Gut-wrenching tally balloons. Gig workers and contract workers are starting to be included. Florida tries to catch up.
By Wolf Richter for WOLF STREET.
Over the past five weeks, 26.5 million initial claims for unemployment insurance have been processed. In the week ended April 18, 4.427 million unemployment claims, seasonally adjusted, have been processed, over six times the peaks during the prior unemployment crises in 1982 and 2009:
The unemployment claims reported today by the US Department of Labor are those that the state offices were able to process – not including claims that have been filed but haven’t been processed yet.
Under the sudden explosion of unemployment claims a month ago, state unemployment offices fell far behind in processing the claims, amid reports of crashed websites, unanswered phones, and eternal hold-times. Since then, the unemployment offices have ramped up staffing, expanded hours of their call centers, and boosted the capacity of their servers to where they can better handle the tsunami of people trying to file claims online. And they’re gradually catching up.
Nevertheless, new layoffs are constantly being announced. And the implementations of the provisions in the stimulus package to expand unemployment insurance to contract workers, the self-employed, and gig workers are just now being rolled out state by state, and will mostly fall into future initial claims data.
The 12 states with the most initial claims this week.
Florida is finally making some progress in catching up in processing claims. In the report a week ago, Florida had processed only 181,000 claims. But in the current reporting week, it was able to process 505,137 claims, just behind California.
The table below shows the 12 states that had the most initial claims for unemployment insurance in the week ended April 18:
| Top 12 States, Initial Claims, week ended Apr 18 | ||
| 1 | California | 533,568 |
| 2 | Florida | 505,137 |
| 3 | Texas | 280,406 |
| 4 | Georgia | 243,677 |
| 5 | New York | 204,716 |
| 6 | Pennsylvania | 198,081 |
| 7 | New Jersey | 139,277 |
| 8 | Michigan | 134,119 |
| 9 | Ohio | 108,801 |
| 10 | North Carolina | 104,515 |
| 11 | Kentucky | 103,548 |
| 12 | Illinois | 102,736 |
States’ comments on sectors with increases in layoffs.
Five of the six states where unemployment claims increased from the prior week by more than 1,000 provided comments about the industries that layoffs were concentrated in. Still absent in the special mentions are the industries of finance and insurance – the biggest industry in the US – and jobs directly related to technology. Many of these jobs have switched to work-from-home:
- Healthcare (healthcare service providers for elective services, including as dentists, have shut down)
- Social assistance
- Accommodation
- Retail trade
- Wholesale trade
- Arts & entertainment
- Food services (restaurants, cafeterias, etc.)
- Administrative
- Manufacturing
- Construction
But many states reported “fewer layoffs.”
This week, 42 states reported declines of more than 1,000 initial claims compared to a week ago. Last week, only six states had reported declines. In California, the number of claims that were processed per week had topped out at over 1 million. Last week, it dropped to 660,000; this week, it dropped to 533,568. In the comments, some of these states listed the industries that had “fewer layoffs” than in the prior week. These industries include:
- Services
- Retail
- Manufacturing,
- Construction
- Manufacturing,
- Accommodation
- Healthcare
- Social assistance
- Arts and entertainment
- Agriculture
- Food services
- Waste management and remediation services
The “Insured unemployed” spike to terrible record.
A person who has filed an “initial claim” for Unemployment Insurance (UI) and still doesn’t have a job a week later is added to “insured unemployment.” The number of the “insured unemployed” – often called “continued claims” – skyrocketed to 15.98 million, by far the highest in the history of the data series. The high before this Covid-19 era was 6.63 million in May of 2009.
For the week ended April 18, the “insured unemployment rate” soared to 11.0%, blowing by the record of the pre-Covid-19 era of 7.0%, set in May 1975.
This “insured unemployment rate” is based on actual UI claims, and is different from the survey-based unemployment rates that are released on a monthly basis in the jobs report. Those monthly unemployment rates attempt to show the percentage of people in the labor force who are actively pursuing employment but cannot find it. But many of these job seekers are not covered by UI and are therefore not included in the UI data. So the unemployment rate in the monthly jobs report will be far higher when it catches up.
This was week five of the collapse of the labor market. Layoffs are still happening in large numbers. In addition, contract workers, self-employed, and gig workers will show up in larger numbers in the UI claims going forward. So the gut-wrenching tally will continue to balloon for a few weeks.
Home sales are shaping up to be a lot weaker in some places than in others in the Covid-19 era. Here are the 20 cities with the largest drops. Read… Housing Market under COVID-19: Regular Folks Retreat, Foreign Investors Blocked, Large US Investors Gone, iBuyers Frozen
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Sigh. I’ve been posting here as long as a month ago that the economic misery will be far higher than the viral misery. Or if you prefer the virus deaths were overestimated and the economic deaths ranging from suicides to missed diagnosis of cancer far underestimated (ignored). And all the secondary effects ranging from hunger, drugs etc. also ignored.
Social distancing was needed, but not a national lockdown. Bartenders needed to be let go, but not, say, dentists, who have been wearing masks and gloves for AIDS for 20 years! And elective surgeries postponed still in many places – where there is no surge. And why are grocery stores safe but not clothing? How can Germany open up a bit but not states who have less of a caseload than them and if they do they are equivalent of mass murderers.
But I’m tired of trying to make common sense changes to alleviate economic distress. It is shutdown everyone forever and there are no consequences and if you disagree you are a science denier.
Well said. Frankly common sense is waning everywhere it seems.
King Edward,
50,000 people in the US have died of the coronavirus in the EIGHT WEEKS since we started counting. The number of deaths has DOUBLED in 12 days (from 23,800 on April 11). And this is just the beginning. “Common sense” and basic math tell you that this shit is dangerous and that if you let it get out of hand, an awful lot of people are going to die.
Well said. Frankly common sense is waning everywhere it seems.
It is the first time in the history of mankind that healthy people are quarentined. By all means quarantine and support the people most at risk and make people aware of thier responsabilities to others. But total lockdown of your economy?? We must realise that people die, the person reading this as well as myself will die someday of something, its natural.
The closure of your working economy is not natural.
Sweden understood this and is now coming out of this nightmare with fewer deaths per 100K than any other lockdown country and with a still thriving economy (please look it up, don’t take my word for it)
There is a bigger picture here. I want to believe that my government (The UK) is honest and has undertaken this drastic measure with good intent…… but I’m 67 years old and have seen a great many things in my time and to be honest…. this smells fishy to me.
You don’t bankrupt your country because 0.02% of your population dies prematurly.
So whatever God you kneel to or pray to, please say one for me.
Rik Hughes,
Sweden’s covid death rate per capita is about ten times higher than that of its neighbors. And it’s surging. It just jumped by 131 deaths yesterday to 2,152. Deaths have DOUBLED in 10 days. This shit is taking off. And yet, Swedes ARE practicing social distancing in a voluntary manner. They’re staying at home, they’re working at home, they cut way back on traveling, etc. Their economy is getting hit too.
reviewing last week’s CDC data told me that 80% of deaths are people >65yo and 89% of deaths are people >55yo. with a contagion index of 3.5, this virus needs about 65% herd immunity(1 – reciprocal of the index). if hospitals are not overwhelmed, then why not open up the economy and wear masks for another month or so? the old and the weak can self quarantine for longer. i think we have passed peak deaths, so it is possible that the worst is behind us.
seems like there is no short cut to achieving herd immunity and that collateral damage is unavoidable. people are so scared of getting sick that they are scared to live. quarantine measures will not snuff out the virus and it is my understanding that a vaccine or herd immunity are the only ways out of this pandemic.
maybe this pandemic will make the average american think more deeply about health and nutrition and exercise? obesity, diabetes, poor nutrition and lack of cardiovascular fitness are very common comorbidities.
Are people dying of COVID19 or is COVID19 simply the straw that broke the camel’s back? i think deaths are being over reported because of this.
is the virus actually very deadly? or is the virus simply pulling back the curtain and exposing the poor health and the weak constitution of the ‘average’ American?!
maybe this virus will make Americans think more deeply about their choices as related to agribusiness, nutrition, stress, health& wellness; so that people are motivated to make meaningful change in their lifestyle habits, which will ultimately create a more free society with constituents that are healthier and more vital in mind and body.!
F,
In the US, the rate of people dying due to this virus is still over 2,000 per day, every day, since April 5. It hasn’t slowed down. 2,000 deaths per day means 60,000 per month. We’re now at 53,000 since we started counting, 25,000 over the past 12 days. If this keeps going for another five months, we’re talking nearly 400,000 deaths. And that is with the lockdown measures. Without it, you would have gotten horrific outbreaks like New York City all over the country.
The concept that this virus doesn’t matter because it largely kills older people and people with underlying health conditions — this is two-thirds of all Americans — is heinous and heartless.
There can and should be a reasonable discussion as to when and how to loosen the lockdowns, and how to prepare society for living with the virus.
But starting this discussion by claiming that the virus only kills people that deserve to die because of their dietary habits, and because they’re old, or whatever, as you did, is heinous, and it caused a crack in the earth to open up, and you fell through it and went straight to hell.
I thought we only shut down places for Chernobyl or Fukushima nuclear disasters.
But then again that made too much sense.
I believe we will end up regretting this one. The numbers are already being walked back. Dying of vs. Dying with is a controversial topic.
Iamafan,
50,243 people have died in the US of Covid-19. The total number has more than doubled in 12 days. There is no “walking back” these numbers. Even Trump finally gets it.
This just in yesterday: Nicotine prevents coronavirus! Next week you’ll have to make sure you eat brussel sprouts because that’ll be the cure. Oh and the virus was here in January and in another month it will first have arrived in December. This entire thing was a mess and actually feels like what i used to imagine in 2008 what the financial system collapsing would look like. Our reaction to this only further cements my belief that everyone in high positions, both public and private should be fired. Some should even be tried for treason. Wolf why such hostility towards people who disagree with you?
Trent,
“Wolf why such hostility towards people who disagree with you?”
I don’t allow my site to be abused to spread dangerous garbage. If you want to do that, you’re welcome to do it on your own blog.
Mask and gloves work against blood, not aerosols. That are why dentist are also closed. And grocery stores are not safe but people need food. They eat it every day. Clothes not so much.
You can end the lockdown when it has burned out. With a hard lockdown that takes a month or two. Having too many exceptions and it takes forever with much higher costs and as bonus also more death.
A study tracked thousands of HCW treating influenza patients every day, wearing N95 or surgical masks. After 12 weeks immersed in infectious environments, less than 10% of each group was infected.
