All The Usual Caveats Apply

But Trump’s first month of employment numbers are pretty darn good.

“GREAT AGAIN: +235,000,” Trump posted on his Twitter account in a retweet of a Drudge Report headline on Friday minutes after the Bureau of Labor Statistics released payrolls data for February showing the U.S. added a net 235,000 jobs during the month.

Gary Cohn, the former Goldman Sachs Group Inc. president who’s now director of the National Economic Council, used the report as validation of Trump’s approach to bolstering the economy, which has included bringing in corporate executives to the White House to press them for hiring commitments and publicly scolding companies over plans to move production abroad.

Like I said, all caveats apply; there are a lot of people out there out of work and off the grid, vis a vis the Bureau of Labor Statistics top-line unemployment nmbers.

But the stats show a rise in pay – which has been fairly absent from Obama’s “recovery” so far.  There is a long way to go, and one month of good news isnt’ “Morning in America” just yet.

My personal jury is still out.  But it’s not a bad start.

76 thoughts on “All The Usual Caveats Apply

  1. @Emery Incognito They need to let the insurance companies price risk on individual plans / people and then if that person needs a subsidy it’s done out of the treasury not your premiums.

    If we had a ***pure private*** system for decades people would own premium increase insurance like a whole life policy.

    We are where we are.

  2. All of you guys are smarter than me.

    All of you guys are better writers than me.

    So have at it.

    What is an economy? It’s everyone doing what everyone needs and wants do for each other. What else is it? You tell me.

    Woodrow Wilson legalized Keynesianism, otherwise known as inflationism http://bit.ly/2nhoK7F Now we get asset bubbles and CPI inflation. It was impossible before that. The Fed caused 1929 and then we got the New Deal.

    Why do people need welfare, unemployment, Medicare, and Social Security? Inflationist Keynesianism. This is why people vote for statist inflationism and Democrats.

    Watch this video http://bit.ly/2lOJQx9 Where is he wrong?

  3. Now we get asset bubbles and CPI inflation. It was impossible before that.
    In Wealth of Nations, Adam Smith devoted chapters to asst bubbles and CPI inflation (and deflation). Smith wrote in the 1780’s.
    The Roman Empire went through inflation spirals.
    Asset bubbles can be result of debt, even if the debt is tabulated in gold coins. Inflation is too much money chasing too few goods. This can happen even if your currency is gold bullion.
    The people who tell you that gold is the answer to our economic woes tend to be gold brokers, who take a fee whenever gold changes hands.

  4. I’ve been reading apologists for anti-usury laws. It’s interesting; the idea is that loaning money should be considered an investment. You lend idle capital to enterprises in return for a share of the revenue that the lent capital produces. If the borrower can’t demonstrate how your capital will make you both money, the loan is not made.
    You could never borrow money to a gambler, for example, because the return on gambling is < 1.0.
    In theory, if a person is starving, needs money to live, and can't guarantee you a return, he could not be borrowed money. In the Medieval world, when there were laws against borrowing money at interest, this problem was supposed to be taken care of with charity.
    BTW, people did borrow money from usurers in Medieval times. The interest rates under the Plantagenets were ruinous, ten to twenty percent each month. I'm not sure why.

  5. Didn’t the Roman Empire shave coins? That IS NOT a harder monetary standard.

    The point is, when you are on an honest, hard monetary standard their is a very firm limit to how bad actual asset bubbles can get. You can still have busts and misallocations of capital for other reasons, of course.

  6. Just to be clear, you don’t have to be on gold to have a harder monetary standard there are other ways to do it. A basket of 10 commodities for example. I’m not against central banking completely, but it’s not easy to get it right.

  7. TFS-
    There is a conflict between money as a store of value and money as a medium of exchange. During most of history, economies were constrained by a lack of coinage. Some economists believe that the coin shaving and the adulteration of silver coins in medieval and Roman times was a good thing, because it increased the number of coins in circulation.
    There is nothing magic about gold. Basing a currency on any commodity will have the effect of limiting the supply of money. Kilowatt hours of energy is better than gold, I think, because kWh can be converted to work 🙂

  8. I am not an expert on this but part of gold’s supremacy as money was the fact that the amount mined has matched population growth for centuries.

    I think the issue is***in the short run***it makes the economy more volatile than what is ideal. The problem is the better systems are run by —wait for it—PEOPLE.

    Jim Grant says a gold standard with a fractional reserve banking system is one that flexes just enough. I’m not going to get into a big argument about it except to say “harder” standards are far more humane and fair.

  9. TFS, I know that conservatives tend to condemn John Maynard Keynes. Most conservatives haven’t actually read Keynes (neither have most liberals who support keynesian economic policies).
    FWIW, here is the monograph that launched Kenes career, The Economic Consequences of the Peace (1919): http://lf-oll.s3.amazonaws.com/titles/303/0550_Bk.pdf
    Keynes uses the paper to argue that World War One has fundamentally changed the relationship between the state and other economic actors (firms and individuals). Keynes praises Victorian cultural institutions for producing incredible economic growth in the 19th century by promoting work, saving, and by making the family and churches the agents of social welfare, but he notes that the actions taken by the state to achieve victory in the World War have weakened or destroyed those institutions. The state was the only institution that could credibly replace them.
    I think that Keynes is outdated. Even keynesians like Krugman don’t really follow the principles Keynes laid out — other than state management of the economy.
    It’s not long and it is worth a read.

