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2021-06-08 07:00 by Karl Denninger
in Employment , 246 references Ignore this thread
Ha Ha Ha -- Big shock
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But but but -- everyone is going back to work!

No they're not.  I've posted this out for quite some time and it's not new either. Now Tim Knight has brought it up too with a couple of interesting charts to go with it.

David Stockman, one of the heroes here on Slope, offered up this illustration of the aggregate hours being worked in the leisure/hospitality industry. As you can see, the jobs “growth” is nothing more than a PARTIAL undoing of the shutdown last year. The job market isn’t growing at all. It’s simply partially un-shrinking.


And worse, the make things group has been in a severe decline for 20 years.  You're not really going to tell me that making things isn't the backbone of any economy, are you?  Because it is.

And yet the aggregate weekly hours of those who make things has been in the crapper since 2000.  Oh, it bounced some in the 05/06 timeframe, but then dove doing the alleged "Great Recession."  Note that rather than recover those jobs we offshored more of them and never brought them back.  In addition despite the claims otherwise we have a growing population which makes it worse in that the hours worked to produce things per-capita has fallen even more than that chart suggests.

This is both sides of the aisle folks.  Do recall that we've had both Republican and Democrat Presidents during those times, yet has not the "recovery" from the 2008 crash continued more or less at the same pace from when Obama was President to when Trump was?  Wasn't Trump the "bring it back" President?  Did he?  Nope -- not at all.

Nor did Bush.

If you think this is a partisan political issue and gets resolved with more partisan political BS you're out of your mind.  It does not.  And more credit emission by Congress just makes it worse by raising the cost of living which forces those on the lower rungs of the economy out entirely.  If you can't earn a living doing "X" then X will not get done no matter how many Help Wanted signs you put in the window.  If you increase wages then prices must go up which again means that the wage "X" is once again no longer enough to live on!

This is called a wage-price spiral and you'd think that having tried this BS back in the 1970s, complete with wage and price controls you'd figure out that it doesn't work.  It certainly didn't work last time for the same reason it won't work this time -- when you keep emitting credit prices rise faster than wages and because taxes are on top of that and parasitic even if they were to rise at the same rate you still wind up underwater.

The only way to stop it is to force back downward the credit aggregates by forcing the government's spending to fit within revenues minus a bit.  In other words spend a bit less than you take in.  In today's world where the Federal Government blows huge sums on Medicare and Medicaid the only way to do it and make it work is to destroy all the medical monopolies.

It's simply math: There is no other way to get the books to balance.

I pointed this out back in the 2008 timeframe and it's only gotten worse since.  There's not a prayer in Hell that more deficit spending will make it better.  It will in fact make it worse, much worse, because all of that simply encourages more offshoring of production to third-world nations where the price of labor is often close or actually zero.  Never mind the environmental destruction which we do not allow here but they do not care about there.

Here locally I can report the same thing: There's a nice local BBQ joint down the road from me now sporting a "Closed Tuesdays" sign as they can't staff the place.  While the termination of the "bonus plus" unemployment payments will force some people back into the workforce it does not matter if the cost of living exceeds the wage you can earn with your skillset, and forcing wages up just forces up the cost of living too.

You have to collapse the cost of living which is focused in the primary areas of housing (speculative, credit-driven bubble) and health care (corrupt, felonious under laws more than 100 years old in the form of 15 USC Chapter 1 bubble and parasitic on every other employer) along with the insane practice of paying people to either not work (e.g. teachers) or refusing to work in-classroom thereby forcing working parents out of the workforce because their kids have nowhere to go and no schooling.

Simply put a job that does not put a roof over my head, food on the table and pay the power bill doesn't get done and the problem cannot be solved by raising wages because that immediately reflects back into price and solves nothing.

You have to collapse price.

Yeah, I know, Powell and the rest "hate" deflation.  So do banks.

Sorry, either do it or watch the economy continue to fail to recover and eventually circle and go down the drain as it has been on a productive basis since 2000, all as a direct result of the policies of our Federal Government and Congress.

Remember folks The Fed cannot buy a single bond or play a single QE game that Congress does not issue the predicate paper to do it with.  Further, Congress can enforce the mandates of The Federal Reserve Act, which requires The Fed to constrict and withdraw credit aggregates until prices are actually stable, which in this case would mean contracting back to where they were at some point in the past, any time it would like.

The responsibility for it not happening in fact rests with us since we elect Congress and allow the current critters there to continue to infest The Capitol.  Each and every single one of them is responsible for this and has been for more than 20 years and thus, so are you.

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User Info Ha Ha Ha -- Big shock in forum [Market-Ticker]
Posts: 528
Incept: 2009-05-11

Davenport, Fl
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I've never in my life seen so many "Hiring" "Paid Daily" "Open Interviews NOW" signs as I have in the last 30 days here in Orlando. Tourist season isn't even back to 30% of what it was and company's can't even staff for that. The mouse, is bringing back the college program (cheap labor) as FAST AS FRICKING POSSIBLE and still likely won't have enough staff to go 100%.