We could have used masks earlier in the process. But we were told they wouldn’t help.
I guess we were lied to.
Is that a first?
The lockdowns should have been regional and timed to regional needs. The whole point of the lockdowns is to allow the hospital capacity to deal with the caseload, not eliminate the virus (an unrealistic goal). Most hospitals in the country sat empty.
NYC is said to have 21% exposure and NYS 14%. It is probably far less most other places. So we’ve wrecked the entire national economy just so we could stay home and watch NYs numbers. Meanwhile the rest of the country has yet to deal with what NY has, and will not only have to deal with the virus, but more shutdowns as well.
Let’s see if those who missed appointments and who later die are counted against the spastic coronavirus response. You are absolutely correct. Suicides, hunger, and drug increases are the other side of the coin. And of those that dont die, how many more will deal with failed marriages due to the response? How many more individuals will be diagnosed with depression?
And what is to be said about deficits, debt, and the economy? We have torpedoed the monetary system. The media has paralyzed the public with fear, while ridiculing chloroquine w/ zinc effectiveness (it’s cheaper than other drugs, and hence not as profitable).
We are enduring a pandemic, less of Coronavirus than of mindless fear and stupidity.
50,000 people in the US have died of the coronavirus in the EIGHT WEEKS since we started counting. The number of deaths has DOUBLED in 12 days (from 23,800 on April 11). And this is just the beginning. This shit is dangerous and if you let it get out of hand, an awful lot of people are going to die.
Effective this coming Monday, the 26th, Colorado stay at home order expires and many businesses can open. Some of these include dentists, nail salons and tattoo parlors. But not restaurants and gyms.
Alot of people are opposed to the shutdown and some have commented on this website about it. As for the commenters on this website “just like every site”, if someone already posted what you were going to say, you might just not post anything that day. Also, the people who are opposed to shutdown, might feel they have the info already and just skip the articles focusing on the shutdown altogether.
Top-down edicts from the Cloud People almost inevitably end in severe updrafts of enormous convections of desperate, pissed-off plebians … and some “ones'” are going to have hail to pay ! Especially if that Insured Unemployment Rate goes north of say, 40+ mil.
Grandmaster Flash –
“It’s like jungle out there, I gotta wonder how I keep from going under, ha Ha ha ..” “It’s like a jungle sometimes, I have to wonder how I keep from goin under ha HA HA Ha ..”
I also think WAR was on to somthing some 40+ odd years ago. Instead of the World being the Oyster we’ve all thought for the last 30 years, it looks like it really IS turning into a global ghetto ! .. IF the elite incognoscenti have their way, sans any contrition/repercussions …
I disagree…
I have been thinking the same since the very beginning of the lockdown.
While I keep thinking it, this is my last comment on this topic for the coming months.
I’ll say my word when it’s time to vote.
As for the question whether our global civilzation ‘s response to covid19 is appropriate, we’ll see it crystal clearly in 12 months by GDP and death rate numbers.
Also by comparing the tactics. If Sweden proves that lockdown is ineffecitive (which is not proven by now) then… well… it’ll be embarassing for many.
Right now, the best strategy is being patient and attentive.
Sweden’s per capita death rate is well above the US. But not that different from the rest of Europe yet. Probably helps that the Swedish greeting doesn’t include kissing both cheeks.
No body said grocery stores were safe, just essential.
Grocery stores aren’t safer than clothing stores. I will allow you one guess, under an emergency situation, as to why one is allowed to be open and the other not.
Pandemics are profitable… for a few.
via The Institute of Policy Studies:
Between March 18 and April 10, 2020, over 22 million people lost their jobs as the unemployment rate surged toward 15 percent. Over the same three weeks, U.S. billionaire wealth increased by $282 billion, an almost 10 percent gain.
Between March 18 and April 10, 2020, over 22 million people lost their jobs as the unemployment rate surged toward 15 percent. Over the same three weeks, U.S. billionaire wealth increased by $282 billion, an almost 10 percent gain.
Billionaire wealth rebounded quickly after the 2008 financial crisis. Between 2010 and 2020, U.S. billionaire wealth increased 80.6 percent, more than five times the median wealth increase for U.S. households.
Between 1990 and 2020, U.S. billionaire wealth soared 1,130 percent — an increase more than 200 times greater than the 5.37 percent growth of U.S. median wealth.
Measured as a percentage of their wealth, the tax obligations of America’s billionaires decreased 79 percent between 1980 and 2018.American billionaires have gotten $280 billion richer since the start of the COVID-19 pandemic.
Cheap and easy money goes to those in the front of the line. Banks, Wall Street Houses and Hedge Funds.
Bailout money goes to those in the front of the line. Banks, Wall Street Houses and Hedge Funds.
To those in the back of the line – you get 27% interest credit cards and $800,000 crack shacks.
What is America prepared to do to fix the problem?
Sleep Walk over Cliff ?
It’s like the enforcers with bulldozers, working their way methodically, through the ‘people’s camp’ .. crushing and smashing any semblance of continuity, while the ghouls go on, doin their thang, using up resources – making Our planet THEIR’S. (Yes, I’m paraphrasing – sorry John..)
And we don’t even need wear Hoffman lenses to see how this is goin down.
How far do things go, before ‘push’ begets ‘shove’?
The deficit is currently a little over a trillion. At a 30% tax rate on that windfall we could almost cover that number?
AB,
Please step through your math.
funny, BUT cares act allows them to deduct OTHER LOSSES(like in stock market, elsewhere to help them out of their predicament )
so I doubt they pay even $1 in new taxes
You are picking the dates to fit your opinions. The billionaires net worth dropped like a rock the prior month. They are still on the loss side of the equation. Don’t forget, stock market values also affect the pension funds for all the non-billionaire workers.
Tell that to Bezos and the guy who founded Zoom.
Also,
“Between 1990 and 2020, U.S. billionaire wealth soared 1,130 percent — an increase more than 200 times greater than the 5.37 percent growth of U.S. median wealth.”
There’s nothing to cherrypick here.
While some of the problem is certainly in new laws favoring the rich, one has to conclude that Median Joe (5.37% over 20 years, really?) really wasn’t interested in doing what it takes to save and accumulate wealth. It’s not that hard if you make it a priority and are willing to do what it takes.
It’s not been that way for many decades now Wisdom Seeker.
I detect someone born in the 1940’s who came of age in the 1950’s when the top marginal tax rate was 90%.
one has to conclude that Median Joe really wasn’t interested in doing what it takes to save and accumulate wealth.
He was too busy trying to keep up with skyrocketing health care, higher education, and housing prices as US jobs were sacrificed to overseas labour arbitrage. But it’s his own fault because he insists taking a few hours off to get some sleep instead of getting that fourth part-time gig job.
Blaming the victim says something about you. Something nasty.
@Suzie – I have lived the 1990-2020 period during my early career years. But I do come from a family that values savings and financial independence and minimizing personal debt.
I believe Median Joe has swallowed too much bankster propaganda about the virtues of debt, or he’d have increased his wealth by much more than 5% in 30 years. Just from inflation alone.
I also question the source and potential bias in the data being quoted by Idaho. I don’t think Median Joe has been doing quite that bad.
Also keep in mind that Median Joe is always about the same age, not a single person going through life. Most younger people have little savings (paying for college, housing, kids), but many older people have considerable savings (retirement).
Let’s see, Wisdom Seeker. I have two advanced degrees, Moved to the U.S. at age 25, have no mortgage or car payment, no credit card debt.
I should have been exponentially wealthy going by your logic. My tax obligations have gone up, healthcare, insurance and other costs have gone up. I have seen three big market crashes. Have owned a small business. Where are those mythical millions I am supposed to have?
@Idahopotato
The most important trait is to inherit.
That’s the only thing missing in your list.
I think Wisdom is giving you Boomers talking points…why don’t you pull yourself by the bootstraps and save your way into being a millionaire.
Wait, healthcare, tuition and housing have all gone up way more than income? pssh…save harder please and stop being lazy or waiting so much. You also want a nice house with picket fences? Sorry that’s entitlement to the younger generation but not for the older folks.
Also keep in mind that Median Joe is always about the same age, not a single person going through life.
Top Ten candidate for Stupid Post of the Month.
It’s not that hard if you make it a priority and are willing to do what it takes.
It’s Median Joe’s own fault for not failing to buy up senators, bribe his way into lucrative sweetheart deals, and take advantage of insider trading opportunities.
Life isn’t fair. Unless you have the foresight to choose wealthy people to be your parents and learn how to sell out everybody in sight for a buck. Then it’s totally fair.
Wow. Surprised by the victim mentality getting traction. I’m with Wisdom Seeker, but being FI to me doesn’t have to mean mythical millions, so I don’t spend a lot of time blaming everyone for my situation. I’ve made every mistake twice at least. BTW, I was raised by a immigrant single mom who was left penniless by an abusive husband. Her accent was so thick, none of my friends could understand her. She raised two chillrens and NEVER took welfare. That’s back when welfare had a stigma. She did work union for maybe 20 years and took every extra hour offered her. I was a latch-key kid; no money for daycare. We eventually bought a house, 850 SF 2/1 with -car garage) for $19,500 via 4 mortgages. The Realtor carried his commission in as a loan for the DP to close. My mom, who was raised during the Great Depression, died of cancer too early, but I never heard her snivel. Both of her chillrens are comfortably FI, yet we both still work hard and i am still frugal and live well below my means. I had thought Covid would foster a return to thrift, but looks like its increasing generational conflict as well as a reliance of gubbermint. I haven’t gotten the flu yet, so I have no reason to bitch.
I stand by my diagnosis of Joe Median. Joe Median is NOT you, nor your children, nor anyone you know. I know many people have faced tough times for the past 30 years. But Joe is a statistical construct representative of the average choice made by millions of people – not any single person. And the reality is that that average person has been making spectacularly poor financial choices.
Consumer credit metrics support me. People are borrowing more than they should, to buy things they think they can afford, but really they can’t. People are not saving adequately for the future. If savings were a priority, we would not have as much spent at Starbucks, in movie theaters, in sports venues, on restaurant meals, or for huge new SUVs instead of used (or smaller) vehicles, etc. Wolf has documented much of this here.
Joe Median’s real problem is that he feels he has to live the same lifestyle as the marketers sell to him, or as he sees his neighbors living – instead of choosing what’s right for him and sticking with it. By definition – this is Joe Median – he is average.
If saving-for-retirement and personal financial responsibility were “average” behavior, we would not have had the cash-out refi boom of the mid 2000s, nor the housing bubble. People would have known better than to pay over 20% of income on housing, and that would have held prices down instead of supporting both bubbles.
