We're All Job Doomers Now

[Kamala Trump]

Do you have to study long to be able to state things in such a manner?

I like " Neocons have their heads up their butts" better.

No. I'm gifted in this area. Thanks for noticing.

 

[Kamala Trump]

Raise the interest rate and BABIES WILL STARVE! liberal fear mongering.

 

[uscitizen]

Hmm I find it interesting that several of those on the right are now clamoring for an interest rate increase as bush and several republicans in congress are about to exit. Why no call for interest rate incresases a few years ago when it would have helped prevent some of the current mess ?

 

[Topspin]

how many on the left understand it, it takes more than a GED much more.

 

[uscitizen]

Well the finaiancial gurus on the right both enabled and embraced the buildup to this subprime mess. I told ya topper long before this happened. But you called me a ged trailer trash bowler for saying it was going to fall apart.

 

[Topspin]

I'm surprised you could spell enabled without a dictionary. Your ged does not give you the base to be in a discussion about this. The idea of you calling anything other than a spare at the bowling alley is laughable.

 

[Kamala Trump]

I'm surprised you could spell enabled without a dictionary. Your ged does not give you the base to be in a discussion about this. The idea of you calling anything other than a spare at the bowling alley is laughable.

Ummm. "I told you so." Is clearly in layman's terms, dipshit.

 

[uscitizen]

I'm surprised you could spell enabled without a dictionary. Your ged does not give you the base to be in a discussion about this. The idea of you calling anything other than a spare at the bowling alley is laughable.

:lmao:

Toppy talking about spelling and grammer.

 

[Annie]

More on Unemployment via Minimum Wage

It may well be another 'unintended consequence' or as the following implies, perhaps not unintended. There are links at site:

http://austrianeconomists.typepad.com/weblog/2008/06/the-jump-in-une.html

A Closer Look at the Rising Unemployment Rate

The news that the unemployment rate jumped half a percentage point in May has certainly received plenty of coverage in the news. A closer look at the data reveals some interesting sub-plots.

As several analysts have pointed out, the rise in the unemployment rate is probably picking up a significant increase in the labor force participation rate resulting from high school and college students going into the labor market with the end of school. The civilian labor force grew by 577,000, comprising 2/3rds of the 861,000 increase in the number of unemployed (the remainder were those who lost jobs they had).

But what only one or two people have noted is the two groups where the jump in the unemployment rate was the largest: teenagers, where the rate went up 3.3 percentage points and blacks, where the rate went up 1.1. The unemployment rate for adult men is 4.9% and 4.8% for adult women, but for teenagers it is 18.7% and 9.7% for African-Americans.

It is at least possible that in addition to the more general problems in the US economy, last summer's increase in the federal minimum wage as well as the next jump coming in late July are behind the particulars here. Last July, the federal minimum wage increased to $5.85/hr and it will go up to $6.55 on July 24 of this year. With a sluggish economy, it certainly seems possible that the higher minimum wage is discouraging employers from hiring lower-skill workers whose productivity cannot justify paying them that wage, particularly if they know they will have to give them a raise come late July.

Economic theory predicts that minimum wage laws will disproportionately harm lower-skill workers such as teenagers and non-whites (not, it is worth noting, because the latter are inherently less-skilled, but because they have not had the same educational opportunities or other ways to increase their human capital as have whites). This effect of the minimum wage is why higher-skill workers have long supported it as a way to shut out cheaper competition (e.g., US unions shutting out immigrants and blacks 60 years ago, white South Africans shutting out black natives 100 years ago, etc.). It would seem that this prediction is born out by some of the facts in the latest US unemployment data. It might also temper arguments that the May unemployment rate reflects "market" problems as opposed to the undesirable consequences of bad government policies.

And to link this to another discussion here, if one is tempted to minimize the role of self-interest in the political realm, one might wish to read the debates surrounding the creation of the first federal minimum wage law in the US as well as similar laws as part of apartheid in South Africa. The backers of the US law were not ignorant of its effects; they knew exactly what it would do (shut out immigrant and black labor), which is precisely why they supported it, and also why a number of politicians voted for it.

For example, in the April Freeman, David Henderson reports the following story:

At a 1957 hearing on increasing the minimum wage, a northern U.S. Senator who favored the increase stated: “Of course, having on the market a rather large source of cheap labor depresses wages outside of that group, too—the wages of the white worker who has to compete. And when an employer can substitute a colored worker at a lower wage—and there are, as you pointed out, these hundreds of thousands looking for decent work—it affects the whole wage structure of an area, doesn’t it?”

Who was the senator? Here’s a hint: just four years later he was the President. His name: John F. Kennedy.​

JFK was not ignorant of the economics of the minimum wage and neither were the unions he was responding to. The unions were looking after their collective self-interest and JFK knew where the votes came from.

Finally, abolishing the minimum wage is also a good example of using free markets to accomplish Rawlsian ends.

Oops, didn't realize I hadn't opened comments! Go right ahead folks.

 

[Care4all]

I did not say it was solely from ethanol. But when you use 15% of your food crops for fuel, that increases demand by 15% that otherwise would not be there. When there is a shortage of grain, that hurts.

