The on growing the number of jobs in the USA continues to be bad. The growth in jobs has been very poor thus far this century. The good news has been unemployment has been fairly low, it now sits at a 4 year high of 5.7% (which is not great but not horrible by historic standards).
Update: today the labor department announced the unemployment rate increased to 6.1%.
This year the news has been worse, with actually declining numbers of jobs and some economics see No job turnaround on horizon:
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“I’m not expecting increases in employment until next year because in the second half of this year we’ll see very lethargic economic growth,” said Joel Prakken, chairman of Macroeconomic Advisers. The Conference Board has created a new reading called the Employment Trends Index, which combines a number of different economic readings to predict when employment will turn higher or lower. The index, which typically signals three to six months before job losses will turn to job gains, has yet to show signs of a recovery.
“We think the unemployment rate will keep growing, probably reach between 6 to 6.5% by mid 2009 and only start declining in the second half of next year,” said Gad Levanon, senior economist at The Conference Board.
Related: What Do Unemployment Stats Mean? - Economic Fault: Income Inequality
Kiva has added a fellows blog - which is a great idea. The fellows are funded by Kiva (fellows are unpaid) to go to spend time in the countries Kiva facilitates loans for working with the local partners. This post is about Rita Bashnet (in photo) an entrepreneur from Nepal:
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Five years ago, Ms. Rita took her first loan of NRs. 10,000 (USD $150) and purchased some extra seed and fertilizer in the hopes of expanding her small vegetable patch. With the profits from this initial investment and a second loan from Patan Business and Professional Women (they offer a graduated loan program), she then purchased her first dairy cow.
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After hearing about a program that subsidized the installation of methane gas storage tanks, Ms. Rita took another loan and applied for the program. With this new system, she is now able to capture the valuable gas released from her cow’s waste in a simple controlled-release storage tank. Today she no longer purchases gas from the city and can even sell some during times of shortage.
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Ms. Rita exemplifies the potential of microfinance. A combination of access to capital and strategic investment has allowed her and her family to drastically improve their economic situation in a short five years.
Great story, and exactly my home for using capitalism to improve the standard of living for people around the globe. I notice today, for the first time, some of those seeking loans are about to have their listings expire unfunded. Kiva gives listings 30 days to be funded. I have no problem if some loans are not funded (I want to help entrepreneurs by providing funding to build a business - some loans are for things like adding a room onto their house, which is fine but not what I want to support with interest free loans from me). But, this is a big change from when I couldn’t find anyone to loan to (they had so many people looking to lend that they didn’t have enough loans to fund). If you haven’t loaned money through Kiva (or you haven’t added to your loan portfolio recently), please consider it now. If you do, send me your Kiva lender link and I will add it to Curious Cat Kivans. My biggest wish for this blog is to get more readers listed on that page.
Related: Using Capitalism to Make a Better World - Funding Entrepreneurs in Nicaragua, Ghana, Viet Nam, Togo and Tanzania - 2006 Nobel Peace Prize to Economist - Frontline Explores Kiva in Uganda - Trickle Up
The Entrepreneurship Lottery by Scott Shane
Generating significant financial value is something done by a very small percentage of start-ups, but a handful that do generate a lot of value.
Scott Shane is a Professor of Entrepreneurial Studies at Case Western Reserve University
Related: Easiest Countries from Which to Operate Businesses - Capitalism in China - Frontline Explores Kiva in Uganda
Wholesale Prices Rising at Fastest Pace Since 1981
New federal government data showed that the cost of materials used by businesses increased 1.2 percent in July and have risen 9.8 percent during the past 12 months. It was the largest yearly increase since 1981, as businesses absorbed sharp increases in energy and other commodity costs.
Today’s report follows recent news that consumer prices are also rising faster than expected — and faster than the Federal Reserve’s generally accepted target rate of around 2 percent.