Interestingly, while the shelter-in-place rules have left millions unemployed and in trouble, millions of others – the ones now working from home – are finding themselves with a lot of paycheck left over. They could have been saving much of that all along….
And had they made it a priority to do so in the past, they’d be a lot wealthier now.
Hopefully some will see the light and choose the path that. provides them the future they want, instead of the one Google and CNN want to sell them.
People would have known better than to pay over 20% of income on housing
Twenty percent of three part-time minimum wage jobs gets you a one-bedroom cardboard box under a crumbling American bridge.
You could save yourself a lot of typing if you just admitted that you enjoy blaming the victims of wealthy predators, as part of your self-serving program to catapult the propaganda of self-serving corporatists.
You should also change your handle, because it’s clear you’re never going to find it.
I believe the number of billionaires in that data increased dramatically, accounting for most of that gain.
It does NOT mean that the pre/existing billionaires saw a wealth weighted 1130% gain.
The number of billionaires may have increased 5 fold?
Yo Wisdom Seeker – My mother was deeply affected by what happened to her father when the Great Depression hit.
He had owned two gas station/repair shops prior to that, but lost them and worked as a mechanic in somebody else’s shops the rest of his life.
It broke him as a person, and he became a miserable person, and violent drunkard.
When I came home from school one day, when I was 11, and announced that I had negotiated a leveraged buyout of a 73 customer paper route, my mother was delighted.
At the end of the first week, she explained to me again why it was important long term for half the profits to go into the bank for long-term savings.
That amounted to about $3.50 a week.
However, she was right, and the money helped a lot when the parents divorced a few years later and I struck out on my own at 15.
I have lived my entire life WAY below my means, never bought a new vehicle for my own use, not borrowed any money since I was 30, done most of my own vehicle repairs, bought used clothes, etc.
Sometimes people laughed at the vehicles I had. Sometimes I laughed at the payments they had.
I remember driving past a food bank on distribution day and every car in the lot was newer than mine!
I will leave millions to my daughter, and am happy to do so.
Your views are exactly correct, and you will undoubtedly get mostly negative feedback to them as you are in an extreme minority now.
People no longer understand and/or value financial security.
I live like a relatively poor person, but I have everything I want, including good health and plenty of money in liquid assets to fix most any problem that might come along.
That gives me peace of mind that I did not have when I was young, and I consider it priceless.
Controlling/limiting wants is critical.
Buddha taught about the difference between needs and wants.
Needs are very limited, wants are infinite.
It boggles my mind how few can see it that way.
The 1970’s – 2008 were easy years to make good money.
Most everybody nearing retirement age now should be a millionaire.
Sadly, however, median household net worth of that group is now below the median home price, and median financial net worth, excluding home equity, is only about 1 year’s median income.
They squandered it all, precisely as you describe.
I have little sympathy for them.
I have seen the same mentality develop amongst the younger people in Thailand over the last 20 years.
Banks here allow debt service to income ratios of 70%!!!!!
It was 30% in the States when I was young!
If the current crisis lasts as long and is as deep as I expect, I plan to sell a few bars of gold and buy a late model 4-door truck and a few more parcels of land, all at auction, and all having previously been owned by people who did not live within their means.
Wisdom Seeker
I’m happy you’re seeking wisdom; I hope it’s something you eventually find. Here’s a tip. Try living for a moment in the shoes of those not fortunate enough to come from a household where the qualities you ascribe to were not manifest. Where people have to struggle just to survive and have sacrificed in ways that are so beyond your experience you have zero comprehension of their everyday lives.
And sure every working stiff could have saved a bundle during this time. But the US has been a service economy since God knows when. And if all that money was saved there would be no American economy. Or at least not one that would have allowed you to pocket all that cash while the other fools kept it going.
We all need to support each other and the reality is that, in one way or another we do. And all of the material goodness you get to experience often comes from the backbreaking sacrifice of those you seemingly disdain.
I’ll add my two cents on the issue.
I believe it’s very difficult for the average guy with average motivation and average smarts to make six figures. There simply aren’t enough high paying jobs out there. He’ll make the median income of $60-70k, or whatever it is today.
In years past, you could have become financially independent on that average salary if you were frugal and invested. The stock and bond market returns have been fantastic, and RE estate gains have been huge.
In the future, it’s not going to happen. Cost of living has increased (tuition, medical, auto, food, etc.). Asset prices are now very high relative to GDP, and GDP growth itself has slowed to a crawl, making it very difficult to get ANY investment return over the next 20 years.
So Average Guy is screwed, unless some mechanisms are put in place to disperse wealth more efficiently (i.e., wealth tax, estate tax, executive pay reforms, etc.).
It’s just not a matter of how hard you work. The guy with average intelligence is going to have some limits.
The good news is, Average Guy probably doesn’t give a F. He’d rather hang with buddies and drive a Ford truck than work 60 hour weeks for……what?.
Well Wissdom Seekeer,
Not everyone is in the same situation. For the people in their late 20’s and possibly 30’s, they might have only recently gotten enough money to save. They now have to buy assets/houses at hugely inflated prices that might be on the verge of price collapse. That’s assuming that any particular person in their 20’s or even early 30’s and pushing towards late 30’s as time goes on can save anything, because, for the exact same jobs their parents had, they make a lot less money, might have to have a college degree, which is far more expensive than it used to be, and housing/renting continually skyrockets in price, on top of other larger than they used to be expenses. But, all the congressmen are on average about 60, their interests are very different.
This is on top of the social experiments that the gen x’s and boomers have pushed onto America and, especially, younger generations about “””equality”””, now marriage rates are plummeting and divorce rates skyrocketing, this whole femminist agenda has not done, becoming financially responsible any favors.
As for the middle aged and older savers, We’ll find out after the Fed can no longer inflate their savings/assets, just how much they are really worth. And as always, the jobs available and cost of living varies dramatically across the country.
@MarkInSF –
I’m well aware that below Joe Median there are 50% of the population that are below average, and that the virtues I learned to value aren’t taught in most homes. It’s precisely BECAUSE I feel people’s pain that I’m writing here, hoping my experience might stimulate some thought to save others.
While schools and parents have forgotten the wisdom of personal savings, there are shelves of books on the subject for those willing to look (and then read). Best among these might be “The Millionaire Next Door”, which describes how millions of Americans choose to save and thrive on thrift, even on average or below-average incomes. Another good one is “The Two Income Trap”, which explains how to avoid oversizing your lifestyle on two incomes and then getting slaughtered when one of you loses a job. And of course savers must find good investments, so the do-it-yourself investment guides are valuable, if read skeptically. Trial-and-error has been my best teacher.
And yes, I do have a spouse that feels even more strongly than I do about this, and taught much of it to me. She had less than nothing growing up and never wanted to go through that again. I was an ambivalent saver until the Great Recession – but then I also decided that I wanted to be financially independent before the next crisis hit, so that I wouldn’t have to go through that stress again.
We know how fortunate we are to have put ourselves in a position of relative safety at this time, and are doing what we can to help those we can. But the lifelong lesson is to do whatever it takes to not get yourself put through this again!
And actually I agree with Unamused on one thing – we should have hauled out the pitchforks in late 2008 when Congress passed TARP over raging popular objections, and bailed out the banks while screwing over the middle and lower classes yet again. I still don’t understand why more people didn’t take to the streets. But I guess if Joe Median doesn’t care enough about his own future to save, he doesn’t care enough to fight for his future either.
I have to agree with Wisdom, the vast majority of people are just not willing to do what it takes to really get ahead. When I was in school long, long ago they graded on a curve. The curve mandated that most people were average, with only a very few at the top and bottom.
Life is kind of like that. If you are doing as much as everyone else, you end up average. Only the people who are willing to do much more than everyone else rise to the A level.
For most people who achieve it FI requires doing what most people will not do, and you almost certainly will not do it working a job.
It requires making the majority of your money via capital gains and deferring taxes. It requires 18hr days, 7 days a week, living way, way below your income, no vacations, used everything, postponing children, and funneling every dime back into your investments. It also probably requires having a wife from a third world country because no woman raised in America is going to put up with a life like that. By the time you reach your goal, you will probably be in your 50’s or older, and will have missed much of what others have enjoyed. Then, when you finally get to FI people will hate you for what you have accumulated and accuse you of having come by your wealth dishonestly or at the expense of those who were not willing to do what you did.
I have to agree with Wisdom, the vast majority of people are just not willing to do what it takes to really get ahead.
They can stop being black. Maybe that would help.
Maybe if they practiced throwing rich fucks under the bus they’d eventually get the hang of it and get rich themselves. Instead they waste their time trying to do something impossible like pulling themselves up by their bootstraps like rich fucks tell them to.
Thanks for saying it for me jdog. Life isn’t fair folks. Some have it given to them and some have to work for it. Get a plan and live below your means.
AGREE, like totally Jdog dude, and also with the concepts of working hard, saving all ya can, etc… disagree with the part about foreign born wife/spouse,, just the opposite in some cases, far shore…
In spite of Una’s and others typical ”opposition” comments, (that is the always opposition postures, constant negativity about any concept,) etc. it can be done now, in USA at least, and is being done here constantly.
Does it require ”sacrifice?” Not really. We started with nothing in 1996, are now FI with the entire nut less than half our SS. And we certainly never missed a meal except when fasting by choice.
Did we work hard? Yes, but, most importantly, other than new vehicles to facilitate driving sometimes 2500 miles a week for months, very little/nothing we did not actually need, including fancy smarty pants phones, etc., etc.
Choices folks choices!! In a society with SO many choices, it certainly can be challenging to save instead of purchase, especially when the constant brainwashing is going on, and the TV or Radio or ads on your phone pop up to convince you to buy buy buy!!
I’m always curious how these bootstraps people think society could be organized so that everyone is the chief, and no one is the brave.
Setting aside that many, perhaps most, people lack the human capital to do all of the fairly abstract things required to pull themselves into the upper class by their bootstraps, does anyone really think American society can be run without all the schlubs doing the dirty work that keeps food on our tables?
Our system is reliant on masses of these schlubs screwing up so that a small fraction can convince themselves how smart and virtuous they are for coming from a background that values thrift instead of the consumerism pushed by mass media and pop culture. Without the 90IQ Joe at the plant blowing his whole paycheck cleaning up his mistakes and wasting it on circuses, there would be a lot fewer of these self-proclaimed masters of the universe out there talking about how De’various just needs pull those straps harder.
