Where is the US economy headed?

More indications Obama's stimulus plan is doing little or nothing.

"New Jobless Claims Rise More Than Expected, as Auto Layoffs Increase
The Labor Department says the number of people requesting rose to a seasonally adjusted 637,000, from a revised 605,000 in the previous week. "

http://www.foxnews.com/politics/2009/05/14/new-jobless-claims-rise-expected-auto-layoffs-increase/

I wonder if 4 years from now, the Democrats will still be blaming Bush for all of this?

And folks, another strange new invention by the Obama administration, "jobs saved." They claim now they have saved over 150,000 jobs, even as unemployment rises! Now, that is quite a feat!

"In President Barack Obama’s news conference [1] on Wednesday night, he said the $787 billion economic stimulus bill has already created or saved over 150,000 jobs. We decided to find out how the president arrived at that figure.

The simple answer: guesswork.

It turns out the feds don’t have a way to measure exactly how many jobs have been created or saved, so they use projections instead, and it’s all rather academic.

The new estimate, like the original one predicting the stimulus bill [2] would save or create 3 to 4 million jobs, came from the Council of Economic Advisers [3]. To get the number Obama used, economists at the council simply prorated their earlier estimates based on stimulus outlays as of April 21.

As we’ve reported before [4], the administration’s estimates are based on a guess at how much tax cuts and government spending will make the economy grow."

http://www.propublica.org/ion/stimulus/item/fact-checking-obama-on-that-job-count-501/

1 Reply

@okie,

okie wrote:

I guess the Democrats want us to live like Europeans, living in a tiny flat in a congested city, to ride a smelly subway to work every day. Doesn't seem all that great of a progress to me.

inner city of London Not Equal

all of Europe

I thought we had this cleared up. I'm glad you at least draw on your personal knowledge to arrive at sweeping, absolutist generalisations based on deeply held prejudice, though.

2 Replies

@old europe,

I probably did overstate the case, oe, but I do have relatives in both Denmark and Great Britain, and I have visited both. In England, my experience includes both London and outside of London. Bottom line, I prefer our living conditions when compared to outside of London as well.

Most Americans are spoiled. We don't realize how well off we are.

By the way, I made the statement not to offend. There are things I admire about Europe, and especially Denmark.

1 Reply

@old europe,

okie is very good at "absolutist generalizations." 99% of his posts can be classified such. He's even able to forecast Obama's presidency after two-three months in office. He has a "special" skill that nobody else possesses.

1 Reply

@cicerone imposter,

It doesn't take much skill to predict the Obama administration. It should be obvious to the most casual observer.

0 Replies

@okie,

okie wrote:

I probably did overstate the case, oe, but I do have relatives in both Denmark and Great Britain, and I have visited both. In England, my experience includes both London and outside of London. Bottom line, I prefer our living conditions when compared to outside of London as well.

Well, alright then. No objections if you put it like that. It's just that living conditions vary widely all over Europe as well as all over the United States. There's just such a vast difference in population density between metropolitan areas like New York or Los Angeles and states like Wyoming or Montana, not to mention gaps in wealth, variation in climate, difference in policies between states, the social make-up of a population within a certain region, etc. etc.

I think it would be hard to say "that's what living conditions in America look like". Sure, you could use some kind of average or median numbers, but even then you'd have to make a choice what to include and what not. Do you include per capita income? Ethnic diversity? Family cohesion? Crime rates? Social mobility? Divorce rates? Environmental conditions?

okie wrote:

Most Americans are spoiled. We don't realize how well off we are.

Generally speaking, I think that's true for all "First World" countries, no matter where you're living. Depending on your personal preferences, specific countries (or even regions within those countries) might suit you better, but the differences between individual countries really pale in comparison to conditions people in other parts of the world are born into.

okie wrote:

By the way, I made the statement not to offend. There are things I admire about Europe, and especially Denmark.

Well, no offense taken then.

1 Reply

@old europe,

okie wrote:

Quote:

"I probably did overstate the case, oe, ..."

is the truest statement ever made by okie. And that goes for 99% of his posts.

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@okie,

Okie- Unemployment is now at 8.9%. Actually the rate is much higher because that number does not include those who have used up their unemployment insurance but are still looking for a job and those who are working part time but would like a full time job.

Look for May's Unemployment Report to show 9.2% Unemployed.

BO had better do something fast. The campaign season will begin soon. If the Unemployment numbers are still over 10% in 2010, BO will lose a lot of seats.

1 Reply

@genoves,

the real unemployment rate is north of 16%, and just about everyone now says that the official number will grow to at least 10%, and that getting unemployment down to anywhere near 4% again without creating a bubble on purpose will be impossible. High unemployment is here to stay, which will create huge political problems because American society does not offer a safety need to those that we leave out.

However, the problems are systemic and structural, partisan politics has nothing to do with the problem and thus the parties will not gain from the problems not getting solved (as you clearly hope)

2 Replies

@hawkeye10,

From the Washington Post:

Quote:

Actual U.S. Unemployment: 15.8%

This morning's news that U.S. unemployment has hit 13.7 million, pushing the rate to 8.9 percent, tells only half the story of this recession.

