18 Feb 2014 4:34 am
You don't need to change the entire methodology to change the result. I believe the concept of "discouraged" workers was introduced under Reagan. The inclusion of the military was under Reagan. The number of hours work required before someone is deemed "fully employed" was reduced. There were also changes to the CPS calculations in 82, 83, 85 and 86.AmazonTania » 17 Feb 2014 8:35 pm » wrote:
What change are you referring to? The only change to the BLS methodology since 1940 was in 1994. Prior to 1994, the BLS use to ask people if they searched for work recently. If people give the BLS one of five reasons why they haven't searched for work within the last 4 weeks, they were assumed to have given up, even though they were not asked when they last looked.
In 1994, there was greater specificity involved in the methodology, which ultimately cut the amount of discouraged workers in half. That happened during the Clinton administration, not the Reagan Administration. You can read all about it here:
http://www.bls.gov/opub/mlr/1995/10/art3full.pdf
I've noticed we've been having a bit a trouble determining when each administration starts and where it ends, but it's a bit of a stretch to assume Reagan had anything to do with this.
Does any of that change what Volcker and Carter did and how it benefited Reagan? You know - the thing we were discussing.AmazonTania » 17 Feb 2014 8:35 pm » wrote: The expansion of the monetary didn't start under Nixon. It started under LBJ and the guns and butter administration. To pay for all of their great social reforms, they started printing dollars at an alarming rate. This caused people to redeem their federal reserve notes for gold at an increasing rate, which was depleting the overall gold reserves held by the United States.
The monetary base was essentially stable before the 1960's.
To prevent this from happening, the Nixon suspended the Bretton Wood's System, and eventually resulted in Americas' first default.
Yes, the dollar became much stronger under Reagan, having spent the previous decade weakening (so he inherited a weak dollar, as I said). In fact, the strengthening of the dollar became a problem - hence the Plaza Accord. Because he ran up high deficits (due to the military buildup and tax cuts) and because of what Volcker was doing, interest rates were high. The value of the dollar rose accordingly.AmazonTania » 17 Feb 2014 8:35 pm » wrote: While your anecdotal claims does not interest me, what weak dollar? The Dollar Index (DXY) peaked at 164.74 in 1984. Today, it's barely half of that.
Just so you know, the Dollar is weighed against a basket of major currencies (Yen, Pound, Euro, Franc, Canadian Dollar, Krona). You cannot determine the strength of it by just pairing it with one currency. All you've done was determine the strength of the dollar relative to the Pound. That's meaningless information.
Check the DXY when he came to power. http://www.tradingeconomics.com/charts/united-states-currency.png?s=dxy&d1=19700101&d2=19891231
You appear very confident in that multiplier. It seems high to me. Don't they vary depending on circumstances (e.g recession vs expansion) and on the type of investment? Either way, there is a lot of debate around the multiplier for military spending but few would argue that it has no impact on the economy, as you appear to be doing.AmazonTania » 17 Feb 2014 8:35 pm » wrote: I've already shown that most of the shortfalls in GDP was in government spending (decreased as a percentage of GDP). Whatever was pumped into the economy, it wasn't in the form of federal salaries.
This this particularly important because Government spending has the multiplier of x2, while PCE has only a x1 Multiplier. Meaning, when the government pays the salaries of its workers (as well as when these employees spend their paycheck).
It isn't about federal salaries. That money has to go somewhere. It gets spent. Businesses supply the military and other businesses supply them. These businesses employ people. They also buy raw materials. They develop technologies and do research. There is a whole industrial complex that wants feeding. Does this industry have no impact on the economy? Please explain why.