Payrolls in U.S. Rise 173,000 as Jobless Rate Falls to 5.1%

[sookster]

Guess the real question is what is your definition of success? Liberals buy the rhetoric about the worst recession since the Great Depression, that Obama saved us from another depression, that the stimulus was a success and yet there are no specifics to prove any of that. Just emotional rhetoric based upon beliefs and an ideology. It was TARP that kept us out of a depression, there was no successes with the stimulus because no one can prove that the stimulus saved jobs, and the reality is most here were old enough to know about the 81-82 recession. Seems that history, economics and civics are not being taught in school these days

Well we have to accept the fact that we can't know for sure if the stimulus helped or not. I mean we had GDP growth for every quarter except for like 2. I know it was less than five. So it did something.

 

[Conservative]

Well we have to accept the fact that we can't know for sure if the stimulus helped or not. I mean we had GDP growth for every quarter except for like 2. I know it was less than five. So it did something.

Of course it did because 842 billion was government spending which is a component of GDP. When govt. spends money it does impact GDP but it was short term and didn't generate longer term growth

 

[whataboutbob]

The unemployment rate in Jan 1981 was 7.5%, unacceptably high. The economy had been in recession during the first half of 1980, pushing the rate up from where it had been in Dec 1979 at 6%. GDP was basically flat in Q3 1980, and then expanded at two percent for six months, from Oct 1980 to Apr 1981.

Then GOP SSE policies were implemented. GDP contracted by 1.2% in Q4 1981, and by Jan 1982, unemployment was up to 8.4%. The economy continued to decline, with GDP down by almost two percent in 1982.

In Jan 1983, unemployment was at 10.4%, a rate not experienced since the Great Depression, and not seen since. It didn't get back under 7.5% until May 1984, and remained above 7% until Dec 1986.

It looks to me like Reagan didn't do the country much good on that measure in his first six years in office. Things got worse, then much worse, and then stayed more or less the same.

Let's start with this... yes, the economy went into a recession in 81/82 because Volcker did what was required to kill the double digit inflation... he substantially raised interest rates until inflation was hammered back down. Something Carter wouldn't let Volcker do, because Carter knew the price... a recession, which wouldn't help him get re-elected. Reagan made the hard choice and Reps paid for it in the midterms in 82. But he did what was necessary for the long term benefit of the country.

By the time Reagan left office, unemployment was down at 5.4% and the economy was booming. Notice: Data not available: U.S. Bureau of Labor Statistics

Also... looking at one statistic and pretending that it is somehow indicative of the economy as a whole is rather silly. You leave out the fact that as he took office labor participation rates were under 64 and by the end of 85 had climbed over a point. So that is a part of why unemployment rates maintained at 7% for a longer period of time. Notice: Data not available: U.S. Bureau of Labor Statistics

GDP growth rates under Reagan...

1981 12.2 2.6
1982 4.2 -1.9
1983 8.8 4.6
1984 11.1 7.3
1985 7.6 4.2
1986 5.6 3.5
1987 6.1 3.5
1988 7.9 4.2

Shows the economy was indeed in good shape. BEA National Economic Accounts

>>high interest rates, high rates of inflation

When JEC appointed Volcker as Fed chair in Aug 1979, the prime rate was 11.75%, unacceptably high. Inflation was 11.8%, also unacceptably high. Carter would come to regret that decision.

By April of 1980, the Fed had raised the rate to 20%, the same month inflation peaked at 14.6%. Three months later, it was back down to 11%. But by the end of the year, it had spiked back up to 21.5%, an all-time high, even though inflation had dropped to 12.4%. I can't understand why Volcker went back to strangling the economy in the last half of of 1980 when inflation was subsiding. I figure Mr. Carter was unhappy about the Fed's actions.

So... in your world, Volcker didn't have the stomach for keeping rates high under Carter (who was trying to get re-elected), but suddenly he DID have the stomach as soon as Reagan took office?

Comical. Try rethinking that. Volcker was appointed, his job secure. Carter was up for re-election. Keeping rates high enough to kill inflation meant a recession. Something Carter couldn't afford during a re-election (same could be said for every incumbent in Congress trying for re-election). yet you think it was the Fed chief just acting on his own?

Under Reagan, Volcker didn't have the pressure to stop. The economy dipped into recession and inflation was hammered down.

FYI... GDP growth in 1980 by quarter...

1980q1 10.0 1.3
1980q2 0.5 -7.9
1980q3 8.9 -0.6
1980q4 20.0 7.6

I wonder why the politicians trying to get re-elected didn't like the Fed keeping rates high to kill inflation???

The prime rate was still at 19.5% in Oct 1981, even though inflation had dropped under 10% in May. Then the Great Reagan Recession hit in July. By April 1982, inflation had fallen to 6.6%, but the prime rate was still at 16% in July. It didn't get under 10% until Jun 1985, even though inflation was all the way down to 2.35% in Jul 1983.

Yeah... because the fed funds rate was still about 15%. They were trying to KILL inflation. Not beat it up a little. Not real sure why you are focusing on Prime rate, but with the Fed Funds rate above 9%, that is why prime stayed high. With the above GDP growth rates... they didn't want the economy over heating, so yes, rates stayed high.

There was no reason to drop rates lower. So not sure what your point is.

Take a look at the misery index under Reagan... both inflation and interest rates plunged.

http://inflationdata.com/articles/wp-content/uploads/2015/01/Misery-Index-1980s.jpg

the above image is from Inflation in the 1980's

 

[whataboutbob]

Sorry about all the numbers. My point is this: the reason we had high inflation in the last two years of the Carter administration was an oil shock, the same thing that drove it up to 12.1% in Dec 1974. It was back down to 5% two years later, and the prime rate was lowered by four points from 10.25% to 6.25% during that period.

So it looks to me like there was NO REASON to push interest rates through the roof 1980-81. We needed lower energy costs, not higher interest rates. If I'm gonna take some of the blame for the Jul 1981 through Nov 1982 recession off of Reagan's fiscal policy, it would be to place it on his decision to allow that destructive lunatic Volcker to stay in charge at the Fed.