Not surprised that most of the comments like this that referenced ages are from 20th century America, not 21st.
Jdog, you are far more correct than the usual negative commenters imply. Our business employs a relatively small number of people, but everyone ambitious and hard working moves up, and everyone lazy and entitled moves out. Obviously it’s much harder if you are a single parent, this is the single largest factor for poverty and always will be. In some cases this is also a choice or the result of bad choices. Generally speaking, people in poverty in the US are there because of a series of bad choices including addiction, overspending, debt, and poor impulse control. Why pretend this isn’t the case?
The commenters who talk about people struggling with several minimum wage jobs and such are also talking about something real, but the fact is that poor people generally find means to cope. Typically the immigrant strategy is 10 to a room and focusing on bettering the life of your kids. If you are native to the US you move somewhere cheaper. I’ve lived in the SF Bay area and Denver for many years and have seen countless people in both places move to cheaper locales. Very few ambitious and hard-working are doomed to minimum wage dead end work and 3 jobs for life.
And there are consequences of being raised in a 2 parent family that cares for their children and actively teaches the value of hard work and impulse control. There is no outside force that can make up for the lack of that upbringing except the very painful school of life.
Or you could be extremely lucky like Mark and Jeff being in the right place at the right time with the right stuff. Never, ever, underestimate the importance of luck. And never forget that many are called but few are chosen.
The world isn’t fair to anyone, including the wealthy.
I come from an immigrant family that was handed some particularly scary wild cards when I was in high school. Everything was and has always been stacked against me. Ive fought tooth and nail to build my various businesses. Ive nearly lost my business at least once a year in some major crisis. And in that same time, the business generated 100m in revenue with no debt, high margins, and a hell of a lot of savings. All from $200 my cousin brought to the table for us to start my former biz. When I was 19, I would take $1-5k 100% interest 90 day loans from people because I had no way to tap into any kind of credit or funds (it was also mid Great Recession), certainly not my family. I made it work every time. Blood. Sweat. Tears. Rinse and Repeat. I am wealthy now and yet its always the same for me – blood, sweat, tears, repeat. I keep pushing for the next leg up and the next challenge. Because this is what capitalism encourages – those with the most developed skills win. Im not talking about old money. Most of my network of entrepreneurs are similarly wealthy and self made. Those of us who come from “nothing” and do something different. Many billionaires today that we are publicly talking about are self made. They have earned their keep, that is capitalism.
I did get one thing that I think is critical for every child in America to get – a great pre k to 12th grade education. We need to level the playing field at least on intelligence otherwise the game is super rigged. Education also coincides with better homes, better communities, better health, etc.
Anyone complaining about now vs 60 years ago has already lost. We live here and now. We have a more connected world than ever before. You can start a new business with next to no capital, whether that is consulting, ecommerce, tech, selling home improvement solutions, etc. Stop comparing and start playing the game. There is a very clear and proven path to prosperity that worked in the 40s and still works today.
All that said, government policy on the rich is rediculous and taxes need to be raised. The government also needs to do its part to prevent capitalism from morphing into a nasty beast and they have done what it takes before. Maybe not now but hopefully in the future. In the meantime, none of this stops anyone from pursuing a strategy to build financial security, in any environment.
If you picked Feb 22 to March 18, billionaire wealth would have declined 35% and middle class would have been flat.
Follow the money. it always tells the real story. Mass Fear = Billionaire Opportunity
I don’t get the impression that many people in Washington and Wall Street understand the force that has been unleashed. I don’t know why they had this naive idea that the ‘real’ economy or ‘main street’ economy could be just turned on and turned off like a light bulb. Quite unfortunately, there is no real feedback loop because the people making these ‘lockdown’ decisions are not the people suffering the ‘immediate’ effects.
‘Something evil comes this way’. This may be the great phrase that describes the coming summer of 2020!
‘Something evil comes this way’.
You’re misquoting Macbeth:
2nd Witch: By the pricking of my thumbs, Something wicked this way comes.
people making these ‘lockdown’ decisions are not the people suffering the ‘immediate’ effects.
The people making these lockdown decisions aren’t cold-hearted enough to send their constituents off to become human sacrifices to the gods of capital.
Others, of course, have no problem with it. Profits aren’t disposable, but people are.
You must have forgotten about Brian Kemp and Ron Desantis, along with that Lt governor of Texas and Mayor of Vegas. Think they are perfectly ok with that.
Well, I was trying to forget them.
The attempt by the mayor of Vegas to turn the town into a collection of lab rats for a pandemic study is a gross violation of medical ethics, not that she’s aware of such concepts. Naturally she herself has declined to volunteer.
This isn’t just about profit. People have to work or everyone would starve. We can’t completely isolate as long as needed to completely kill the virus because everyone would lose everything they have. Not everyone who is looking for the economy to open is Satan incarnate.
The current problem appears to be that people will lose those things that they went into debt to have immediately. It is difficult to lose that which is bought and paid off with cash.
All you need now is an EMP pulse and all hell will break lose.
So – an EMP alone in “good times” would not cause all hell to break lose all by itself?
The three day NYC blackout in 1977 was caused by a tree branch across some wires in update NYS. The city almost ripped itself apart.
The 2020 Atlantic hurricane season starts on Monday, June 1 and ends on
Monday, November 30. Stay at home or evacuate?
Hard one…hmmm.
Head for your basement and drown from water surg or crowd into shelters and catch the virus…hmmm.
Buy a poncho.
The 2020 Atlantic hurricane season starts on Monday, June 1 and ends on Monday, November 30
Who’s favored in the playoffs?
“Who’s favored in the playoffs”
I normally don’t care for your comments but I have to compliment you on that one. Golf clap.
Unamused is deeply cynical probably dead nuts right.
I’ll put 100 dollars on Charleston SC
A village was for the last two days evacuated because of a wildfire so those things can happen together
Yeah, or an extreme volcanic event like a Krakatoa.
Don’t worry though, Cramer, President Pump, Jay-Po & the Munchkin would find a way to pump it up. This shit is almost funny were it not for the extreme misery that is being inflicted on the average American that simply has no clue.
or… Yellowstone ?
I can report that Colorado has NOT been accepting any self-employed style workers…as they still have this message on the unemployment site, for nearly 6 weeks now…
“IMPORTANT NOTICE: The CARES Act has been signed into law, but those benefits are not yet available until we receive official guidance from the U.S. Department of Labor.
For those who are self-employed, independent contractors, nonprofit employees, and gig-economy workers, or are requesting an extension of benefits, please check back with this page for the latest information. ”
…so no gig workers or self employed counted in Colorado yet.
Until employment checks are in their hand, the people you mention should never pay one bill in their name.
For those liberals in Aspen we trust you remain comfortable.
If you are a lobbyist, the job market is realy hot. An example of how the smash and grab works:
……
In late March, real estate investment firm Ashford Inc. was on the verge of financial ruin. Its chairman, Monty Bennett, penned an open letter on March 22 stating:
“My industry and our businesses are completely crushed. This pandemic’s economic impact on the hotel industry is worse than all of the previous calamities combined.”
Bennett is a big RNC donor. On March 10, twelve days before Bennett wrote that open letter, Ashford hired its first-ever Washington lobbying firm, Miller Strategies. That firm is run by Jeff Miller, who was a finance vice-chair of the President’s 2017 inaugural committee.
Now, Dallas-based Ashford Inc., that invests in hotel real estate is the top recipient nationwide of coronavirus relief aid from the $350 billion Paycheck Protection Act.
Miller’s firm employes several top White House alumni. The revolving door is spinning quickly, while ordinary citizens wait for their measly stimulus checks.
And they decided to add another half trillion to the program. Nice.
This will qualify as a ‘per-existing condition’ for over 22 million people.
“They can always go to the emergency room.”
A pound of cure is more profitable than an ounce of prevention. If poor people had the good sense to stop breathing they wouldn’t have these problems.
Hush. The virus is quietly inching Social Security and the government pensions towards solvency. Not enough, but every bit helps.
What’s your best guess at what the impact to the labor participation rate from this will be? Interested minds would like to know.
BLS shows a drop from 63.4 o 62.7 as of March. Could drop below 60. Not sure its every been below 60. Increased population and drop in participation rate = very bad outcome.
The size of the US labor force in February 2020 was 164.5 million.
That implies that the total potential number of workers was
(1/0.634) * 164.5 = 259.5 million.
Wolf states that 26.5 million have been processed for unemployment in five weeks.
Let’s assume that they all are actually unemployed, i.e. they have not found jobs since filing.
26.5 / 259.5 = a 0.102 drop in labor participation, or 10.2%.
If it started at 62.7 at the beginning of march, then by today it would be around 62.7 – 10.2 = 52.5%.
This is a rough guess, I don’t think it’s accurate to three significant figures, but “about 10%” is probably correct, plus or minus a percent.
Layoffs are still continuing, we could easily dip below 50% by May 1.
God, not long before the pitchforks
Between the sedating effects of legal drugs, video games, porn and helicopter money drops I am not sure pitchforks are in our immediate future.
When helicopter money is no longer an option then maybe the pitchforks come out.
Is there any such thing as no more helicopter money?
I use to thinks so, I am no longer sure.
Inflation hasn’t been eliminated – good example, medical face masks.
Maybe 12 cents retail pre C19…now 70 to 80 cents per mask on Amazon (assuming honest delivery).
Another good example – SFH/apt rents grossly inflated by two decades of ZIRP…despite very weak job growth punctuated with 3 epic implosions.
Inflation is two part, specific items and services, and overall.
You are always going to see certain price swings associated with supply demand variations, but the overall inflation rate will be tied to overall spending which is, and is going to continue to drop pretty dramatically.
No inflation in commodities, with the exception of a few.
Oil prices, the biggest commodity of all, are shouting D E F L A T I O N so loudly that they hit negative prices this week in some places.
The commodity cycle then kicks in:
High-cost producers shut down.
Supply decreases to match reduced demand.
Demand slowly picks up again.
Only then will we have demand-pull inflation again.
Monetary hyperinflation is a different animal. But the Fed and government money-printing so far have barely managed to fill the deflationary hole.
I have several. Two are well oiled,and very sharp! The third is a blunt backup .. in case of just-in-tine failure .
Ha ha. The USA’s hyper militarized local police have no fear of stinking pitchforks.
Minneapolis hosted the Super Bowl in Feb. 2018 and the Final Four one year ago. The show of force and the ‘toys’ the Minneapolis Police Department displayed was quite the sight. And many on the force are ex-military, or active Guard members, so they know how to use all the ‘tools’ in their arsenal very well.
