Social mobility in the USA

[Torvald Von Mansee]

As described by that leftist commie rag, The Economist:

http://www.economist.com/world/united-states/displaystory.cfm?story_id=15908469

[tater]

The Economist is certainly "left" as defined by American politics. I read it since my father in law gets it. It's clearly left of the WSJ, or even Bloomberg (my cousin's a reporter for the latter, so I read that, too). As is, of course, PEW which that article quotes.

Comparing mobility to countries like Europe that have twice the unemployment isn't really very fair. We freak out with even double-digit unemployment, a condition that's been endemic to the EU for ages.

I think, as your article states, the situation in in fact more complicated. Look at lifestyle changes over the same period. People might make less than mom and dad, but their houses are bigger, they have more (and better) stuff.

I think if people lived a 1970 lifestyle, they'd have loads of leftover money. I sure would.

[SteamWake]

As the country emerges from recession


LOL they lost credibility in the first sentance.

The only reason to read this magazine is to impress lib chicks in an airport lobby :O:

[mookiemookie]

LOL they lost credibility in the first sentance.


They lost credibility for stating the obvious? :-?

[CaptainHaplo]

Mookie - they lost credit when they claim the recession has ended - try telling that to the 11.2% unemployed in the state of NC (which doesn't even count those no longer looking for work having given up, or simply run out of benefits but still looking)....

When unemployment as a whole makes a steady, significant improvement over the course of 3 months (say at least .2% per month) then the recession will be ending - to the man on the street.

You can use some fancy definition for what is and isn't a recession - but to the common man on the street - its defined by jobs.

[Tribesman]

You can use some fancy definition for what is and isn't a recession
There is nothing fancy about an ordinary, everyday well established definition.

So the definition of recession as used isn't really the definition even though it is the usual definition as Haplo doesn't like it and Steamwake doesn't understand it.

[August]

You can use some fancy definition for what is and isn't a recession - but to the common man on the street - its defined by jobs.

The Dems do seem quite eager to declare victory over the recession.

[mookiemookie]

The Dems do seem quite eager to declare victory over the recession.

Because all the data supports that conclusion. You'd have to be blind or a partisan hack to argue with the fact that the gradual increases in industrial manufacturing, exports, autos, retail sales, durable goods all confirm the economy is getting better.

Remember - a recession ending is not the same as full recovery. It just means that things are getting better instead of worse.

[August]

Because all the data supports that conclusion. You'd have to be blind or a partisan hack to argue with the fact that the gradual increases in industrial manufacturing, exports, autos, retail sales, durable goods all confirm the economy is getting better.

Remember - a recession ending is not the same as full recovery. It just means that things are getting better instead of worse.

The point is you are jumping the gun to declare the recession over. What increases we've seen are minuscule and could easily be temporary.

*I hope that is not the case.* but to declare that we're on the road to recovery is at best premature and at worst putting lipstick on a pig.

[tater]

The definition is like recession in the first place. Consecutive quarters of growth or retraction.

[Tribesman]

The point is you are jumping the gun to declare the recession over.
The word is entirely dependant on measured levels of growth or contraction.
You cannot just decide you don't like the definition as it must be wrong because your favourite muppet isn't in office and some other muppet got the job instead.
Well to be fair you can just decide that the agreed definition used wordwide is wrong because you don't like it, but you must realise it just makes you look rather foolish when you decide to do that.

[mookiemookie]

The point is you are jumping the gun to declare the recession over. What increases we've seen are minuscule and could easily be temporary.

*I hope that is not the case.* but to declare that we're on the road to recovery is at best premature and at worst putting lipstick on a pig.

You are correct in saying that it could very easily slip back into recession and to some extent it remains to be seen if the road to recovery is sustainable and long term, but based upon the available empirical data the country is indeed out of the recession (i.e. contraction) stage at this point in time.

And tater, there is no one single benchmark test of a recession or recovery. Instead, folks in my business look at a variety of factors and how they interplay and affect each other. The old saw about "two quarters of positive/negative GDP" oversimplifies things.

[tater]

Any less simple definition opens the economist link to criticism based on claiming we're leaving recession. It in effect becomes entirely subjective.

Using a simplistic definition then they could very well be correct that we're coming out of it. Regardless, the economist, like ALL journalism has an editorial slant, and that slant as calibrated by US politics is absolutely "left." It's also very European in sensibility from my reading ("the US is bad, m'kay").

[SteamWake]

http://money.cnn.com/2010/04/12/news/economy/NBER_business_cycle/

[mookiemookie]

http://money.cnn.com/2010/04/12/news/economy/NBER_business_cycle/

From your own article: While those and other developments have caused many economists to tentatively place the recession's end date sometime in June or July 2009, the economists at NBER decided they needed to wait for more definitive data before making an official determination. (emphasis mine)

The NBER is notorious for taking a lengthy amount of time to call an official end to the recession. It took them over a year and half after the 2001 recession ended to call the trough of the cycle. And it took 21 months after the 1990-1991 recession ended for NBER to call that one over.

So the moral of the story is that just because the NBER hasn't said its over yet, doesn't mean it isn't over yet.

[August]

http://money.cnn.com/2010/04/12/news/economy/NBER_business_cycle/

Important part highlighted.

"Although most indicators have turned up, the committee decided that the determination of the trough date ... would be premature," the group said in a brief statement.
The committee said that many economic indicators are "quite preliminary" at this time and could be revised in the months ahead. The committee bases its decisions on "actual indicators" -- not forecasts -- about economic growth, the job market and other measures.

[mookiemookie]

Important part highlighted.

