next blog post about strategic defaults, you will begin to see more of this happening. Combine that with defaulting or collapsing currencies and you begin to see the end of credit fueled bubbles.

    Ok, now we’re done.

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