Comments on: Why financial reform won’t hurt employment http://blogs.reuters.com/felix-salmon/2010/05/17/why-financial-reform-wont-hurt-employment/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: DACoffin http://blogs.reuters.com/felix-salmon/2010/05/17/why-financial-reform-wont-hurt-employment/comment-page-1/#comment-14898 Mon, 17 May 2010 19:01:56 +0000 http://blogs.reuters.com/felix-salmon/?p=3871#comment-14898 I get slightly different numbers than you do. Using seasonally adjusted data (fromt he BLS), I have state & local employment at 15.1% of total nonfarm employment in April, essentially unchanged from April 2009 (15.0%), with state and local employment down 170,000 from a year ago. On the other hand, I think the argument, that the growth in state & local government employment (up from about 9.3% in 1955) is attributable to employment expansions during recessions/recoveries, made by Whitney, is nonsense. State and local government employment has grown over this time period, but if that growth ins more rapid in recessions or early in recoveries, it’s certainly not apparent in the data. In fact, if anything, growth in state and local government employment tends to slow down or fall in recessions and early in recoveries. The budget squeeze being experienced now is, in fact, quite tyical, and the quite typical response has been cutbacks. Not large–certainly nothing as large as she suggests–but this time is certainly not an exception.

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By: y2kurtus http://blogs.reuters.com/felix-salmon/2010/05/17/why-financial-reform-wont-hurt-employment/comment-page-1/#comment-14894 Mon, 17 May 2010 17:03:19 +0000 http://blogs.reuters.com/felix-salmon/?p=3871#comment-14894 Great post Felix,

As a local community banker I’m thrilled at the prospect of winning more customers from large multi-national banks who often overcharge customers.

I do question how much credit community banks are willing to extend in this enviroment. I know at my bank we are targeting loan growth in the low single digits. This at a time when we have EXCESS capital and funding costs at litterally all time lows.

I do think that at the margin some credit worth businesses are finding themselves short of credit right now.

Keep up the great writing!

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By: DanHess http://blogs.reuters.com/felix-salmon/2010/05/17/why-financial-reform-wont-hurt-employment/comment-page-1/#comment-14891 Mon, 17 May 2010 16:05:18 +0000 http://blogs.reuters.com/felix-salmon/?p=3871#comment-14891 I think Whitney’s point is that credit will contract further. Admittedly the types of credit that are contracting are the more risky credits. But any kind of credit contraction will tighten liquidity conditions, a deflationary wind blowing toward higher unemployment.

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By: dWj http://blogs.reuters.com/felix-salmon/2010/05/17/why-financial-reform-wont-hurt-employment/comment-page-1/#comment-14888 Mon, 17 May 2010 15:21:47 +0000 http://blogs.reuters.com/felix-salmon/?p=3871#comment-14888 On the first point, at least, you read Whitney differently from how I do. I believe her point is, indeed, that *typically* government hiring provides a tailwind at this point, but *now* it is not doing so. The ballooning has taken place over 55 years, as — again, this is my reading — government hiring has boosted the number over a portion of each business cycle and the number hasn’t then returned to its previous level before the next business cycle.

Also, I bet small business credit cards are a more competitive part of the market than the underclass consumer part of the market. A small business will be more willing to switch to find a lower rate. I’m not sure a close tie between costs and prices is even that important to her assertion that a cap on prices will reduce credit availability, but I’ll leave that alone for now.

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