It doesn't change the fact that the NBER uses a (very long) rear view mirror in calling recession beginning and end dates. There is a fundamental difference between saying something is over and saying when that something ended. That is the crux of the discussion. The majority of NBER committee members will tell you that the recession is over (Feldstein, Frankel) but what they will not do is commit to putting a date on it. Yet.

Regardless, the majority of economic data is showing an end to the recession. No one can ignore that. However, the recovery is another phase altogether. It may take years for a recovery to happen.

But since people seem to like charts, here's one:

http://www.ritholtz.com/blog/wp-content/uploads/2010/04/cfnai_data_2_11678_image021.png

This here's the Chicago Fed National Activity Index

The CFNAI is a weighted average of 85 existing monthly indicators(pdf) of national economic activity. It is constructed to have an average value of zero and a standard deviation of one. Since economic activity tends toward trend growth rate over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend.

The 85 economic indicators that are included in the CFNAI are drawn from four broad categories of data: production and income; employment, unemployment, and hours; personal consumption and housing; and sales, orders, and inventories. Each of these data series measures some aspect of overall macroeconomic activity. The derived index provides a single, summary measure of a factor common to these national economic data.

[CaptainHaplo]

I admit I am no learned economist in the classical sense. You can argue whether the recession is over, temporarily in abeyance, whatever. To the average joe on the street, it really doesn't matter is the point - until the job market turns around. To the average guy or gal - the old statement of "its the economy, stupid" still applies - and so its the improvement in the job market - jobs available, unemployment lowering, as well as the quality of the jobs and their duration, that becomes the main factor that is looked at by the masses.

True, it doesn't meet standard definitions, but telling me the "recession is over" when my state has a 11.2% unemployment rate, doesn't mean anything to me in real terms, because while the fall may be over, the job market is still in the basement.

I'm lucky, I am not one of those who lost their job. But in looking for another one - or a second one - the pickings ae slim. I can only feel sympathy for all those who are families or individuals without a job at all. I am able to cover things while my lady is still looking. Not all families are so lucky.

Sure, the article is likely technically true, but it feels like everyone is just waiting for the other shoe to drop......

[mookiemookie]

I admit I am no learned economist in the classical sense. You can argue whether the recession is over, temporarily in abeyance, whatever. To the average joe on the street, it really doesn't matter is the point - until the job market turns around. To the average guy or gal - the old statement of "its the economy, stupid" still applies - and so its the improvement in the job market - jobs available, unemployment lowering, as well as the quality of the jobs and their duration, that becomes the main factor that is looked at by the masses.

True, it doesn't meet standard definitions, but telling me the "recession is over" when my state has a 11.2% unemployment rate, doesn't mean anything to me in real terms, because while the fall may be over, the job market is still in the basement.

I'm lucky, I am not one of those who lost their job. But in looking for another one - or a second one - the pickings ae slim. I can only feel sympathy for all those who are families or individuals without a job at all. I am able to cover things while my lady is still looking. Not all families are so lucky.

Sure, the article is likely technically true, but it feels like everyone is just waiting for the other shoe to drop......

I know exactly what you're saying. I often do speaking engagements for public funds groups (people in charge of investing school district/local county/city funds)around here and I run into the same kind of thing. These investors, especially for the smaller school districts and cities are by and large not very sophisticated...a lot of them have just been placed in charge of this in addition to their accounting and other job responsibilities. It's hard to show them charts like this and say "See! The aggregate data shows things are getting better!" when they personally don't see it. The recovery thus far has been "lumpy"...a lot of places are still having tough times, but there's a lot of places that are doing well. It makes it hard to believe when you personally don't see something. It's like a "trust me, take my word for it" thing, which can be hard to swallow. But the bottom line is that things are not getting worse. But full recovery is going to take a long time to happen.

I think the employment situation is going to be very bad for a long time. One of the economists I place a lot of faith in puts it this way:

We started the decade with a national payroll level of 130.8 million. We finished the decade practically unchanged at 130.9 million. Meanwhile, the total pool of available labour rose from 146 million to 159 million. In other words, we have the same number of jobs today as we did a decade ago, and yet we also have 13 million more people competing for them. It was more than just a lost decade for the equity market. It was a lost decade for the labour market.

Making up all those jobs is going to take years. This chart illustrates percentage of job losses from the last peak and compares it across recessions...you can see that we're going to take a long, long time to recover:

http://cr4re.com/CRimages/EmployMarchRecessions.jpg

[August]

But the bottom line is that things are not getting worse. But full recovery is going to take a long time to happen.

Well again I hope you're right it is no guarantee that things are going to get better, or that it's just a temporary hesitation before continuing the free fall.

[Aramike]

An economic recession, for practical purposes is based upon a baseline ... ergo, over a 2 year period the recession has perhaps ended. However, over a 10 year period, the economy is still in recession.

The best analogy is a beach front where the water line is receeding. Indeed, the waves still come in and dampen the sand on the beach, but the waves keep coming up the sand less and less.

Hence the need for a long view. And, in the long view, there is no way in hell anyone can claim we are not in a recession. We may be making some gains, but are they merely waves soaking the beach or is the average waterline actually growing higher?

[Tribesman]

True, it doesn't meet standard definitions, but telling me the "recession is over" when my state has a 11.2% unemployment rate, doesn't mean anything to me in real terms, because while the fall may be over, the job market is still in the basement.

So Haplos arguement against a wide measure of a national cycle is his personal perception of a single factor at a very local level.
Thats like people arguing for or against global warming on the basis that it was hot or cold this morning where they live.