Also, some of my neighbors have permits to carry, and many are hunters. There’s plenty of firepower in people’s hands and homes in my neighborhood.
As I commented recently, guns and ammo are moving off the shelf in Minnesota’s gun stores at record pace.
Pitchforks will not be enough I reckon.
I learned this week that Dentists are not considered small businesses by the PPP. So all the hygienists that typically work there are being laid off. My Dentist carried them for a while, but had to stop.
I know of a hygienists that ended up partnering up with a dentist to start their mobile business. Wonder how he is holding up or getting any business in this environment. He seems to be doing ok before, showing off fancy lifestyle on FB and bought a $850k house in SoCal last year. Only one working to support a wife and a 3 kids…just by looking from the outside, I am guessing hygienists make a killing with that kind of lifestyle.
This is false. Your dentist friend must be in a business with more than 500 employees. The small practices are all doing PPP.
Funny how the more unemployed numbers we have each week, the market just goes up more..either a completely disregard to reality or just a massive bull trap waiting to happen. Perhaps the V shape recovery is still the dominating mentality out there even though these numbers are about as bad as it gets.
Per “The great one” – Skate to where the puck is going to be, not to where the puck is.
No, I get that, market is forward looking..etc. Make sense when you can clearly see where the puck is going to be, however at this stage of the game, only way you will see where the puck is going to be is these traders truly think this is a V shape recovery and will end very soon. I guess most of them are betting on FED carrying the market and that all these people will spend like drunken sailors once and 26M and counting will all have their jobs back. Perhaps I am just naive to even think the market don’t put the cart before the horse. Silly me
PI,
Let’s wait for all the Q1 earnings reports to come in (smaller hit) and for all the Q2 earnings to come in (much bigger hit…but not until late July thru August)
The current mkt has the look of a dead cat bounce – the real world economic dislocation is simply too large for the middling (-15 pct) loses seen so far in the mkt.
And, sure, the mkt is forward looking…but only so far – look at the time to recoup from 2009.
With you on this, PI. Though that micro flash crash at around 1245pm Eastern when the latest Gilead speculative news was “discovered” was something to behold. Gilead and the S&P dived in lock step for one second. Them algos have amazing foresight…
The stock market has nothing to do with the economy. The stock market has to do with what stock traders are feeling about stock prices at any given moment in time.
Funny how the more unemployed numbers we have each week, the market just goes up more..either a completely disregard to reality or just a massive bull trap waiting to happen.
The higher unemployment goes, the sooner the next trillions in corporate bailouts.
It used to be that way with interest rates before they bottomed out. A bad economy is good for business when you can get enough of your employees into high-ranking federal positions.
In a couple more weeks, the unemployment will match the population of Canada. That’s a massive number of people who need help.
That’s a massive number of people who will be desperate enough to risk their lives for two or three part-time jobs that won’t pay the bills.
Most of them are expected to survive, but there will be plenty of comers to replace those who don’t.
The gods of capital are demanding human sacrifices. The US is a very religious country.
“desperate enough to risk their lives for two or three part-time jobs that won’t pay the bills.”
It’s easier to just stop paying the bills. Full Stop.
It would be interesting to know the breakdown on these figures by earnings.
I can’t help but to think that the vast majority of these unemployed are lower income jobs in the restaurant, bar, and travel / hospitality industries.
If that is true, and if indeed these unemployed lower income workers are getting a windfall, earning more from the government PPP than they were working, it seems like that would have a real impact on getting the economy restarted when that time comes.
What happens when they try to start everything back up, and workers will not go back to work because they are making more being unemployed? Seems like just one more hardship for the industries already getting hammered by this shutdown.
I guess wages will have to go up to lure people off of unemployment? And then consumer prices of nonessential services like restaurants and bars will go up.
“And then consumer prices of nonessential services like restaurants and bars will go up.”
Or profits will go down. Or some combination of the two.
Wages won’t necessarily go up. The government unemployment checks can also be phased out.
The exact balance will depend on election year politics.
When consumer prices go up there just may be considerably less consumption there used to be.
Low wage workers will spend all of the unemployment money, it might just jumpstart those hammered industries.
‘might just jumpstart those hammered industries
It is a wishful thinking. Most of them live from one pay check to next with on going payments to home mortgage, auto loans, CC loans and possibly student loans. How much $1200 one time going to jumpstart the industries! Which industries?
From my daily conversations all business leaders are cutting jobs, cutting expenses jobs will not recover fast enough. Even construction companies working utilities they have long term infrastructure work are worried for what tomorrow will bring they cut staff in half…
small essential business tenants – why are u not open? Staff scared plus making more money staying home so business is closed tenant will not return… and if and when they do the back rent vs new rent will put them out anyways. Even if you cut rent in half how will they repay back rent?
Office companies requesting all Bill’s and rents via wire/ ACH plus cutting staff and already rengoiating rents. Staff works great at home let’s keep it that way… plus no more free meals free snacks, supplies and most important no water cooler chat..
Softbank’s we work largest office pushed JP Morgan chase into #2 spot who moved back office prior to covid for tax free texas. We work not paying any rents and looking to renegotiate leases.
One stated they applied and recieved SBA loans 30% went to cover some expenses balance to be used as deposit to purchase real estate.
Everything is out of whack. Few people clueless (least affected) thinking all is well going back to normal soon…
Then the other side thinking how to survive?
Then the thrive mentality, the vampires looking for pints of blood.
The only bidding wars are the ones bidding down like a barrel of oil.
Job market will become extremely competitive.
We went from cant find good help or anyone to hire to lower pay more work and cherry picking the best of the best.
Job market was fudged #s before covid. You recieved a pay check even for 1 hour you were counted as employed. What new finacial wizardry will the create next?
Bankruptcy king in office sent minions signaling to states file for bankruptcy- your over spending and mismanagement of funds will bring you down.
How long can tax free states hold on to that status? This decade might bring a new tax code to a tax free town near you…
How long can tax free states hold on to that status?
Until they’re bankrupted and privatised.
I think it will be great for wework in the medium term. If you don’t need an office for the day-to-day work you may need it for meetings etc. For those you rent space with Wework or its competitors.
Problems is i expect Wework to be out of work shortly
No such thing as a “tax free” state, only states without sales or income taxes. Taxes will be going up for everyone, but the states with pre-existing fiscal problems, like IL and NJ, are at much higher risk.
Another 4M about to make $4-5K (depending on their state) a month for not working. Nothing “gut wrenching” about it. Then add in mortgage forbearance, say at an average of $2000/mo, and it’s really $6-7K tax free income. Just in time for summer.
That’s Great ! Let’s all go on holiday ..
oh, wait !
Friday, May 8, at 8:30 EDT, is the release of the next UN-Employment Situation Summary (formerly and still officially known as the Employment Situation Summary). That release will be a historic moment in the history of the series, and in the documentation of the side-effects of the pandemic.
Wolf’s reporting makes clear that the unemployment rate will be over 10%. Last month’s report, based on a mid-March survey date before the shutdowns were widespread, had a 4.4% unemployment rate. The one-month change will most likely be a record increase for the series.
It’s possible that the stock market might start looking at that mid to late next week. After the Fed meeting on 4/28-29.
Wolf,
I think the Fed predicted 32% unemployment this quarter:
https://www.stlouisfed.org/on-the-economy/2020/march/back-envelope-estimates-next-quarters-unemployment-rate
Whatever it will end up being, it’s going to be horrible.
The big question if we get to that point. Will the FED or the administration launch more nuclear monetary or fiscal missiles at it or as long as market behaves, they’ll just quietly go about their way and maybe pass a smaller relief package? Either way, 32% is absolutely insane, I guess there’s a first time for everything in US history. This week negative oil contract price, next month highest unemployment ever in history. Heck we already won the most CV19 cases in the world. American exceptionalism in all the wrong things.
Right now, the Fed is slashing QE further. New article on this in a couple of hours.
Better to write about what has QE actually SOLVED.
My simple math of a pre corona virus recession employment shows a mulrplier effect not a simple addition to c19 employment effects. My results are 40million lost jobs over the next 18months. The next 3 weeks can effect the 18th month terminus by + or – 30%. The multiplier kept coming at me no matter the manipulations within my constraints . Worse,I knew I was biased from the start for an addition effect. Sinking feeling ensued.
Would you please share your formula with us?
Label the parts and your math.
Don’t assume any follows what is in your head.
I think what you said is really important, but don’t understand it fully.
I think he meant that if you have say 10M unemployed and add 5M more, the number is still relatively small, and the impact just adds. But, if you have 15M and add 25M, it starts to impact the economy, generating even more job losses. The multiplier is an exponent on each iteration, which makes up the dreaded deflationary spiral.
I feel like CARES Act is set up for huge moral hazard, when even self-employed or freelancers can receive Unemployment Insurance (minimum $600/week from Federal government plus whatever each state offers).
I saw on my twitter feed a freelance guy receiving UI in California, even though he is still working from home and generating some income, although I don’t know how much.
How are the state unemployment offices supposed to verify how much income freelancers lost or have not lost?
Also, when the Fed expanded UI to cover self-employed people, why do they need to run the Paycheck Protection Program at the same time?
Isn’t UI supposed to be the safety net for the lost jobs? Why the redundancy of PPP?
I have so many questions and can find few answers.
KK, I know several people around here that have filed for UI. They are getting state benefits, but NO ONE has seen any of the Gov’s $600 per week benefit. Even the state UI office don’t know how or when it will be paid out.
A couple of the folks I know are self employed and still have a “little” income trickling in. But they are getting state UI.
As I understand it, $600 from the fed is retroactive, so I’m pretty certain they will get it eventually going back to the start of UI benefit.
Assuming everyone on UI will get the $600 per week, many people will be making more than when they were working, all the while “essential workers” will have to keep working at the same pay, exposing themselves to higher risk of getting the virus.
I just don’t think the CARES Act is well designed.
That’s what happens when a committee of lobbyists get together. Our congressvolkin are purposeful dolts, who are easily lead to signing bills of bad outcome, meaning that the Liliputians get it good-n-hard, ad infinitum!
I feel like CARES Act is set up for huge moral hazard, when even self-employed or freelancers can receive Unemployment Insurance (minimum $600/week from Federal government plus whatever each state offers).
A drop in the bucket compared to the trillions in ‘moral hazard’ getting hoovered up by execs at transnational corporations.
