Job Growth

[Akaran_D]

Article is being a pain to cut and paste, but short story:

http://money.cnn.com/2004/11/05/news/ec ... tm?cnn=yes

October: up by 337,000 jobs, unemployment rate up to 5.5% from 5.4%.
Expected job growth was only 137,000.

[Deward]

They fail to figure in the fact that unemployment only counts those people actually looking for a job. Those people who used up their unemployment benefits and are still unemployed are not counted. I estimate the unemployment rate to be closer to 8% if not higher.

[Voronwë]

its good that jobs are up, no doubt.

Heritage Foundation obviously pumping this (conservative think tank) saying things like "in the face of uncertainty (high oil, election, etc), solid growth". And there is some truth to that.

A lot of hiring has been in response to Hurricane rebuilding efforts in Florida as well as some seasonal hiring in the retail sector.

Regardless, its a good thing.

[Deward]

A few good disasters are great for the economy. The earthquake in CA singlehandedly broke teh country out of a recession if I remember right.

[Winnow]

Stock market is rising, jobs rising, price of oil is dropping...thank the god of your choosing or no god at all for George W. Bush!

PS. If Kerry was elected the exact same thing would have happened but the liberals would be screaming at the top of their lungs at how great Kerry was and that reason for the climb was that the people were happy to see Bush go. Sorry Charlie.

ppss: The stock market always goes up after an election for a little while.

[Marbus]

<shocker> Agree Winnow, except for the Thank GWB part but I think you are right in that the Dems or Rep would both say "Yea for my canidate!"

Marb

[Aslanna]

Of course the stock market went up. Big business has their King for another 4 years. Even Indians are happy!

http://www.nytimes.com/2004/11/04/busin ... ource.html

An Industry in India Cheers Bush's Victory

ANGALORE, India, Nov. 3 - India's outsourcing companies were jubilant Wednesday that the elections in the United States will return President Bush to office.

"This is great news for the offshoring industry," said Nandan M. Nilekani, chief executive of Infosys Technologies, a software services company. The trend toward outsourcing will now become even more inexorable, Mr. Nilekani said.

Offshore outsourcing, or the moving of work from the United States to low-cost centers like India, was an issue in the presidential election. The Democratic candidate, Senator John Kerry, blamed Mr. Bush and outsourcing for the loss of thousands of American jobs.

Mr. Bush, in contrast, was largely silent on the issue. But members of his team, among them N. Gregory Mankiw, the chief economic adviser, and Treasury Secretary John W. Snow, have both defended outsourcing as another form of free trade.

Mr. Kerry referred to ''Benedict Arnold companies and C.E.O.'s'' that sent jobs overseas. He promised that as president he would end tax deferrals for companies that send work abroad.

The tone of some campaign comments criticizing outsourcing was noted with some concern in India. The Times of India, the country's leading newspaper, called outsourcing the "swear word" of the 2004 elections. Thousands of workers in India's technology centers like Bangalore and Hyderabad closely followed the campaign. India's outsourcing industry employs over 800,000.

For more than a decade now, leading Indian outsourcing companies like Infosys Technologies and Wipro have written software applications and done back-office work for top American corporations including General Electric and Citigroup. The work can be done more cheaply here, where skilled labor is inexpensive and plentiful. The leading outsourcing companies earn as much as two-thirds of their revenue from customers from the United States.

India's software and back-office services industry posted $12.5 billion in export revenues in the year ended in March, a 30 percent rise over the previous year as global demand for its services grew.

News that Mr. Kerry had conceded the election to Mr. Bush was greeted with joy in the industry. "We are very happy that Bush is back," said Kiran S. Karnik, president of the industry group Nasscom, or National Association of Software and Service Companies.

"The president's track record has been of recognizing the advantages of free trade," Mr. Karnik said.

Mr. Bush's re-election will bring out the latent demand for outsourcing and lead to more offshoring announcements by companies, he said.

"Some corporations have been cautious about signing or announcing deals in the last few months," he said, adding, "Now they will no longer hold back."

Some executives said that offshoring would grow at even steeper rates with Mr. Bush's victory.

"The elections are over and so is the rhetoric; it will be easier for American corporations to step out with their outsourcing plans," said Vivek Paul, the vice chairman of Wipro, who works in Mountain View, Calif. The company itself is based in Bangalore.

In spite of some strong American sentiment against offshoring, Indian outsourcing companies have been growing robustly recently. In the quarter that ended in September, Infosys Technologies announced a 49 percent rise in profit, and added more than 5,000 employees. Its rival Wipro had a 65 percent increase in quarterly profit, and hired 5,500 more workers.

