Oops. Yesterday’s post went long.
Lesson learned: explaining something that is a big mystery to most folks is hard to do (for me anyway) in a quick posting. How does Krugman do it?
I’m keeping stats (remember the MBA’ism: that which is measured is controlled, and remember this Friedman’ism: that which is publicly declared is hard to back away from).
Here they are:
|Date||Words||Title Words||Spaces||Spaces per Word||Content|
Growth vs. Value
The trend is not good. Not good at all.
So why count title words? Because one comment I got on the Goldman piece was that, upon receiving the email, one spouse had said to the other, Jeeze, another email from John, and this time even the title is long.
And why count spaces per word? I do that in an effort to see if my language is getting more jargony. I don’t know whether this is a valid measure of jargon-creep, but, hey, the two numbers were already there, and dividing one number by the other is so very easy to do in Excel that I figured I would just go ahead and do it and see if the data-exhaust proved interesting.
* * *
The jobs report came out today — the NFP, as Barry Ritholz (and others) call it. Predictions had been for a boffo number of $700k+ new Non-Farm Payroll jobs. It came in at less than two-thirds of that, but initial punditry (it takes a while to go through all the data) indicates that all but 20k of the new jobs were due to the U.S. census hiring a bunch of people. So it’s a very disappointing number, and the markets are falling (off 3% or more as I write this, with the Dow again below 10000) (factoid: many style guides for publications call for never using a comma in Dow numbers).
Now I could get all political about this. And surely some politics will come in here, because job growth is a thoroughly political issue, stemming right from the labor vs. capital dialectic that has informed economic and political thinking for the past 150 years (not to mention having informed real life since . . . well, since the first time two or more organisms somewhere in this ol‘ universe ever hung out together).
The fact is that, without job growth, whatever recovery we have is fairly meaningless to everyone, and 10000% meaningless to those seeking jobs. We are, after all, all in this together (which, unto itself, is a very political statement, yes?).
* * *
A year ago lefty economists argued that the stimulus package was too small by at least half, i.e., that the hole it was trying to fill was about twice as big as the stim.
More technically and jargony, they argued that the shortfall in aggregate demand was closer to $2 trillion than to $1 trillion (out of an economy of about $14 trillion). So think of this $2 trillion figure as the amount of economic activity that these economists view the economy as having the capacity to generate, minus the actual economic activity generated.
To plug that hole, they argued, you need to have the government spend more — an argument that anyone who ever took Econ 101 knows is what Keynes was all about.
The righty economists, on the other hand, argued that Keynes doesn’t work, and that government spending is bad. Bad, bad, bad.
I have to confess that I am less able to make the righties‘ arguments because I don’t totally understand them. And perhaps it is also because, as many argue, their arguments have no basis in reality.
At any rate, the result of all this, as embodied in a deadlocked Senate, was to do a stimulus half the size the lefties thought appropriate (let’s see, if you average the $2 trillion the lefties want. and the $0 trillion the righties want, you end up with a stimulus package of less than $1 trillion, a sizable portion of which is tax cuts, which most academics believe do not foster aggregate demand nearly as efficiently as government spending).
* * *
So here we are today, with today’s NFP putting thoughts of a double-dip recession squarely back into the picture, i.e., a post-recession recovery that peters out, never having really gained traction, to be replaced by a second recession, hopefully not as severe as The Great Recession.
Let’s hope not. Most folks I know just can’t take any more of this. Of course, they will if they have to, but for most people the mantra was to just get through 2009, which meant that, when 2010 finally rolled around, they just didn’t have the spirit left to deal with yet more bad times.
And what to do about this? How to maintain your financial health? The answer is to (a) spend less, which (b) requires rejiggering one’s fun-ometer to appreciate things that are free or at least less expensive, and (c) de-risk your money-in (it’s still not a great time to quit your job and pursue your dream . . . ), and (d) be smart about your money-stored.
Ah, but this latter point is especially hard, because, right now, everything having to do with money-stored is scary.
Bonds are scary (with historically low interest rates, one of these days interest rates will go back up, and the Vice-Versa Rule says interest-rates-up-leads-to-bond-prices-down and vice versa).
Stocks are scary (up some 60% from their 3/9/09 lows).
Cash is not scary (but it is expensive in terms of opportunity cost).
And real estate is real scary (no explanation needed here!).
So there are no easy answers when it comes to money-stored.
Hmmm . . . might it be wise to have someone who knows what s/he is doing help you figure out what to do with your money-stored?
* * *
We close, as before, with the foldback, both to the top of this piece and to yesterday’s piece.
So you wanna see how stale MSFT’s ideas are? Use the spell-checking in Google’s Blogger (the tool I use to post these pieces). It uses a very different approach compared to the approach MSFT has used in its products for what, the past 20 years? And it is in some ways very much better — eye-opening at the least. The cloud it is good.
‘Til tomorrow then, here’s to your financial health, and may it continuously improve (notwithstanding risks of double dips, etc.).
P.S. 989 words. The trend it is reversed.