Where is the US economy headed?

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Regardless of the outcome. Chrysler is a dead duck. And mosty if not all it's workers will soon be among the ranks of the unemployed. That is an economic disaster in the making.

"what about the workers losing their jobs , you say ? " .
"let them eat cake while working at macdonalds" , i say .

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To continue to be the richest country in the world, we cannot rest on our laurels and act like spoiled brats, learn nothing in school, expect luxurious wages while working at McDonalds, go home from school or work and stop and buy a half dozen lottery tickets, cigarettes, and beer at the local convenience store, then pick up a movie at Blockbuster, and then go home and lounge on the couch eating expensive junk food and watching stupid movies. [CODE]

hbg

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cicerone imposter wrote:

okie, How many times do we need to spell it out for you? We're talking about what Bush did to our economy - not compared to other times (half a century ago) or other countries (all third world countries).

FYI, Japan is the second largest economy in the world. They also live in very small homes. What does that prove?

So, what did Bush do that destroyed the economy? It doesn't tell anybody here anything to claim that, cicerone, you have to have something to back it up other than a company or companies scaling back or moving manufacturing overseas. I remember this happening almost every day or every week since I was old enough to follow the news in the 50's. As far as Japan, it proves they are frugal and work hard. What else do you need to know?

P. S. A comparison to the 50's is valid, because it puts things into perspective, and other countries are pertinent because this is a world market and that is the arena we now operate in. We haven't awakened to that fact yet and Democrats especially pretend they can saddle all our economy with everything imaginable and we can still compete. Also, I still remember Clinton accusing Bush I of having the worst economy since the Great Depression, which was probably the biggest lie since the Great Depression. My parents lived through that period and they were quite un-amused by the politician from Arkansas. This country does not exist in a vacuum.

By the way, I have never purchased a foreign made car, have you?

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Okie said:

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By the way, I have never purchased a foreign made car, have you?

Not me, I drive a Toyota. a really good american truck.

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Good evening from Johnboy in Virginia. I am going to try again to post something about the topic of Health Insurance in the US. It may be a bit long. All I can say is that these are my own thoughts. There is no cutting and pasting. I may, to try to avoid the "Critical Errors," do this in two or three successive posts. You might want to wait to see the whole thing before responding. I have numbered the paragraphs for easier refenence.

1) Last week, the leader of Wal-Mart and the leader of a labor union normally battling Wal-Mart appeared together and suggested that the notion of employer-paid health insurance was dooming American competitiveness versus foreign competitors as the globalization of the economy continues.

2) I have been in a Wal-Mart twice, and this company, the largest employer in the US, is much vilified for its employment practices. The union chief who appeared with the Wal-Mart guy has also been criticized by other unions. So be it. I would prefer that this not become a Wal-Mart bashing thread, but I can't control that.

3) I am in the retail trade, and the health insurance premiums I pay as the employer amount to some $30,000 per year. That is a big chunk of money but it buys employee loyalty. And with that comes a certain longevity of employment. That leads to what I consider to be crucial in the management of any business: Institutional Memory. I watched one of my employees think on her feet the other day with a customer who came in thinking he might have a problem. But she had been here long enough. She resolved it quickly because she knew how I would have resolved it. But I digress.

4) Debate #1 Question is this: Is the Employer-based Health-Care Insurance crippling US companies' ability to compete?

5) Debate #2 Question is this: Is the rising cost of health care and the declining numbers of people (through jobs that don't offer health insurance) or through shut-downs and lay-offs going to bankrupt our system?

I realize the last two questions are worded awkwardly. I am sure someone can do better.

Anyway, that is my start at this. -rjb-

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rjb, Let my try to answer your two debate items.

4) Debate #1 Question is this: Is the Employer-based Health-Care Insurance crippling US companies' ability to compete?

Yes, especially in the auto industry. Americans now have the most expensive health care system in the world, but continue to increase the number of the uninsured while costs escalate by double-digits almost every year. The cost to produce a car by the old car manufactures in the US is multiple times more expensive than the new-comers like Toyota, Honda, and other European-based companies, because of the union-contracted health plans that's been negotiated before world competition made it no longer viable. That's the reason American car manufacturers lost by both price and quality.

