GDP Sector Growth is as follows:

- Inventories 94 hundredths of 1% (Cash for Clunkers inventory build)

- Residential Construction: 53 hundredths of 1%

- Federal Spending: 62 hundredth of 1% (Unemployment Programs, etc)

- Motor Vehicles: 1.01% (Cash for Clunkers)

- Miscellaneous: 4 tenths of 1%

What might have been a contraction in the 3rd quarter was reversed by Cash for Clunkers (mostly) and the ARRA. <link> Angry Bear Blog, hat tip to DOLB and kharris. Looks like GDP growth was all government. Anyone still looking to raise Fed Rates?

Long Term Unemployment as shown here: <link> Economists View Long Term Unemployment is at the highest level since WWII with slightly < 2.5% of the population experiencing unemployment >27 weeks

Spencer's Argument on Labor Share:

A far better statistician than I and also an accomplished economist, Spencer at Angry Bear <link> makes a well reasoned argument that Labor has not seen its fair share of productivity increases for the last 20-30 years.

Pre-1973, productivity growth averaged 2.8%. From 1974 to 1995, productivity growth slowed to 1.5% before returning to 2.4% after 1995. Real GDP followed a similar pattern, falling from 68% (ratio prod to real GDP) in the strong productivity era to 50% in the weaker part and returning to 80% after 1995. Real GDP growth equals productivity growth plus hours worked or employment growth. In 2009, a 1% increase in real GDP results in a 2 tenths of 1% increase in hours worked versus 3 tenths of 1% in pre-1974 and a 5 tenths of 1% in the 1974 to 1995 period. <link>

Examining non-farm Productivity versus Output gives a clearer picture. In the 1990s and early 2000 recoveries, productivity growth outpaced Output growth resulting in drops in hours worked, decreased employment or what were called jobless recoveries. <link> It appears the real issue is weaker growth rather than productivity improvements. The result of this change since 1982, labor has experienced a decreasing portion <link> of the productivity gains. The graph represents labor payments as a portion of the total nonfarm business output as reflected in 1992 $.

So what happened to business after tax profits? <link>

Old Topic New Chart; 2001/2003 10 year Impact on Taxpayers

Not much has changed here. ~25% of the 2001/2003 tax breaks were skewed toward 1% of the taxpayers, ~ 1 million taxpayers, in the amount of ~$550 billion. Note also what the $200,000 salary tax breaks amounted too. <link>

In a nutshell, the recent 3.5% GDP growth was a sham brought about almost entirely by government spending; productivity has been rising since 1995 allowing employers to downsize either workers or hours worked; the 2000s boom was almost totally brought about by Bush and Greenspan goosing the economy by tax cuts and low interest rates...weakening the dollar by nearly 40%, encouraging people to pile into overpriced housing as their de facto (and mostly tax free) retirement plans, and giving most homeowners who hadn't experienced real wage increases since 1999 little choice but to resort to the (tax deductible) Housing ATM until 2007, thus, leaving an intolerable hangover for the next generations to pay--in every sense of the word. Does that about sum it up?

I would say it was a pretty rotten deal, wouldn't you?

diogene:

The 3.5% growth is not a sham but you need to understand what it consists of so we don't leap on the interest rate increase wagon. Productivity Gains have increased, real GDP growth has not. I wonder why? Take a guess as I think I know and am waiting for an answer elsewhere.

I would say the worse is yet to come with Labor. We are a part of the decrease of Labor's share of Productivity Gains. The new frontier for the next decade is the increase in Automation minimizing Labor even more or "I Robot."

Output is way down physically. Output is counted in dollars, which are way down since 2001.

No recovery has occurred. There are no physical gains available for workers -- unlike global profits.

This is all the way things are supposed to work in a globalized system. And it works that way even moreso because the Chinese are in on it. Plus USA's labor has lost
skills and brainpower.

Of course the Chinese are in on it - they are 20% of the world's population. So are the Indians. They didn't press the issue, US business interests did. Their internal price/wage relationships were reasonable. However, when we had negligible commerce with them, the fact that the scale factor between our currencies was bizarre had no real consequence - they could have been on another planet. Once there were massive interconnects between the two economies, it was suddenly of great consequence. Don't blame the Chinese - our oligarchs found them!

I didn't miss the point, the other day, when you mentioned that subtracting the Chinese exports from our GDP in US dollars was misleading. If the GDP was calculated with foreign trade scaled by PPP ratios, it would be much more revealing. Almost every manufactured product I buy is made in China: printers, Levi's, towels, clocks, telephones, light fixtures - everything! And I have to say that I don't really see a significant difference in quality from things that were formerly made here. I think that all products made anywhere in the world have been changed to minimize the possibility of disassembly and repair. It's hard to know whether the driver is to force replacement buying or to reduce assembly costs. I can remember when my father would remove the sole plate from an electric iron and replace the tungsten(?) heating element. But that capability went away long ago, when irons were still made in the US. I tend to worry a bit more about chemical mishaps in Chinese pharmaceuticals and bathroom preparations, but the government there deals harshly with those found to have compromised product quality intentionally, so I suspect they will be more rapid in discouraging those practices than we have been.

I think that one point that is consistently missed in reportage and commentary is the huge markups of the prices of Chinese goods on the US market so that the price is about equal to what it would be if the products were made here. Obviously, a good deal of that markup is flowing to and benefitting that same top 1% to whom all good things flow. If the markups were reasonable (i.e., the same percentage as is applied to domestic products), then the prices would be a good deal lower and the bottom 99% might find that the economics of this new relationship were perfectly acceptible. It isn't as if we would rush to import more Chinese products with the lower prices - there is little that could be imported from them that isn't already and the oligarchy would see less profit and thus have less impetus to import more Chinese goods.

By the way, although I am a great fan of what is here considered Asian food, I have to say that the Asian women who have grown up on a Western diet are noticeably longer and leaner. No doubt, that hasn't escaped your notice.

From a very funny song by Ry Cooder titled 'Every Woman I Know (Is Crazy 'Bout An Automobile':

I used to date women who were long and lean!

But now I'll take 'em knock-kneed and bow-legged---

Heck, I'll even take 'em BALD!

LeRoy: The protagonist is complaining about his lack of success with women due to his lack of an automobile. So he goes and steals one.

I don't like them over 5'6" unless fixed up for Victoria's Secret. And only Mediterranean-European!

Some of those Asian women are the cat's meow!

A few years ago, when 'Enterprise' was on TV (a Star Trek spinoff), I had the 'hots' for the female Vulcan science officer named T'Pau. Interspecies romance would have been AOK with me, if that's what aliens really look like!

as Tom Hagen told Sal Tessio and as I told Phil last week.

My wires demand shorties with olive-complexion and major T&A. Exceptions include Sharon Wilde (and Stone) and Britney Skye.

When you were younger, did you stalk Rita Moreno?

No. Too old, bony, dark.

My yout favored Joan Collins and Tempest Storm and Blaze Starr.

Then came Cardinale, Lahvi, Lollab...

Fifteen years ago it was Kari Salin (aka Wuhrer).

I looked up Kari Wuhrer nude pictures. In a few, she is a dead ringer for my older kid, whose mom was a Jewish Bardot-Cardinale combo.

Oy veh!! Gevolt!!