Early on Wednesday, news of Mr. Bush's likely re-election also buoyed India's stock market. The bellwether Sensex index in Mumbai ended up 1.53 percent, at 5,842.54 points.

Some experts said that Mr. Bush's return to the White House augured well not just for India's technology industry but also for trade relations between India and the United States.

"The results mean that it is less likely that either the Congress or the administration will interfere in the growing and mutually beneficial trade relations between the two countries," said Daniel T. Griswold, director of the Center for Trade Policy Studies at the Cato Institute in Washington.

Mr. Bush's victory also proved that Mr. Kerry's anti-outsourcing position did not resonate with voters, Mr. Griswold said. "The talk about Benedict Arnold C.E.O.'s and traitors of the country, that rhetoric is finally dead," he said.

[Voronwë]

nobody should get a hard on for the market. we still arent at the levels we were at in January....and the outcome of the election wouldnt have changed that.

One thing that may buoy the market is if SS gets privatized, that will be a huge boon to financial services industry. They will rake so much in commissions it will be sick. So if that legislation does ever go through, then buy that sector =)

[Tenuvil]

One thing that may buoy the market is if SS gets privatized, that will be a huge boon to financial services industry

is this a possibility?

[Winnow]

nobody should get a hard on for the market. we still arent at the levels we were at in January....and the outcome of the election wouldnt have changed that.

One thing that may buoy the market is if SS gets privatized, that will be a huge boon to financial services industry. They will rake so much in commissions it will be sick. So if that legislation does ever go through, then buy that sector =)

pssst!

Blue SS Fund loves Anacot Steel

[Chmee]

A few good disasters are great for the economy. The earthquake in CA singlehandedly broke teh country out of a recession if I remember right.

This is wrong. This is what is known as the broken window fallacy as made famous by Bastiat. Having bunches of capital randomly destroyed is not good for the economy.


For a couple critiques ...

http://www.knowledgeproblem.com/archives/000950.html

In an article so absurd that you really ought to read it for yourself, see the story from USA Today: "Economic Growth from Hurricanes Could Outweigh Costs."

It is so incredible that I am almost left speechless.

Of course, no one expects a USA Today reporter writing about the weather to have training in economics, but she quotes people who by corporate affiliation and title a reader would suspect they have economic training. And then these people say things about all the damage suffered in Florida and throughout the southeastern United States like, "It's a perverse thing ... there's real pain, but from an economic point of view, it is a plus."

No, no, no, no, no, no, no, no, no, a thousand times no. Destruction of real economic resources is not, from an economic point of view, a plus. Actually, destruction of resources is bad for people, and they are made worse off, which from an economic point of view, it is a "minus."

Or, as Frederic Bastiat put it in his essay, "What Is Seen and What Is Not Seen":

To break, to destroy, to dissipate is not to encourage national employment, or more briefly: Destruction is not profitable.

If you read the USA Today story and the Bastiat essay, and you still believe the USA Today story, then I'll make the following offer: If you live in the Washington, D.C. area and grant me your permission, I will be happy to break one window of your home or automobile, your choice. (You must prove that you own the home or vehicle and accept all liability for damage to the window, and sign a waiver to that effect. I will sign a statement giving you full personal credit for any net stimulus to the economy caused by the broken window.)

The Bastiat story mentioned in the quote abover here is found at this link http://www.econlib.org/library/Bastiat/BasEss1.html



also


http://www.marginalrevolution.com/margi ... aq_to.html

Bombing Iraq to Prosperity
The actual headline is no less absurd: "Economic Growth from Hurricanes Could Outweigh Costs". The story is here, courtesy of USA Today.

The body of the story is worse:

Although natural disasters spread destruction and economic pain to a wide variety of businesses, for some, it can mean a burst in activity and revenue.
For that reason, economists tallying the numbers expect the hurricanes will be neutral in their effect on the U.S. economy, or may even give it a slight boost, particularly because of an expected reconstruction boom in the already red-hot construction industry.

Or how about this?

Cochrane estimates that in Florida, the state hit hardest by the storms, 20,000 jobs will be created that otherwise would not have been. Two-thirds of those jobs will be in construction. The rest will be in areas including utilities, retailing, insurance and business services. Another 2,500 jobs will likely be added in Mobile, Ala., according to Economy.com.


Economic consulting firm Global Insight estimates the hurricanes at most will shave two-tenths of a percentage point off gross domestic product, the broadest gauge of U.S. economic activity, in the third or fourth quarters. That will be offset by reconstruction activity.

I would not have dared this as satire. Nor is it presented as a sophisticated critique of national income accounting, which in fact does treat such expenditures as productive. Will it next be suggested that excess productivity is our main economic problem?