5) Debate #2 Question is this: Is the rising cost of health care and the declining numbers of people (through jobs that don't offer health insurance) or through shut-downs and lay-offs going to bankrupt our system.

I'm not sure about "bankrupt our system," but it's up to our government to make sure all citizens have health insurance like most developed countries. The unfortunate part of our current system is the simple fact that nobody can be turned away from the emergency room of any hospital whether they have insurance or not. That's the mose inefficient way to care for those uninsured individuals, and the hospitals costs skyrocket out of control. Those who are paying the bill also pay for the uninsured. The whole system is broken, and it's up to our government to develop a universal health care system that will reduce the cost for the uninsured by making it a one-payer system. The US now spends more on health care than any other country. It's only a matter of streamlining the system to cut out all the middle-men of the insurance companies. Doctors should be making the decision on what care each patient requires; not somebody sitting at a insurance company desk.

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That makes a lot of sense, CI, but no politician is willing to touch this issue. It is too complicated to explain in 30-second sound bytes. So nothing is going to get done while the baby-boomers, many under-insured or un-insured, end up on the door steps of our hospitals in the next few years.

"Bankrupt our economy" may have seemed a bit strong. But combine that with the cost of the war and the globalization of jobs (ie, loss of jobs here) and we may come close.

By the way, I did not mean to imply that I am "against" globalization. It is going to happen because the laws of economics really can't be changed. Production will move to where the resources (labor, land, raw materials) are cheapest. We can take steps to stop explotation of, say, the labor component (child-labor, slavery) or degradation of the environment (over-grazing, clear cutting) but beyond that, steps such as tarriffs against imports or subsidies to local producers is spitting in the wind.

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WHERE IS THE U.S. ECONOMY HEADING? Just ask johnboy.

Yall might find this amusing. My business gets selected with a certain amount of frequency to participate in various kinds of government surveys. Many of them are mandatory and require my participation. Most are a royal pain in the butt and I put minimal effort into actually researching the information they are asking about.
I think I get selected as often as I do because I fit some business demographic profile: bigger than a mom and pop retailer but smaller than a large chain store.

A few days ago I got a call from an economist at the Federal Reserve Bank of Richmond. She was very nice, very professional, and, when she found out I had an interest and a background in economics, she was eager to send me a letter regarding what she wanted me to do. It arrived today.

There are, as I recall 11 Federal Reserve Districts. I may be wrong about that. The 5th District includes Washington DC, Maryland, Virginia, North Carolina, South Carolina and most of West Virginia. Each month I will get a survey form which is due to be responded to by the 21st. About 190 other businesses in the District are sent the same survey. In January, 107 responded. Two or 3 days later, the Richmond District and, I assume, the other Districts, publish a "Sector Report-Retail Businesses."

I am asked, by the 21st of February to indicate how things look so far this month with a comparable period last month:
UP/DOWN/NO CHANGE in these categories:
Sales, Number of Employees, Average Wages, Shopper Traffic, Inventory.

I am asked to project how I feel things will look six months from now in those categories.

And, finally, price trends for the current month and what I think will happen over the next six months.

I have spent the afternoon pondering what buttons to push that would accurately answer those questions without a great deal of research on my part--particularly in mid month. Damn, I found data that I can use.

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realjohnboy :
i read your comments with a great deal of interest .
it occured to me that when i watch CNBC next week your survey input will no doubt be reflected in the movement of shares on NYSE - it'll be either up or down or unchanged :wink: .
have a good weekend !
hbg

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Buy low---Sell high.
Hi, Hamburger. I don't think I know you. Pleased to meet you.

When I talked to the lady from the Federal Reserve Bank of Richmond, I mused that the sample size was very, very small and the credibilility of the responses was suspect. She assured me that there were adjustments made to account for various things.
But, on the back of the one page newsletter from the Richmond Federal Reserve dated January 23, 2007 and headlined "Retail Sales Fall Sharply In January..." is data from "107 of 190 firms surveyed."