No reason? Stagflation that existed was the reason. You seem to think the inflation would have just subsided. That is not logical nor realistic. Volcker was one of the best Fed Chiefs we have had. Calling him a destructive lunatic is beyond the absurd.

>>all paired with anemic growth in the economy.

As I noted, GDP grew at two percent in Q4 1980 and Q1 1981. If you look at the last thirty years, you can't expect to do much better than 2% over a six-month period.

I already posted the GDP data above that proves the above comment is absurd.

>>The stagflation Reagan inherited was worse than the wall st induced mess that Obama inherited as the high inflation was hammering everyone under Carter.

I'd say that's a tough comparison to make. I see yer point … up to a point. If Obama hadn't pushed through a stimulus, refused to slash entitlements like unemployment benefits, Medicaid, and SNAP, and held off on raising taxes, the polices that combined to keep deficits high, the result could have been disastrous. When the economy is so effed up that it needs to be on life support, it's arguably a good decision to provide that support.

And just because a lot of Americans weren't hurt much by the financial collapse, a lot of others were. Moreover, you can argue that a lot of Americans weren't hurt much by the economy of 1978-1982. If you had enough income/wealth, you could make up for the high rate of inflation by earning a good return on safe investments tied to the prime rate. If you had enough market power in yer occupation/business to get a pay raise/increase yer prices to adjust for inflation, you were OK.

No, you cannot make that argument. The high inflation high interest rate environment under Carter hammered EVERYONE. Yes, the wealthy were still 'OK'... the wealthy are rarely going to be in danger of 'not making it'.

>>Debt under Clinton increased every single year he was in office.

Yes, but only if you include intergovernmental debt.

>>Your desire to use 'public' debt instead of total federal debt is odd. We pay interest on all debt, not just the public held debt.

Yes, but the government pays interest on intergovernmental debt to itself, i.e. to us.

True... but it is still money that must be paid out via SS/Medicare/Food stamps etc... Debt is debt. Who gets paid the interest is pretty irrelevant.

 

[Conservative]

No reason? Stagflation that existed was the reason. You seem to think the inflation would have just subsided. That is not logical nor realistic. Volcker was one of the best Fed Chiefs we have had. Calling him a destructive lunatic is beyond the absurd.



I already posted the GDP data above that proves the above comment is absurd.





No, you cannot make that argument. The high inflation high interest rate environment under Carter hammered EVERYONE. Yes, the wealthy were still 'OK'... the wealthy are rarely going to be in danger of 'not making it'.

>>Debt under Clinton increased every single year he was in office.

Yes, but only if you include intergovernmental debt.



True... but it is still money that must be paid out via SS/Medicare/Food stamps etc... Debt is debt. Who gets paid the interest is pretty irrelevant.

Great job, you left them speechless which is what normally happens when you confuse a liberal with facts and actual verifiable data

 

[mmi]

we had GDP growth for every quarter except for like 2.

Yes, two bad winters — Q1 2011 and 2014.

Of course it did because 842 billion was government spending which is a component of GDP.

A thrid of the stimulus was tax cuts.

>>When govt. spends money it does impact GDP but it was short term and didn't generate longer term growth

Sure it did. Short-term growth leads to additional long-term growth.

Let's start with this... yes, the economy went into a recession in 81/82 because Volcker did what was required to kill the double digit inflation

I say he overdid it, and I think the data shows that.

>>he substantially raised interest rates until inflation was hammered back down.

He then doubled them and inflation went UP before the economy fell into a long and painful recession with high levels of unemployment that lasted for years.

>>Something Carter wouldn't let Volcker do, because Carter knew the price... a recession, which wouldn't help him get re-elected.

Oy. Check the timeline.

By April of 1980, the Fed had raised the rate to 20%, the same month inflation peaked at 14.6%. Three months later, it was back down to 11%. But by the end of the year, it had spiked back up to 21.5%, an all-time high, even though inflation had dropped to 12.4%.

All this damage was done while JEC was in office. You say he "wouldn't let Volcker" "substantially raise interest rates." Carter appointed him, a very big mistake.

>>Reagan made the hard choice and Reps paid for it in the midterms in 82.

Fantasy. Totally inconsistent with the history.

>>But he did what was necessary for the long term benefit of the country

Reagan didn't set the rate, Volcker did. Meanwhile Reagan was seriously damaging the economy in other ways.

>>By the time Reagan left office, unemployment was down at 5.4% and the economy was booming.

And what happened 1981-1986?



>>looking at one statistic and pretending that it is somehow indicative of the economy as a whole is rather silly.

Let's see. I used unemployment, interest rates, and GDP — the same ones you referred to. I think that's … three.

>>You leave out the fact that as he took office labor participation rates were under 64

The rate was 63.9 in Jan 1981, so yeah, "under 64."

>>and by the end of 85 had climbed over a point.

Took five years to get that done. Carter raised it 2.3% in just four years.

I addressed LFPR, although I didn't specifically mention the statistic. I explained why the rate increased.

16.7 million, from 100 million to 116.7. And 10.3 million of those jobs, 61.8%, or nearly two-thirds, were filled by women, a segment of the population that was deciding to move into the labor market in large numbers in the 1980s. Given the Great Reagan Recession of July 1981 to Nov 1982, many had no choice.

LFPR had been increasing steadily since 1965. As this chart indicates, a steep climb occurred 1977-80. It then flattened out until 1984, when it began increasing again, but at a slower rate.



If you look at the year-to-year percentage change, only in 1985 did the expansion exceed one percent. Sure, the GOP SSE Great Reagan Recession ended and a lot of people started looking for work again. So when you say "by the end of 85 had climbed over a point," ya might mention that it was up only .2% to 64.1 in Mar 1984.



The really strong year was 1974, and the increase topped one percent in 1970, 1977 (1.9%), and 1978. Wanna say some nice things about how JEC brought people into the labor force?

>>So that is a part of why unemployment rates maintained at 7% for a longer period of time.

Unemployment was still at 7.4% in July 1985, so I'd say the increase in LFPR played a small part in the persistently high level.

>>GDP growth rates under Reagan... Shows the economy was indeed in good shape.

