Episode-275- Economic Recovery, Think Again — 8 Comments

  1. I was just saying yesterday that I felt that the reason that unemployment is slowing is because businesses are getting down to the bare bones of what they need to survive, but the slowing drop does not mean that people are going back to work.. which is a huge problem. I think we’ll see things turn around briefly, just as you said.. and in 2 years we’ll be slammed and most people won’t know what hit them.

    Thanks for a great program, Jack.

  2. Keep in mind that when a person has exhausted their unemployment benefits, they are no longer counted in the system- even if they still have not found work. One has to wonder what the true unemployment rate would be if they were added back into the equation.

  3. @Cat that is true and here is what is worse and I forgot to mention today about the report on GDP declining less then unemployment.

    About 40% of the spike in the unemployment rate in the early 1980s came from new entrants to the workforce who couldn’t immediately find jobs. Now, only 25% of the increase in joblessness is due to new entrants. The rest is from job loss.

    This means that a hell of a lot of the jobless are experienced people deep into there careers.

  4. @Steve

    Um yea actually if all the non working went off benefits and no new people went on it would be zero.

    It would be almost impossible but it could very well be that one day we hear that unemployment is “down to 5%” and it will actually be in the 25% range.

  5. Jack – Thanks for another great show. I personally like your economic shows. I know that a lot people wants to get rid of our current fiat monetary system. But using your marble example, what happens when someone sits on the majority of the marbles causing the marble circulation to slow down? Then the people will be forced to a barter economy or look for another valuable commodity to represent money. This could be disastrous for the people, especially in today’s world. I see the reason for our current fiat system to stop such events from happening. But unfortunately our elected officials and the Fed have totally abused the system to line their own pockets. What’s the solution? It’s time to throw the bums out and audit the Fed.

  6. Just a note. The GDP is a not a good statistic to base a line of thinking off of (not that I disagree with your conclusion). The government has been skewing that statistic heavily for the last 30 years. For one thing all government spending is included in the total even though it is a consumer and not a producer.
    Also when a company trims fat and improves their bottom line wether it is by finding a cheaper method of production or getting rid of unnecessary workers it is always good for the overall economy. I do not have the time to go into a complete explanation on this but for a very down and dirty explanation look at the leech that government is, how many unnecessary workers they have, and how inefficiently they operate.
    For a very good explanation of business theory take a look at and some of the books and articles they recommend.

    Be careful how much you read into it. As they say ignorance is bliss and once you understand how it works you will never look at any part of your life or what goes on around you the same.

  7. Unemployment numbers are down too because employers cut hours, take pay cuts and won’t be getting raises. I believe foreclosures are down because banks have now stopped foreclosing. They are just letting houses sit and rot after they have given eviction notice. This happened to my neighbors! Jack, I’d like to hear a show on using “Preparedness” as a retirement plan.