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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (51066)	1/23/2006 7:46:25 PM
From: benwood	Read Replies (1) \| Respond to of 110194

"My base hourly rate is 6.4 times what it was in 1979, the year I started doing what I do now." How much of that 6.4x increase was due to raises for experience, added responsibility, etc.? Looks like you are comparing apples to oranges to me. My own salary is 4x what it was in '83 when I started; however, I'm paid about 2x what a rookie is, so I've gained 100% due to experience and added responsibilities. How does the newbie hourly rate today compare with that which you received in '79? And how does the hourly rate for a 26-year experience veteran in '79 compare with you today?

To: GraceZ who wrote (51066)	1/23/2006 8:40:38 PM
From: anachronist	Read Replies (1) \| Respond to of 110194

That is exactly what I'm talking about when I say people quote articles written by economic illiterates. Mark Zandi is not exactly an economic illiterate, but lets take a look at what you have to say: Just take a simple broad measure like per capita income: In 1979 it was $9146, In 2003 it was $31,632 Ok now you are comparing apples and oranges. The statistics in the article looked at the differences in pay between, for example, 35-44 y.o. male workers over that time period, NOT per capita income (what do you mean by per captia income?). Why is there a discrepancy? I'm not sure, but I bet I could write my Masters thesis on it. Back in 1982 (the labor force participation rate for women was still rising although not as sharply as it did in the 60s and 70s, but so was the number of households headed by women) the median for the US household was $24,000 and in 2005 it was $58,500.The CPI calculator yields: $24,400 in 1982 is $49,204.56 in 2005. So 15.9% rise in real median household income since 1982. That seems to support the author's thesis, given the rise of two income households and the equalization of women's pay. As for the erosion of those high paying manufacturing jobs, I have one, I'm officially a manufacturer of photographic prints. My base hourly rate is 6.4 times what it was in 1979, the year I started doing what I do now. You are not a laborer, you are a capitalist and an entrepreneur. I wonder what the average hourly wage of a manufacturing worker is now compared to 1979, in real terms?

To: GraceZ who wrote (51066)	1/24/2006 2:49:26 AM
From: bond_bubble	Respond to of 110194

Well Grace, what you are forgetting is this: At this elevated salary, US can not afford engineers, can not afford university professors, can not afford manufacturing industry. With that high house price, the salary of the above jobs are slavery jobs!! That is exactly the reason why jobs are migrating to Asia and people are not preferring engineering etc. Unfortunately, you need patience. Just wait for the deflation to hit soon - and you will see all those wall street jobs, Real Estate/Mortgage Agency jobs go up as vapours!! Then you might want to discuss whether that 31K or whatever number is better or not!! Then you might say, Oops, had the CPI had been higher, we might not have printed so much and exported the jobs....Now, Social security is going bust, Medicare etc... You get the drift!! Printing money is always fun may be for 20-25 years. But it takes that long for the drug to works its way through!!! You just have to be patient to listen to the music!!! BTW, why do you think CPI itself is important? Why not just ban that statistics? Did you ever think of that? Price stability was a concept introduced to the world only in 1920s. Never before. What ruled before then? People did not just care for that number as the world was mostly in deflation!! What mattered then? Interest rate stability!! That is what gold standard provides (interest stability means less maladjustment!!). So, what happens if the Labor dept just releases CPI as always 2% and refuses the world to look into the actual data? Nothing really. At this manic stage of credit bubble who really is caring for CPI? The only significance of CPI is that it is supposed to guide the FEd in printing money. Fed is very much aware that if it gets out of hand, there will be lot of unemployment. Unfortunately, the Fed is hoping that they can keep printing by reporting low CPI and keep the boom going!!! Only in hindsight (when the recession hits) people wonder, oh why dont I've requested the Fed to report higher CPI number so that the maladjustments would not have been high!! The pain in the recession depends only on how far you carried this money printing!! Longer the boom, longer and deeper the bust!!! If you dont believe in boom and bust, the above will make no sense. But if you believe in boom and bust, the coming bust will be such a razor sharp horrifying freezing period. You want a lower CPI number? Just go for it. Let the Fed go for it!! OfCourse the bust will hit no matter what. Are you ready for the consequence? Is this argument of quality of life adjustment etc... Are they relevant at all? In my opinion: NO.