Slow job growth

I've mentioned our nation's unemployment problem here before, and I see a version of this chart every month when the jobs report comes out, but it still bears sharing every once in a while. This month, we've got two different lines here, showing how long it will take our economy to get back to pre-recession employment levels, assuming two different average rates of job growth (one low, one more ambitious).

Even in the more ambitious case, you can see that we won't return to pre-recession levels for another 30 to 35 months, putting us in mid to late 2014 at the earliest. In the slower growth environment, it would take us until nearly 2016. For those counting at home, that's almost a decade of lost economic activity, a fact that shows just how long and painful a deleveraging process can be for an economy of our size.

Worse yet, these charts don't even consider the annual increase in the labor force as more and more debt-laden students graduate from college--over the course of a decade, those numbers will be significant, and we'll need to create many more than just the 125k or 200k monthly jobs that are charted here in order to keep pace. So, for those in Washington who think we can "solve" our deficit/debt crisis by simply assuming higher growth, you might want to take a look at this chart and reconsider.

Oh... and I haven't even mentioned the off-balance sheet liabilities of Social Security and Medicare yet... it's cool, nobody's planning on retiring in the next decade, right?

[Calculated Risk]

I love this

I could look at this picture all day long. It's great to see my man Fitzy making it to the big time, even if it does sometimes come at the expense of my Pats. My boy's wicked smaht.

(h/t Deadspin)

This seems like bad news

From Business Insider:

The FBI has released a new gang assessment announcing that there are 1.4 million gang members in the US, a 40 percent increase since 2009, and that many of these members are getting inside the military...

The report says the military has seen members from 53 gangs and 100 regions in the U.S. enlist in every branch of the armed forces. Members of every major street gang, some prison gangs, and outlaw motorcycle gangs (OMGs) have been reported on both U.S. and international military installations.

Yeah, there's absolutely no way that's a good thing. From the FBI report:

Through transfers and deployments, military-affiliated gang members expand their culture and operations to new regions nationwide and worldwide, undermining security and law enforcement efforts to combat crime. Gang members with military training pose a unique threat to law enforcement personnel because of their distinctive weapons and combat training skills and their ability to transfer these skills to fellow gang members.

So... yeah. This could be a problem. The last thing we want is to be spending taxpayer dollars to effectively train a new generation of gang leaders. That's at best counterproductive, and I think we can pretty comfortably chalk that up as a nasty unintended consequence of the military-industrial complex. 

When we overextend our military in all number of apparently indefinite conflicts around the world, it's seemingly inevitable that we will eventually have to relax our enlistment standards (note that gang member concentration is at its greatest in the Army, which has been struggling to recruit since the Bush administration if not before). The more we relax, the more likely we are to find ourselves facing a situation like this one. Not good.  

 

 

[Business Insider]  

[FBI]

Clip of the Week

It was a pretty slow week for clips, so I'll just take this opportunity to share some of the best recent work done by my favorite late night host, Conan O'Brien (I used to love Letterman but he's way past his prime, I've never liked Leno, Kimmel is increasingly solid but not my favorite, and Fallon is mediocre except for his hysterical musical skits--plus Conan's a Harvard guy so I've got a soft spot for him, especially since his awesome Class Day speech way back in 2000).

Now, I don't really watch the late night shows much any more, but Conan is clever and his skits are well-written--even if they're now buried on TBS instead of a major network. More importantly, his staff tends to do a great job with video editing, which generally makes his job a lot easier. Along those lines, he did a great job mocking Apple's Siri commercials with an ad of his own, and he also put together a hysterical video of him delivering Chinese food in New York City. But my personal favorite, and the best-edited video of the bunch, is this manufactured clip of Obama without his teleprompter. Good stuff. Go Conan.

Greece fun facts

As we all know by now, Greece is a mess. Statistics like this one help explain why.

There are more Porsche Cayennes registered in Greece than taxpayers declaring an income of 50,000 euros (£43,800) or more, according to research by Professor Herakles Polemarchakis, former head of the Greek prime minister’s economic department.

