James Pethokoukis

Politics and policy from inside Washington

How fast will the U.S. job market bounce back?

Aug 27, 2009 18:11 UTC

Economist Robert Brusca thinks he knows:

Right now the job losses in this cycle number 6.9mln, a drop of 5.9% from the peak. It has taken 19 months to get these losses in place. The metrics above suggest that the forecast of how long it will take to get them back should be about 19 months as well (we’ll use 20 months since jobs are still falling). And while that is a long time – nearly two years- it is not so long to restore 6.9mln jobs. If we get them back in 20 months it will take job gains averaging 345,000 per month. Right now that seems like an amazing number. Yet, that is what history says happens. So we’ll see.

And here is a table from Brusca showing how long it took to loose jobs in previous downturns and how fast the economy recovered them:

brusca-chart

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COMMENT

I think we must hope for the better situation.Recession time soon gets over and we would definitely have many jobs in future.

Tobin taxes, again

Aug 27, 2009 16:51 UTC

If FDIC chief Sheila Bair really wants to cause a regulatory stir, she ought to take a look at what Lord Turner, chairman of the Financial Services Authority, is up to. He wants to trim down the size of the U.K. financial sector (via the Telegraph):

If higher capital requirements did not eliminate “excessive activity and profits”, options could include taxes on financial transactions, so-called Tobin taxes, after the economist James Tobin. The economist suggested a small tax on foreign exchange transactions in the 1970s to discourage speculative trading.

Me: Generally, the theory is that such a transaction-based tax could only work on the international level since market participants would inevitably jurisdiction shop. Here are four possible benefits from a Tobin tax from the George Soros-funded Open Society Institute:

First, it is likely to generate significantly greater revenues. Second, it maintains a level playing field across financial markets so that no individual financial instrument is arbitrarily put at a competitive disadvantage versus another. Third, it is likely to enhance domestic financial market stability by discouraging domestic asset speculation. Fourth, to the extent that advanced economies already put too many real resources into financial dealings, it would cut back on this resource use, freeing these resources for other productive uses.

Interestingly, only the third reason had any appeal initially to economist James Tobin who certainly didn’t view it as a “capitalism tax” the way anti-globalists do. The idea has also received some support in the past from White House economist Lawrence Summers.

COMMENT

This article is really helpful and give us information on how Tobin tax would be beneficial for all of us. We really need a stability in our economy as soon as possible.
http://www.miningstockalerts.com/

Posted by AndrewSmith | Report as abusive

Good 2Q GDP report could mean an even stronger 3Q report

Aug 27, 2009 16:21 UTC

The bullish Brian Wesbury and Bob Stein of First Trust find today’s GDP report (2Q was down an unrevised 1.0 percent) to be, well bullish:

The first reason is that inventories were even leaner than previously reported, meaning companies have more room to re-stock shelves and showrooms in the months ahead. Second, corporate profits jumped at a 24.9% annual rate in Q2 on top of a 22.8% rate of increase in Q1. Notably, all the increase in profits in Q2 was due to domestic operations, not earnings generated abroad. Soon, these profits are going to translate into more business investment and more hiring in the US.  … Given the improved details in the Q2 GDP report and the decline in claims so far this quarter, we are raising our forecast for the Q3 real GDP growth rate to 4%. We had been forecasting a 3% growth rate for Q3 since the start of this year. We maintained this forecast even as many other economists became hysterically pessimistic, claiming zero positive growth until 2010. Now we are finding that even our forecast for the early stages of this V-shaped recovery was not strong enough.

Can U.S. grow its way out of deficit problem?

Aug 27, 2009 16:07 UTC

Certainly America shouldn’t settle for 2.5 percent real GDP growth over the long term, but the economy would have to do much better than that to fix entitlement programs through growth alone (via the Heritage Foundation). Like, a LOT better:

b2291_chart8

COMMENT

The Economy vs. The Health Care Dollar
To see the true Health Care Tax forum you must stop thinking in 3-D,This multi tax forum is against a $100 Trillion Dollar system.. …
To force pay into another system of failures within Health Care Insurance Groups.
This economy will not balance with this concept of a tax forum against the Health Care System. The issue of how to force pay into this system of Health Care may have worked but I am still troubled over the progressive tax forum within this Bill. It covers so many items and Countries that it only forces the system to adjust itself. In some areas, increases against the people and the troubled economy, and in other areas, less effects will be felt.
But this is my big problem, Government Officials seek help and they are to proud to ask us, “the true working force of Government.” It is understandable they have failed the People and within the United States Of America all we ask is to see us as who we are and not try to bring us into this world of the intellectual. I guess our Prime Directive is that of Star Trek, so it must be understood that for millions of people we are just as happy as can be making $13.00 per hour and we have no interest in this world of politics, and how to be a Enstine. Government Officials must understand that there is a level of people within different parts of this Country, that seek to be only that they find to make them happy.
As for this economy well, it is said that the U.S.A. Arms Division has created enough arsenal to destroy every last creature in the world 2 times over,built with tax dollars. This would be funny if not for the irony of it. And now as time has passed Government Officials keep failing. Before 9/11 all the way to today.
As it is in a world of a system, when employees continue to fail, one or two things happen, one; you get fired, two; if you see into a person a good, then it is political correct to implement a penalty or roll back in pay. But this implement of penalty is more favored in the course of action in the Federal Employment World. So how to fix the economy and unite it with the Health Care issue. It would be in the Countries best interest to implement a 10% per cent penalty against every State, County and Government Official within this Matrix of failures. Hey what is that old saying, what is good for the Goose is good for the Gander. I am serous about this, it is past due to show that our Government Officials they have failed, their system failure reaches into this world of warnings that they brush aside as if the information is not worthy noting. From Pearl Harbor to 9/11/2001 to 3/07/2010 of our tax system and Health Care Reform. This 10% per cent penalty should go into the Health Care Forum.
The big problem that Government Officials have is that they have no street credit. President Obama still has some but if he does not take his family and step away from these dueling Parties, that fight over this Health Care Dollar, and stand with Us he will lose all credit from the streets to the county.
President Obama, I would say to you, you have one last chance to regain the hopes and dreams of the American People. To reach out in a concept that states, if there is 250 million people in trouble because of these failures, I would give all my money to them and then I would say to all that I gave money to, “I have no money left, would you all please give me $1.00 back and then I would have $250. million dollars to start all over again.”

As for this $100,trillion dollar in site………….
Results 1 – 10 of about 685,000 for net worth of medicine development industry
Just to show how deep this Health Care Tax split petition reaches. The term split petition is used because of the Tax factor plan that is not seen because of the intent not to show a capital Taxing of close to a $100 trillion dollar package, a yearly system income, not profit…..

Some have stated that I clam to have spiritual in site or something of the sort. I assure you this is not true, so when I state that I asked God to help, it is my way of saying hey Bobby show me how to work on theses Chevy engines. But I do thank you for the consideration. Consider me a cross of Jethro Bodine from the Beverly Hill Billies with my 10th. Grade education and Vin Diesel from the move Pitch Black.
So drop on by and see page 100 at our site and follow the blue pill link

Health Care within a moral value, is to ,

{ GIVE LIFE TO HOPE WHERE THERE IS NONE }

Henry Massingale
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