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Fintan
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Joined: 18 Jan 2006
Posts: 4103
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 Posted: Mon Jun 07, 2010 6:01 pm Post subject: |
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Well the Chinese would rather let the Yuan slip
against the Euro/Dollar rather than raise it!
In order to protect their exports. the problem is
that China manufacturing often operates on profit
margins of 1% or 2% --so there's not a lot of room
there for maneuver.
Meanwhile this Monday the DOW slipped -115 to 9,816
--waving goodbye to 10,000 as it did so.
Not a full-blown Black Monday, but dire nonetheless.
Looking like a slow bleed right now.
Also meanwhile more indications that the old coalitions
of the NWO are now paddling their own canoes and
no longer interested or capable of collective intent:
| Quote: | G-20 Clash Over Recovery Risks ’Sub-Potential’ Growth
By Simon Kennedy and Mark Deen
June 7 (Bloomberg) -- Global policy makers are starting to clash over their individual prescriptions for recovery as Europe demands lower budget deficits while the U.S. warns against pushing exports instead of domestic demand.
At a meeting of Group of 20 finance chiefs in Busan, South Korea, June 4-5, Treasury Secretary Timothy F. Geithner said the world cannot again bank on the cash-strapped U.S. consumer to drive growth and urged other nations to stimulate their own demand. European Central Bank President Jean-Claude Trichet said fiscal tightening in “old industrialized economies” would aid the expansion by shoring up investor confidence.
Each strategy carries threats for the global rebound that the G-20 said faces “significant challenges.” Continued stimulus risks bondholder revolt over rising debt burdens, while spending cutbacks could worsen unemployment. Relying on exports leaves the world prone to trade wars and competitive currency devaluations as countries seek to give their companies an edge.....
More:
http://www.bloomberg.com/apps/news?pid=20601087&sid=ajCu8.BfseQE&pos=1 |
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MichaelC
Joined: 06 Jul 2006
Posts: 1855
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| Posted: Sun Jun 13, 2010 11:15 am Post subject: |
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Not bad for someone who never worked a day in his life:
http://www.telegraph.co.uk/property/propertynews/7822976/Blairs-property-portfolio-reaches-14-million.html |
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Fintan
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| Posted: Fri Jul 02, 2010 6:16 pm Post subject: |
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Time to wake up and smell the coffee.
This particular pot has been brewed by Karl Denninger:
| Quote: | The Clock Is Running (Out)
Oh boy.....
| Quote: | | Debra Rousey of Gainesville, Georgia, says that she received an unemployment check of $194 last week, half the usual amount she receives, along with a letter announcing that this check would be her last. She is now in a complete panic over what to do next. |
Welcome to a thing called "reality."
| Quote: | | "I'm desperate and devastated," she told HuffPost. "I didn't get any warning. I was barely making ends meet on $330 a week, trying to diaper my grandchild and put food on the table for the four people I support. What do I do now? How am I going to make rent next month? I keep thinking, 'If I end up in a cardboard box, can I find one big enough for everybody, or do I have to send my son to live with someone else?'" |
Ok, let's think here. Four people you support? One is a grandchild (where's Dad - if not Mom?); who are the other three?
| Quote: | | Since Rousey, 45, was laid off from her job as a branch manager for Suntrust bank in November, she says she has been "frantically looking" for a job -- everything from entry-level marketing positions to a fry cook job at McDonalds -- but hasn't had an interview in months. As of tomorrow, she will be one of nearly 1.7 million people whose unemployment benefits have prematurely expired while Congress sits on legislation that would renew those benefits. |
How long did you have that job and how much did you save of your income during that time? Little - or zero? It sounds like it. This situation, incidentally, is why that's a bad idea.
| Quote: | | Rousey is currently pursuing a master's degree in adult education through an online program, and her son, 17, and her 25-year-old daughter are also full-time students. She said all three of them are desperate for work. |
How is the school being paid for? And the 25-year old - how long has she been in school?
| Quote: | | "They cut off my Internet and cable about five minutes ago, and my landlord is already calling," she said. "I don't have time to wait for Congress to extend these benefits. I'm drowning fast." |
Oh, I see. And in November, when you lost your job, the Internet and Cable (which is likely $100 a month or so) was not something you cut off proactively to conserve funds? Why not?
