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22 years of job creation wiped out in a day

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Re: 22 years of job creation wiped out in a day

#11

Post by cchooper »

barbie17 wrote: post #3

Um, according to standard economic theory in the long-run equilibrium the unemployment rate is the rate of frictional unemployment and that is more-or-less of a constant. What we have is cyclical unemployment, which is temporary. http://en.wikipedia.org/wiki/Unemployment_types Look, someone who doesn't have a job will lower his/her price until he/she gets a job. If you are really on the verge of starvation you will b…

The problem is that 'standard economic theory' is not in complete agreement here. As the article you linked says, classical economists (whose argument about the market clearing is the one you put forward) do not believe in cyclical unemployment. Those who do believe in it don't believe that the employment market clears of its own accord.

A separate issue is that people can't lower their wage demands to any level. To get a job you must have a home, a means of commuting and the basic necessities of life. There are also costs associated with employing someone, so even if someone worked for free, the employer could not necessarily justify the cost of employing them.

These are theoretical issues though. The existence of unemployment benefit means that the only people who will reach these depths are the homeless.

Re: 22 years of job creation wiped out in a day

#12

Post by alecco »

aaronblohowiak wrote: post #4

The crux of the article is this: "So the bottom line for me is that the venture capital business is not going to solve this problem we are in. We are going to play a role, possibly an important role, but we'll need more forms of job creation to get everyone back to work." That, I wholeheartedly agree with. Unfortunately, it seems that it will take a while for housing prices to deflate enough and for people's wage exp…

IMHO, solving the problem will be much harder than that. US is highly based on a plan of idealized life through media. A typical lifestyle of the suburbs:

  * Multiple cars per family and doing heavy commuting.
  * Huge houses with high bills and maintenance.
  * Consumerism based on filling those houses and cars with non-essential disposable items.
All those millions living with that mindset apply those same rules at work. There are great exceptions, but their size is not relevant to the national bottom-line.

Now apply that to venture and you get what doesn't work. PG is on this problem often. Perhaps a bit too Socratic-style for my taste. (http://en.wikipedia.org/wiki/Socratic_method)

I never understood how the economy worked in the US with so much waste. Now with this crisis I get it, it never did. US needs a culture shock urgently. (A bailout is more of the same, IMHO.)

Re: 22 years of job creation wiped out in a day

#13

Post by HeyLaughingBoy »

alecco wrote: post #12
aaronblohowiak wrote: post #4

The crux of the article is this: "So the bottom line for me is that the venture capital business is not going to solve this problem we are in. We are going to play a role, possibly an important role, but we'll need more forms of job creation to get everyone back to work." That, I wholeheartedly agree with. Unfortunately, it seems that it will take a while for housing prices to deflate enough and for people's wage exp…

IMHO, solving the problem will be much harder than that. US is highly based on a plan of idealized life through media. A typical lifestyle of the suburbs: * Multiple cars per family and doing heavy commuting. * Huge houses with high bills and maintenance. * Consumerism based on filling those houses and cars with non-essential disposable items. All those millions living with that mindset apply those same rules at work…

Now with this crisis I get it, it never did

You're summing up 50 years of post WWII history into the last 10 years? Good luck with that. The economy works just fine with hat you call "waste." Nothing humans do will ever be close to 100% efficient for any length of time. We're messy that way! The bottom line is that most people the world over will generally live just within their means (or just over if there is sufficient credit) and you may as well get used to that. Living "efficiently" is normally done only by those who have little in the way of resources (in which case they're normally living barely within their means), or by the handwringing worriers who have plenty but feel guilty about it.