Inflation can cause serious damage to your personal finances. As prices increase if you don’t get a raise (or your investments don’t raise) to match the increased costs you must pay your financial situation deteriorates. One benefit, to those with 30 year fixed rate mortgages, is that you get to pay back your loan with inflated dollars. This can be a huge advantage for some, and a huge loss for whoever holds the mortgage.
Related: inflation risk for investments - Inflation is a Real Threat - Food Price Inflation is Quite High - posts on inflation
The Declining Value Of Your College Degree by Greg Ip:
For decades, the typical college graduate’s wage rose well above inflation. But no longer. In the economic expansion that began in 2001 and now appears to be ending, the inflation-adjusted wages of the majority of U.S. workers didn’t grow, even among those who went to college. The government’s statistical snapshots show the typical weekly salary of a worker with a bachelor’s degree, adjusted for inflation, didn’t rise last year from 2006 and was 1.7% below the 2001 level.
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To be sure, the average American with a college diploma still earns about 75% more than a worker with a high-school diploma and is less likely to be unemployed. Yet while that so-called college premium is up from 40% in 1979, it is little changed from 2001
The job market is more challenging than it was, it seems to me. Counting on being able to steadily progress during your career, without any gaps or times when you must accept much less than you hoped, is risky. This is one more reason why it is so important to spend less and save more in the good times in your career.
Related: What Do Unemployment Stats Mean? - Engineering Graduates Again in Great Shape - USA Job Growth - The IT Job Market
In response to: Fair Use Rights by David Bradley
Copyright is a taking of a public benefit for a private entity. This was put into law in order to increase the total public benefit. The idea was that taking from the public to provide the creator a limited-term, exclusive, government-granted, right to their work would encourage individuals to invest their time in creating works that would benefit society.
So the debate is properly about how great the taking from the public should be. It seem to me the current situation is completely corrupt. Many of the actions are taking public benefit to provide to the private entity where no possible public benefit exists. Extending copyright periods of long ago created works, where obviously the public is harmed purely for private benefit. No possible argument can be made that their is a payoff to the public for this taking.
If you wanted to take such an action and made it only for new work then their could be an argument that now a creator knows they have 100 years of government provided rights and therefore investing more time and effort in their work creates new and better work. I don’t believe this argument but at least it is possible. The current actions though are mainly about large companies using government to take from the public to provide themselves private benefit with no corresponding public benefit.
Lawrence Lessig is the person who has the best insight in this area, in my opinion: The Value of the Public Domain.
Dr. Deming published his seven deadly diseases of western management a couple decades ago. I would add 2 new diseases: Excessive executive compensation and a broken intellectual property system.
Fair use is the right to reference (and quote limited portions of) works that have been granted government copyright protection. This is integral to the whole idea of creating the greatest public benefit (even while providing some government imposed limits on public rights to the creator). The large companies now are using lawyers to greatly increase the harm to society by expanding the taking of public benefit. They threaten and scare many into paying fees (or completely avoiding works that have been granted limited government granted copyright rights) where none are are rightly due (see Lawrence Lessig for examples). This causes great harm to society for the private benefit of a few. This is an obvious failure of government. Those countries that are successful at adopting more sensible systems are going to have a great advantage over those countries that chose to continue to increasingly bad practices of harming society to benefit a few private interests.
Related: What is Wrong with Copyright Taking Public Good for Private Special Interests - Innovation and Creative Commons - Diplomacy and Science Research - More Government Waste - Crazy Watchmen - General Air Travel Taxes Subsidizing Private Plane Airports - China and the Sugar Industry Tax Consumers
I believe in this model. Giving People the Opportunity to Succeed - Provide a Helping Hand - Creating a World Without Poverty
U.S. Consumer Prices Jumped in June by the Most in 26 Years
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Prices increased 5 percent in the 12 months to June, the most since May 1991. They were forecast to climb 4.5 percent from a year earlier, according to the survey median. The core rate increased 2.4 percent from June 2007, also more than forecast.
Energy expenses jumped 6.6 percent, the biggest gain since the aftermath of Hurricane Katrina in September 2005. Gasoline prices soared 10.1 and fuel oil jumped 10.4 percent.