Got a cell phone? What's the monthly nut on that?
Diapers are expensive in packages. Cloth ones are cheaper. Yes, they're less convenient - a lot less convenient. I remember buying the packages of Pampers for my daughter. If I had been broke, cloth it would be.
What's your electric bill? Did the AC get cut off in November too, or has it been blasting away all spring and summer? Was your heat set at "Jimmy Carter" levels over the winter months, or was it a nice toasty 72F inside?
November -> June is six months during which the standard 26 weeks of unemployment (that you do pay into via taxes and premiums that are assessed on your employer) ran.
The rest is a handout.
Over those six months this individual appears to have made no adjustments of materiality to compensate for the fact that she lost her income. Now she's in a panic and is looking for someone to blame.
Notice that nowhere in that article is even the first hint of accepting responsibility for not cutting back on significant discretionary purchases when the job was lost and attempting to stretch every dollar as far as it could possibly go.
I empathize with this woman's dilemma, but here's the problem: We (the government, the people) don't have the money to keep doing this.
Yes, I also recognize that we squandered an awful lot of money, but those funds are gone. Take it out on whoever you'd like for those acts. I did my level damndest to stop it, and failed. We gave money to GM, we gave money to Chrysler, we gave money to AIG, we gave money to foreign banks. Both republican and democrat administrations did this, including President Barack Obama who, I remind everyone voted for TARP along with a number of other pork-laden bills.
Nearly three years ago I recommended that the government fund and put aside $200 billion in actual cash to provide emergency shelter and food for up to 25% of the population for as long as 12-24 months. I was entirely serious, although I'm sure that many Congressmen and women who got my faxed letter perceived me to be absolutely insane. My recommendation was to be prepared to provide "three hots and a cot" on closed military bases or unused parts of active facilities for this purpose. These would not be "luxury accommodations" or even trailers - we're talking literally "three hots, a cot, hot water to shower with and flush toilets." That's all.
The simple fact of the matter is that huge swaths of America literally have saved nothing. They have been goaded into borrowing amounts that in some cases exceed their annual earnings. Most of these people are literally one hiccup in their income stream away from utter destitution.
Yes, much of it (if not all of it) is their own fault. They have saved nothing. They run $100 cable TV and Internet bills, and another $100 for "smart" cellphone service - each and every month. They have their financed car(s) on which they must maintain full coverage insurance (instead of a "moving jalopy" that is paid for, worth little, and on which one only needs liability insurance at 1/4 the cost.) They're entitled to a 75 degree house in the winter or summer, even if it generates a $300 electric bill. They believe they're entitled to student loans to go to college (instead of refusing to attend until the colleges get costs in check) further damaging their economic futures.
This state of affairs did not come about in an afternoon and it can't be fixed in one either. We cannot allow people to starve, but we also cannot continue to fund handouts as we have. The money simply is not there.
We need to figure out how to live in a nation with a forty percent smaller GDP than we now have. Yes, 40%. That means you, I, everyone else. The "living large" game is over. All Ponzi Schemes ultimately collapse - they do not go quietly into the night. The collapse is brutal, it's quick, it's efficient and it's devastating to anyone caught in it.
Every time.
These are facts, not fantasies.
If you are not prepared today, you need to become so by tomorrow.
Incidentally, yesterday would have been better.
There are some things we can do to help though, and they don't cost much money at all.
One of them is to kick out the 20 million+ illegal invaders who are consuming resources of all sorts - including taking jobs that Americans could be doing. The non-institutional working-age population (of legal residents and citizens) has gone from 230.6 million in 2007 to 237.5 million now. The number employed has gone from 144.2 million to 139.5. That's 11.5 million citizens out of work but ready, willing and able.
So tell me why we have 20 million illegal invaders in our nation again? Sure, some of them have jobs. But every one of those jobs is one that an American could be doing. It is an outrage that we allow our nation to be overrun with illegal Mexican invaders while our citizens are out of work and days or weeks away from being evicted and living under a highway overpass.