Shows the strong stimulative effect of big tax cuts and large spending increases leading to ballooning deficits. Federal outlays increased by 40% 1981-85, while receipts went up by only 22%, leading to a 35.4% hike in debt/GDP in just four years.

 

[Conservative]

Yes, two bad winters — Q1 2011 and 2014.



A thrid of the stimulus was tax cuts.

>>When govt. spends money it does impact GDP but it was short term and didn't generate longer term growth

Sure it did. Short-term growth leads to additional long-term growth.



I say he overdid it, and I think the data shows that.

>>he substantially raised interest rates until inflation was hammered back down.

He then doubled them and inflation went UP before the economy fell into a long and painful recession with high levels of unemployment that lasted for years.

>>Something Carter wouldn't let Volcker do, because Carter knew the price... a recession, which wouldn't help him get re-elected.

Oy. Check the timeline.



All this damage was done while JEC was in office. You say he "wouldn't let Volcker" "substantially raise interest rates." Carter appointed him, a very big mistake.

>>Reagan made the hard choice and Reps paid for it in the midterms in 82.

Fantasy. Totally inconsistent with the history.

>>But he did what was necessary for the long term benefit of the country

Reagan didn't set the rate, Volcker did. Meanwhile Reagan was seriously damaging the economy in other ways.

>>By the time Reagan left office, unemployment was down at 5.4% and the economy was booming.

And what happened 1981-1986?

View attachment 67189941

>>looking at one statistic and pretending that it is somehow indicative of the economy as a whole is rather silly.

Let's see. I used unemployment, interest rates, and GDP — the same ones you referred to. I think that's … three.

>>You leave out the fact that as he took office labor participation rates were under 64

The rate was 63.9 in Jan 1981, so yeah, "under 64."

>>and by the end of 85 had climbed over a point.

Took five years to get that done. Carter raised in 2.3% in just four years.

I addressed LFPR, although I didn't specifically mention the statistic. I explained why the rate increased.



LFPR had been increasing steadily since 1965. As this chart indicates, a steep climb occurred 1977-80. It then flattened out until 1984, when it began increasing again, but at a slower rate.

View attachment 67189942

If you look at the year-to-year percentage change, only in 1985 did the expansion exceed one percent. Sure, the GOP SSE Great Reagan Recession ended and a lot of people started looking for work again. So when you say "by the end of 85 had climbed over a point," ya might mention that it was up only .2% to 64.1 in Mar 1884.

View attachment 67189943

The really strong year was 1974, and the increase topped one percent in 1970, 1977 (1.9%), and 1978. Wanna say some nice things about how JEC?

>>So that is a part of why unemployment rates maintained at 7% for a longer period of time.

Unemployment was till at 7.4% in July 1985, so I'd say the increase in LFPR played a small part in the persistently high level

>>GDP growth rates under Reagan... Shows the economy was indeed in good shape.

Shows the strong stimulative effect of big tax cuts and large spending increases leading to ballooning deficits. Federal outlays increased by 40% 1981-85, while receipts went up by only 22%, leading to a 35.4% hike in debt/GDP in just four years.

I keep hearing about those Obama tax cuts, how much did you and your family get?

As for long term growth, Obama took an economy from 14.7 trillion to 17.5 trillion or 2.8 trillion dollars in almost 7 years. Don't think that is long term growth. You buy the rhetoric and ignore the results

Do you understand percentage change at all since you do it well for the debt but not for GDP Growth, when Reagan doubled GDP from 2.6 trillion to 5.2 trillion what percentage change was that vs. Obama taking GDP from 14.7 trillion to 17.5 trillion? You seem to have a very selective use of percentage change

Do you have any idea what impacts Labor Participation rate? Ever understand the word incentive?

 

[mmi]

So... in your world, Volcker didn't have the stomach for keeping rates high under Carter (who was trying to get re-elected),

but suddenly he DID have the stomach as soon as Reagan took office?

Hmm. I'd say that in the world just about all of us live in, Volcker effed the country by jacking rates up through the roof under JEC (from 12% to 20%), cutting them back down by about 50% (to 11%), and AGAIN doubling them (to 21.5%) — all of it under Carter. Between May 1981 and Oct 1982, the rate was lowered from 20% to 12%.

>>Comical.

I'd call it irresponsibly destructive.

>>Try rethinking that.

You should check the data and the timeline and take yer own advice.

>>Volcker was appointed, his job secure. Carter was up for re-election. Keeping rates high enough to kill inflation meant a recession. Something Carter couldn't afford during a re-election (same could be said for every incumbent in Congress trying for re-election). Yet you think it was the Fed chief just acting on his own?

I have no idea what yer talking about. I can't make any sense of that. Are you arguing that Carter somehow forced Volcker to raise rates? And did so because he didn't want the recession that result? I'd say yer extremely confused.

>>Under Reagan, Volcker didn't have the pressure to stop. The economy dipped into recession and inflation was hammered down.

Pressure? I thought you said Volcker's "job was secure." As I noted, inflation had dropped 2.3% between Mar and Nov 1980. Volcker then jacked rates up six points in six weeks. Yeah, inflation did drop another 1.5% over the next nine months. I figure the downward trend had already been established and Darth just went on some sort of destructive binge.

>>FYI... GDP growth in 1980 by quarter...

1980q1 10.0 1.3
1980q2 0.5 -7.9
1980q3 8.9 -0.6
1980q4 20.0 7.6

Ya mean year-to-year? Try these numbers instead:

1980q1 10.5 1.4
1980q2 7.9 -.7
1980q3 7.1 .1.6
1980q4 9.6 -0.4





But I don't know why yer focusing on the first three quarters of 1980. You said that the economy Reagan inherited "was most certainly in shambles." I figure the relevant periods are Q4 1980 and Q1 1981. The year-to-year change in Q4 1980 was negative (-0.4%), but in terms of output, the economy grew in that quarter (1.9% real and 4.7% nominal) and in Q1 1981 (2.1% real and 4.6% nominal).

When Reagan came into office, the economy was expanding at a moderate pace, unemployment was high at 7.5% and inflation was high at 11.8%. But inflation had dropped by three points in ten months and unemployment by three-tenths of a point in six months. Things were not good, but there was no recession and the problems with unemployment and inflation were subsiding. I wouldn't call that "a shambles," and it's nothing like the disaster Obama walked into — more than four million jobs lost in just five months.