We got a ways to run on this, before we see the spiral down. I'd say at least 3 years at this point, the demand for travel hasn't even really started yet domestically and not at all internationally.
Posts: 59
Incept: 2021-04-13

Akron Ohio
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Amen. And amen. I always appreciate your ability to put this into laymans terms. Of which I am. But I get all this quite easily. Im certain they (our rulers) totally understand it too. So its truly up to us. Trouble is, were not hungry enough. Yet.

The whole world is one big ****ing scam
Posts: 61
Incept: 2019-05-09

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For the first time in a year, I went to a restaurant. The Chilis we went to was offering free GED and Associates Degree. Earlier that day we were at a local tourist destination. They were offering jobs on the spot. My brother-in-law was at a convention while we are out and about. We had to go into the hotel to pick him up, we all noticed how filthy the place was. Everywhere we went, the establishments were apologizing and asking for patrons to be courteous towards there short staff. Of course, our state (Kentucky) is still restricted by a worthless Governor. This has to stop. Till then, I am not going anywhere but grocery stores.
Posts: 80
Incept: 2016-10-21

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All over southern ontario, canukistan there are help wanted signs. The local college is starting a program offering free courses in skilled trades namely construction to help fill the labour shortage.

Why would amazon need to open fully automated stores? But that could be to increase profits and get around the demand for unions.

I laugh when I pass long term care homes who advertise for ALL areas of nursing, housekeeping, dietary and maintenance. I keep in contact with former coworkers. The gubment had to rescind the ruling of limiting the hours they could work and the number of homes they could work at because they are beyond desperate for workers.

I keep hoping the gubment will begin to realize that all of these free money programs need to stop. Namely paying women to have babies.

The sad part of this whole scam is that it won't affect the gubment or the weathly, it will only hurt the average joe and josephine.

Maybe I need to brush up on my chinese or russian.
Posts: 18
Incept: 2019-09-23

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It may be what needs to be done, but these people in charge will never allow it. Yellen has already said she's fine with inflation, and is for Biden's plans if it brings more inflation. They'll never give up their money printer voluntarily.

The only way this will end is in an epic collapse, that is going to be hell to live through. The question is who will get to rebuild. Are people going to let these same idiots rebuild the new system, or the people who saw it coming? My guess is they'll just let the central bankers try again, the pure volume of uninformed masses is just too large to overcome at this point.
Posts: 566
Incept: 2018-01-29

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No one is making cars right now.

All those autoworkers are on furlough.

But hardly a peep in the news (I have family in Detroit and supply some part makers).

Locally, the wage for gas stations is pushing $13. But rent is going up, and my house is assessed at %20 more than three years ago.

Things are going to get spicy.
Posts: 3047
Incept: 2008-12-31

Pacific NW USA
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Saw an item on the local news last night. The Toyota dealership here in town had ZERO new vehicles on the lot that weren't already sold (3 of those).

I want to see teeth flying as someone is beaten with a cast iron dildo hidden in a sock.
Posts: 312
Incept: 2019-05-07

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I tried to book routine maintenance at car dealer yesterday. Next available appointment July 21st. Unreal. I know our idiot leaders say this time is different and debt doesn't matter but just saying it doesn't make it true. The reality is the world is still shut with all the global restrictions. It looks like that will drag on into 2022 or even 2023. With all the inflation warning signs I don't understand who's buying 10 years or longer treasuries.
Posts: 134
Incept: 2009-02-27

Connecticut - Massachusetts
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"Make things" is one of the few ways to create wealth. Add in invent things, mine things and grow things. All other endeavors simply debase money or rob others.
Posts: 145
Incept: 2020-03-02

South Texas 93 miles from Houston
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I believe used cars are up 21% Y-O-Y.
We normally see a LOT of used cars being towed out of Houston down Highway 59 to end up being in Mexico(repaired, used for parts, etc). I expect that to end REAL soon if not already when good mechanics figure out their profit on repairing and selling used vehicles. Flipping Used Cars!
Posts: 18
Incept: 2019-05-12

Green Mountain
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I bought a new Tacoma last June. Took it in for its 5k mile service last week. I had to book 5 weeks out. Got to the dealer and they had 0 cars on the lot. This is a very large dealership. Started talking with one of the sales guys. He hadn't sold a car in a month. Not for lack of buyers. He had no stock to sell, or even to put on order. Offered me $10k more than I paid for my truck. Turned it down. What am I going to do? Walk.
Posts: 219
Incept: 2021-03-26

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I think everyone knows that the current jobs growth thing is simply a return to 2019 normal. There is no net increase beyond this. At least I would think everyone knows this. But who knows.

One of the problems in the service industry is that you have to wear a mask all day long, and that's a pain in the ass. Get rid of the mask requirement and more people will return to work. The other more long term problem is this "bubble in everything" rap, particularly real estate, has made living a normal life unaffordable to those working in lower wage jobs. We need a real estate crash to make things affordable again.

