Appraisers' Free Forum

The real story is here, Edd.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/10/25/MNMR1A9PMQ.DTL&tsp=1

"The answer is, we don't know," said Tim Bartik, a liberal economist with the Upjohn Institute for Employment Research in Michigan who is proposing a tax credit for employers who hire new workers.

At a cost of $21,000 per job created, he said, a tax credit is far cheaper than the average $112,000 cost of each job created by the stimulus, as calculated by the administration.

You have to know that, when liberal economists start proposing tax credits, the pendulum is beginning to swing.

"You can't grow with a huge trade deficit," Morici said. "If you don't revalue the Chinese yuan against the dollar you can't get out of this mess, and if you don't do something about oil imports you can't get out of this mess. Industrial policies won't fix it."

Morici is partly right. We have grown with a large trade deficit before... but, things were a bit different then. Industrial policies might fix it, if they were the kind of policies that rewarded industrialists for taking risks and creating jobs here.

One thing that definitely won't fix it is a tariff war with the developing world.

I've been practicing the don't buy Chinese if you can help it rule for a long time. Mainly because the quality is usually shoddier than stuff made in other places. However, GM does not practice that same rule.

FYI, recovery from recession usually starts before jobs begin to recover. That is normal. I'm not all that sure that the economist predictions are right. One other thing going on here is demographics. As the population ages, there are fewer jobs because there are fewer workers. Same thing is happening in Japan.

Here are a couple of good articles on these topics. I don't necessarily believe everything said in either of them, but for both, the comments following are telling.

http://seekingalpha.com/article/168938-why-is-the-market-going-up-when-jobs-are-going-down?source=email

ryanclarke said something that is possibly true, but really frightening...

There will be no long term recovery in S&P 500 earnings when the U.S. economy is based on a transportation model that requires gasoline to be under $3 gallon. If the Fed leaves the easy money policy in place ... the money will just get burned away in someone's gas tank. Let me be clear: The next bubble will be one that doesn't help the U.S. consumer ( unlike the tech and housing bubbles ) but brings about inflation without end ... and next summer will be too late for the Fed chief to do anything about $5 gallon gasoline.

But, the world of currency exchanges and deficits is not nearly as simple as the anti-free-traders would have you believe.

http://seekingalpha.com/article/168911-here-s-why-asia-must-eventually-ditch-the-dollar?source=email

From Crocodillian:

The PRC leadership has shown zero interest in losing control over their own currency. Being a reserve currency means that massive amounts are held by foreign central banks, and these foreign banks have an associated power.

The Chinese Communists will eventually run up against the problem of either losing control and having greater economic prosperity or clamping down and having less. Maybe that is exactly what Nixon had in mind.

The reason we are dealing with unemployment right now has little to do with demographics... it is because of the massive fraud perpetuated by the banking industry, Wall Street, the government, and the real estate industry (including appraisers).

There are two separate issues here. One is the current crisis, which has hit many other nations harder than the US. The other is the endemic situation, which has more to do with things like trade imbalances and demographics. Many people want to come to the US because things are much worse in their country. Some of those have returned home now that things are not so good here. But, a few weeks ago I hired a couple of Mexicans to help with some yard work. The one who spoke English had a US driver's license, so I asked how long he's been here. About thirty years... he hardly looked older than thirty to me... and he's married to an American Indian. I asked if he ever thought about going back. No way! He'd rather be here doing day labor. (Mexican unemployment was really low the last time I checked... something like 3 percent.)

Employment. I live in Stark County, OH. September of 2009 our UNemployment rate was 11%. In Sep 2008 it was about 6.7%. These were the two highest numbers for the past 10 years.

In 2000 we had about 187,000 jobs in the county. Now we have 165,500. (This is non farm employment.)

About 4 years ago the Hoover HQ & plant moved out of town and Timken Steel layed off a bunch of people right on the heels of Hoover shutting down.

This is not helping me sell my house! To whom do I b***h, besides this forum?

Edd Gillespie wrote:Tell you what Tel. If employment = being able to sell your house, I think you are going to be waiting 4 or 5 years or more.

Is that what you voted, Edd?

http://appraisers.freeforums.org/how-long-will-it-be-please-vote-t4235.html?hilit=%20vote

Note: if you now believe 5 years, then you vote, as of December 2008 would be six to ten.

You can change your vote at any time. (That way we can all be right in the end.) The question is, how long will it take from the date of post (December 2008).

Let's all cheer for NAFTA. Who started that mess any way? Besides a good 5 cent cigar, this country needs some more jobs outsourced overseas, there must be too much work for us to get it all done. Geez, with the communications we have set up today, why do we need teachers in schools. Let the kids sit in front of a TV and watch somebody from India teach math. Think how much money we can save in our schools.

Arghhhhhhhhhhhh.

I believe that international commerce will be a fact of life regardless of whether we are proactive and have agreements like NAFTA. The Internet and modern shipping have changed the paradigm. For a company it is about making the best profit for their stockholders. Some companies, early on, discovered that it was better and cheaper to make the product here than to make it in Mexico and have to fix it when it gets here. Some changes in management and manufacturing technology have changed that to some degree and now manufacturing plants there have fewer defects than before. This is nothing new. At the turn of the century there were textile mills all along the Eastern Seaboard... try to find a piece of cloth that was made in the US after 1950. (Before the turn of the century it was made in England.)

Contrary to the opinion of the UAW, we have to learn to compete on an international basis. If something can be done better and cheaper somewhere else, then we must do what we can do better and sell them our product and buy from them theirs. There is no question, however that things have gotten out of hand... trade deficits are not a good thing. I remember reading in the mid-1980's in the Federal Register about Chinese clinker (concrete) being dumped on the US market at below cost. The government at the time dealt with the issue and so we still manufacture concrete here. It's like any other deal, you have to watch your trading partners and be sure you are getting a good deal. And, like most other things, the government has not done a very good job of it.