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Interesting times

By Owen Paine on Friday December 5, 2008 09:43 PM

"So here’s what I’m wondering: will it, in fact, even be possible to pull the economy out of its nosedive before unemployment goes into double digits?" That's the terrier of Times Square, columnist and antigolemist at the Grey Lady, Princeton professor of economics and this year's miss faux-Nobel, Paul Armitage Krugman.

Past 10% unemployed already baked-in, Paul? Then the coaster is about to pick up speed, and it's too late to pull out of this nosedive now.

Today, the aggregate job shuck by corporate Amerika is running at about half a million a month.

Now we got a very active job market. The system usually turns over 20 million positions a year. That means each month, at the present rate, maybe 1.8 million jobblers jump ship, or get pushed out over the rail. Add in about 150k new arrivals and re-entrants, and even ignoring the 6 million seriously unemployed already out there, thats nearly 2 million new folks each month lookin' to get into a new job.

But the system right now don't want 2 million new hires. The system only wants 1.3 million. So after sloughing off the dropouts -- the ones that have officially stopped lookin' -- we end up with about 650k newbies without a job to call their own.

Now my figurin' tells me that an unchecked free-fall US economy will produce a peak point total for nationwide once-and-for-all net lost jobs of around 15 million (creatively destroyed positions, I hasten to add, victims of that cannibal king Progress).

Fifteen million jobs lost, before corporate Amerika "feels safe enough" to sustain "present staffing levels" indefinitely. In other words: left to itself, the system will take us toward Depression levels of joblessness.

At today's rate, we'll take 30 months to reach bottom. That's long enough for Emperor Obama to meaningfully intervene.

But, fellow critters, it won't happen that slowly. The system ain't linear. Expect further acceleration in job drops this winter -- maybe up to a million-man month, and as soon as February.

That means too soon, as St Pauly girl seems to be sniffin' in the wind. It's proably too late now, no matter what Abe Redivivus does -- just like the war of southern secession.

Too late, baby, too late to avoid the deeper than necessary jobless pit. No dembo recovery package will kick in fast enough. By the flowers of May... ugh.

These dynamics are taking us into unknown territory. It's quite possible, by hitting the million-a-month level on the early side -- say, by Groundhog Day -- our job market might hit a system phase change where qualitative morphs hit the dynamics. One thinks of the credit sector this past September.

Research project: find the Great One's peak drop and scale 'er up to now. Inevitably, piling up all these lost-job souls stokes hotter flames elsewhere -- or rather, everywhere, or at least everywhere wage households' dollars once reached. Positive feedback frenzy, anyone?

Comments (3)


Here's how it begins:


From little acorns mass movements grow!


using the 500 k per figure
we're now losing jobs at about 1/3 of 1 % of job force per month ( job force ~ 150 mill)

way back to the deep dark one

rough numbering like the very devil himself....

1930 averaged
about 1/2 of 1% in per month job loss
and it looks like '31 ave in at 2/3 of 1%
and at the bottom
in the election year of '32
the average monthly rate came in
at 3/4 of 1%

voila acceleration!!!!

but note tis a slow acceleration
-- majestic by my pre estmate as reflected in the above post --

translation of those three year's ave rates onto our present morass
ie at todays economy scale
using last quater of 2008
as say the beginning quater of 30
we get
a range of quater loss of now's 500 next stage 750 k per month ave
final stage 1 million per month
peaking in some quarter of late 2010
or early 2011 at 1.2 million per month

obviously there'll be some some flux here
not a simple paraboloid incline

but it gives me hope
all may not end in a technical depression moment ie 15% unemployment
if barrack's high kilowatt gang
act fast and furious

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