  10. Right. The fact is, central banking is a tool of war and geopolitical force. It’s very, very tricky for ONE country, much less a geopolitical power to switch to a humane, fair, harder monetary standard. Plus it enables Ruling Class theft, and keeps the populace stupid and dependent.

    The second the USSR fell and NAFTA was enacted and China opened up, ALL of the Western powers should have switched to a much harder standard and concentrated on paying off their Medicare, SS etc.

    Central planning is a real bitch anfd we are going to find that out the hard way.

  11. Conservatism can’t create a disbursed prosperity in this regime but Democrat policies just speed up the implosion and sociological issues. People have no idea.

  12. The global monetary system is going to get overhauled. The question is, ***if or how badly*** the USA loses it’s comprehensive hegemony over everything.

  13. The GOP hates David Stockman and David Stockman hates the GOP, but they really need a special projects devision to dissect what he is saying about this stuff. We need people in congress, state legislatures, and on Hate Radio, that are ready to adapt and lead as this crap unfolds. Thank god for Jason Lewis.

  14. Murray Rothbard was insane, but his world is way better than the one we have now. That is just reality.

  15. I am not an expert on this but part of gold’s supremacy as money was the fact that the amount mined has matched population growth for centuries.

    Not any more, so the concept of hard money is fatally flawed. Look what happened to crude oil. Shale gas revolution completely rewrote petrodollar economics – OPEC no longer sets the top, they can only affect the bottom price.

    What happens when (not if) someone finds a new way to mine/make (yes, alchemy is alive and well and making progress) more gold?

    I don’t have an answer, but “gold standard” is not a panacea.

  16. @justplainangry It HAS to be “harder”. That’s all.

    The last 100 years of the Fed devaluing the dollar only “worked” due to some unique geopolitical factors and a mostly slower growth in technology.

    What this did is grow the crap out of government and create an economy that is based on credit growth at ANY cost. ***Now the debt to GDP is rolling over***

    This is because they are trying to create inflation (because we have too much debt already, because government will never shirink) into NAFTA, China opening up and robots etc. etc. that are suppressing wags. It is killing the middle class and the poor and IT WILL COLLAPSE.

    A gold standard the whole time would have prevented this mess. That is just a fact.

  17. Living under an inflationary economy requires a ton of central planning and government graft basically.

    The natural way is to live with a slight deflation and a smaller government.

  18. Regarding gold as a store of value, the Romans did corrupt their coins, and that’s why a lot of coins have machined edges–it showed that the center was not a base metal like lead or copper. The one big diversion in the value of gold over the years that I can think of is when American gold mines were opened up by the Spanish–they experienced ruinous inflation because the supply of gold opened up far more quickly than did productivity. Theoretically, it’s possible for that to happen again if huge new deposits are located, or if someone figures out how to do it a lot cheaper.

    Geologists might argue that this is unlikely, since we’ve got a pretty good idea of how gold and its ores interact with chemicals, and also because we’ve mapped out an awful lot of the planet. But it’s possible. Bankers would also point out that banking-led partial reserve monetary expansion is generally far more volatile than are technological realities.

    All that noted, I dare suggest that there is a lot of pent-up productivity that can be released to greatly increase the size of the economy without unleashing ruinous inflation–too many guys have been on the sidelines for years, and if they rejoin the game, it’s a big boost to both supply and demand curves. Market clearing prices might be fairly insensitive to the joint effect.

  19. “Bankers would also point out that banking-led partial reserve monetary expansion is generally far more volatile than are technological realities.”

    I have covered this already. It’s an issue.

    Once the cold war was over and trade opened up they should have run with less inflation. Instead they gave us the Boskin Commission.

    The debt to GDP trajectory and the Founder’s vision of disbursed prosperity is going to go back to normal the hard way. That is what is going to happen.

  20. Geologists might argue that this is unlikely

    Same geologists (well, not same same, I am sure) were saying 20 years ago there would be a shortage of crude right about now. Just saying.

  21. JPA; correct, but in the geologists’ defense, the units they were using are “economically recoverable reserves.” That number is far different at $10/barrel than it is at $200/barrel. The same applies to gold, really, and is why a commodity monetary standard is such a good idea. There is a lot more gold that can be recovered at $10,000/ounce than at $35/ounce, and hence the value of an ounce of gold has been, since Roman times, about the value of a good quality suit of clothes for a man.

    Could change if someone figures out how to “frack” for gold or some such thing, but I’ve got reasonable confidence that’s not in the cards.

  22. Could change if someone figures out how to “frack” for gold or some such thing, but I’ve got reasonable confidence that’s not in the cards.

    You are forgetting alchemy. It is not as far fetched today as it was 2000 years ago. Direction of time is about the only constant (until it is not), everything else has changed, and will change.

  23. Oh, and don’t misunderstand me, I am all for a standard other than fiat money. And gold does fit the need in today’s world, but what about the future? I, personally, would like to see something more robust.

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