While German car workers may take pride in this evidence of their export success, German taxpayers may be less keen to bail out a nation whose population appears to take such a cavalier approach to paying its fiscal dues. Never mind all that macroeconomic talk about deficit distress, many Greeks are still plainly riding high on the hog.

So, by definition, either the Greeks are overextending their budgets to an insane degree or else they're just massively understating their incomes for tax purposes. Realistically, it's a mix of the two explanations, but mostly it's the latter--it's long been clear that tax evasion is simply a way of life over in Greece, as this old post noted. I'm pretty sure it's just a matter of time before taxpayers in Germany, France, Italy, and elsewhere decide that they don't particularly feel like subsidizing Greek purchases of Porsches.

[Telegraph]

Geography and the economy

It's probably not exactly Earth-shattering to suggest that geography goes a long way toward determining economic prosperity--in fact, the "geography is destiny" theory is a leading candidate to explain why the United States enjoyed such an extended era of economic growth in the 19th and 20th centuries (well, there's also those who point to the contributions of slave labor, but that's a conversation for a different day).

Nevertheless, it's interesting to see the concept displayed so clearly on a map, as was done by a trio of economists who pioneered the concept of "GDP Density"--simply put, a measure of the intensity of economic activity in a given spot (h/t Econbrowser).

Landlocked and tropical nations seem to be at a very clear disadvantage as far as economic production is concerned (the same also goes for particularly cold regions--sorry Canada), with any number of suggested explanations (ease of transportation and prevalence of disease are the leading candidates). As is pointed out over at Econbrowser, this map bears striking similarities to satellite pictures of the Earth at night (clearly, there's some correlation between lights and economic activity--I know, it's shocking).

I think these sorts of maps are interesting, and that they cast doubt on the importance that we all like to place on systems and institutions. Is America great because of its democracy, its capitalism, its banking infrastructure (ha!), its education systems, or its innate work ethic? Or was America just lucky, its success due to a fluky accident of geographic history?

It's certainly a question worth wondering when you consider just how much of our economic prosperity (and, of course, or foreign policy) today is determined by the one product that we just don't have enough of here at home--oil. Geography may not completely determine our destiny, but it certainly plays a starring role.

[Econbrowser]

Quote of the Week

This one probably wouldn't be Quote-of-the-Week-worthy if it was coming from a different source, but since it's coming from CNBC, it's noteworthy.

If you've been reading me long, you know how I feel about the Fed's easy-money policies and what they do to the economy. But CNBC isn't quite the cynic I am, and the network in fact tends to be a heavy apologist for government policies and for big business in general (Rick Santelli is a notable exception, but Steve Liesman is a hack through and through). That's not necessarily surprising giving that their ultimate parent company is one of the biggest corporations around, but it's nonetheless worth knowing.

That's what made this article so striking when I came across it yesterday. The topic of the article was the Fed's insistence on focusing on "core" inflation measures which ignore the impacts of food and energy prices, which are deemed "volatile" and therefore too noisy to consider. The problem, which I first mentioned in this blog post, is that food and energy comprise the majority of American's budgets--especially for the poorest Americans.

Ultimately, the cost of fuel and food is basically all that matters to most Americans. Ignoring it is very dangerous, especially when you note the broader trend--and that broader trend is the subject of this week's quote.

This week's QUOTE OF THE WEEK

"Since 1987, there has never been a five-year period where food and energy prices declined on an annualized basis... Only four years in the last 24 have seen a decline in combined food and energy prices."
                           - John Melloy, CNBC Executive Producer

Yeah, it's hard to make a case that inflationary pressures are "temporary" or "transitory" when 25 years of history suggest otherwise. We need to stop pretending that government policies aren't creating this phenomenon, or that it's somehow going to magically reverse itself now that our planet is welcoming its 7 billionth human. Keep that in mind with this week's Fed meeting ongoing--whatever Bernanke says, it's what he's not saying (or conveniently ignoring) that's arguably most important.

[CNBC]