This is, I guess, a very quick snapshot of what might be going on in the economy. Perhaps people much smarter than us can discern a trend. I am, at this point, going to be one of the reporters of data.

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rjb, I'm a skeptic when it comes to government statistics on almost everything. The worst one put out by our government is the "unemployment" rate. There is no way that our unemployment rate is below five (5) percent when the creation of new jobs doesn't meet the demand for jobs by high school and college grads, and those losing jobs in manufacturing. I see new jobs created way below the 200,000 per month needed to just meet those coming into the work force after graduating from school. I never see any report of job replacements for those losing jobs by the thousands such as the recent report of 13,000 job loss by Chrysler workers.

Sampling such a small number of retail businesses is not a good way to
determine retail sales trends. Most specialty stores have different sales trends, and one region cannot be compared to another based on many variables.

I'll remain a skeptic.

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May 15, 2003

Are Retail Sales Sailing Away?
by Chad Hudson

(UNEDITED)
April retail sales were weaker than economists expected. The Commerce Department's monthly report showed April sales declined 0.1%, while retail sales excluding autos fell 0.9%. Economists were expecting an increase of 0.4% and 0.2% respectively. The 0.9% decline in ex-auto sales was the largest decline since September 2001 and one of only eleven declines greater than 0.5% over the past ten years. Part of the weakness is due to the huge gains in March when retail sales increased 2.3%, with ex-auto climbing 1.5%. There are only two months since 1992 that ex-auto retail sales grew faster than in March 2003 (April 2002 matched the 1.5% increase). The weaker sectors of the economy according to the government report were clothing and accessories stores (-3.2%) and gasoline stations (-5.9%). The decline in gasoline station sales is almost purely due to the decline in gasoline prices, the average price in April was down 5.8% from March.

On a year-over-year basis, ex-auto retail sales increased 2.8%, which is the lowest year-over-year increase since February 2002. But here again it is compared to a very strong prior period. Last year, April sales were very strong (+1.5% month-over-month). April retail data was already cloudy due to the war and the shift of Easter compared to last year. The strong comparable periods only make Aprils sales that mush more difficult to analyze.

It is interesting that the government retail sales report is almost mirror opposite of the index of monthly sales that I maintain. While the government report showed March being much stronger than April, the retailers I track had a much bigger April than March. On a year-over-year basis, total sales for my retail basket increased 8.0% vs. an increase of 5.2% in March. Wal-Mart continues to dominate retailing. Wal-Mart accounts for almost half of the total sales of the combined 22 different retailers and accounted for over 70% in the total sales growth in April.

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I don't at all disagree with you, ci, about your distrust of the statistical value of this thing I am participating in with the Richmond Fed.
Having said that, I see it as a very, very early warning system that something is going wrong or right in the economy before the more substantive data comes out later on. Very flawed data, but useless? I am not so sure.

Moving right along to today's news perhaps impacting "Where Is The US Economy Heading" was a story from the Associated Press (2/18/07 2:18 pm) entitled GROCERY INDUSTRY PREPARES FOR BIRD FLU.

I hope one of yall can find that and post it here, and then we can talk about it.

The telling line for me was the 3rd paragraph from the end: "The federal government and public health agencies are urging people to stock up on nonperishable food, like canned goods and dried fruit, to ensure they have ... food to eat during a pandemic." Really? Have you been urged?

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cicerone imposter wrote:

rjb, I'm a skeptic when it comes to government statistics on almost everything. The worst one put out by our government is the "unemployment" rate. There is no way that our unemployment rate is below five (5) percent when the creation of new jobs doesn't meet the demand for jobs by high school and college grads, and those losing jobs in manufacturing. I see new jobs created way below the 200,000 per month needed to just meet those coming into the work force after graduating from school. I never see any report of job replacements for those losing jobs by the thousands such as the recent report of 13,000 job loss by Chrysler workers.

Sampling such a small number of retail businesses is not a good way to
determine retail sales trends. Most specialty stores have different sales trends, and one region cannot be compared to another based on many variables.

I'll remain a skeptic.

You used this point as an argument in one of our past debates, cicerone. Perhaps a dumb question, but have you considered the number of people either retiring or dying on the job, thus leaving the active work force, but are not entering the unemployed ranks?