The boomers are retiring in large numbers, and that is creating a lot of job openings as well. I've flow cross country lots over the past 8 years. Many of the pilots you see in food courts in O'hare and Midway look like senior citizens. I suspect there are lots of jobs where this is the case.
Posts: 2060
Incept: 2019-01-08

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Jefes podrian ser mas creativos mentalmente. Los jefes podian ofrecer a los trabajadores pagos de alquiler, tarjetas de identificacion falsas y un salarios.
Posts: 1102
Incept: 2015-01-29

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Not sure about other areas, but the ones I've seen with signs begging for people to apply are quite often the companies that are demanding the "un-vaccinated" employees wear face diapers in 90 degree heat and high humidity and are more or less treated like lepers. On top of that, if it's a larger corporation, the ******* MBA's metric their workers to death and **** can them as soon they don't meet their numbers. Yeah...I wouldn't be a hurry to work their, either. **** those *******s.

"I'd like to live just long enough to be there when they cut off your head and stick it on a pike as a warning to the next 10 generations that some favors come with too high of a price." -Vir Cotto Babylon 5
Posts: 140
Incept: 2021-05-01

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Off topic (sort of). I have a high end oxygen saturation monitor because I have asthma and it can be critical to know my numbers. I think we are all aware of the dangers of masks. So just for the heck of it on a good asthma day I checked my oxygen saturation. It was 98 percent. Entirely normal. I put on a mask FOR JUST A FEW MINUTES and rechecked my oxygen saturation. It was at 93 percent. This is without any activity. Just standing at the sink in my kitchen. 93 percent is a number I would get after an asthma attack and a nebulizer treatment. I literally can't breathe with a mask.

Of course the results of the oxygen saturation challenge are going to vary based on age, sex, level of physical conditioning, underlying respiratory disease, history of smoking and so forth. But this is madness. Not to mention the masks don't work.
Posts: 165
Incept: 2020-03-29

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This is off-topic, but since I don't think you've had a column recently where it would be, I'll ask it anyway. I've asked this in multiple places, but received no answer. Perhaps the answer is not a simple one and is filled with too many "it depends"? If so, a rough approximation is fine.

Considering this...:

Federal Debt: Total Public Debt


...what effect on this:

Federal government current expenditures: Interest payments


...might come from raising this?:

Effective Federal Funds Rate

Posts: 783
Incept: 2016-02-11

Pacific Northwest
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I don't throw money around like I used to. Any biz that were mask fascists or had BLM posters on the door will never get a penny from me.

Hard times a coming. Remembering the Inflation act that was almost passed during the Long Depression. .Gov, imo, would destroy the currency in order to keep prices from falling.

Imagine all those freshly minted homeowners who end up 50% underwater on their abodes.
Posts: 6122
Incept: 2009-03-19

Just North of Detroit
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The Arby's near us puts up orange safety cones across the driveway and a sign saying they are closed weekends. The kids don't want to work weekends and I suspect there is no bus service weekends from down in Detroit. I say suspect because when I tried to load the routes and schedules online I couldn't do so.
Posts: 4870
Incept: 2009-01-20

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I work at a logistics company North of Houston and we can't find quality people to work here. Brought in my daughter and the accountants son for the summer as a stop gap measure till we find somebody else.

My daughters first job pays $10 an hour. She's probably under paid lol. What a time we live in!

It's always something. Forever till you die.

Reason: **** twitter
Posts: 342
Incept: 2017-05-03

The South
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@bagbalm: or, the Health Inspector put a moratorium on severe diarrhea on weekends so as not to overwhelm the ERs from all the gunshot wounds!
Posts: 165
Incept: 2020-03-29

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I guess I should have addressed my question above directly to someone I thought would be most likely to be able to answer it - Karl.
Posts: 269
Incept: 2016-03-15

Northern Ohio
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Visited one of my company's manufacturing facilities in Kendallville Indiana today. Workforce at full staffing is approx 150 FTEs. Right now they have 20 openings. Had a big job fair a couple of weeks ago, 3 people showed, one was hired that that person lasted a week. Starting Pay is $17.50/hr.

Plant is overloaded, working lots of Overtime which is contributing to attrition.
Posts: 140
Incept: 2021-05-01

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@winston2020. I don't think any of these charts and/or economic theories mean a hill of beans. We (as in the USA and it's people) are bankrupt in every way imaginable. Do you think it will matter what the government does? Every single "solution" sets off its own unique time bomb. There isn't a solution.
Posts: 209
Incept: 2009-04-18

Pickled in the brine of futility
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There isn't a solution.

Truer words were never spoken...about a lot of things going on today.
Well, there is one solution...but it's pretty drastic and final. And who knows? May well be where this is all leading to anyway.

"We must overcome the fear; we must stare it down and power through it. We have no choice." - K. Denninger 4/3/20

"This is madness." - @Susanlauren 5/18/21
"You just eat it. It does not taste good. Whatever. Just eat it." - @Ann_Barnhardt
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