>>I wonder why the politicians trying to get re-elected didn't like the Fed keeping rates high to kill inflation???

If Volcker's job was secure, what difference did it make what Carter liked or didn't like?

>>Not real sure why you are focusing on Prime rate

Because it's the one that affects businesses and consumers. The Fed funds rate is important to banks.

>>With the above GDP growth rates... they didn't want the economy over heating, so yes, rates stayed high.

Overheating?? Well, if you think the economy was expanding at 7.6% in real dollars in Q4 1980, then I can see why you say that. But that figure is WAY off.

>>There was no reason to drop rates lower. So not sure what your point is.

My point is that it would have been a good idea not to choke the economy into a severe recession when inflation was already subsiding. The oil shocks were over.

>>Take a look at the misery index under Reagan... both inflation and interest rates plunged.

Tim McMahon isn't an inflation hawk, he's a nut. He says his views are based on his grandfather's experiences in the Wiemar Republic. I expect he has a lot of money in gold and has been predicting that hyperinflation is just around the corner for the past six years.

More to the point, check out the y-axis on that chart, ostensibly a way to measure the data in one image. But in this case, it allows him to depict a steadily sloping line on this artificial "misery index." Inflation dropped like a stone between Aug 1981 and Jun 1983, from 11% to 2.5%. No wonder, the economy was in a bad recession Jun 1981 to Nov 1982.

My thought is that I'd rather have a job during those two years and deal with an inflation rate of maybe five or six percent than be miserable to say the least cuz my wife is divorcing me and I'm losing my house and my car after my unemployment benefits ran out six months ago.

 

[mmi]

No reason? Stagflation that existed was the reason.

As I noted, it was receding. Volcker's actions lowered inflation down below an acceptable rate of, say, four or five percent, and did so at the cost of helping drive unemployment WAY up. I say "helping" because GOP SSE policies did the rest.

>>You seem to think the inflation would have just subsided.

I've shown that it was subsiding.

>>That is not logical nor realistic.

You may not think so, but the data indicates it.

>>Volcker was one of the best Fed Chiefs we have had. Calling him a destructive lunatic is beyond the absurd.

So I'm the only one who feels that way, eh? Check the views of many leading macroeconomists.

>>I already posted the GDP data above that proves the above comment is absurd.

Unfortunately, yer data is WAY off.

>>The high inflation high interest rate environment under Carter hammered EVERYONE.

It wasn't Carter's preference to double rates AGAIN in the second half of 1980. As for inflation, people aren't "hammered" by inflation of around 5%. Volcker pushed it down to 2.5%.

>>Yes, the wealthy were still 'OK'

As are businesses and workers with a reasonable amount of market power.

>>it is still money that must be paid out via SS/Medicare/Food stamps etc...

Paid out?? We pay interest on debt, not income support benefits.

>>Debt is debt. Who gets paid the interest is pretty irrelevant.

Nonsense. If we collect the interest ourselves, there is no net cost.

Great job, you left them speechless which is what normally happens when you confuse a liberal with facts and actual verifiable data

I keep hearing about those Obama tax cuts, how much did you and your family get?

I'm a liberal Democrat, so I got a check for $125K. How about you?

>>You seem to have a very selective use of percentage change

Yer judgement on these matters is non-existent.

>>Do you have any idea what impacts Labor Participation rate? Ever understand the word incentive?

Ya might try "demographics." The incentive to get a job is the same as it always has been — money.

 

[Conservative]

As I noted, it was receding. Volcker's actions lowered inflation down below an acceptable rate of, say, four or five percent, and did so at the cost of helping drive unemployment WAY up. I say "helping" because GOP SSE policies did the rest.

>>You seem to think the inflation would have just subsided.

I've shown that it was subsiding.

>>That is not logical nor realistic.

You may not think so, but the data indicates it.

>>Volcker was one of the best Fed Chiefs we have had. Calling him a destructive lunatic is beyond the absurd.

So I'm the only one who feels that way, eh? Check the views of many leading macroeconomists.

>>I already posted the GDP data above that proves the above comment is absurd.

Unfortunately, yer data is WAY off.

>>The high inflation high interest rate environment under Carter hammered EVERYONE.

It wasn't Carter's preference to double rates AGAIN in the second half of 1980. As for inflation, people aren't "hammered" by inflation of around 5%. Volcker pushed it down to 2.5%.

>>Yes, the wealthy were still 'OK'

As are businesses and workers with a reasonable amount of market power.

>>it is still money that must be paid out via SS/Medicare/Food stamps etc...

Paid out?? We pay interest on debt, not income support benefits.

>>Debt is debt. Who gets paid the interest is pretty irrelevant.

Nonsense. If we collect the interest ourselves, there is no net cost.







I'm a liberal Democrat, so I got a check for $125K. How about you?

>>You seem to have a very selective use of percentage change

Yer judgement on these matters is non-existent.

>>Do you have any idea what impacts Labor Participation rate? Ever understand the word incentive?

Ya might try "demographics." The incentive to get a job is the same as it always has been — money.

You got a check of 125K? ROFLMAO!! How many taxpayers did you take advantage of. Now that is truly funny. You got a check for $500 and believe that was a tax CUT. That is total liberal ignorance

I feel sorry for people like you but actually believe this is an act

 

[Conservative]

>>You seem to have a very selective use of percentage change

Yer judgement on these matters is non-existent.

>>Do you have any idea what impacts Labor Participation rate? Ever understand the word incentive?

Ya might try "demographics." The incentive to get a job is the same as it always has been — money.

Since percentage change is so important to you how about explaining which is better

Reagan taking a GDP from 2.6 trillion to 5.2 trillion; Bush taking GDP from 10.2 trillion to 14.7 trillion, or Obama 14.7 trillion to 17.5 trillion?