Good Morning Super,

How much is corn production UP in this country, has to be considered in this also....i believe that corn production is way up due to this ethanol thing so that should keep the prices more in line, however it seems as though it hasn't, and I was wondering why?

-----------------------------------------------------------

On the other post....

c-span doesn't have transcripts Super, I wish they did, but they only have an archive of the actual meeting's video.

Basically, I believe they were saying that one reason this was occurring was because hedge fund/futures were not regulated, very little upfront money was needed to buy them, not visible and undercover/ under the radar....

And that the same big financial firms that are holding a bunch of bad subprimes, that actually were a main factor in the Real estate boom, and also the dot.com boom are the ones trying to make up for their losses in the subprime hedge funds they owned with CAUSING another boom, only now in OIL/commodities.....

i'm not certain the guests being questioned proved such, but they gave a good case for it....one expert was an EX fed chairman though....and i thought he made some good points....

bottom line, all three or maybe it was four guests estimated that about $60 bucks in the price of oil was NOT JUSTIFIED in any manner...not by supply and demand....but by these stupid Futures puchases driving it up...

At least that is what I got out of it....and please take in to consideration that I really know very little about the stock market or hedge funds, futures or really even economics.... other than knowing that I can make a business run and make it more profitable than it was before I got there, through some in depth analysis and actions taken...in extremely simplistic terms....and that somehow what the Corporations that I worked for ended up in the total gdp of the country and a part of the overall statistics.... hahahahahaha....

basically, I am close to hopeless on this topic, but I earnestly want to learn more....mainly because i love numbers, and analysis!

Care

 

[Epicurus]

I like the Chris Matthews reference.

 

[Damocles]

Good Morning Super,

How much is corn production UP in this country, has to be considered in this also....i believe that corn production is way up due to this ethanol thing so that should keep the prices more in line, however it seems as though it hasn't, and I was wondering why?

-----------------------------------------------------------

On the other post....

c-span doesn't have transcripts Super, I wish they did, but they only have an archive of the actual meeting's video.

Basically, I believe they were saying that one reason this was occurring was because hedge fund/futures were not regulated, very little upfront money was needed to buy them, not visible and undercover/ under the radar....

And that the same big financial firms that are holding a bunch of bad subprimes, that actually were a main factor in the Real estate boom, and also the dot.com boom are the ones trying to make up for their losses in the subprime hedge funds they owned with CAUSING another boom, only now in OIL/commodities.....

i'm not certain the guests being questioned proved such, but they gave a good case for it....one expert was an EX fed chairman though....and i thought he made some good points....

bottom line, all three or maybe it was four guests estimated that about $60 bucks in the price of oil was NOT JUSTIFIED in any manner...not by supply and demand....but by these stupid Futures puchases driving it up...

At least that is what I got out of it....and please take in to consideration that I really know very little about the stock market or hedge funds, futures or really even economics.... other than knowing that I can make a business run and make it more profitable than it was before I got there, through some in depth analysis and actions taken...in extremely simplistic terms....and that somehow what the Corporations that I worked for ended up in the total gdp of the country and a part of the overall statistics.... hahahahahaha....

basically, I am close to hopeless on this topic, but I earnestly want to learn more....mainly because i love numbers, and analysis!

Care

It doesn't keep prices in line because the demand increases because of fuel usage. It will also rise because of the floods in the midwest where the corn is under water right now in the fields.

 

[Care4all]

It doesn't keep prices in line because the demand increases because of fuel usage. It will also rise because of the floods in the midwest where the corn is under water right now in the fields.

Morning Damo!
HOLY crud, I hadn't thought about what these floods out there could cause...... man, I wish corn meal and popcorn was part of my food reserves....big mistake for not having some before the price rise....

Well, minus the floods, if we just grew more corn in some of our empty farm lands, the price of corn should readjust and come back down no?

care

 

[Damocles]

Morning Damo!
HOLY crud, I hadn't thought about what these floods out there could cause...... man, I wish corn meal and popcorn was part of my food reserves....big mistake for not having some before the price rise....

Well, minus the floods, if we just grew more corn in some of our empty farm lands, the price of corn should readjust and come back down no?

care

Again, not necessarily. The increased demand because of use for fuel tends to continue the rise in prices. One should also note that the corn replaces other crops that were also used as food rather than fuel, this creates use of arable land to run cars rather than to feed people. It increases cost for all types of food products, not just corn.

The subsidizing the use of corn for fuel rather than food is one of the worst policies we have ever produced.

 

[uscitizen]

We use 15% of our total food crops for ethanol ????
I thought it was just corn.

perhaps some just live on bourbon.

 

[Care4all]

Again, not necessarily. The increased demand because of use for fuel tends to continue the rise in prices. One should also note that the corn replaces other crops that were also used as food rather than fuel, this creates use of arable land to run cars rather than to feed people. It increases cost for all types of food products, not just corn.

The subsidizing the use of corn for fuel rather than food is one of the worst policies we have ever produced.