Re: 22 years of job creation wiped out in a day

#15

Post by aaronblohowiak »

alecco wrote: post #12
aaronblohowiak wrote: post #4

The crux of the article is this: "So the bottom line for me is that the venture capital business is not going to solve this problem we are in. We are going to play a role, possibly an important role, but we'll need more forms of job creation to get everyone back to work." That, I wholeheartedly agree with. Unfortunately, it seems that it will take a while for housing prices to deflate enough and for people's wage exp…

IMHO, solving the problem will be much harder than that. US is highly based on a plan of idealized life through media. A typical lifestyle of the suburbs: * Multiple cars per family and doing heavy commuting. * Huge houses with high bills and maintenance. * Consumerism based on filling those houses and cars with non-essential disposable items. All those millions living with that mindset apply those same rules at work…

It also isn't globally scalable -- consider the acres per person that the American lifestyle requires.

Re: 22 years of job creation wiped out in a day

#16

Post by astrid »

alecco wrote: post #12
aaronblohowiak wrote: post #4

The crux of the article is this: "So the bottom line for me is that the venture capital business is not going to solve this problem we are in. We are going to play a role, possibly an important role, but we'll need more forms of job creation to get everyone back to work." That, I wholeheartedly agree with. Unfortunately, it seems that it will take a while for housing prices to deflate enough and for people's wage exp…

IMHO, solving the problem will be much harder than that. US is highly based on a plan of idealized life through media. A typical lifestyle of the suburbs: * Multiple cars per family and doing heavy commuting. * Huge houses with high bills and maintenance. * Consumerism based on filling those houses and cars with non-essential disposable items. All those millions living with that mindset apply those same rules at work…

Wich also means that America has a confortable margin to improve. Their own genius lies in pragmatism, I wouldn't bet against them when necessity joins the game.

Re: 22 years of job creation wiped out in a day

#18

Post by ryanwaggoner »

jamesfoster wrote: post #2

This post is way off base. The VC industry is at the heart of creative destruction. And the job creation that results goes well beyond the jobs created in the VC companies themselves. There is a trickle down effect.

Did you read the post? I don't think that he was limiting his context to jobs within the VC companies...quite the opposite, in fact.

Re: 22 years of job creation wiped out in a day

#19

Post by aaronblohowiak »

HeyLaughingBoy wrote: post #13
alecco wrote: post #12

Earlier quoted context omitted.

IMHO, solving the problem will be much harder than that. US is highly based on a plan of idealized life through media. A typical lifestyle of the suburbs: * Multiple cars per family and doing heavy commuting. * Huge houses with high bills and maintenance. * Consumerism based on filling those houses and cars with non-essential disposable items. All those millions living with that mindset apply those same rules at work…

Now with this crisis I get it, it never did You're summing up 50 years of post WWII history into the last 10 years? Good luck with that. The economy works just fine with hat you call "waste." Nothing humans do will ever be close to 100% efficient for any length of time. We're messy that way! The bottom line is that most people the world over will generally live just within their means (or just over if there is suffic…

Have you looked at household debt vs wage since WWII?

http://en.wikipedia.org/wiki/Debt-to-income_ratio

What we are seeing is the unraveling of that process -- since the 30 year fixed mortgage was widely available from the FHA and the VA, the amount of debt we've been willing to shoulder has increased over time.

With increased living expenses (college costs, et cetera) and flat wages, how have americans maintained their standard of living?? Home Equity lines of credit... MORE DEBT! Living on less isn't just for "handwringing worriers who have plenty but feel guilty about it", it is the prudent thing to do.

Then again, prudence isn't hot or hip.

Re: 22 years of job creation wiped out in a day

#20

Post by jamesfoster »

jrockway wrote: post #5
jamesfoster wrote: post #2

This post is way off base. The VC industry is at the heart of creative destruction. And the job creation that results goes well beyond the jobs created in the VC companies themselves. There is a trickle down effect.

Care to explain in more detail?

The most sucessful VC companies are the most innovative. They produce a product or service more competitively than the alternative at a cheaper cost.

Companies which consume these products or services save money. As a result they can offer their products/services more competitively, which results in hiring (or at the very least fewer layoffs).

The bottom line is that innovation acts as a stimulus in times of recession. During times of expansion (when the economy is at full employment) it simply results in increased standards of living. I agree with barbie17 that the unemployment rate is more or less constant in the long term.

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