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Rents which, make up almost 40 percent of the core CPI, also accelerated. A category designed to track rental prices rose 0.3 percent after a 0.1 percent gain in May. Today’s figures also showed wages decreased 0.9 percent in June after adjusting for inflation, the biggest drop since August 1984, and were down 2.4 percent over the last 12 months. The drop in buying power is one reason economists forecast consumer spending will slow.
The continued increase of inflation is a serious problem. Eventually the federal reserve needs to take serious action (raising the discount rate). And the politicians need to stop raising taxes on the future to spend more and more every year. Their continued financial irresponsibility is a large part of the reason for the declining value of the dollar - along with the voters that keep electing those proposing large increases in spending while pushing off paying for that spending to future tax increases.
Related: inflation investment risk - Food Price Inflation is Quite High - Bernanke warns of inflation - Politicians Again Raising Taxes On Your Children - USA Federal Debt Now $516,348 Per Household
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The largest oil consuming countries (and EU), in millions of barrels per day:
| Country | consumption | % of oil used | % of population | % of World GDP |
|---|---|---|---|---|
| USA | 20.8 | 25.9 | 4.5 | 21.0 |
| European Union | 14.6 | 18.1 | 7.4 | 21.9 |
| China | 6.9 | 8.6 | 19.9 | 10.7 |
| Japan | 5.4 | 6.7 | 1.9 | 6.5 |
| Russia | 2.9 | 3.6 | 2.1 | 3.2 |
| Germany | 2.6 | 3.3 | 1.2 | 4.3 |
| India | 2.4 | 3.0 | 17.0 | 4.6 |
| Canada | 2.3 | 2.9 | 0.5 | 1.9 |
| Korea | 2.1 | 2.7 | 0.7 | 1.8 |
| Brazil | 2.1 | 2.6 | 2.9 | 2.8 |
| Mexico | 2.1 | 2.6 | 1.6 | 2.1 |
All data is from CIA World Factbook 2008 (downloaded Jun 2008). GDP calculated using purchasing power parity.
Related: Top 10 Manufacturing Countries 2006 - Country H-index Rank for Science Publications - Best Research University Rankings (2007)
I would guess a majority of people that read this blog are in the top 2% of earnings in the world. Many might not think they expect to live with more economic wealth than 98% of the world but their expectations seem to indicate that they do.
Generalizations about age groups I find to be mainly useless (providing no actual valuable information, either because it is plain wrong or the truth is so limited as to provide little value). There are often differences among age groups, but rather than the binary way it is presented it is more like those in their 20’s have x trait to say 45% and those in their 30’s have it 35% - hardly the distinct separation many claim. I do, however, think many in the USA today seem to think that it is their right to be rich. This can lead to behavior that is detrimental in the long term - since they are entitled no need to work hard, since they are entitled no need to worry about spending more than they have, since they are entitled there is no need to invest so the future will be prosperous, since they are entitle no need to worry about their own future (savings, career planning…)…
I don’t think this is very defined by age: though to some extent I feel this has grown over the decades. Those that lived through the depression, World War II, without air conditioning, without central heating, had parents that worked in factories when the parents were 14, only the richest in the USA lived in mansions (Mc or otherwise)… are not as likely to think that they just have a natural right to be rich.
Other countries are making the sacrifices today to invest in a prosperous future. It seems to me the USA is mainly counting on the huge economic wealth that has been built up to continue to provide it a prosperous future. That wealth does provide a huge advantage. But if too much is consumed today the future will not be as bright. And for the last few decades it seems to me we have been spending down the huge advantage more than building it up.
It is nice to be rich. But a society believing it is owed a life of luxury has not worked out well over the course of human history.
Related: The Ever Expanding House - Creating a World Without Poverty - Charge It to My Kids - Engineering the Future Economy - USA Federal Debt Now $516,348 Per Household - China’s Economic Science Experiment - Trying to Keep up with the Jones - It’s Not Money