More Evidence of Economic “Recovery”

| April 16, 2014 | 14 Comments

The price of beef has risen to a 27-year high.

That must be good news.  Because of course wages have kept pace, right?

Hey, they must have.  The current administration keeps telling us their economic policies are sound, and that good times are “just around the corner”.

Isn’t that what they keep telling us?

Sheesh.  GBAFB.

Category: Economy

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  1. streetsweeper says:

    The only good times their gonna have is if Chillary gets elected, unless Obama decides to pull a rabbit out of his hat and show us he ain’t leaving da man’s house. Heh. 8-)

  2. Blaster says:

    Yeah, good times are just around the corner.

    NOVEMBER 2014! (if all goes right)

    Then maybe this mess can start to be fixed. I’m not sure if it will be straightened out in my lifetime though.

  3. David says:

    Hondo – believe I read this is primarily attributable to the recent years’ droughts? I hate to defend any administration economic policies, but I’m pretty sure they are not responsible for the weather?

    • Hondo says:

      David: the 2009 and 2011 drought certainly didn’t help. But the collective US beef “herd” is at it’s lowest numbers since 1951 – or in over 60 years. And the rest of the world is eating far more beef.

      The US human population in 1951 was approx 155M. Today, it’s approaching 320M.

      Supply and demand. Reduce supply through regulation, and the price goes way up.

  4. Veritas Omnia Vincit says:

    The recovery meanwhile in the real world, not so much….one of my competitors folded up a week and a half ago and while it will bring me another 1.2 million in gross volume I would prefer to see his employees working…that volume on its own doesn’t give me the income needed to hire all of his people who are out of work. I’ve hired those I can but the reality is that many will remain unemployed for some time….so his recovery went really south.

    The truly sad part about all of this is that so many localities are thinking in terms of adding casinos and service jobs as if the road to economic prosperity lies in low paying service sector jobs. There is no national future for the United States if we spend our energy creating low paying jobs that require very little education to perform.

    An intelligent workforce with manufacturing jobs available is the road to recovery, we are kidding ourselves if we think otherwise. We can continue to debate what cuts will be needed to the budget versus what should stay all we want, but the reality is that our current system is already failing when 43% of the workforce makes so little money they have no Federal income tax burden. There is no benefit to the treasury in thinking an increase in that number is a positive move for the economy. As the system comes apart it will be interesting watching the competing groups tear each other to pieces over what was promised them versus what can actually be delivered.

    • Richard says:

      Yeah, okay, but this economic model works for the Democratic party because those low-pay people keep voting Democratic. They do that because the Democrats keep promising to raise those service wages by taking the money from all of us rich Republicans. Yeah right. I’m not feeling that rich part. How do we convince the low-wage voters that there isn’t a pot of gold at the end of the rainbow?

      The other thing the Democrats say is that even if those nasty-but-clever-Republicans figure out ways to protect their fortunes from us good progressives, we will write checks and take care of you. They have us coming and going.

      BTW, if you solve this problem, you get to be president — unless you happen to look like me. In which case, it would require a completely blind population. Let’s run Jonn for Da Pres. At least we could count on a sensible foreign policy, regular witticisms, and a daily reminder that we are just dickweeds.

  5. Roger in Republic says:

    I’ll tell you one thing that has gone up more than Beef. Gunpowder! Not only has it become impossible to find, but those who have it are gouging the people who really want it. I saw 8 pounds of Unique go for $405.00 on the gun auction site, and a one pound can with a reserve of $95.00. Is it the government or is it the hoarders? Or have the powder makers scaled back production to create higher prices? Shooters want to know!

    • David says:

      kinda like the jerk at recent gun shows trying to sell .22 CCI MiniMags for $23/100…. screw him. Powder is running about $30-35 a pound retail around here, but supplies are limited. Production is running pretty well 24/7 at most plants, but hoarders are really killing the rest of us – people who reload 50 rounds a year buying 8 lb jugs, and folks who hit the range an hour a year buying out thousands of rounds at a time. What worries me is that at some point people will realize they have several lifetime’s supplies and decide to stop buying, or even unload some or all of their stocks at a loss. When that happens, I foresee a LOT of shuttered gunshops with no more clientele.

  6. 68W58 says:

    “An intelligent workforce with manufacturing jobs available is the road to recovery…”

    VOV-I’d like to draw you out on this if I could because I am curious as to what you think might be done to accomplish this.

