I do not always agree with Mish Shedlock on all of his economic pronouncements. In my view he is to "religious" in his libertarianism. A viewpoint, I also lean toward, but am more inclined toward accepting its limitations.
But I thought he made a very valuable summary of the economic situation we are in today without resorting to the idea that it most somehow lead to a complete economic collapse and anarchy. And impoverishing deflationary spiral, maybe, anarchy, not necessarily.
I will only note the last line on his final conclusions.
Percentage Growth in Government Jobs vs. Private Jobs vs. Population Growth; Facts and Consequences
Upcoming generations are highly likely to see a drop in standard of living vs. the baby boomers. This has never happened in US history.
7 comments:
i would certainly agree with his assessment! i simply can't even fathom what jobs are going to be available for kids who will graduate with a university degree in 4 years. our government has been cutting back on government jobs and the private sector as well. it's not going to be pretty. i know baby boomers who got out of university and didn't even have to do a job interview!!! they just went straight into cushy gov and private sector jobs. they have no idea how difficult it is for young people today. and i can't help but believe that they are a big part of what is wrong in our two countries today.
your friend,
kymber
My two eldest children graduated with honors from a university in the US. My daughter graduated in 2009. It took my daughter two years to get a fulltime job, and until then, she worked the same part-time job in a library she had had since high school and through college. My son graduated with honors from the same university in 2010, and two years later, he still has no job, full time, part time or otherwise. He started a "by mail" business and helps us on our farm. None of their friends have jobs that they did not already have before college graduation, i.e. sandwich maker.
I have a third one in university now who wonders what the point might be.
I read Mish every single day. He is an asshole but he does provide data that I feel is accurate though chosen to support his position.
He is smart, but he is so focused in the belief of his "truth" that he comes up lacking the subtlety and nuance needed for a truthful look at the world.
This is one of his better pieces. He is careful to point out that Armageddon isn't an "only" option.
I have been telling my kids that they will have to work harder than I did. My fall from grace from being a 100K+ Chief Science Officer to being a 40K government stooge had taught them about the fragility of success.
A lot of folks are going to have to learn this lesson. None of them are going to like it.
I know that I didn't.
Oh the anarchy will happen. It doesn't have to happen from the economics of the thing it will happen from the social engineering and victim mongering class warfare the left has been pushing for decades. The problems will start financially but as the various groups begin to compete for the shrinking pie the solution will come from social violence.
Japan is lucky they do not have the social group issues to deal with.
"Upcoming generations are highly likely to see a drop in standard of living vs. the baby boomers. This has never happened in US history."
-WRONG, This happened during the last recession in the 90's, and that generation never recovered. Most 40-50 year olds I know are underemployed, low-income, "childless by choice" (i.e., could never "afford" to give a baby the childhood that they had received, let alone a better future), have underwater mortgages or never bought - and they all grudgingly accept money from their elderly parents.
Kymber: I graduated into a recession so I know what it is like to have few options. But it was toward the tale end of the downturn (1985) and did not last too long. But it never was the workplace that my father had.
Jane: I have an 8 year old. So I certainly hope we find our way through this. On the plus side, I would rather be in VA, the North Carolina or Alabama than some other locations. To some degree, these States benefit from the problems in other areas. The are all have lower cost educated work forces that "benefit" a little from the depreciation. VA of course also has the Federal Government and a lot of retiring beurocrats.
It is not enough to make it wonderful, but it keeps it from being a disaster.
Degringolade: I agree would to a slightly toned down assement of Mish.
I have been "stuck" for a long time at my current income. I think I am Mr. Median for my education level and work area. I suspect that I am lucky not to fall back.
I think some youngsters are going to have to really think out of the box to really have a chance at serious success - versus just survival.
Pioneer: You may be right. But I think where you are living colors some of your opinions. Not every part of the country is as divisive as yours. What would be key is to see how the more settled areas react, and I don't see how that can be known with so many inputs. Also, even if the less embattled regions don't go haywire, there are still enough stress areas that it might tip a balancing point. I hope not.
Izzit: You are correct. People who graduate into a recession, or have a poorly timed layoff often take decades to recover, if they ever do. I have bounced around on enough plateaus to know the feeling.
But I think Mish is taking a completely different magnitude of reality here. He is talking about an asset collapse, and an income collapse that sets us way back.
Even the 1990s boom was somewhat limited in its effect on real incomes. Much of the growth was generated through borrowing, and for a time, the exchange rates actually worked to the advantage of the U.S. (remember when Wal-mart had a Buy U.S.A policy.
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