People tell me we can't deport 'em all. My retort is that we don't have to. Drive a bus with armed security to every chicken plant and strawberry field in America. Pick 'em up, fingerprint 'em electronically, bus 'em to the border. Make clear that if they get caught again in the United States they'll do five years at hard labor, no possibility of early release, before being deported again. Third time, 10 years. And so on.
It'll be a week before they all leave on their own, except the gang bangers, of which there are many. Those we'll have to actually go round up the hard way.
There's your employment problem.
Who was it that gave a speech yesterday exhorting us to "understand" all those illegal invaders in our country, let them keep the jobs that Americans could be doing, and not kick them out again?
That would be President Obama, I think.....
Hmmm...
http://market-ticker.org/archives/2469-The-Clock-Is-Running-Out.html |
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Fintan
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| Posted: Fri Jul 02, 2010 6:29 pm Post subject: |
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Have some more coffee!
It'll really wake you up.
Denninger again:
| Quote: | Our Douchebag Government
Here's reality folks: We've written checks for 30 years with our political mouths we cannot cash with our producing fingers. We've papered over this with fraud in virtually every nook and cranny of public and private life.
We have allowed producers to depart for lands where effective slavery exists for labor, refusing to enact parity tariffs to put a stop to it. We have allowed blatant and outrageous theft of our producers' intellectual property and conferred upon these nations "most-favored nation" trading status. We have blown serial bubbles in the stock and housing markets and would love to blow another one in "carbon trading", but all three were and are frauds without foundation in reality - or sustainability.
There is no "lack of clarity" in the economy. What has been done is transparent to anyone who cares to look. The Federal Debt picture is published each and every day and it is clear, convincing, and irrefutable. The same bluff was run in both Iceland and Greece, and got called twice by the market. Europe has recognized this and has pledged to stop playing Ponzi (whether they'll actually do it until cities burn at the hand of angry mobs is another matter, but at least they're claiming intent.) We, on the other hand, keep pressing for more and more Ponzi.
I don't care if people want to talk about austerity - and implement it - or not. I don't care if people want cradle-to-grave medical care with the "best" we can offer. I don't care if people want to be able to have $100/month cell phones while unemployed, or 99 weeks of unemployment so they don't have to save for their own tough times, or $40,000 annual tuition and fee costs at universities to learn about "woman's studies" or "primary education."
None of what I want, you want, or the government wants has a thing to do with the mathematics of the situation we have before us today and the instabilities we built into the economy over the last 30 years.
In 2000 we had to accept a 10% contraction in GDP, along with a reduction in debt levels in the system to 150-175% of GDP, to get back to some reasonable resemblance of parity.
In 2007 the contraction we had to accept was 20%.
Today, it's approaching forty percent, and the commensurate reduction in debt in the system - in total - is about 60%.
This means the federal government must shrink in size by that same 60%.
As I said a couple of weeks ago, get the BBQ sauce and pick several sacred cows, because we must size the Federal Government to roughly 15% of a $10 trillion economy, or $1.5 trillion in total. Here's the pie chart you need to reduce by sixty percent:
Go ahead and tell me how you're going to do it. Or tell me, if you wish, that you're NOT going to do it, and then extrapolate to how long our creditors will permit that situation to persist, because it is not under our control - it is under theirs.
We are in the beginning stages of a global asset market collapse.
When did the stock market take off? At the same time the debt Ponzi took off. The debt Ponzi is now collapsing. What's going to keep the stock market from losing all of the "gains" it put on during those years? Yes, all the way back to early 1980s levels.
Go ahead - make the case that it won't happen when the leverage capacity disappears - and it is disappearing. The "establishment" folks know damn well this is in the cards, which is why they're scrambling to lie, lie and lie some more lest you figure it out and hold them to account. They're well-aware that while most of the time the "elites" manage to do just fine there are historical exceptions when extreme imbalances are cranked too far and the arrogance of the elites continues beyond all reason. Hold a seance and ask Marie Antionette's ghost about the consequences of such actions and how quickly they can appear.
What you saw in 2008 was the opening act. 2009 and early 2010 was the intermission - the eye of the hurricane when everyone came outside and marveled at the pretty blue sky.
