Why don’t they consider an unemployment rate of zero to be even healthier? How are they defining “healthy”?
An unemployment rate of zero means that industries aren’t growing. You naturally expect to have some unemployment when industrial growth occurs, since it takes a finite amount of time to fill newly created job openings.
Actually, I should amend that last statement to say that zero unemployment means that people aren’t around to fill job openings. That is not good, since it means that vital functions are not being fulfilled. (This is not quite the same as saying that there is no industrial growth, and so I was speaking hastily in my last post.)
If industries are growing, and if people are around to fill the requisite jobs, then there will be some unemployment, since it takes a non-zero amount of time to fill the positions being generated.
But why is growth considered essential to a “healthy” economy? Why can’t an economy be “healthy” and be in a steady state?
Because the population is not in a steady state?
That just begs the question. Besides, in Europe the population is declining, or threatening to, but somehow I don’t think any orthodox economist would argue that a steady-state (or contracting) economy would be “healthy” even under those circumstances. Makes me wonder what, exactly, their values are. If they’re assuming that it’s not enough to be rich, people (in the aggregate) always have to be growing steadily richer – isn’t that an assumption that needs to be examined more closely?
Well first, even if we consider a steady-state economy to be healthy, a growing economy is generally healthier. (I say “generally” because it has to be sustainable growth – unlike the dot.com bust, for example.)
And second, a steady-state economy is a stagnating one. It runs the risk of being overtaken by other economies which are indeed growing. In a world of capitalist competition, particularly in high-tech arenas, that is simply not a good thing.
No, not really. JThunder gave a good reason. More generally, and more closely related to my point, the number of people was not the only thing I was refering to. Even in a declining population, the demographics make up of that population will not be stagnant. A stagnant economy will have fewer resources available to alter course in order to service that population.
One of Europes big problems is that their productivity level will not sustain them in the expected future. Unless they can develop ways for fewer and fewer workers to support more and more non workers, they will have a crisis on their hands. We have a similar problem. Although, we have an expected continuation of immigrant growth to help alleviate it quite a bit.
The only way for a population to be stagnant is for it to be dead. 
Are you saying Europe doesn’t?
Yes. In some studies I have seen they project negative population growth over the coming century. I understand that such things are not certain. But that is what I have read.
Here is a cite. it contains this paragraph:
This sort of projection is what BrainGlutton was refering to if I am not mistaken.
BTW, I really love this place. I was going to leave my response without the cite. But somehow that did not seem dignified enough for this board. SDMB ROCKS!
Reuters: More U.S. jobs seen in June, buoying Bush
The Democrats had better hope that Iraq is a disaster, because the Bush campaign is going to be all over the economic news.
This isn’t just good job creation - it’s GREAT job creation. A million jobs in 100 days, or almost half of what was lost in the previous three years. And the numbers are getting stronger, not worse. The data shows that the jobs are NOT low paying ‘McJobs’, but that more high paying jobs are being created than low paying jobs. And not only are jobs being created, but wages overall are on the rise.
Also mentioned was that even though the job creation numbers are outstanding, the unemployment rate hasn’t changed because people who had given up looking for work before are now looking again. This also does not bode well for the Democrats, because it shows that confidence in the recovery is trickling down even tho the unemployed. Consumer confidence is near record highs as well.
The fed raised rates today .25 percent because the economy is heating up so fast that there are fears of inflation. By November, all the economic talk is going to be, “How much stronger can the economy possibly get?”
There are also some hidden factors in here that could push the economy even harder. For instance, productivity has increased almost 30 percent in the last four years, largely due to transformations in manufacturing processes due to the intranet, internet, and process technologies that were supposed to come along in the dot-com boom. Well, they’re here now, and they are making us a lot more efficient. Productivity gains start out by showing up on the bottom line in corporate profit statements - it’s a leading indicator. But as profits go up, competition forces expansion, hiring, and pay increases.
So we’re in the middle of a big boom, but this boom is driven by fundamentals. The last boom was partly fundamental driven, but was also partly due to a bubble. There are no bubbles this time - just a lot of pent-up demand and productivity gains. This could be the start of an expansion like the one we saw start during the Reagan years.
That is not good news for John Kerry. The latest polls show a modest gain for Bush, due mostly to increasing numbers of people saying he’s doing a good job on the economy. By November, that’s going to be a big boost.
And if Iraq drops off the news, Kerry is in big trouble.
So, when Bush loses in November, it won’t be because of the economy, and it won’t be because of Iraq. It will be because America has decided we just don’t like him.
Is Iraq scheduled to drop off the face of the planet by November or something? Or some kind of mass amnesia gas to be released?
In any case, I don’t put much value in the economy’s resurgence. I think that has more to do with natural market flunctuations than Bush’s administrative genius (ditto with Clinton)
But when it wasn’t doing well, it was all his fault?
Not to me. It was because of the market collapsing into itself when the tech bubble burst. It inflated, burst, and is levelling back off, just like I said it would in 1998.
I will, however, credit Mr. Bush for putting us even more into debt.
…and with any luck, by November 2004 we’ll have almost as many jobs as we did in January 2001!
Spin it all you like, Sam, but the simple truth is that the only economic news we’re getting is “it sucks less now!” Short of divine intervention, job creation under George W. Bush will be embarassingly pathetic.
You’re the one applying spin. I just reported on what the data says. It doesn’t say “It sucks less now”, it says, “The economy is roaring”.
Maybe its true? Hundreds of millions of americans can find work, why is this guy so special that the system has singled him out? :rolleyes:
Because the economy expands and contracts.
Also seasonal jobs, cyclical cycles, and all this comes into account.
Then theres the grandaddy of them all; inflation. Inflation at 0% unemployment would be through the roof, thus interest rates would be high, thus the economy would slow yadda yadda yadda.
4-5% is a nice stabiliser.
Three years of job losses + several months of job gains = It sucks less now.
Really, Sam, it’s not as if the universe didn’t exist before 2004…