The Three Biggest Lies About the Economy

[Newsjock]

Source: MarketWatch

The counter-revolution is underway.

The G-20 calls for members to slash their budget deficits. The U.S. Senate ices further aid for the unemployed. The head of the Business Roundtable slams President Obama for undermining American capitalism. Wall Street succeeds in watering down reform.

... We're still living in a fantasyland. Most people have no idea what's really going on in the economy. They're living on spin, myths and downright lies. And if we don't know the facts, how can we make intelligent decisions?

Here are the three biggest economic myths — the things everything thinks they know about the economy that just ain't so.

Myth 1: Unemployment is below 10% ... Consider, for example, the situation among men of prime working age. An analysis of data at the U.S. Labor Department shows that there are 79 million men in America between the ages of 25 and 65. And nearly 18 million of them, or 22%, are out of work completely. (The rate in the 1950s was less than 10%.) And that doesn't even count those who are working part-time because they can't get full-time work. Add those to the mix and about one in four men of prime working age lacks a full-time job.

... Myth 2: The markets are panicking about the deficit ... They aren't seeing inflation either. On the contrary, they're saying it will average just 2.3% a year over the next three decades. That's the gap between the interest rates on inflation-protected Treasury bonds and the rates on the regular bonds. By any modern standard the forecast is low. Instead of worrying about inflation, some are starting to worry about something even more dangerous: deflation, or falling prices.

... Myth 3: The U.S. is sliding into "socialism" ... For a system allegedly being strangled in its bed, U.S. capitalism seems to be in astonishingly robust shape. Numbers published by the Federal Reserve a few weeks ago show that corporate profit margins have just hit record levels.

Read more: http://finance.yahoo.com/banking-budgeting/article/109949/the-three-biggest-lies-about-the-economy

[BeFree]

1. We have deflation

Yeah, partly because the bubble burst, but wages have gone down and real estate prices are sinking.

[FBaggins]

2. Unemployment IS below 10%.

analysis of data at the U.S. Labor Department shows that there are 79 million men in America between the ages of 25 and 65. And nearly 18 million of them, or 22%, are out of work completely.

This requires the assumption that everyone between 25 and 65 should/must have a job and anyone who doesn't is unemployed. This includes millions of people who retired before 65.

rate in the 1950s was less than 10%.)

In the 50s there weren't many women working outside the home, and few men working INside it. This isn't the 50s.

[KillCapitalism]

3. It all depends on where you're at.

Some counties in North Dakota have unemployment rates of <1%.

Places like Detroit and some towns in California's central valley have rates of 30+%.

[FBaggins]

5. Well sure... but we're talking nationally.

There are places where unemployment was at 10% even during the Clinton years.

[Lasher]

4. You have to use square brackets here to invoke HTML.

Chicken beaks don't work. Click on HTML lookup table just above the Subject window when posting a message.

[FBaggins]

6. Thanks.... I know but...

...the system I spend much of my day on uses the standard <> format and my fingers just go there by habit. :spank:

[Lasher]

9. Sorry, didn't mean to talk down to you.

Thought you might have been just learning, like everyone once was.

[FBaggins]

10. Oh, no problem at all.

I didn't mean to imply otherwise.

I should have at least previewed my message before posting. DU has these pretty "check spelling" and "preview" buttons here and I need to use them more frequently. :)

[Vinnie From Indy]

7. lol - "chicken beaks" - cheers!

[Lasher]

11. I used to call a tilde an eyebrow until I learned the proper name for it.

I wonder what the chicken beaks are supposed to be called?

[JoeyT]

14. In math they're called

greater than and less than symbols. I think the name for both of them is "angle brackets".

[Lasher]

15. Thank you.

But I guess I like chicken beaks better. :D

[sendero]

17. U6 is the real unemployment....

..... and last time I checked it was running about 17%.

10% is a joke in any practical terms.

[FBaggins]

18. No it isn't.

It's hard to call a measure "the real unemployment" that includes millions of employed people as "unemployed"

It's like announcing that a guy with a .275 batting average really has the best batting average in baseball... because you've decided that the REAL batting average is the number of times he put the ball in play (rather than reaching base safely). He "hit" the ball after all, didn't he?

If we can only win a debate by changing the terms of the debate, then what have we won?

[sendero]

19. There is no debate..

.... the BLS's own numbers say 17. Put your fingers in your ears and go la la la all you want.

[FBaggins]

20. Nonsense.

What a load... "there is no debate" indeed.

They report it as an alternative measure. Where there really "is no debate" is what EVERY industrialized nation considers "unemployment"...

...and U6 isn't it.

When people talk about "the unemployment rate" - they mean U3.

[OhioChick]

8. Bookmarked for later

Thanks for posting.

[Hosnon]

12. Re: Myth 2, my understanding is that any market fear about the deficit would show up as increased

interest rates for treasuries - and a "panic" increase simply hasn't occurred.

[Kringle]

21. tell that to Greece

Greek bonds,
10 plus percent

http://www.bloomberg.com/apps/quote?ticker=GGGB10YR%3AIND

[Greyhound]

13. With so many economic lies being spread through every venue, how do we know these

are the biggest?

I can spend a week doing nothing but cataloging economic lies manufactured (mostly) by the "financial industry" alone.
:kick: & R

[LawnKorn]

16. K&R