Reagan taking employment from 99 million to 117 million, Bush taking employment from 137 million to 142 million, or Obama taking employment from 142 million to 149 million?

mmi, do you understand the election process at all? You want to blame Reagan for a recession that began in July 1981 which was according to NBER an extension of the 1980 recession thus a double dip and a recession that began before Reagan's economic plan was implemented. Doubt you were old enough then to truly understand that recession at all but it was explained well to you here which of course goes against your beliefs thus according to you is wrong

 

[Erod]

Actually, things are looking bleak.

Bartiromo: Analyst paints bleak global economic picture

 

[Conservative]

.

Here is what mmi and other liberals want to ignore when they blame Reagan for the 81-82 recession

https://en.wikipedia.org/wiki/Early_1980s_recession_in_the_United_States

The United States entered recession in January 1980 and returned to growth six months later in July 1980.[1] Although recovery took hold, the unemployment rate remained unchanged through the start of a second recession in July 1981.[2] The downturn ended sixteen months later, in November 1982.[1] The economy entered a strong recovery and experienced a lengthy expansion through 1990.[3] However, the unemployment rate nationwide remained high throughout the decade, a trend that was prolonged and exacerbated by the early 1990s recession.

Principal causes of the 1980 recession included contractionary monetary policy undertaken by the Federal Reserve to combat double digit inflation and residual effects of the energy crisis.[4] Manufacturing and construction failed to recover before more aggressive inflation reducing policy was adopted by the Federal Reserve in 1981, causing a second downturn.[2][4] Due to their proximity and compounded effects, they are commonly referred to as the early 1980s recession, an example of a W-shaped or "double dip" recession; it remains the most recent example of such a recession in the United States

 

[whataboutbob]

Hmm. I'd say that in the world just about all of us live in, Volcker effed the country by jacking rates up through the roof under JEC (from 12% to 20%), cutting them back down by about 50% (to 11%), and AGAIN doubling them (to 21.5%) — all of it under Carter. Between May 1981 and Oct 1982, the rate was lowered from 20% to 12%.

Wrong. The rates were raised the second time in 1981 AFTER REAGAN took office.

It is quite simple to goolge the rates to prove you are incorrect.

O'Neill Wetsuit Size Chart | evo

I'd call it irresponsibly destructive.

You can call it anything you wish... that is your right. But here in reality, it is realized that Volcker did what was necessary for the long term benefit of the country, even if it meant short term pain. That is the problem with the idiots in DC today... they are unwilling to take short term pain even if it is what is in the best long term interest of the country.

You should check the data and the timeline and take yer own advice.

I have posted links to all the data. I have checked it. You clearly have not.

>>Volcker was appointed, his job secure. Carter was up for re-election. Keeping rates high enough to kill inflation meant a recession. Something Carter couldn't afford during a re-election (same could be said for every incumbent in Congress trying for re-election). Yet you think it was the Fed chief just acting on his own?

I have no idea what yer talking about. I can't make any sense of that. Are you arguing that Carter somehow forced Volcker to raise rates? And did so because he didn't want the recession that result? I'd say yer extremely confused.

I know, you clearly have no idea what occurred back then. So it is understandable that you do not understand what I am talking about. I am saying that when the economy dipped in the second and third quarters of 1980, Volcker came under pressure to alleviate the short term pain... so he lowered rates, leading to a big bump in GDP growth in the fourth quarter of 1980. All because a bunch of incumbent politicians wanted to get re-elected.

>>Under Reagan, Volcker didn't have the pressure to stop. The economy dipped into recession and inflation was hammered down.

Pressure? I thought you said Volcker's "job was secure." As I noted, inflation had dropped 2.3% between Mar and Nov 1980. Volcker then jacked rates up six points in six weeks. Yeah, inflation did drop another 1.5% over the next nine months. I figure the downward trend had already been established and Darth just went on some sort of destructive binge.

Volcker's job was secure... but that doesn't mean he wasn't pressured under Carter... and as I stated, Volcker did not see the same pressure under Reagan, which is why he was able to carry out his plan to kill the high inflation... which he DID.

>>FYI... GDP growth in 1980 by quarter...

1980q1 10.0 1.3
1980q2 0.5 -7.9
1980q3 8.9 -0.6
1980q4 20.0 7.6

Ya mean year-to-year? Try these numbers instead:

1980q1 10.5 1.4
1980q2 7.9 -.7
1980q3 7.1 .1.6
1980q4 9.6 -0.4

No, I meant precisely what I stated.

But I don't know why yer focusing on the first three quarters of 1980. You said that the economy Reagan inherited "was most certainly in shambles." I figure the relevant periods are Q4 1980 and Q1 1981. The year-to-year change in Q4 1980 was negative (-0.4%), but in terms of output, the economy grew in that quarter (1.9% real and 4.7% nominal) and in Q1 1981 (2.1% real and 4.6% nominal).

I don't know why you can't work the quote function properly... but the point of the GDP numbers was to show that after Volcker began raising rates to kill inflation, the economy dipped, then when he lowered them again in the second half of 1980, the economy rebounded, but so did inflation. You keep wanting to look at JUST GDP growth. You ignore the long term damage high inflation was doing to this country. You ignore the misery index I mentioned previously.

When Reagan came into office, the economy was expanding at a moderate pace, unemployment was high at 7.5% and inflation was high at 11.8%. But inflation had dropped by three points in ten months and unemployment by three-tenths of a point in six months. Things were not good, but there was no recession and the problems with unemployment and inflation were subsiding. I wouldn't call that "a shambles," and it's nothing like the disaster Obama walked into — more than four million jobs lost in just five months.

That is complete nonsense. It is purely revisionist on your part. unemployment and high inflation were 'receding'??? LMAO.

 

[Pollycy]

Are things looking up now? At what point would you on the right start considering the idea that things aren't going to hell in a hand-basket under Obama?

Payrolls in U.S. Rise 173,000 as Jobless Rate Falls to 5.1% - Bloomberg Business

The big fat bubble that the Federal Reserve System has created during the last eight years with quantitative easing, bond-buying, and other "magic tricks", has had the side-effect of bringing additional employment. But, at the same time, it has also brought into being the lowest labor force participation rate since the mid-1970's: Unemployment Is Low But More Workers Are Leaving the Workforce - US News . Bottom line: more and more people taking part-time jobs, or just abandoning attempts to find full-time jobs. A huge number of people now get different kinds of unearned, handout subsistence welfare from the government.