    Industrial production has been generally increasing in the U.S. over time- http://research.stlouisfed.org/fred2/graph/?id=INDPRO -even as employment in the manufacturing sector has declined http://www.bls.gov/emp/ep_table_201.htm

    It seems to me that the days of relatively low skill workers being able to go to the factory or the mill and get a job that they can do for 40 years or so are over (I personally have known many people who were able to do this from the 50s until the 90s in the furniture factories and knitting mills here in my hometown, but today there are very few who work in manufacturing-and all of those furniture factories and mills are long gone). Partly, this is due to those jobs being shipped overseas, but it is also due in part to changes in technology-which speaks to the other part of your statement about “an intelligent workforce”.

    I am skeptical that there is some great overarching government policy that can be put in place today to increase manufacturing sector employment. Those kinds of policies were easier to implement 30 or 40 years ago, but the dynamics of the more high tech economy have rendered those kinds of policies ineffective or obsolete IMHO.

    So, what do you think might work? More STEM education? Those are demanding classes that run counter to the idiotic “everybody gets a trophy” education policies currently in place. Maybe we ought to try to encourage more exploitation of the primary sector (mining, drilling, agriculture), but the greenies will scream bloody murder.

    What do you think would work?

    • Veritas Omnia Vincit says:

      Less free trade agreements with 3rd world nations, there can be no free trade with a nation whose workers make fractions of percentages of your labor force.

      Free trade is not actually possible in that situation, I’m not talking about protectionism but reality. The only winner in these situations are those who are already winners meaning that top 1% group that can actually move certain processes to their new free trade (low labor cost) partner. The big loser is the nation and the middle class.

      A model that mirrors, or extracts the components that make sense in the US, the current German model might be an effective starting point. There is a combination educational/job-related approach that has been very successful in creating the necessary workforce. The Germans have managed to keep manufacturing as a percentage of GDP above 20% by contrast the United States sits at just over half that at about 12% (which is an increase and fits with your productivity results).

      Their current model has flattened out income somewhat but it has been successful in keeping manufacturing within its’ borders. I don’t believe there is a single magic bullet solution, but the reality of our current lack of direction in both education and policy it’s clear we are without effective leadership in resolving these complex issues.

      I’m no economist and I don’t claim to have all the answers by any stretch. But anyone can read the history and see that the US is strongest when manufacturing drives the economy, and less so when it doesn’t. Can manufacturing be replaced by high end technology jobs? Perhaps, but that requires a quantum leap in educational efforts far beyond those required to produce high end manufacturing personnel.

      It should be painfully clear that adding a casino isn’t bringing anyone long term prosperity, that was more my point.

      • Hondo says:

        And yet, VOV, what you propose forces all US consumers to subsidize a few domestic jobs in manufacturing via paying higher prices than necessary for most items. I’m not sure I see the justice in that, either. (It also pretty much guarantees we will be hugely noncompetitive in selling most manufactured goods overseas, too.)

        I understand your point. But that point is essentially nothing but the protectionist argument. If you’re going to make that argument, go ahead. Just please do so openly vice trying to claim that’s not what you’re advocating.

        I’m also not sure I see the long-term utility of doing that, either. We did that for the steel industry for decades; ditto for the auto industry. The rest of the world got better, cheaper, more efficient – and then freaking killed us when the tariff barriers went away. De facto monopolies/oligopolies don’t really have to be efficient or produce excellent products – so in general, they aren’t, and don’t.

        The ultimate form of the mindset you propose is called juche (self sufficiency). North Korea practices it.

        It doesn’t work out all that well in practice.

        The bottom line problem IMO is that we American’s don’t want to make any hard choices. We want to have cheap goods, but don’t want to pay low wages at home (gotta have that “living wage”, even for folks flipping burgers at McDonalds!) or put up with the inevitable environmental effects of
        industry. In short, we want it all fast and perfect – and preferably paid for by someone else.

        The problem with all that is the real world simply just ain’t Utopia. But we may end up literally legislating ourselves back into the Stone Age trying half-baked schemes to “make it so”.

      • David says:

        Plus there’s the dictum that says all modern wars are won by the countries with the greatest manufacturing capacity. We’ve sent most of ours to China….

        Once again I am reminded of Heinlein, but “The Moon is a Harsh Mistress” when at one point he comments that if there only two Chinese in a settlement they would get rich selling rocks to each other. That’s about what we do now…. we sell the rocks to each other. But as a nation we are not getting richer, but infinitely poorer.

  7. 68W58 says:

    “…but the reality of our current lack of direction in both education and policy it’s clear we are without effective leadership in resolving these complex issues.

    I agree entirely with this. My great hope is that people will increasingly turn away from the current education model and towards a more decentralized, less bureaucratic model (see, for example, the Khan Academy) which will help to redirect human capital away from the learned incompetence that we currently get from education and towards a more responsive system.

    Thanks for the intelligent reply.

  8. Veritas Omnia Vincit says:

    Another small point, these flights of fancy discussions are a lot more fun over beers and grill cooked sausages….

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