That six hundred bucks a week all flows uphill with the rest of it, so it’s not as if it’s going to do them much good. It’s really just a bribe for peeons so the top of the food chain can get away with an average of $1.7 million each in ‘government assistance’, presumably because they need that money just to get by.
“A drop in the bucket compared to the trillions in ‘moral hazard’ getting hoovered up by execs at transnational corporations.”
you’re on FIRE / thanks for punching up for us all.
x
One aspect of that moral hazard as I see it is that the over generous unemployment benefits incentivize people not to go back to work, and that has a lot of negative implications.
It will add to the struggle of restarting small companies and the number of companies that go out of business.
It will add pressure to automate jobs.
And it will add to the need to bring in immigrants to fill the positions not automated.
None of these things are good in the long run. At some point the government programs will end, and the people who were on them will need jobs again, but have a much smaller job market to return to.
Every action has an equal and opposite reaction, and the people in positions of power need to realize that.
Automation is good in the long run.
Makes you wonder how the US managed to become The Greatest Country in the World with such a lazy workforce, unwilling to risk a horrible death for a dead-end job that doesn’t pay the bills.
And it will add to the need to bring in immigrants to fill the positions not automated.
You already have plenty in cages ready to go but you’re going to have to throw out the child labour laws. So long as you don’t give them human rights you won’t have to pay them, but don’t expect them to contribute to consumer demand.
Unamused…. I have learned one truth in my many years. There is something in life called the pin-spotter theory. A pin-spotter is the mechanism at a bowling alley that puts all the pins where they belong. Life has a way of putting everyone where they belong. If you are a success, it is because you have done what it takes to be successful. If you are not successful the same principal applies. A person who is bitter and hates others for their success is a waste of time, and they will probably never attain any level of success in there entire life.
As you get older, you see that people themselves are their own worst enemy. They can blame others all they want, but their failures always belong entirely to themselves.
Unamused, don’t you see? The upper crust have even revived the concept of predestination for their religion. Only this time it’s called pin-spotter theory.
One aspect of that moral hazard as I see it is that the over generous unemployment benefits incentivize people not to go back to work, and that has a lot of negative implications.
It reduces the quantities of money directed to overseas tax havens.
When are you going to complain about the ‘moral hazard’ and ‘negative implications’ of handing out trillions to the parasite class? Just pick out a date and a time for some time in the next six months and I’ll put it on my calendar.
Many of us are very concerned about the moral hazard in all parts of this deal, especially those that relate to the financier and corporate entities. We can also be concerned about a stupid policy that pays many people more to not work than to work. Those aren’t mutually exclusive concerns in the mind of someone who cares about the common good.
The PPP keeps people off unemployment numbers. If you keep employees vs layoff, it becomes a grant. Free money. No wonder it’s so popular – even if you have funds and business coming in… as a business owner you’d be crazy to not take a piece of that pie.
How long do you have to keep the “retained” employees before firing them and keep the grant for yourself?
https://home.treasury.gov/system/files/136/PPP–Fact-Sheet.pdf
“You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs. You will also owe money if you do not maintain your staff and payroll. Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount.Level of Payroll: Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019. Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.”
I think it’s just 8 weeks.
Floridians reported the state unemployment website did not let them collect unemployment. The system worked fine during times of the lowest unemployment in 50 yrs.
Gilead Sciences’ antiviral drug candidate Remdesivir may not be awarded breakthrough status according to a report that appeared briefly on a W.H.O. website. Hydroxychloroquine has been discredited.
Convalescent plasma treatment programs are hopeful, but slow to develop. They have not been able to create a cure for the common cold, only treated the symptoms.
) NDX, Nasdaq100 index, daily, today made an upthrust above Apr 14(H), a resistance line @ 8,708.55.
2) So far it failed to exceed Apr 17(H), which is a lower high and closed under the resistance line.
3) NDX weekly RSI up from bearish zone @ 25 to 55.81 last week, still bearish.
4) NDX weekly green high quality bars are the largest on the chart, larger than any other green bars in 2018 and 2019, but volume is falling sharply.
5) The weekly(H) is still lower than last week(H).
6) Next week NDX is free to go wherever wants to go, as long as its > 2,489.
7) NDX weekly, Feb 24 big red open @ 9,055.30 is a resistance line.
8) Both SPX & NDX peaked on Feb 19, but NDX thrust brought much
closer to the peak. Both SPX & NDX daily are in trading rage, but NDX is more volatile !!
9) SPX is shortening of the thrust.
10) AAPL daily gave x6 headbutts to the cloud and AMZN is flying way above the flatbed of the cloud.
Mitch McConnell says that States having economic problems, they should file for bankruptcy…
Reminds me of someone…
Oh ya, I know who now.
Moscow Mitch’s home state of Kentucky would already be bankrupt if it wasn’t subsidised by blue states every year. He seems to be unaware that reptiles are also susceptible to viruses.
McConnell is bankrupt, but not financially. The only reason he’s not disabled is because of socialised medicine, but he conveniently seems to have forgotten that, along with the socialised student aid that allowed him to go to college. The stench of his hypocrises permeates the northern hemisphere.
A US State cannot file for bankruptcy.
Entities within a State such as a municipality can file for bankruptcy protection. Congressmen like Mitch, scare the hell out of me.
States can’t file for bankruptcy, but they can and have defaulted on bond payments historically. And also on pension fund obligations.
Anyway, states don’t need to file for bankruptcy because they can write the laws necessary to return to solvency.
Like Joe Median, they have to face up to the fact that they cannot have everything they might want, that hard choices need to be made, and that usually sooner is better than later.
The only question is to what extent each state chooses to squeeze its bondholders, pensioners, taxpayers and employees.
So, going forward if Congress is no longer willing to provide funding, file for bankruptcy. If you can’t file for bankruptcy, default.
50 States in default? Instead of 50 stars will the new flag have 50 toilets? Sad times ahead.
The only question is to what extent each state chooses to squeeze its bondholders, pensioners, taxpayers and employees.
But not billionaire corporatists because they’ll send out the posse to wave guns at them.
I stand by my diagnosis of Joe Median.
And your prognosis is dire. Maybe he should see a doctor.
There will be an epic squeeze in a few states in particular, IL and NJ, losing population, already overpromised massively on pensions, and taxes so high that people won’t stay as they increase.
Oh, the nerve…
So private businesses will get many hundreds of billions of dollars in “forgivable loans” (in the English language these are more accurately known as “grants”), but cities and states should declare bankruptcy.
Why should taxpayers in States that were responsible with their budgets bail out irresponsible states that spent like drunken sailors and promised all their government employees millionaire retirements.
Everyone should have to lie in the bed they made…..
+1, lots of very irresponsible state spending on pensions
My thought exactly – you overspent, you are responsible to spend less and make the necessary cuts to correct your own spending habits.
Trolling the “libs”, that’s all. They get off on that, it gives them the illusion of power, the joy of crushing the Spirit.
1) WTI black swan.
2) US is challenged by China in South China sea & Iran in the ME.
3) The Iranian people are very angry, shouting “Kill America” for 40Y.
4) Iran know that it’s risky to start a street fight US.
5) The Iranian leadership is tough & smart, surviving already for 40 years under harsh condition, building a mini super empire, invincible in the ME region.
6) Smart and conniving they are, but the Iranian leadership is so angry, because their empire haven’t been treated fairly, with respect,
7) Steam is coming out of their brains brains. They are no longer willing
to compromise with US, hoping to humiliate us.
8) Their good judgment is impaired.
9) Both side wouldn’t budge, willing to cross red lines for self respect.
10) Iran is going to hunt WTI black swan.
My parents , one a depression baby ,the other a german war baby impressed on we children the value of hard work , being frugal, living within our means. Mother was a stay at home , father was a sr partner at a law firm specializing in municipal bonds. He made a good living when he slaved his way to making partner. I grew up with used toys , clothes only on sale , no movies or records unless I weeded for my spending money. My parents made most of their retirement on assets inflation. Stocks and real estate. That’s how I think most have from the 1980’s and on. Me included , I got lucky with the house in the right place and time. Good luck with that now. I agree many Americans are profligate spenders and go into needless debt. But I also see many who struggle , work hard, save and tread water if they are lucky. This system is broken ,has been for a long time. The virus is ripping the scales from our eyes. By the way. It’s physically impossible to pull oneself up by their bootstraps What a patronizing bs phrase to constantly spout off
I like your story. My folks also had a tough life. But towards the end, their business was extremely lucky.
Personally, if I feel I have not achieved what I want to achieve, I blame myself and no one else.
As far as the lockdown, I feel it’s against democratic principles and liberties. The costs don’t even justify it.
I suspect allowing the ‘gig worker’ to file for unemployment assistance will dramatically change the makeup of the unemployment statistics. U-3 and U-6 will likely trend much closer together for – the first 6-9 months anyway. It certainty doesn’t change the severity of the downturn but at least we are going to get more accurate numbers this time around.
Wolf, Florida having “processed” 500,000 claims means absolutely nothing whatsoever from a “catching-up” perspective except to say that said claims have been thrown, or, “processed” into a giant queue of pending applications. As of yesterday, Florida has about 700,000 new claims received since mid-March but has completed processing and begun paying on only about 15% of those claims. The rest, you guessed it – are still being “processed”. The State at this point has no clue and can’t commit to a timeline of resolving the remaining 85% of the ever-growing pile of claims, besides to say that they are “working on it”.
People who struggle to hold three part-time minimum-wage jobs have only their own laziness to blame for their poverty.
On a cold day in April when all the clocks are striking thirteen, what time is it?
Perhaps those people should learn a valuable skill that would translate into one decent job instead of 3 unskilled entry level jobs……
Life does not owe you anything except a chance.
I once sat next to a woman on a plane who was an immigrant. She and her husband had immigrated to the US with basically nothing. The only jobs they could get were part time fast food. They were amazed that on their pay they could afford to buy a chicken at the market every day. She said in her country she could only afford to buy a chicken once a year. They were so grateful for their prosperity.
They worked their fast food jobs and worked as hard as they could doing more that they were asked to do. At night they went to night school taking English and real estate classes. After about a year they were promoted to management positions in the fast food restaurant and continued taking all the free classes they could. They got Real Estate sales licenses and began working part time selling real estate while working fast food. After another year they were able to sell real estate full time, and 5 years later became Realtors and bought their own brokerage. She said that America was the most wonderful place they could ever imagine.
I once sat next to a woman on a plane who was an immigrant.
Must have been a pretty well-off immigrant to afford plane fare. Probably had a corporate sponsor and a job waiting for them to replace a more qualified American.