So how do you make sense out of the official statistics? By realizing that there is more than one unemployment rate! There are no fewer than SIX of them: Table A-15. Alternative measures of labor underutilization

You must make up your own mind which of the six sets of figures is most applicable to the REALITY of today. For decades, the "U3" report was the official percentage of unemployment, and the government still uses the U3 for that purpose. But, consider the "U6" report. Read the description of what it measures, and then compare that with the old U3 report. So, is the real unemployment rate really more like the U6 statistic of 10.3%...?

And yes, the employment situation is better than it was, and may remain so, as long as the Federal Reserve combine goes on with its magic tricks and manipulating what is supposed to be a "free-market" economic situation.

 

[mmi]

Wrong. The rates were raised the second time in 1981 AFTER REAGAN took office. It is quite simple to goolge the rates to prove you are incorrect.

Yes, it is very easy to find the data. I provided a list, and you fail to cite a single number or date. I figure that's because the evidence doesn't support yer argument.

Here's a chart:



You can see the two huge spikes, the first from 12% in Aug 1979 to 20% in Apr 1980 and then back down to 11% just three months later, and the second back up to 21.5% in Dec. Reagan was inaugurated in Jan 1981.

In April, it dipped slightly to 17% before going back up to 20% and 20.5% during the summer of that year before beginning a steady decline.

Notice that this third raising of rates was on a much smaller scale. Fwiw, I will point out that it was during that period that the long and painful GOP SSE Great Reagan Recession started, so I'm willing to lay the responsibility for that misery on Volcker as well as Reagan. The fact remains, however, as I have stated repeatedly (something sadly required around here), that the two BIG SPIKES in interest rates occurred in 1980 … BEFORE Ronnie and "Mommy" moved into the WH and started ordering very expensive china.

>>O'Neill Wetsuit Size Chart | evo

A strange link, imo.

>>You can call it anything you wish... that is your right. But here in reality, it is realized that Volcker did what was necessary for the long term benefit of the country, even if it meant short term pain.

And you too "can call it anything you wish." It was NOT necessary, as inflation was already subsiding, and its cause (oil shocks) was then behind us. As I have already noted (another one of those), Volcker drove inflation to an unnecessarily low level of 2.5%, and drove the economy into the ground doing it. This clearly was not "necessary for the long term benefit of the country." It can only be described as destructive and completely UNnecessary. It's equivalent to the medical treatment applied to George Washington when he had a very bad cold — his doctors essentially bled him to death. Volcker was guilty of monetary malpractice, and Reagan failed to recognize it as such.

>>I have posted links to all the data. I have checked it. You clearly have not.

You posted a link to some clothing. I didn't need to "check the data" because I was already familiar with it. I have no idea what you've been looking at.

>>you clearly have no idea what occurred back then. So it is understandable that you do not understand what I am talking about.

I do know what happened. I lived through it. I studied it as a graduate student focused on macroeconomic policy.

To be more specific, you said:

So... in your world, Volcker didn't have the stomach for keeping rates high under Carter (who was trying to get re-elected), but suddenly he DID have the stomach as soon as Reagan took office? Comical. Try rethinking that.

Interest rates were very high and very volatile in 1980 because Volcker led the Board in late 1979 to a decision to stop managing the money supply through the fed funds rate and shift to a focus on the level of bank reserves. "Stomach" isn't the organ I'd point to, but rather the gall bladder.

You say that Carter "pressured" Volcker to drop rates. Any evidence to back that up?

It's true that the Reagan administration supported the very tight Fed policy for a time. Like about six months. The economy slowed in Jul 1981, prompting Treasury Secretary Don Regan to call for a loosening.

In a published report yesterday, Treasury Secretary Donald T. Reagan suggested that the Federal Reserve loosen its money policy to avoid a deeper recession than the slowdown being forecast by the administration.

Until now, administration officials publicly have urged Paul A. Volcker, the Federal Reserve board chairman, to keep money tight, even at the cost of high interest rates.

The continuing high interest rates have been a major factor in slowing the economy.

Administration officials had hoped that the enactment of President Reagan's economic program would be welcomed in financial markets, and lead to a drop in interest rates. But the rates have remained stubbornly high. This places further pressure on the administration to find more budget cuts.

Officials in the Office of Management and Budget say they believe that the large federal deficit is a major factor behind high interest rates and financial market fears of continued inflation. — "Jobless Rate Declines to 7 Percent," WaPo, Aug 8, 1981​

 

[mmi]

I am saying that when the economy dipped in the second and third quarters of 1980

GDP fell sharply Q2 1980, and then recovered sharply Q3.

>>Volcker came under pressure to alleviate the short term pain... so he lowered rates

Volcker didn't actually lower rates, but rather allowed them to drop.

>>leading to a big bump in GDP growth in the fourth quarter of 1980.

The continuing expansion Q4 was a straight line continuation of the Q3 growth.



>>Volcker's job was secure... but that doesn't mean he wasn't pressured under Carter... and as I stated, Volcker did not see the same pressure under Reagan, which is why he was able to carry out his plan to kill the high inflation... which he DID.

Again with the unsubstantiated "pressure." As if statements from our elected representatives were influencing that arrogant butcher. And I would argue that what you describe as "a bunch of incumbent politicians [who] wanted to get re-elected" was in reality people doing their job, trying to keep Volcker from shoving the economy into a ditch.

>>No, I meant precisely what I stated.

So yer saying that GDP grew at 20% nominally and 7.6% in real dollars Q4 1980? Yer gonna stand by that nonsense?

>>I don't know why you can't work the quote function properly

Ahh, another "conservative" who wants to complain about my posting style. Is it difficult for you to follow? Is that why you keep making such a fool of yerself?

>>the point of the GDP numbers was to show that after Volcker began raising rates to kill inflation, the economy dipped, then when he lowered them again in the second half of 1980, the economy rebounded, but so did inflation.

Inflation dropped steadily from Mar 1980 until Dec of that year. Volcker's policies led to a HUGE RATE INCREASE throughout the second half of 1980. The only month inflation went up was Dec, when rates went up three points in two weeks, to the record high of 21.5%. Happy Holidays, America.