OH, I agree with the bold, and senator grassly on the republican side pushed for it and Harkin on the Dem side pushed for it....it was a bipartisan LOVE FEST in congress....

Stupid idiots is what they are....

not for pursuing ethanol or bio fuels, but for not choosing the RIGHT means for it or thinking beyond their own personal pockets....

like switch grass....or even sugar, if they would have lifted the sugarcane embargo with Cuba and taken Brazil's model....

 

[evince]

good morning Care.

Maybe someday we can get people in office who actually research the pros and cons of something before they just jump on it because it has short term gains for their state?

 

[uscitizen]

Buying votes with tax dollars and such.

But on a side note, it has been better to route money back into our rural economy vs sending it to the middle east. Still not a good thing overall though. I hope they phase it sout soon.

 

[Cancel 2016.2]

Good Morning Super,

How much is corn production UP in this country, has to be considered in this also....i believe that corn production is way up due to this ethanol thing so that should keep the prices more in line, however it seems as though it hasn't, and I was wondering why?

-----------------------------------------------------------

On the other post....

c-span doesn't have transcripts Super, I wish they did, but they only have an archive of the actual meeting's video.

Basically, I believe they were saying that one reason this was occurring was because hedge fund/futures were not regulated, very little upfront money was needed to buy them, not visible and undercover/ under the radar....

And that the same big financial firms that are holding a bunch of bad subprimes, that actually were a main factor in the Real estate boom, and also the dot.com boom are the ones trying to make up for their losses in the subprime hedge funds they owned with CAUSING another boom, only now in OIL/commodities.....

i'm not certain the guests being questioned proved such, but they gave a good case for it....one expert was an EX fed chairman though....and i thought he made some good points....

bottom line, all three or maybe it was four guests estimated that about $60 bucks in the price of oil was NOT JUSTIFIED in any manner...not by supply and demand....but by these stupid Futures puchases driving it up...

At least that is what I got out of it....and please take in to consideration that I really know very little about the stock market or hedge funds, futures or really even economics.... other than knowing that I can make a business run and make it more profitable than it was before I got there, through some in depth analysis and actions taken...in extremely simplistic terms....and that somehow what the Corporations that I worked for ended up in the total gdp of the country and a part of the overall statistics.... hahahahahaha....

basically, I am close to hopeless on this topic, but I earnestly want to learn more....mainly because i love numbers, and analysis!

Care

yes, corn production is also up, but most of that gain is by taking away crop land for other grains. Which is why other grains have also seen an increase in the gap between supply and demand.

As for the other topic....

Yes, margin rates on futures are low. Typically you need 10k in a cash position to take a 100k position in a futures contract. (this varies a bit, but it is a good generality) If the contract value of the 100k position were to drop by 12%, you would get a margin call to cover.

I think the politicians are getting worked up because it makes them feel all warm and special inside. Speculators can certainly take the price of a commodity above or below fair value. This is also done with the dollar, gold, grains, stocks, bonds etc.... Speculation will always be a part of it.

The politicians running around saying we should increase margin rates... will only succeed in raising margin rates. That will not stop speculation. Fair value for oil right now is about $90. (rough figure... you will likely hear ranges from $85-100) So there is about a $45 premium on oil right now. Why? Because with expected demand increases outpacing supply increases, you end up with more buyers than sellers on the futures contracts. Which means the sellers have control right now. In the 1990's the opposite was the case, oil was continually running at a steep discount to fair value. Fair value then was around $25 barrell.... yet in 1999 oil was just under $10 barrell.

So right now you have a 50% (again roughly) premium on oil. back then you had a 60% discount on oil. Obviously people don't tend to bitch when the speculation works in their pocket books favor.

How do we get rid of the premium? You change the supply and demand dynamics. Find new sources of supply... drilling in the Gulf/Anwar, wind, solar, cellulosic biofuel etc....

Or you decrease demand through improvements in technology/efficiency or reduced consumption (like walking/biking instead of driving or getting a Vespa etc....). There is a great technology from CSU that will help reduce pollution and emissions greatly in Asia/Africa where they use those little two stroke vehicles. The tech will reduce emissions on them by about 75% while also improving fuel efficiency. Currently there are an estimated 50-100 million of these things on the roads in Asia/Africa.

That will take a few years for the conversion to be done (depending on funding... as they are a non-profit). But things like this is what we need to focus on. In addition to increasing every available source of energy.

I will agree with the politicians in that those firms that issue "price targets" on commodities should absolutely be disclosing their firms net position in those commodities. Not only for their hedge funds, but for the entire firm.

 

[Damocles]

OH, I agree with the bold, and senator grassly on the republican side pushed for it and Harkin on the Dem side pushed for it....it was a bipartisan LOVE FEST in congress....

Stupid idiots is what they are....

not for pursuing ethanol or bio fuels, but for not choosing the RIGHT means for it or thinking beyond their own personal pockets....

like switch grass....or even sugar, if they would have lifted the sugarcane embargo with Cuba and taken Brazil's model....

True, or take off the ban on Sugar Beet ethanol. There is no reason to ban Brazilian sugar beet ethanol in order to enrich the American farmer who would be enriched through different crop production anyway.