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Business Is Booming

prospect.org

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Re: Business Is Booming

#21

Post by yummyfajitas »

davidmathers wrote: post #18
yummyfajitas wrote: post #4

The author of this article has internalized some Keynesian assumptions so deeply that he doesn't realize the story he is writing directly falsifies one of them. A major assumption of Keynesian economics is that employment scales with production. Thus, if you stimulate aggregate demand, you will increase production, and thereby increase employment. This hasn't happened - aggregate demand and production have recovered,…

aggregate demand has recovered Wow. Ok, I lean left and you lean right so obviously we're going to differ on some things. But, conceptually, you'd think those things would all be values-related things. In this case what you're saying conflicts with my mental model of the world. The basic "reality" that I live in. I don't have a point to make, just expressing how weird it is to me to see someone write that.

I stand by the reality of my statement.

Here is data on production: http://research.stlouisfed.org/fred2/series/GDP http://research.stlouisfed.org/fred2/series/INDPRO

Here is employment: http://research.stlouisfed.org/fred2/series/PAYEMS

See the disconnect?

Lets focus specifically on Durable Goods, since we have a decent measure of their demand (not just their production). The recovery here is incomplete, but it's we are about halfway from trough to peak.

Durable goods demand: http://research.stlouisfed.org/fred2/series/DGORDER

Durable goods production: http://research.stlouisfed.org/fred2/series/IPDCONGD

Durable goods employment: http://research.stlouisfed.org/fred2/series/DMANEMP

It doesn't surprise me that what I'm saying conflicts with your model of the world. It conflicts with my old model, and nukes my favorite possible solution (tax cuts) as well. But the data is the data, and all we can do is try to build new models which fit it.

The economy has changed, and our old models don't work very well anymore. We need new models.

Re: Business Is Booming

#22

Post by yummyfajitas »

pessimizer wrote: post #19
yummyfajitas wrote: post #4

The author of this article has internalized some Keynesian assumptions so deeply that he doesn't realize the story he is writing directly falsifies one of them. A major assumption of Keynesian economics is that employment scales with production. Thus, if you stimulate aggregate demand, you will increase production, and thereby increase employment. This hasn't happened - aggregate demand and production have recovered,…

What evidence do you have that demand has recovered?

Production has recovered, as have profits. Goods are being produced, services being performed, and consumers are buying.

See my response to davidmathers for links to specific timeseries.

Re: Business Is Booming

#23

Post by davidmathers »

yummyfajitas wrote: post #21
davidmathers wrote: post #18

Earlier quoted context omitted.

aggregate demand has recovered Wow. Ok, I lean left and you lean right so obviously we're going to differ on some things. But, conceptually, you'd think those things would all be values-related things. In this case what you're saying conflicts with my mental model of the world. The basic "reality" that I live in. I don't have a point to make, just expressing how weird it is to me to see someone write that.

I stand by the reality of my statement. Here is data on production: http://research.stlouisfed.org/fred2/series/GDP http://research.stlouisfed.org/fred2/series/INDPRO Here is employment: http://research.stlouisfed.org/fred2/series/PAYEMS See the disconnect? Lets focus specifically on Durable Goods, since we have a decent measure of their demand (not just their production). The recovery here is incomplete, but it's we…

we are about halfway from trough to peak

That sounds reasonable. It was the implication of full recovery that sounded crazy to my mental model.

Re: Business Is Booming

#25

Post by yummyfajitas »

davidmathers wrote: post #23
yummyfajitas wrote: post #21

Earlier quoted context omitted.

I stand by the reality of my statement. Here is data on production: http://research.stlouisfed.org/fred2/series/GDP http://research.stlouisfed.org/fred2/series/INDPRO Here is employment: http://research.stlouisfed.org/fred2/series/PAYEMS See the disconnect? Lets focus specifically on Durable Goods, since we have a decent measure of their demand (not just their production). The recovery here is incomplete, but it's we…

we are about halfway from trough to peak That sounds reasonable. It was the implication of full recovery that sounded crazy to my mental model.

In terms of total production we have fully recovered and grown beyond our peak. It's only industrial production that hasn't fully recovered.

Re: Business Is Booming

#26

Post by a5seo »

cageface wrote: post #20
muhfuhkuh wrote: post #10

Earlier quoted context omitted.

"The fact is, our economy is a lot more complicated than it used to be." Or, our economy is actually just not the top of the heap anymore, and probably never will be unless Asia suddenly slides off and sinks into the Pacific. If it weren't for anomalously successful companies like Apple or Wal-Mart, multi-nationals will eventual write-down the US market as dying and move everything overseas. If KFC can make more mone…

The U.S. may no longer dominate but with 300 million people and tremendous resources we're not heading to the bottom of the heap either. Our standard of living is going to move back closer in line with the rest of the world, which is fine.

I'll accept 1 American moving from upper middle class to lower middle class if it lifts 3 people out of poverty in the third world.

In some ways, this makes me long-view bullish as an entrepreneur. Imagine the opportunities to serve a global market that lives at first world standards.

Re: Business Is Booming

#28

Post by thisisananth »

The article talks that Germany is able to export even after giving full wages in the workers. How is it that their products are competitive for exports even after paying good salaries compared to China or India?
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