The back half of this Cat 5 storm is far worse as instead of an offshore wind this time we'll get the onshore wind and a 30' high storm surge. The wind is starting to pick up.
We either act right now or our choices will be made for us.
Now go watch the pretty Fireworks over the 4th of July weekend - and consider what it's going to feel like when those start going off in your face in the coming weeks and months.
"Here it comes"
http://market-ticker.org/archives/2471-Our-Douchebag-Government-Midyear-Debt-Update.html |
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MichaelC
Joined: 06 Jul 2006
Posts: 1855
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| Posted: Sat Jul 03, 2010 4:53 am Post subject: |
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The reason that 'unemployment' is so high here in Spain - and elsewhere in Europe - is because unemployment payments seem to go on practically forever.
Although the 'official' unemployment is 20%, in reality only about 2% are actually unable to find work.
Most who are 'unemployed' or 'disabled' collect government benefits while working 'black' - a European tradition!
Last edited by MichaelC on Sat Jul 03, 2010 1:57 pm; edited 1 time in total |
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duane
Joined: 07 Mar 2007
Posts: 511
Location: western pennsylvania
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| Posted: Sat Jul 03, 2010 8:19 am Post subject: |
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http://finance.yahoo.com/tech-ticker/article/514505/Howard-Davidowitz:-U.S.-Economy-%22Is-a-Complete-Disaster%22
Howard Davidowitz: U.S. Economy "Is a Complete Disaster"
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dragonfly
Joined: 02 Feb 2007
Posts: 13
Location: Driftwood, Texas
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| Posted: Sat Jul 03, 2010 7:32 pm Post subject: Denninger |
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hey Fintan - just a cautionary heads up from one who's been reading Denninger for a long time. It may be the case that he's an incendiary device if you know what I mean. He's got a vituperative style that's easy to fall prey to and I suspect that he's a pitch-man for those who need something a bit more cerebral than Glen Beck or the host of pit-bull radio whackos. The thing that got me wondering was when he linked to Hal Turner sometime prior to Hal being outed as an FBI stooge. Just because he's doing what I'd call a "limited hang-out on steroids" does not a truthful person make. Yes, there's the 'any port in a storm' argument and 'enemy of my enemy' thing but his rabble-rousing leaves something to be desired, especially when his target changes from the big, bad banks to the little common jane with nary a skip. He could just be a highly testosteroned guy who needs to lash out and position himself as the epitomy of rational and patriotic behavior at the expense of anyone who can't do the math but I'm kind of doubting that as time goes on. Just my take, adios, dragonfly.
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Fintan
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Joined: 18 Jan 2006
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| Posted: Sun Jul 04, 2010 8:07 pm Post subject: |
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| Quote: | | He's got a vituperative style that's easy to fall prey to.... |
Actually I find that style of Denninger's (in video) quite off-putting.
Easy on the sarcasm and heavy on the facts would be better.
I'd rank him alongside Rick Santelli when it comes to the rant factor.
With similar question marks.
But I'm posting his material because, regardless of motivation,
the facts he's presenting are hard to argue with.
Yes, a bit unfair of him to rant against the "common Jane," but dude
a lot of people need a serious wake-up and need to engage with their
survival instinct.
While survival is still an option.
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Fintan
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| Posted: Thu Jul 08, 2010 7:22 pm Post subject: |
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Bill Still Interviews Karl Denninger
Karl's supply-side economics is right -on
but he is a bit of a financial absolutist.
1 to 1 leverage on credit is overkill and would
cause an instant depression if implemented.
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Last edited by Fintan on Thu Jul 08, 2010 9:36 pm; edited 1 time in total |
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duane
Joined: 07 Mar 2007
Posts: 511
Location: western pennsylvania
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| Posted: Thu Jul 08, 2010 9:34 pm Post subject: |
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the oil hasn't even hit the beaches yet
this does sound good but
maybe with LeBron going to the Heat this will change...
http://www.miamiherald.com/2010/06/30/1708422/realtytrac-40-percent-of-florida.html
40 percent of Florida homes sales are foreclosures
By KIMBERLY MILLER
Palm Beach Post
Sales of foreclosed homes in Florida made up nearly 40 percent of all purchases in the first part of this year, a ``terrifying'' statistic, one analyst said, and one that led to deeply discounted prices on distressed properties.