You have the data completely ass-backwards. You have absolutely no idea what yer talking about. Yer analysis is DEAD WRONG on the facts.

>>You keep wanting to look at JUST GDP growth.

That's the second time you've said that I'm only looking at one measure. I'm addressing all three that you raised — unemployment, inflation, and GDP.

>>You ignore the long term damage high inflation was doing to this country. You ignore the misery index I mentioned previously.

Bull****. I commented directly on that, noting that very high levels of unemployment were MUCH more damaging than inflation that was easing and being eliminated by exogenous factors.

Here's a Misery Index for ya — unemployment plus the prime rate:

1981

Nov 25.3%
Dec 24.25

1982

Jan 24.35%
Feb 25.4
Mar 25.5
Apr 25.8
May 25.9
Jun 26.1
Jul 25.8
Aug 24.8
Sept 23.6
Oct 23.7
Nov 22.3
Dec 22.3

1983

Jan 21.4
Feb 20.9
Mar 20.8
Apr 20.7
May 20.6
Jun 20.6
Jul 20.4
Aug 20.5
Sept 20.2

Two years of hell. Inflation was down to 6.5% in Apr 1982, six months into that terrible stretch of national anguish. By Nov, it was under 4%, but the suffering associated with "can't get a job, can't but a house, can't buy a car" continued for nearly another year.

>>That is complete nonsense. It is purely revisionist on your part. unemployment and high inflation were 'receding'??? LMAO.

I provided the god damn statistics.

unemployment was high at 7.5% and inflation was high at 11.8%. But inflation had dropped by three points in ten months and unemployment by three-tenths of a point in six months.​

Laugh all you want. Yer dead wrong and the data are there to prove it.

 

[mmi]

All because a bunch of incumbent politicians wanted to get re-elected.

?? So now yer saying that Volcker dropped rates because of political pressure from the Administration and the Congress?

It's clear that he conducted Fed policy with utter disregard for what he was hearing from the WH and Capitol Hill. And he blithely ignored criticism from both sides of the aisle. Here's George Hansen (R-ID) a conservative (passed away a year ago yesterday), giving it to Darth pretty good at a hearing in Jul 1981:

Mr. Chairman, my concern is that over the past two or three years — and this is something that perhaps there is good explanation for — but we have had an erratic monetary supply management policy which has seen us not going on some kind of a direct line toward realizing our targets, but we have been on a roller coaster, up and down and all over the deck. Twenty percent. Then during the political campaign for whatever reason, coming down from 20 percent to businessmen being in the needle of the storm, seemed to take some kind of heart. They reinvest, get themselves committed again on huge flooring situations or whatever. Then all at once they are hit with an extended 20 percent roller coaster again. This is the kind of thing we are finding. We are forcing these people out of business.

I would like to leave this little bit of counsel. I think what is happening is we are destroying the small businessman, we are destroying middle America and the American dream, the ability to own a car and home. We are feeding inflation more than we are actually defeating it, because anytime you have the federal government paying 20 percent or 18 percent or whatever for the money it is borrowing, you actually are heaping it on the Federal debt and creating larger deficits than we had before. And, Mr. Chairman, I think it is time we got away from catering to the big banks, big corporations, big income people, and catering to a type of capitalism in this country it was never designed to have, and see if we can't have something for middle-America. I encourage you to take a look at this in the testimony and the answers you are giving today. The CHAIRMAN. The Chair will instruct staff to find a seat on this side of the dais for the gentleman from Idaho, after hearing that statement. [Laughter.] Mr. Volcker, I think your time has come. [Laughter.]​

 

[mmi]

But, at the same time, it has also brought into being the lowest labor force participation rate since the mid-1970's

The drop in LFPR is the result of demographic trends associated with the aging of the baby boomer cohort into retirement, as well as increasing tendencies for:

• parents to drop out of the labor force for a few years to raise young children
• adults to drop out temporarily to care for elderly parents
• young adults to remain focused on college studies rather than enter the labor force

>>more and more people taking part-time jobs, or just abandoning attempts to find full-time jobs.

The number of Americans who are employed has increased by eleven million, from 138M in Dec 2009 to 149M last month. During those six-and-a-half years, full-time employment has grown by 11.5M, while part-time employment for economic reasons has dropped 29% from nine million to 6.4M. The private sector has added 11.5M jobs, while government has shed 441K. The number of so-called "discouraged workers" has declined 1.3 million to 624K, a drop of 53%.

>>A huge number of people now get different kinds of unearned, handout subsistence welfare from the government.

How many is "huge"?

>>is the real unemployment rate really more like the U6 statistic of 10.3%?

I don't understand yer question. U-6 has been collected since 1994. It was above 10% throughout 2003, hitting 10.4% in Sept of that year. It was 11.8% in Jan 1994, and fell to 6.8% in Oct 2000. All the different rates are "real." U-3 is sometimes referred to as the "official" rate.



>>the employment situation is better than it was, and may remain so, as long as the Federal Reserve combine goes on with its magic tricks and manipulating what is supposed to be a "free-market" economic situation.

The Fed has withdrawn much of its support to the economy and the labor market continues to improve. U-3 is approaching a level seen only twice in the last forty-five years — in the housing bubble under Bush43 and during the long expansion under Clinton.

 

[Conservative]

The drop in LFPR is the result of demographic trends associated with the aging of the baby boomer cohort into retirement, as well as increasing tendencies for:

• parents to drop out of the labor force for a few years to raise young children
• adults to drop out temporarily to care for elderly parents
• young adults to remain focused on college studies rather than enter the labor force

>>more and more people taking part-time jobs, or just abandoning attempts to find full-time jobs.

The number of Americans who are employed has increased by eleven million, from 138M in Dec 2009 to 149M last month. During those six-and-a-half years, full-time employment has grown by 11.5M, while part-time employment for economic reasons has dropped 29% from nine million to 6.4M. The private sector has added 11.5M jobs, while government has shed 441K. The number of so-called "discouraged workers" has declined 1.3 million to 624K, a drop of 53%.

>>A huge number of people now get different kinds of unearned, handout subsistence welfare from the government.