I think the unemployment rate is more dependable than the "number of new jobs created" statistic.

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realjohnboy wrote:

Buy low---Sell high.
Hi, Hamburger. I don't think I know you. Pleased to meet you.

When I talked to the lady from the Federal Reserve Bank of Richmond, I mused that the sample size was very, very small and the credibilility of the responses was suspect. She assured me that there were adjustments made to account for various things.
But, on the back of the one page newsletter from the Richmond Federal Reserve dated January 23, 2007 and headlined "Retail Sales Fall Sharply In January..." is data from "107 of 190 firms surveyed."

This is, I guess, a very quick snapshot of what might be going on in the economy. Perhaps people much smarter than us can discern a trend. I am, at this point, going to be one of the reporters of data.

Your posts are interesting, and I believe to really put any confidence in statistics, you need to look at how they are generated. Figures don't lie, but liars will figure. I have also been in business, and I have seen effects that generally pre-date actual economic trends as published. I saw the economy beginning to falter in Clinton's last year in office, I think in part because the dot.com bubble was bursting and just a general over playing of the actual strength of the economy, and 911 had its effect on top of that. I have seen it come back steady ever since, more or less.

I intended to post in response to your medical discussion, but have not gotten around to it.

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okie, Of coarse there are people retiring and dying, but the simple math tells us that creating <50,000 new jobs a month (under Bush), falls short of the 200,000 new jobs needed to meet demand.

You probably haven't noticed, but more seniors are working after age 65, because they don't have enough savings for retirement; people are living longer; and the greatest number of new jobs are in the service industry (far from middle class wages).

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the canadian government just established a website "be prepared" and is doing regular advertising on TV and in newspapers to read the information and "be prepared" .

i know that physicians from our local hospitals are serving on committees that are meeting in toronto to establish action plans for "what if" situations . they do not just deal with birdflu preparedness but the whole range of "what if" scenarios .
hbg

GET PREPARED - CANADIAN GOVERNMENT WEBSITE

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here is another - rather lengthy - bulletin issued by the government of canada on how to deal with "pandemics" .
hbg

HOW TO DEAL WITH A PANDEMIC

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cicerone imposter wrote:

okie, Of coarse there are people retiring and dying, but the simple math tells us that creating <50,000 new jobs a month (under Bush), falls short of the 200,000 new jobs needed to meet demand.

You probably haven't noticed, but more seniors are working after age 65, because they don't have enough savings for retirement; people are living longer; and the greatest number of new jobs are in the service industry (far from middle class wages).

I am not familiar with employment statistics, but something tells me your reasoning is flawed in a big way somehow. I could not seem to find good statistics on people that retire each month but the following site gives the fact that there are 18.4 million people between the ages of 65 and 74. Whether all of those were in the work force at 65, probably not, but the vast majority were likely in the work force sometime in their lives, so they become part of the statistics at some point, it really doesn't matter when. So if you took them all, that is 153,000 people retiring each and every month if they retired at age 65. And if they did not, they would retire later, and thus would eventually be part of the statistics. This does not include the numbers of people dying or being disabled and thus leaving the work force earlier.

So your logic that just because 200,000 people are entering the work force each month, and only 50,000 new jobs are created, then you claim the unemployment statistics have to be grossly wrong, that somehow the bureaucrats are lying big time. Well, their statistics are far from perfect but I doubt they are that bad. I think you are overlooking many factors here, one of which might be that many people are simply moving into existing jobs that are vacated by retirement and other factors. Obviously, I am speaking as someone unfamiliar with what goes into the numbers, but it strikes me that you are making unwarranted claims here, as you did in our previous arguments.

You said the simple math supports your claims, so if you have the simple math, I would be glad to see it.

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okie, There is nothing that will convince you that Bush has been bad for our economy, and that the unemployment stats put out by the feds are unreliable.

FACT: Job creation under Bush has been one of the worst since Hoover.

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http://jec.senate.gov/Documents/Releases/jan07unemploymentrel.pdf

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Where is the US economy headed?

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