In Miami-Dade County, foreclosure sales made up nearly half -- 47 percent -- of all homes sales in the first five months of 2010, according to a new report from Irvine, Calif.-based RealtyTrac, which aims to measure foreclosure sales and their impact on home pricing. In Broward County, 46 percent of all homes sales involved distressed properties.
To compare, less than 1 percent of Florida home sales in 2005 were of foreclosed properties, RealtyTrac found.
The report, released Wednesday, defines foreclosure sales as those of homes that are bank owned or where the owners have defaulted on the mortgage and received at least one foreclosure notice.
``Forty percent is a significant number,'' said Michael Sichenzia, president of Dynamic Consulting Enterprises in Deerfield Beach. ``When you look at where it should be, it's a terrifying number in the short term and will reverberate throughout the whole system.''
Sichenzia said distressed property sales should make up about 2 percent of total sales.
By 2007, foreclosure sales grew to 4 percent of the total market in Florida. It rose to 38 percent last year.
Yet Florida didn't even make it into the top three states nationally for distressed property sales, and even showed a small decrease of 3 percent compared to the fourth quarter of 2009.
Coming in first was Nevada, where 64 percent of all sales were foreclosures. California and Arizona followed with 51 percent and 50 percent, respectively.
Nationally, foreclosed property sales during the first quarter made up 31 percent of all sales and had an average sales price of $171,971 -- 15 percent below that of regular sales.
Average sales prices for distressed properties in Miami-Dade County were $149,236 in May, reflecting a 33 percent discount compared to traditional sales. Those buying foreclosures in Broward paid an average of $127,258, a 21 percent discount compared to traditional sales.
Statewide, foreclosure sales were discounted 28 percent compared to regular sales.
Banks became more aggressive this year in taking over foreclosed properties as homeowners in trial loan modifications dropped out or were refused permanent payment reductions.
In May, 10,491 Floridians lost their homes to bank takeovers -- the final step in the foreclosure process. That was an 81 percent increase compared to May 2009, according to RealtyTrac.
Nationally, 93,777 homes were repossessed by banks in May.
``As lenders have begun repossessing homes at record levels over the first half of 2010, it will be interesting to watch how they will manage the inventory levels of distressed properties on the market in order to prevent more dramatic price deteriorations,'' said James Saccacio, chief executive officer of RealtyTrac.
Sichenzia said he doesn't believe there is a management plan, and that sales prices will continue to decrease.
``There is a lot of pain that needs to happen between now and the bottom,'' he said.
Miami Herald staff writer Toluse Olorunnipa contributed to this report.
The Miami Herald
Read more: http://www.miamiherald.com/2010/06/30/1708422/realtytrac-40-percent-of-florida.html#ixzz0t9FYRc6R
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Fintan
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| Posted: Thu Jul 08, 2010 9:43 pm Post subject: |
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Must see interview of journalist Teri Buhl by
Max Keiser -about Timothy Geithner, RICO
an imminent $1 Trillion Muni Bond default,
and the looming next financial crisis.
| Quote: | Another Financial Crisis Is Coming
Scroll player Slider to Interview at 13:00 minutes
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MichaelC
Joined: 06 Jul 2006
Posts: 1855
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| Posted: Fri Jul 09, 2010 4:05 am Post subject: |
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| The appeal of Florida real estate has always eluded me, but Europeans seem to be in love with it. |
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MichaelC
Joined: 06 Jul 2006
Posts: 1855
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| Posted: Fri Jul 09, 2010 4:23 am Post subject: |
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Just one more small reminder why no American should pay a penny in federal income taxes.
Ever.
http://www.nytimes.com/2010/07/09/health/research/09aids.html?_r=1&hpw |
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howg
Joined: 24 Mar 2006
Posts: 45
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| Posted: Fri Jul 09, 2010 10:27 pm Post subject: |
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| Fintan wrote: | But I'm posting his material because, regardless of motivation,
the facts he's presenting are hard to argue with.
