Sunday, May 1, 2011

Where Wall Street Money is going this campaign season...Well, Mr President, you did not actually think they would be grateful...did you???

Source: WSJ
 The trend prior to 2010 is interesting and probably not what people would guess. Hedge fund managers and their employees have been relatively more generous to the Democrats than Republicans over time.  Does Wall Street know something we don't?? (Rhetorical question, I already know the answer...)

One look at this graph and you may become (if not already) a Keynesian...Do not turn away!!

Source: Econbrowser
This graph shows two important categories that economists use to define peoples unemployment status. 

One is cyclical unemployment (Red Bar), which means people lose there jobs because there is a down turn in the business cycle. This is a fancy way of saying there is a lack of demand for the goods and/or services businesses produce so they lay-off workers and/or close the business altogether. The workers skills are still relevant and they want to work, but there is no current demand for the goods or services they produced.

The other is structural/technological unemployment (Blue Bar) which means people have lost their jobs due to changes in technology and work place efficiencies. This is a fancy way of saying you lost your job to a machine, robot, computer, or better processes.  Workers skills have become obsolete and must update their skill-set or learn to do something else altogether.  The longer one is unemployed, the threat of moving from cyclically unemployed to structurally unemployed increases. This is not good for the worker because there can be a significant time lag between getting the re-training and obtaining a new job.  What to do in the meantime? How to support themselves? Their families? How to pay for re-training?

The good news (if there is any) is that while the ranks of the structurally unemployed is growing, the MAIN problem is cyclical unemployment.  This graph shows approx. 60% of unemployment is cyclical.   These workers are, more or less, ready to go back to work, have the relevant skills and can be productive immediately IF THERE WAS DEMAND FOR WHAT THEY CAN PRODUCE. 

So...Does this beg for a Keynesian solution to the problem?  Private sector hiring is not robust.  Could MORE "priming of the pump" by Government be necessary to kick start the economy and get Aggregate Demand increasing?

If not, what is your solution?  Inquiring minds want to know...

At this golf course if you land in a bunker it could contain sand or a machine gun. I wonder if you get a free drop? The rules of golf are different in War-time...

I am assuming this Golf Course is in England or one of the British Isles (notice the date). Under THESE conditions, I think the PGA could set a record television audience...(HT: Coyote Blog)

Source: HERE
 Reminds me of this clip from "Caddy Shack"....

Do you know the difference between Trash and Treasure? Nice example of a good that went from one to the other in the marketplace, and it is found in your kitchen...

What is the difference between trash and treasure in terms of your refuse (fancy word for garbage)?  With trash YOU have to pay someone else to take it away.  With "treasure" someone PAYS YOU to take it away.  It is not a subtle difference.  Here is an example of a commodity that crossed over from the former to the latter:
""...Spent cooking oil. Used to be, restaurants had to pay companies to haul away their used cooking oil. In recent years, selling that yellow grease has become a half-billion dollar a year industry. So companies are now paying restaurants for the stuff. And that's pitting grease collector against grease collector..."" Source NPR
Tell me again, how much money do you RECEIVE from filling your recycling bin and putting it on the curb every week? We pay to have our recyclables picked-up. Do you ever ask yourself why? Seems like at a minimum, recyclers would pick it up for "free" from you if they can profit from it down the supply chain. I am willing to hear counter-points---let me have it.
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