Is the economy doing badly

I think you're right. I think you're starting to see analysts come around to this, too.

Record profits for Fortune 500..but still huge unemployment numbers. I think we've entered a new paradigm of structural unemployment. We've shipped jobs away...we've replaced jobs with technology.

 

long term self interest?

Because if there is no middle class in the USA, there will be no one to feed the gravy train and it will collapse. The top 5% cannot buy enough to sustain the economy no matter how well they are doing. They won't need 2 million cars, 2 million houses, 2 million shipping centers ...ad infinitum.

 

Problem with this argument is that record high highly educated folks can't find jobs.

To answer your question .... What's the point to engage in a philosophical debate? There is always a perspective in judging economy ... my neighbor loses job its recession, i lose job it's depression. Nonetheless, it adds up. You can't tell me when the unemployment rate is close to double digits officially, the economy is doing fine. Maybe structure is to blame, but that doesn't mean the economy is doing fine, not least because the companies are profitable. We are consumption economy, if people can't buy like they used to, the company will soon feel the pinch.

 

Unemployment and lower pay are spiraling down the same drain.

Big business has busted the unions, torn down foreign trade barriers, killed the housing industry, raped the integrity of the free press, stifled regulation, avoided taxes while claiming "we are taking back America".

The middle class has lost the nest egg of their home values and cannot keep up with inflation with bank savings or saving bonds. Their only choice is to sign on the ponzi scheme of the stock market where they are the pigeons at the card table. Once the existing money supply becomes tied up in unreinvested corporate profits, hedge funds and top tier personal wealth, where will the money creation come from?

 

New York times the other day ran an article reporting that eastern Kentucky folks growing their own groceries instead of buying. The trend caught on like a wild fire.

Record profit and consumption slump ... I am no economist. Maybe there is a latency? To average folks, bad is bad, there is no difference whether it's structural or not.

Now, I am not sure what your point is. Are you saying what we seeing here is transitional pain that we have to endure and macroeconomic policies are just fine because things have been figured out? Or are you a Bush apologist?

 

I wonder how much of the positive GDP growth can't be accounted for by increased in government expenditures.

Things aren't good because politicians have their own clashing visions of what the U.S. economy should be (as far as types of industry and demographics of employment), and these clashing ideals ignore the realities of the modern economy (as mentioned by the OP). In my opinion, economic stagnation will not occur because there are so many wants that people have that, even today, aren't satisfied. Firms may shift toward more capital-intensive operations leaving some people unemployed. However, that just means that there are more resources to apply toward providing people with their unsatisfied wants. This is all very theoretical, but the idea provides a framework for understanding why the economy will not simply stagnate as industries shift toward more efficient methods of production which use less labor.

 

Sure people can grow groceries, but that ain't going to help economy, more like a start of vicious cycle. The companies probably figured out a way to stay very efficient by not hiring, but is the profit sustainable? This goes to Dubious's point. We can all speculate, but I like to quote you the line in Time's article "Europe used to look to us to be the counter balance, now no more because we are Europe ."

That doesn't sound like very promising at all, also see Japan.

 

Germany? Germany? Hello.

Are we anything like Germany?

We are PIGS + internet.

 

Large corporations have done well lately, however, the engine of the US economy to do well tends to be small businesses, which have not been doing well.

In addition, huge swaths of the economy are still in utter disrepair, such as housing and construction. If you got construction back on track, you'd probably see unemployment drop dramatically.

In fact, most of the people I personally know that are really being affected by this economy have their businesses or jobs tied into construction or a support business having to do with construction.

 

The problem is, the jobs that were lost are either 1 of 2 things.

1. Easily replaced by computer programs or robotics

2. Low wage "unskilled" labor like manufacturing or support that can be outsourced.

Economically we are actually not THAT bad, will the wealthiest nation in the world with the strongest economy. Its no wonder that many Conservs are harping on our labor issues because historically the main jobs of conservative voters are rural or manufacturing jobs, and unfortunately those are going to the wayside as the world GLOBALIZES.

I feel like the Media has done a terrible job at relating global economics to our recent "problems" as we are getting into a world where transportation and tarrifs get lower and lower, and countries from all over the globe INCLUDING the US are exporting their labor in exchange for a lower purchase cost per good across the world.

This is the price for pumping out over-average education...as the people get smarter and the US transforms from a Manufacturing/Farming nation into a nation of technology and innovation we lose out on those people who fell behind the education curve...

Thats my take. PREPARE THE DOWNVOTES.

 

They sure can...at the cost of higher cost goods.

Which will then cause COMPLAINTS.

 

Tax those profits pay off the debt.

DD

 

I think pgab is right in that the growing class disparity is making this recession much worse for some, and that's reflected in things like the unemployment rate, median income, home ownership, etc. I think on the dimension of wealth distribution, we're trending in a bad direction even while the economy's total output is stong.

I also think we are and will be living through our country's transition to a post-hegemonic power, as places like India and China take a more prominent role. Much like Europe had to step back when the USA came into it's own, we will also be stepping back.

However, I don't think we will age as gracefully as northern Europe did, because our culture isn't geared that way, specifically in our villification of socialism. Northern European countries have been content to take a secondary role internationally and concentrated more on maintaining high standards of care and development for their citizenries. With our self-made man culture, we're going to allow portions of our citizenry to atrophy and drag on the rest of society. With our highly automated economy, you need high education to participate meaningfully, but we're not willing to make the necessary sacrifices to provide that education, nor are we willing to provide support to those who have not been prepared to contribute to our economy. That sounds to me like a recipe for disaster.