Yes, a bit unfair of him to rant against the "common Jane," but dude
a lot of people need a serious wake-up and need to engage with their
survival instinct.
While survival is still an option. |
True... but the facts, and the general reaction to such,
are all within the current paradigm.
If we were to extend this logic, (as we do),
then the current move to "austerity" makes a lot of sense too.
Never mind that half (?) the country (i.e. the people of any country),
could have been bailed out for what was just handed over to
multi-trillionaires at virtually zero interest!
The problem with all of this is that austerity breeds depressions,
while growth just increases overall debt.
And nobody (in power) knows what to do about it,
despite the fact that we live in the most productive
time in human history, and there is really a surplus
of most goods and services, cost notwithstanding.
Also, if / when all the folks on welfare and unemployment insurance
are cut, their economies would contract even further.
I doubt any of these social programs were conceived with altruism in mind.
We have never come to terms with the industrial revolution,
and I doubt everyone is employable as a simple fact of life, (in the current system).
The only alternative would be to have about 20%+ (?) of the population
on the streets... if you call that an alternative.
Perhaps it's time our survival instincts should simply ignore the old rules completely... I dunno??
Of course, this would only work if a large enough mass of people were doing it, (whatever it is).
If not, then what is the alternative?
Just more of the same, I fear...over & over & over again.
Rather than discussing anachronistic solutions to insane political / social
structures, perhaps we could / should be discussing this from...
the next level?? 
On another note...
Re. Max, I always really liked the guy, but...
Max & Stacy News: “Truth About Markets: USA” Show Debuts on GCN June 26th
June 9th, 2010 by maxkeiser
Genesis Communications Network (GCN), home of the “Alex Jones Show” begins syndicating a new Max & Stacy “Truth About Markets: USA” show on June 26th. This new show will build on “TAM: London” and “TAM: New Zealand” bringing radio listeners the views and opinions of Max Keiser and Stacy Herbert. For 7 years, Max & Stacy have been recommending listeners to buy gold and to view the global markets as a corrupt racket run by bank and government insiders. |
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atm
Joined: 16 Apr 2006
Posts: 2750
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| Posted: Sat Jul 10, 2010 2:22 am Post subject: |
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A read worth mulling over.
| Quote: |
Catallactic Unemployment
Mises Daily: Friday, July 09, 2010 by Ludwig von Mises
http://mises.org/daily/4541
[This article is excerpted from chapter 20 of Human Action: The Scholar's Edition and is read by Jeff Riggenbach.]
"Unemployment in the unhampered market is always voluntary."
If a job seeker cannot obtain the position he prefers, he must look for another kind of job. If he cannot find an employer ready to pay him as much as he would like to earn, he must abate his pretensions. If he refuses, he will not get any job. He remains unemployed.
What causes unemployment is the fact that — contrary to the above-mentioned doctrine of the worker's inability to wait — those eager to earn wages can and do wait.
A job seeker who does not want to wait will always get a job in the unhampered market economy in which there is always unused capacity of natural resources and very often also unused capacity of produced factors of production.
It is only necessary for him either to reduce the amount of pay he is asking for or to alter his occupation or his place of work.
There were and still are people who work only for some time and then live for another period from the savings they have accumulated by working.
In countries in which the cultural state of the masses is low, it is often difficult to recruit workers who are ready to stay on the job.
The average man there is so callous and inert that he knows of no other use for his earnings than to buy some leisure time. He works only in order to remain unemployed for some time.
It is different in the civilized countries.
Here the worker looks upon unemployment as an evil.
He would like to avoid it provided the sacrifice required is not too grievous.
He chooses between employment and unemployment in the same way in which he proceeds in all other actions and choices: he weighs the pros and cons.
If he chooses unemployment, this unemployment is a market phenomenon whose nature is not different from other market phenomena as they appear in a changing market economy.
We may call this kind of unemployment market-generated or catallactic unemployment.
The various considerations which may induce a man to decide for unemployment can be classified in this way:
1.
The individual believes that he will find at a later date a remunerative job in his dwelling place and in an occupation which he likes better and for which he has been trained.