And if not, this is how your bullshit story really ends:
And then they were deported back to El Salvador and were executed by the US-aligned military junta.
End of story.
Stop spitting on my cupcake and telling me it’s frosting.
It is not that it is impossible to work your way up from the bottom, it is just you do not have what it takes to do it, so you hate the people who do.
Must suck….
I sat many times beside and talked to immigrants working overseas. They are poor, just visiting mom and dad.
They have saved much for the airfare.
Actually, she was Asian, and yes she owned her own Real Estate office, but it makes no difference. You don’t believe it is possible to work your way up to success, so you are right, at least for you.
What’s the old saying… there are two men, one man believes he is going to be successful and another one does not…. they are both correct.
Jdog,
Don’t worry. Unamused is like a funny bot that derails every now and then. I’m an immigrant who came to this country in his teens alone with a backpack. This shit does happen. You can read about it in the first chapter of my book (2011) — you don’t even have to buy it, you can just read the first few chapters for free:
https://www.amazon.com/gp/product/B00613TA56/
“Became Realtors and bought their own brokerage, taking out a huge SBA loan, only available to refugees, to pay for the expensive franchise, which failed after a couple of years.”
Let me explain something to you, Jdog.
I’ve been lied to by hundreds of job candidates for professional positions. Employees including seasoned managers. Desperate vendors. Government regulators and experienced politicians in numerous countries. High-priced lawyers. Slick sales men and women. Big time real estate developers. Corporate accountants, including auditors. Charity directors.
Now they could tell compelling lies. Some of these guys were practised experts at it. They trained for it. Lying was their job.
For decades my job was to separate the truth from the lies. They were good. I’m better.
Your story is a collection of remote implausibilities. I got as far as ‘I once sat next to a woman on a plane who was an immigrant. She and her husband had immigrated to the US with basically nothing.’
My bullshit detector nearly detonated. Your story did not improve.
Stop lying. You really have no talent for it.
FYI, not everybody grows up to be an astronaut, or a rock star, or a Rockefeller. Most people grow up to be grunts, and no amount of talent or toil is going to change that.
Horace Greeley died in 1872. He’s still dead. I expect him to stay that way.
Unamused… I do not lie, no reason. Like the song says, I got mine. I try to help others from time to time to understand what they don’t. Some people are incapable of understanding. Some people are destined to fail. Like I said must suck….
It must be amazing to be so certain of your own infallibility and the evil intentions of others.
I sat next to a woman on a bus. She said that she bought a lottery ticket and won $500.000.00. She said that America was a wonderful palace of opportunity.
1 PM
(note to Wolf, this is an old post so i hope you don’t mind me writing a long skinny column here; i figured no one will see it at this point, except hopefully for Unamused, if he has that notification thing set up that doesn’t work for me.)
—-
Hey, Unamused- i tracked you down here because my cartoon sucked and i think i’m losing my mind again but i wanted to say before i go into my slightly ashamed and embarrassed “i shared too much about my dreams in front of adults” art mode, I’M SORRY AND YOU ARE VERY LIKELY RIGHT AND I’M FULL OF VESTIGIAL LA LA AMERICAN EXCEPTIONALISM CRAP.
James and i are fighting a lot these past few days and i cannot handle the amount of cynicism required of me to realize we likely are fucking doomed and that any respite is just me in the band playing on as we go down. so be it.
but i’m having existential problems realizing this makes NO SENSE and it’s horrid for so many and will be. i’m in awe of the amount of destruction and despair coming down the pike and while i dig the happiness i feel about me NOW, James says it’s because people don’t REALIZE how bad it’s all gonna get. he said they think they’ll go back to how things were.
i thought the people would remember, would turn, the middle class, but …they won’t. i’m reading history and today we are weaker than ever before with our planet of Tiny Ankled People.
i’m struggling to handle the deep sadness that seems to always come back regarding humanity, so forgive me for fighting so hard for my own vision. i get frustrated because sometimes i wonder if our cynicisms make it so.
but i admit there is a freedom to accepting what is real and likely but finding the MOTIVATION the WILL to do what we believe in no matter the odds or outcomes.
i’m missing art and different thinking relevant to NOW. i’m hungry famished, actually. art and writing are dead. i think the best stuff i have to find as it blows discarded in the wind.
everyone wants the numbers now. i need the screams.
so i’m sorry i’m not showing you my stupid cartoon. it was my dream for how i thought things looked and how could anyone serve such lies that only kill them? but they always DO. and maybe that’s also kind of the POINT in a suicidal world.
right now i am too embarrassed to show how simple i see things. but the reason i BELIEVE is because i’ve been the recipient of so much mad mad magic. my life is a secret faery tale even better than all the things i share so casually.
i think i luck out on my feelings and intuitions. but like a lot of us, i think i’ve run out of rope on my la la world.
no. i’m not offing myself! (smile)
i’m just facing another lost illusion and those are always hard because i was starting to get used to putting new furniture up in THIS one!
so i have to enjoy now the magic of spontaneity and figure out what’s next and find the motivation to be alive and create life and collaborations in this dying world.
thanks for putting up with me and thanks for always standing up for the little shmuck. i just had to come back and say “You’re Right.” there is nothing to ground my argument that people will fight back or even have the intelligence.
people, even my former art colleagues who were supposedly punk lesbian butch outlaws, are all gelatinous before authority and what strangers think.
this said, it doesn’t mean that i don’t have faith that i’ll be lucky enough to find the few freaks to enjoy these final days of america with on the way down. i kinda’ already HAVE with Corky and Basul.
thanks and good night, Unamused. and no, this isn’t the kind of apology where i’ll avoid you from now on. i just didn’t wanna let this “you’re RIGHT” moment slip.
(wink)
x
$600/week federal UE benefits is – surprise!! – enticing people to remain unemployed instead of working. And some businesses are closing, or not re-opening because they can’t find people.
Gee who could have predicted this????
And it is totally skewing the “worse than Great Depression” unemployment numbers. Give someone $1000/week to not work vs $750 a week to work full time, and you don’t need a PhD in economics to figure out what happens.
https://legalinsurrection.com/2020/04/as-predicted-extra-600-per-week-unemployment-enhancement-skewing-labor-hiring-market/
The boats began to rock again this week with three days (I’m including tomorrow) of negative DJIA. Methinks next week when they announce at the federal level that the lock-downs will be extended well into the summer, it might be the proverbial straw on the camel’s back. Not that horrible data hadn’t been coming all throughout the last few weeks. Heck since the post-crash rally began, depressing economic data’s been trickling in pretty much every week but the buy-the-dip mentality that most take as gospel in the investing scene I think has been keeping it going, along with the strong belief that the fed’s efforts have already put a solid floor in.
What are everyone’s thoughts on the next leg of the equities crash? Has the market already priced in lock-down extensions?
Good question.. the hardest thing to, do is predict what irrational people are going to do next. I am dumbfounded that people are not already running for the exits. It really makes no sense.
Maybe they are expecting a bounce when the lock downs are lifted, before the final leg down. I don’t know, I always get out way early, I like being able to sleep.
It is hard to believe anyone believes we are not going to have a serious economic contraction.
Jdog, can’t blame you for staying out. It’s crazy and scary if you try to do any transactions right now. No one but the bravest and the stupidest are in the game right now.
@DeerInHeadlights – I hear you. Next week is a Fed Meeting. Historically those result in a market boost on Monday/Tuesday. Powell has been known to deliver curveballs on Wednesday, though. The week following a Fed meeting is historically a weak one for the markets, and this time that week it ends with what will be the worst Employment Situation Summary in history on Friday May 8. Not auspicious.
The only thing against the market tanking middle of next week is the fact that everyone knows it’s due to tank again soon.
Wisdom Seeker,
Thanks for your input. I have my eye on the fed meeting but I’m thinking the ‘re-opening the economy taskforce’ might have something to say next week. It’s one thing for people to expect something but another when it’s said and done and I feel like the official announcement of lock downs extending well into the summer might just do it. I could be wrong of course.
On the vaccine front too there’s no good news. Way back in January when I heard about the virus, I had a feeling that the second wave of this thing like the Spanish flu could be far deadlier than the first. That was then, when people at work and elsewhere were making fun of people like me for overreacting. This is now, when the CDC is openly saying that the second wave could be far deadlier than the first. I’m afraid there’s very little good news to go around at this point. With that said, if the market continues to go up into the summer, then it really is as dumb of a **** as Wolf says it is!
Well, since you asked. During the last bear market I bought the S&P 500 Index in bits each month, starting when the market had dropped about 35% and kept buying all the way through the trough in March 2009 and up the other side well into 2012. I did very well with this, and these investments have remained in the market until today. I did shift to a 60/40 stock/bond mix in Q4 2018 in a “lean out” strategy to cushion the blow of a bear market in the S&P 500. I also remained about 30% cash in a federal money market that has gone in and out of real estate the past decade. This time it was very difficult to buy during the slide in March since things fell so fast. I did start buying the S&P 500 in bits starting in March at 30% off the highs and continue to do so today. I “leaned back in” to the S&P 500 and converted all the the 60/40 stock/bond fund into the S&P 500 index in March near the bottom. I also bought a big oil company index ETF and nailed the bottom (so far) that has returned 30% to date (talk about contrarian!). I also bought a prime piece of real estate with a run down old rental back in November 2019 that I am fixing up. I also invested a significant amount of time and money in a new line of products that will launch a new business this year. You could say I have some skin in the game. I don’t know what comes next short term. Anything can happen and it is a volatile situation. I still have plenty of cash to get me through just about anything. I would welcome another big leg down that I could buy and would lower my overall cost of shares, but I don’t think I am going to get it. I am probably going to get a crappy sideways market for the next year at least. A life-less sideways stock market, real estate market, and economy is most likely for the next year. 5-10 years from now I’ll have done quite well. That’s me story and I’m sticking to it.
A crappy sideways market for years is a very real possibility. Thanks for sharing.
Unamused is lit tonight!
Thank you.
What is wrong. Too many just seem pixxed off for no reason and dispute any comments that don’t agree with those agenda.
Jeezzzz…..lighten up!!!!!!
class warfare hammer and tongs today, lol.
What people refuse to talk about is you are not immune to this disease if you havent already had it and you are eventually going to get it.
If you are obese, elderly, diabetic, have heart disease, and other comorbidities you have a high chance of dying.
What else can you say?
Unamused is like a funny bot that derails every now and then. I’m an immigrant who came to this country in his teens alone with a backpack.
You do not see things as they are. You see things as you are.