How many is "huge"?

>>is the real unemployment rate really more like the U6 statistic of 10.3%?

I don't understand yer question. U-6 has been collected since 1994. It was above 10% throughout 2003, hitting 10.4% in Sept of that year. It was 11.8% in Jan 1994, and fell to 6.8% in Oct 2000. All the different rates are "real." U-3 is sometimes referred to as the "official" rate.

View attachment 67190095

>>the employment situation is better than it was, and may remain so, as long as the Federal Reserve combine goes on with its magic tricks and manipulating what is supposed to be a "free-market" economic situation.

The Fed has withdrawn much of its support to the economy and the labor market continues to improve. U-3 is approaching a level seen only twice in the last forty-five years — in the housing bubble under Bush43 and during the long expansion under Clinton.

View attachment 67190096

I would think someone as intelligent and "well informed" as you would learn quickly how to use the quote function. I understand why you are reluctant though since it then would be easier to respond to your posts and refute your poorly informed responses.

Do you have any idea what the four components of GDP are? what happened to GDP When the govt. pumpted 842 billion dollars into the economy? You tought GDP Growth without understanding it.

Please provide for us the Reagan Stimulus and it cost to the expense items in the U.S. Budget?

Is it the liberal contention that 1.7 trillion added to the debt is worse than 7.6 trillion added to the debt?

Is it your contention that NBER is wrong and that the 81-82 recession wasn't a double dip or extension of the 80 recession?

Is it your contention that Reagan could have prevented that 81-82 recession prior to having his economic plan passed by Congress?

It is your contention that Reagan didn't double GDP, increase FIT revenue by over 60%(81-88), and create 17 million jobs?

Is it your contention that Reagan's 100% increase in GDP is worse than Obama's 20% increase?

Although I don't expect an answer I know that you post information you don't understand and information out of context to divert, distort the Reagan record.

 

[Pollycy]

The drop in LFPR is the result of demographic trends associated with the aging of the baby boomer cohort into retirement, as well as increasing tendencies for:

• parents to drop out of the labor force for a few years to raise young children
• adults to drop out temporarily to care for elderly parents
• young adults to remain focused on college studies rather than enter the labor force

>>more and more people taking part-time jobs, or just abandoning attempts to find full-time jobs.

The number of Americans who are employed has increased by eleven million, from 138M in Dec 2009 to 149M last month. During those six-and-a-half years, full-time employment has grown by 11.5M, while part-time employment for economic reasons has dropped 29% from nine million to 6.4M. The private sector has added 11.5M jobs, while government has shed 441K. The number of so-called "discouraged workers" has declined 1.3 million to 624K, a drop of 53%.

>>A huge number of people now get different kinds of unearned, handout subsistence welfare from the government.

How many is "huge"?

>>is the real unemployment rate really more like the U6 statistic of 10.3%?

I don't understand yer question. U-6 has been collected since 1994. It was above 10% throughout 2003, hitting 10.4% in Sept of that year. It was 11.8% in Jan 1994, and fell to 6.8% in Oct 2000. All the different rates are "real." U-3 is sometimes referred to as the "official" rate.

View attachment 67190095

>>the employment situation is better than it was, and may remain so, as long as the Federal Reserve combine goes on with its magic tricks and manipulating what is supposed to be a "free-market" economic situation.

The Fed has withdrawn much of its support to the economy and the labor market continues to improve. U-3 is approaching a level seen only twice in the last forty-five years — in the housing bubble under Bush43 and during the long expansion under Clinton.

View attachment 67190096

Although hard data for 2015 are hard to find, the number of people cited as welfare collectors in 2013 was 35.4%, or almost 110 Americans. This figure does not count the number of people who collect "subsidies" for Obamacare, even though, as we all know, "subsidy" is just another word for "welfare".

The 35.4 Percent: 109,631,000 on Welfare

The issue of Social Security is a sticky one, muddied up in public perception by the stunning increase in the numbers of people who suddenly became "disabled" when their prolonged unemployment benefits under the current Democrat regime finally ran out. It is certain that many of them were simply successful in convincing Democrat "social workers" of their conveniently-timed physical problems so that they could start collecting Social Security Disability. But, Social Security benefits for legitimate retirees (in other words, EARNED benefits) should never be considered as any form of welfare. We've all been forced under penalty of the law to pay all of our working lives into SS and Medicare (those damned FICA taxes), and so those are not counted as welfare. Nevertheless, and aside from that, if a third of the country is getting welfare-suck, that's what I would call "huge"....

 

[donsutherland1]

On the interest rate issue, here's a link to a history of the Federal Reserve's target federal funds rate:

Historical Changes of the Target Federal Funds and Discount Rates - Federal Reserve Bank of New York

 

[SlevinKelevra]

Although hard data for 2015 are hard to find, the number of people cited as welfare collectors in 2013 was 35.4%, or almost 110 Americans. This figure does not count the number of people who collect "subsidies" for Obamacare, even though, as we all know, "subsidy" is just another word for "welfare".

I'm not sure I'm concerned with a number of that magnitude, but with that said, have you ever taken a "home mortgage interest deduction" aka a "subsidy" or "welfare" as you like to call it?

 

[Pollycy]

I'm not sure I'm concerned with a number of that magnitude, but with that said, have you ever taken a "home mortgage interest deduction" aka a "subsidy" or "welfare" as you like to call it?

Sorry... I meant 110,000,000 Americans... pulling at the welfare teat. If 35.4% of the population on welfare doesn't disturb you, what factor would...?

 

[Riveroaks]

Are things looking up now? At what point would you on the right start considering the idea that things aren't going to hell in a hand-basket under Obama?

Payrolls in U.S. Rise 173,000 as Jobless Rate Falls to 5.1% - Bloomberg Business

If you want the REAL unemployment rate you need to double whatever is being reported.

So the REAL rate is closer to 10% right now.

We are in an anemic recovery from a massive financial meltdown caused by speculation in real estate and on Wall Street.

It has been 7 years now since the crash of 2008.

Predictions at that time were for 5 to 10 years in order to fully recover.

We are half way through those 5 to 10 years.

3 more years should do it -- hopefully.