The total number of Americans who are not working full-time but ought to be is actually about 22 million, or 15.8 percent, according to the Bureau of Labor Statistics.

Who are those other 8.3 million Americans? Call them the unofficially unemployed.

As The Ticker points out each time the Bureau releases the monthly unemployment figure, it does not include many out-of-work Americans.

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@hawkeye10,

I share your view. As I stated before, the country is screwed. Our manufacturing is gone, and we really have little else to offer. I feel sorry for the people just starting out -- they are in for a bad time.

2 Replies

@Advocate,

Of course, our country is screwed. We now have( courtesy of B O) an unemployment rate of 8.9% which will surely go over 10% before the end of the year. And we have spending, courtesy of the Messiah-BO- which will double the deficit of any one year left by Bush.

Of course, we are screwed. BO has lied to the American Public about Gitmo, ending the war in Iraq, sending more American troops to die in Afghanistan and refusing to prosecute the Bush acolytes who devised policies to sanction torture.

BO is a double talker! We are, indeed, screwed.

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Advocate tells us that our "manufacturing is gone". Who was it that shut down a good deal of the manufacturing base in Michigan? VP Cheney or BO, who threw GM and Chrysler to the wolves.

1 Reply

@genoves,

I am trying to figure out how closing down dealerships is going to increase the sales of cars? Question, to anyone, how does a dealership cost General Motors or Chrysler? Especially if the dealer is making money. Does GM or Chrysler give these dealers money or subsidize them in a big way? It seems to me if the dealer was losing money, they would go out of business, without GM or Chrysler telling them to.

And are these dealers going to disappear? I doubt alot of them will, they will probably become Toyota, Nissan, Honda, or some other kind of dealer, thus only providing more competition to GM and Chrysler, thus decreasing their sales even more.

So, another question, does Obama know anything about building cars or selling them? I don't think so, and I think this whole scenario is an utter disaster.

1 Reply

@Advocate,

Advocate wrote:

I share your view. As I stated before, the country is screwed. Our manufacturing is gone, and we really have little else to offer. I feel sorry for the people just starting out -- they are in for a bad time.

The unions, over-regulation, and the American tax system is basically killing the manufacturing business here. And has anyone noticed the unions, after killing private enterprise, have their greatest growth in the government sector. Does anyone think the unions and the government will increase government efficiency. If you do, I have some swamp land I have to sell, would you be interested?

Obama thinks we can increase wealth and output by increasing government, and by paying government workers more, and by coddling his union thug friends. Folks, the man is an utter disaster.

1 Reply

@okie,

I read, Okie, what the average sales per dealership by car brand. I can't find the numbers right now but I vaguely recall that Toyota dealers sold something like 3 times as many vehicles as GM dealers. I may be wrong.
The argument has been made here that car makers can't compete because the unions have negotiated, over the years, contracts that add too much to the cost of the cars.
You are correct that GM and Chrysler don't subsidize dealers. But the big 3 have been trying, unsuccessfully, to cut the number of dealers for YEARS . The thinking is that the surviving stores could spread the overhead costs (rent, advertising, plaid pants for the salesmen) over a bigger base of cars. Car prices to the consumer might fall.
A counter-argument would be that eliminating competitors allows the survivors to raise prices.

2 Replies

@realjohnboy,

Quote:

You are correct that GM and Chrysler don't subsidize dealers

Actually that is NOT correct. The cars sitting on dealer lots tend to be sitting on those lots at the expense of the builder, not the dealer. If GM can cut the dealer number they can cut the number of sales lots that are being stocked at GM's expense. Also, GM supports each dealer by paying for promotion for each dealer, fewer dealers will mean lower promotion costs.

1 Reply

@hawkeye10,

From All Things Considered on 5/15:

(A local dealer near Cleveland), like other...dealers, buys new cars from the factory with loans from local banks.
"As far as (Chrysler is)...concerned, I own everything, they own nothing," (the dealer said).

I know that the car makers did/do make loans to car buyers (through GMAC, for example). I don't think they do floor-plan loans to dealers. I certainly could be wrong.

1 Reply

@realjohnboy,

I've also had the impression that the location of the car dealer made a big difference. For example, my wife bought her Honda in Gilroy, and they offered her a $500 discount over what the San Jose dealer quoted her. City lots cost more to run - with higher salaries and overhead costs.

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@realjohnboy,

Quote:

But that’s not the worst of it. Dealers for decades have relied on a form of inventory financing called “floorplan” funding that allows them to buy cars from the manufacturer on credit and pay back the debt only after the cars are sold. Without a floorplan agreement, a dealer can’t operate. Franchise contracts require one

http://archives.chicagotribune.com/2009/mar/29/business/chi-sun-car-dealers-0329-mar29

As I recall the way it works is that GM will give a car to the dealer for next to no upfront cost for 90 days or so, after that the dealer needs to start paying GM. The dealer does work with a bank because they need someone lined up to Carry the car if it does not sell in 90 days. Every car that GM has sitting on a lot that GM has not yet been paid for is costing GM money, because they need to pay out labor and part costs without having been paid for the product. The idea is that cutting dealers will allow GM to get its inventory carrying costs down.

0 Replies

Where is the US economy headed?

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