For every impoverished immigrant who comes to the US and gets rich there are thousands who don’t. The chances of just happening to meet a penniless uneducated immigrant who can somehow afford plane fare and goes on to get rich are laughably remote, no matter how implausibly the story is embellished.
And yet, the story is so common and has so many variations that you’re made to think that every penniless uneducated immigrant to the US gets rich. The rule, and not the exception.
Dozens of studies of immigrant poverty have consistently exploded the myth for fifty years. The story persists because it promotes a patently dishonest agenda. That agenda also paints the same immigrants as filthy recalcitrant subhumans when it suits the occasion. Naturally the perpetrators of such myths want to have it both ways.
Corporatists like to catapult the rags to riches myth because it lets them rationalise poverty in the US while excusing the predatory avarice that exploits the poor and keeps them poor by the millions.
Blaming the victim has been industrialised by corporate think tanks. The same think tanks blame federal deficits on poverty programs which total less than half a percent of the federal budget. Most of the rest is corporate welfare.
No poor person has ever blown up the US economy. That privilege is strictly reserved to the very richest. And Horatio Alger stories are fiction.
Exactly. The selection bias in this article’s comments is unreal, but I guess most of them believe they were fated to come up roses so it makes sense to them.
Poor people immigrate here because they can earn multiples of their income in their home country and have a standard of living far in excess of home for less work. And be far safer to boot. If you lived in Guatemala would do anything to be here. Are you suggesting these immigrants are too stupid to know what’s in their own self interest? If it’s so terrible for them here, why is there not a flood of people moving back to Central America?
The ambitious immigrate here because this is the best country in the world for an ambitious immigrant. I’m a former resident of Santa Clara County, half of all tech firms there are founded by immigrants, mostly from China and India. This isn’t a myth, it’s a plain fact, you would do well to occasionally acknowledge facts.
Happy 1…..you are so right. Also an ex SV after 33 years. Worked with the same people in the Tech business. Many success stories and also some failures. And I also met the 1st or 2nd gen person on the plane.
Una, not sure where and when your family ancestors got off the boat(s), but do know about mine, from the earliest, a slave on Mayflower, to last, an Irish lass who passed through Ellis Island at age 11, both of whom became FI in their lifetimes, and begat many more who were FI, right on down to and including me. Current cohort is mostly FI, and now even some of the next generation have already achieved that goal.
And I could go on with the many hardworking individuals I have personally known in the last 70 years or so who have or had become FI by hard work and savings, but just one example relatively recently.
Guy was plaster sub for co I worked for, came with me when I advanced to GC,, all smaller projects; I finally got a big one and asked if he could do it; instead of showing up with usual 3 guys, he shows up with 20 (to do each coat in one day as is best) ; turned out his son was largest plaster sub in bay area, with 20 employees IN THE OFFICE…Dad was up on the scaffold at age 83, perfectly matching existing plaster (first set in 1904) for a ”historical restoration” project because he loved his work.
Implausible successes happen regularly… but, yes, rarely.
Uneducated immigrant becoming rich, uneducated young person becoming rich by creating a startup…
These are variation of eternal myth which gives hope to desperate people for thousands of years.
No need for evil forces to maintain it: that is what people need all the time. Let it roll.
Unamused,
You accused Jdog of “lying” about a personal experience Jdog said he’d had (sitting next to a successful immigrant on a plane), and you did so in a fairly nasty way, and without a scintilla of evidence because you weren’t there. I called you out on it. It’s a violation of commenting guideline #5 (personal attack on commenter)
https://wolfstreet.com/2017/10/07/finally-my-guidelines-for-commenting/
Didn’t you get that?
I beg your pardon for my humor, but we live historical times (may be biblical…), so my guess is that Unamuzed applied to himselff some.depressant in form of totally legal beer (may be from the famous beer mug) which gave him the courage to violate the art.5.
Anyway, what are we supposed to do under the lockdown?
Meanwhile I start to question myself if the number of your site daily comments are correlated with Dow Jones…
(I made a lot of spelling mistakes, sorry, not because I am drunk, but because of my children who stay home and drive me tired)
Engin-ear,
We should have a WOLF STREET Comments Typo index to track work-from-home. As typos surge, it means commenters are at home working and dealing with kids and pets; and when typos drop, it means commenters are back in the office, wasting scarce corporate resources by commenting here without typos.
Unamused also totally missed the point that Jdog met the successful immigrants LONG AFTER they had become successful. Not while they were immigrating!!
I don’t think you’re in touch with all of reality. For the past 20 years, 60% of immigrants were Hispanic (and that’s not counting the illegal ones) [and yes I realize this % is now decreasing]. I don’t know many wealthy Hispanics. I live where Hispanics are the ONLY ones working in dairies, literally 100%. Meat processing plants are full of Hispanics and Africans. Thousands and thousands of workers. Sure, you might know “a” wealthy immigrant, but there are thousands upon thousands of immigrants who work the $10-14/hr jobs not getting wealthy—like Unamused said.
@noname – I work in the Bay Area, among thousands and thousands of legal immigrants from Asia, Mexico and Latin America. And presumably some illegals too.
You’re missing two really important points. First, the ones that are getting wealthy aren’t showing it off, because in order to gain wealth you have to spend years living below your means – living poor. So what you will see will “look poor”, but what you won’t see is accumulating wealth in the form of education, strong families and savings that aren’t being spent on bling.
Second, everyone has to start small and work their way up. The time when you’re actually wealthy comes much later. We all know education and achievement are something people acquire, not something they’re given. Same for wealth.
And yeah, I know it doesn’t work out for everyone, but that’s no excuse not to try. And the hypothetical guy I wrote about, Joe Median, by definition he’s not a recent immigrant. He’s been working a while and blowing his earnings on Starbucks, big trucks, overpriced cell phones and a house he can’t afford in a recession. Many of the recent immigrants you see are going to work their way right past Joe Median, and leave him further behind, because Joe doesn’t make wise choices, instead he serves the corporate propaganda masters by doing their bidding to spend, spend, spend.
But those immigrants – they’ll learn the hard way, and then they’ll teach their kids how to save too, so they’ll have the family-full retirement that Joe dreams about but doesn’t ever achieve.
No, I’m not missing anything—this is the crux of the debate. You don’t understand that it’s become nearly impossible to “pull yourself up by the bootstraps” in this country anymore.
You keep on with the old “Starbucks and cell phone” trope. I was one of those who, for a few years, yes indeed, did buy a coffee to make it through the workday. $3.20 for a Seattle’s Best latte. 5 days a week. So scandalous. I didn’t have a smartphone. My cell service was $40/month. I drove my car to almost 300k miles. I didn’t have my own place—that is what allowed me to save a little. I graduated college right as the economy was collapsing last time. I made all the right choices.
I don’t think you realize how hard it is to make it in this country after the year, say, 2000. I am the youngest of my siblings and the economies of each of our coming-of-age years (spanning 15 years) are drastically different, so I know what I’m talking about!
There are virtually no Hispanic immigrants or their children “accumulating wealth in the form of education” here. That is laughable, really (AY DIOS MIO). They do, however, send money back to whichever country it is they’re from.
For you to keep saying “Joe Median” “doesn’t make wise choices” is infuriating. Look at all the despair in this country. You are on another-world island. Thank your lucky stars for that.
read “Smithfield Foods Is Blaming ‘Living Circumstances In Certain Cultures’ For One Of America’s Largest COVID-19 Clusters” BuzzFeed 4/20 article.
I’m not suggesting BuzzFeed is a reputable source, just the first hit that came up when I was trying to find the quote of the spokesperson that I read the other day.
Proof of what you’re saying, Unamused.
“For every impoverished immigrant who comes to the US and gets rich there are thousands who don’t.”
Please, Wolf speaks German, English, probably French, attended a gymnasium, at minimum, that is the equivalent of a four year college, or master’s degree in the U.S., then worked his ass off and went on to graduate school here.
The problem with the U.S. is that we don’t have enough Wolfs, but for every educated European, we do have thousands of Hispanic ditch diggers with the equivalent of a fifth grade education and high fertility aided and abetted by primitive Catholicism and linguistic uni-polarism.
After 1980 the GOP became a party not of politics but tribalism. In tribal politics the person next to you is a bigger threat than the people on the other side of the mountain. It fit nicely into the policy of nuclear deterrence, and anti-immigration. We can hold the Chinese at arms length but how do we stop the Democrats? Bush ran an FDR style presidency while attacking the Democrat party. The ones who hate government most are the same people who suck up the benefits.
The “commenters” on this subject left me with the, “Thousand Yard Stare!”
The world is in a pickle to be sure!
The “Care Act” is purposely generous to make “isolation” more palatable both for the employees and the small business employers.
Personal family experience shows me that it does work and will work provided the protocols for “isolation” don’t last for more than 3 months…….after that all bets are off. Employees and employers will become very “restless” with horrible uncertainties.
Sad that my comment calling out the entitled Boomers in the room was deleted!
Boomers living in La La Land!
noname,
I don’t generally allow generation-bashing. Not boomers, not millennials, not others. Just because people were born in the same two decades doesn’t mean they’re the same. Some boomers are homeless, others sit in the White House.
I wasn’t too sad, really. I have always felt the same way as you—but my empathy has run low. Sad to read how some here are so educated yet lack much perspective.
Oh boy, what a conversation. Thanks for the discussion people. Some good points on both sides. But Wisdom Seeker, with a handle like that, you know you’re gonna get it, whether you deserve it or not. :)
Unamused, you need to lead the next Occupy Wall Street movement.
Wolf, I’m sure you’ve addressed this before but please remind us what’s the reason the comments are not editable or vote-able?
What Bobber says: “I believe it’s very difficult for the average guy with average motivation and average smarts to make six figures. There simply aren’t enough high paying jobs out there,” took me a long time to understand. You have to have above average smarts, above average motivation AND above average luck (or parents) to get over the median hump.
Each of us suffers from the fallacy of composition. What’s true/possible for the individual simply isn’t possible for the median (much less the whole) in a society as unequal as this one.
Once I grasped that very simple point, I was stunned that it took me so long to figure that out. You know, high IQ, no clue…
So now they are saying the virus was first here in January, we didn’t impose lockdown until march. If its as contagious and deadly as the media (and now most alternative media) is making it out to be why aren’t we at 500,000 deaths? Thoughts?
We’re at 56,000 in the US, up from 370 deaths a month ago. Deaths have been growing at a rate of about 2,000 a day since Apr 5. We’re just at the beginning of it. Do your math. To expect 500,000 deaths instantly when it starts is totally nuts.