He seeks to avoid the expenditure and other disadvantages involved in shifting from one occupation to another and from one geographical point to another. There may be special conditions increasing these costs.
A worker who owns a homestead is more firmly linked with the place of his residence than people living in rented apartments. A married woman is less mobile than an unmarried girl.
Then there are occupations which impair the worker's ability to resume his previous job at a later date.
A watchmaker who works for some time as a lumberman may lose the dexterity required for his previous job. In all these cases the individual chooses temporary unemployment because he believes that this choice pays better in the long run.
2.
There are occupations the demand for which is subject to considerable seasonal variations.
In some months of the year the demand is very intense, in other months it dwindles or disappears altogether.
The structure of wage rates discounts these seasonal fluctuations.
The branches of industry subject to them can compete on the labor market only if the wages they pay in the good season are high enough to indemnify the wage earners for the disadvantages resulting from the seasonal irregularity in demand.
Then many of the workers, having saved a part of their ample earnings in the good season, remain unemployed in the bad season.
3.
The individual chooses temporary unemployment for considerations which in popular speech are called noneconomic or even irrational.
He does not take jobs which are incompatible with his religious, moral, and political convictions.
He shuns occupations the exercise of which would impair his social prestige. He lets himself be guided by traditional standards of what is proper for a gentleman and what is unworthy.
He does not want to lose face or caste.
Unemployment in the unhampered market is always voluntary.
In the eyes of the unemployed man, unemployment is the minor of two evils between which he has to choose.
The structure of the market may sometimes cause wage rates to drop. But, on the unhampered market, there is always for each type of labor a rate at which all those eager to work can get a job.
The final wage rate is that rate at which all job seekers get jobs and all employers as many workers as they want to hire. Its height is determined by the marginal productivity of each type of work.
Wage rate fluctuations are the device by means of which the sovereignty of the consumers manifests itself on the labor market.
They are the measure adopted for the allocation of labor to the various branches of production.
They penalize disobedience by cutting wage rates in the comparatively overmanned branches and recompense obedience by raising wage rates in the comparatively undermanned branches.
They thus submit the individual to a harsh social pressure. It is obvious that they indirectly limit the individual's freedom to choose his occupation. But this coercion is not rigid.
It leaves to the individual a margin in the limits of which he can choose between what suits him better and what less. Within this orbit he is free to act of his own accord.
This amount of freedom is the maximum of freedom that an individual can enjoy in the framework of the social division of labor, and this amount of coercion is the minimum of coercion that is indispensable for the preservation of the system of social cooperation.
There is only one alternative left to the catallactic pressure exercised by the wages system: the assignment of occupations and jobs to each individual by the peremptory decrees of an authority, a central board planning all production activities.
This is tantamount to the suppression of all freedom.
It is true that under the wages system the individual is not free to choose permanent unemployment.
But no other imaginable social system could grant him a right to unlimited leisure.
That man cannot avoid submitting to the disutility of labor is not an outgrowth of any social institution.
It is an inescapable natural condition of human life and conduct.
It is not expedient to call catallactic unemployment in a metaphor borrowed from mechanics "frictional" unemployment.
In the imaginary construction of the evenly rotating economy there is no unemployment because we have based this construction on such an assumption.
Unemployment is a phenomenon of a changing economy.
The fact that a worker discharged on account of changes occurring in the arrangement of production processes does not instantly take advantage of every opportunity to get another job but waits for a more propitious opportunity is not a consequence of the tardiness of the adjustment to the change in conditions but is one of the factors slowing down the pace of this adjustment.
It is not an automatic reaction to the changes which have occurred, independent of the will and the choices of the job seekers concerned, but the effect of their intentional actions. It is speculative, not frictional.
Catallactic unemployment must not be confused with institutional unemployment.
Institutional unemployment is not the outcome of the decisions of the individual job seekers.
It is the effect of interference with the market phenomena intent upon enforcing by coercion and compulsion wage rates higher than those the unhampered market would have determined.
The treatment of institutional unemployment belongs to the analysis of the problems of interventionism. |
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"The only thing that interferes with my learning is my education".
Albert Einstein |
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