tag:blogger.com,1999:blog-6616959642391988608.post6700960463410761577..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Unit labor costs collapse, a portent of increased hiringScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger16125tag:blogger.com,1999:blog-6616959642391988608.post-40182159368885861042010-03-08T07:19:15.305-08:002010-03-08T07:19:15.305-08:00Scott you blame the issue on FNMA, FHMLC and belei...Scott you blame the issue on FNMA, FHMLC and beleive the banks will not fall into the same trap again.<br /><br />Sadly this could not be further form the truth. We are now in a government debt bubble and the banks are the largest players in the game. <br /><br />We had a corporate bubble in 2001, and private and financial bubble in 2008, and we shifted the load onto the sovereigns. <br /><br />Public Libraryhttps://www.blogger.com/profile/00017383928897945054noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-65665762809955066122010-03-05T19:50:39.870-08:002010-03-05T19:50:39.870-08:00scott- you made the comment:
"I would also n...scott- you made the comment:<br /><br />"I would also note that big productivity gains usually occur following recessions"<br /><br />this is actually incorrect. big productivity gains usually occur DURING recessions as companies squeeze out excess (which i agree is a good thing for corporates and longer term, for society).<br /><br />we have seen this with a rebound in profitability Jakehttps://www.blogger.com/profile/07946497592651234440noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-11078053649059855142010-03-05T08:30:31.826-08:002010-03-05T08:30:31.826-08:00At the risk of over-simplifying things, I would sa...At the risk of over-simplifying things, I would say that the near-collapse of our financial system had little or nothing to do with a lack of regulation, so the fact that we have not yet had regulatory reform does not mean that we are vulnerable to another collapse. <br /><br />The problems that led up to the 2008 crisis were many, and most involved government institutions (Freddie and Fannie) Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-86464422459393575672010-03-05T08:14:45.814-08:002010-03-05T08:14:45.814-08:00I do have a question, I would like SG to respond.
...I do have a question, I would like SG to respond.<br /><br />Our financial system collapsed at the end of the Bush Administration. Since then, we have had no reforms, either regulatory or free market-inspired. Obama has done nothing, either positive or negative, aside from silly posturing on exec pay. <br /><br />So, we have the same financial system that collapsed only two years ago. If Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-41431521583833735242010-03-05T05:02:20.888-08:002010-03-05T05:02:20.888-08:00Your perpective only worked when we were a product...Your perpective only worked when we were a production surplus economy, once we morphed into a consumer deficit economy, the rules changed.<br /><br />Now we have $55 trillion of debt that mathematically can't be paid back.<br /><br />If the government is buying goods, whether directly or indirectly, such through entitlement payments or transfer payments, it creates demand that otherwise alstryhttps://www.blogger.com/profile/16025398896639165994noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-66585018803260224802010-03-04T19:34:19.407-08:002010-03-04T19:34:19.407-08:00productivity gains, no matter how large, have noth...productivity gains, no matter how large, have nothing whatsoever to do with the federal budget deficit. If anything, a large deficit makes the economy less, not more, efficient.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-48947216085350032432010-03-04T19:21:20.831-08:002010-03-04T19:21:20.831-08:00Scott,
The was reason we had big productivity gai...Scott,<br /><br />The was reason we had big productivity gains was due to government's $2 Trillion dollar deficit....we never had anything close in the past.<br /><br />If the life support is pulled, we will likely see sales evaporate, if we keep borrowing at this rate.....you know the rest.alstryhttps://www.blogger.com/profile/16025398896639165994noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-18526575251361415952010-03-04T17:55:07.809-08:002010-03-04T17:55:07.809-08:00Jake: to be sure, demand for labor has been weak. ...Jake: to be sure, demand for labor has been weak. But by firing people and increasing overall productivity significantly, businesses have improved their profit margins. With sales increasing, businesses will soon have to hire more people; you can only squeeze existing resources so much. I want to emphasize the title of this post, which is that big productivity gains are a portent of new hiring. Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-86690080185867573852010-03-04T14:40:36.421-08:002010-03-04T14:40:36.421-08:00Benjamin,
Our system was structured for an Indust...Benjamin,<br /><br />Our system was structured for an Industrial Age and NOT Digital Age. <br /><br />By becoming more efficient, firing millions of workers, we have destroyed the revenues to government and now revenues are insufficent to cover the current government structure and obligations.<br /><br />Further, we built an industrial economy dependent on government spending massive amounts of alstryhttps://www.blogger.com/profile/16025398896639165994noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-20455491562463560702010-03-04T13:07:08.483-08:002010-03-04T13:07:08.483-08:00Alstry-
Believe me, I sympathize with laid off wor...Alstry-<br />Believe me, I sympathize with laid off workers, and earnest engineers etc who had spent lifetimes working, and are tossed out overnight.<br /><br />But higher productivity is an unalloyed good. <br /><br />Even without free trade, Detroit probably should employ fewer people every year, as productivity goes up. It takes fewer and fewer workers per car produced--leaving other workers Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-55288352682469561032010-03-04T11:25:57.506-08:002010-03-04T11:25:57.506-08:00perhaps marx was rightperhaps marx was rightseptizoniomhttps://www.blogger.com/profile/14253705209662419429noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-18948124036849000322010-03-04T11:10:39.944-08:002010-03-04T11:10:39.944-08:00WELCOME TO THE DIGITAL AGE...
The need for labor ...WELCOME TO THE DIGITAL AGE...<br /><br />The need for labor is evaporating as technology we spent years developing is finally being adopted and applied.<br /><br />No more video stores as videos and music delivered online.<br /><br />No more bank branches as banking going online.<br /><br />Manufacturing is becoming less labor intensive compounded by fewer people working buying less manufactured alstryhttps://www.blogger.com/profile/16025398896639165994noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-1585322849060668152010-03-04T11:03:34.027-08:002010-03-04T11:03:34.027-08:00Scott,
Let me respectfully disagree (and agree wit...Scott,<br />Let me respectfully disagree (and agree with Jake)...this is a backward looking metric that captures two facts, companies have "over-fired" and primarily gotten rid of their dead wood (least productive employees) while sales have ticked up. I do not think that the unit labor cost of the margin hire is this low. That is not to say we get some hiring but I think it will be Donny Baseballhttps://www.blogger.com/profile/08040288585224426073noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-81142321308877624792010-03-04T10:02:11.812-08:002010-03-04T10:02:11.812-08:00I don't know if you can create the chart but i...I don't know if you can create the chart but if you could invert the unit labor cost chart and place it over a chart of the 3 month moving average of the monthly payroll change. It is uncanny. I shows businesses have a lot of room to hire at these costs. Thanks for the observation.broderohttps://www.blogger.com/profile/12296214283216386700noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-38113158789980910132010-03-04T08:53:55.443-08:002010-03-04T08:53:55.443-08:00Yes, this represents real increases in living stan...Yes, this represents real increases in living standards, when productivity goes up.<br /><br />These huge increases in productivity are also anti-inflationary. <br /><br />It may be that American businesses are better managed than ever. We seem have to developed a "business culture" in the last two generations, in which the purpose of life is to run a business and make money. <br /><Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-22674462506242883862010-03-04T08:53:48.155-08:002010-03-04T08:53:48.155-08:00Your logic may be backwards. You are saying labor ...Your logic may be backwards. You are saying labor demand will increase because labor is cheap. It seems to me that labor is cheap because there is no demand.Jakehttps://www.blogger.com/profile/07946497592651234440noreply@blogger.com