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There was considerable weeping and gnashing of teeth over the December “Employment Situation” report released by the BLS on Friday. Analysts were expecting 200,000 new payroll jobs, but they got only 74,000. Some called the “bad” unemployment report a “statistical anomaly.” A quick look at the BLS Household Survey showed that, rather than being bad, December was actually a better-than-average month in President Obama’s “new normal” economy. This is not a huge accomplishment, given that “Obama’s new normal” comprises slow GDP growth, a stagnant jobs market, and falling real household incomes. However, the nation moved 133,000 jobs closer to full-time-equivalent*...

In the mid and late 90s, Japan experienced a deep recession that was mainly rooted in a collapse of land and property prices and the aftermath of sovereign debt crises in other East Asian countries.Riva Fromovich points us to a 2000 study by The University of Tokyo's Yuji Genda of what happened to Japanese youth during the recession. It is ugly.First, the hiring rate of new graduates relative to the initial number of employees, using human resource stock variables as explanatory variables in a regression analysis:Click to enlarge. Yuji GendaGenda:The hiring rate of new graduates relative to the initial number of employees is significantly lower at establishments...

Pop quiz: Which of the following is true? (a) Over the past 40 years, the middle class has shrunk; (b) Over the past 40 years, the middle class has grown poorer; (c) The middle class just suffered through a “lost decade”; (d) All of the above. You could be forgiven for answering (d), given the angst-producing state of discourse on the economy, but the truth is that none of these claims about middle-class decline — made most recently by the Pew Research Center (PRC) — are supported by the best evidence. Like other analyses before it, PRC’s recent report “The...

Krugman, Fingleton, and Japan By James Fallows May 26 2012, 10:22 AM ET /snip This is a case I sympathize with, and have made various times -- for instance, in the Atlantic two years ago. I am sure that Fingleton has noticed that Paul Krugman, long a skeptic of the "Japan is stronger than it looks" view, now agrees. Or so a new interview with Martin Wolf in the FT suggests: The conversation turns to the Japanese crisis of the 1990s. In retrospect, I [Wolf] suggest, the Japanese seem to have managed the aftermath of their crisis quite well. He...

The Advance Estimate for Q1 GDP came in at 2.2%, down from 3.0% in the previous quarter, and below most mainstream media estimates of 2.5%. However, my friend BC notes .... The GDP deflator is reported to have averaged 1.2% annualized in the past 2 qtrs. Had the trend rate from '11 persisted, the deflator would have subtracted 2.6% annualized from real GDP, resulting in a 2-qtr. growth of real GDP of 0%.  ECRI's Achuthan would appear correct that a recession were imminent instead of looking like a dummy. Rick Davis at the Consumer Metric Institutes makes a similar calculation....

Former U.S. Speaker of the House Dennis Hastert speaks at St. Xavier University in Chicago Wednesday, March 21, 2012. | Brett Roseman~Sun-Times Media There were jabs at Newt Gingrich, kudos for Mitt Romney, connections between driving a school bus and serving as speaker of the U.S. House and opinions on the wars in the Middle East. Denny Hastert, who went from teacher and wrestling coach at Yorkville High School to become the longest-serving Republican House Speaker ever, shared thoughts as wide-ranging as his background last week in a speech at St. Xavier University in Chicago. Hastert, who was raised...

Analysis: Japan's lost decade still a risk for U.S. economy Mon, Sep 19 2011 By Steven C. Johnson NEW YORK (Reuters) - As the U.S. economy slouches toward another recession and confidence in policymakers erodes, investors are coming to grips with the notion that the country may already be several years into a Japan-style lost decade. If so, the years ahead could be a very tough slog. U.S. households, unlike those in Japan, have higher debts and lower savings, while massive deficits have sapped political support for the type of robust government spending Japan relied upon. In short: in a...

UPDATE 3-Japan could face a third "lost" decade-Moody's Mon, Jun 27 2011 * Moody's sees quick economic rebound from disaster * But says Japan may be facing a third "lost" decade * Moody's has highest rating on Japan versus S&P, Fitch * Moody's to decide on ratings by end August (Adds details) By Edwina Gibbs and Stanley White TOKYO, June 27 (Reuters) - Japan could face a third "lost" decade of sluggish economic growth that will leave it struggling to whittle down the heaviest debt burden among developed nations, Moody's ratings agency said on Monday. It chided the government's failure...

(snip) The greatest threat to the nation’s creditworthiness is a sustained period of slow growth that, as in southern Europe, causes debt-to-GDP ratios to soar. Discussions about medium-term measures to restrain spending and raise revenue need to be coupled with a focus on near-term growth. Without the payroll tax cuts and unemployment insurance negotiated by the president and Congress last fall, we might well be looking at the possibility of a double-dip recession. Substantial withdrawal of fiscal support for demand at the end of 2011 would be premature. Fiscal support should, in fact, be expanded by providing the payroll tax...

President Barack Obama and his economic team have decided to follow Japan’s economic path… the same one that resulted in Japan’s “Lost Decade!” Obama wants to be re-elected so badly, that he and Ben Bernanke at the Federal Reserve Bank are proceeding with methods they think will improve the economy quickly. That’s the catch though, this quick fix (if it even works) leads to long-term nightmares. Obama gains, U.S. pains. …On Dec. 29 of that year, the Nikkei 225 Index topped out at 38,957.44, before closing at 38,915.87. By the following September, it had nearly been halved – and there...

California released its latest Labor Market figures today. And, I see also that EIA Washington has updated detailed energy production and use data for California too, through 2008. First, let’s look at the chart which compares oil production in California to total oil product use, in trillion BTU. Unsurprisingly, those killer high petrol prices in the first half of 2008 and then the subsequent economic collapse in the second half took more than 200 trillion BTU of total oil product demand off-line. In just one year, California oil product consumption reset itself all the way back, to 2001. | see:...

apan has often been portrayed in US media as a futuristic society: you know, robots and the like. But more and more, the story has been about the Japanese economy looking like what we'll look like in 10 years -- a land of endless cheap money, sub-1% rates on 10-year bonds, and a three-decade slump in stocks. The New York Times has a very worthwhile piece on the state of Japan, focusing on its economy, and its effect on the national psyche. It starts with a terrifying little anecdote: Like many members of Japan’s middle class, Masato Y. enjoyed a...

Krugman, the Doctor: I Meant to Say It's Good We're Turning Into Japan II, It's Real Good Tim Cavanaugh | September 10, 2010 The next drink will be the one that makes you sober, Paul. In Los Tiempos de Nueva York, the economist formerly known as Pauly Krugnuts recalls his 2008 warnings that the United States economy would follow the pattern Japan's economy followed during its post-1980s recession. Most of the stimulative nostrums Paul Krugman prescribed back then have since been tried (though he believes the dosages have been too low), and nothing got better. So without admitting any wrongdoing,...

Despite the feverish efforts of policymakers, including a new round of money printing by the Federal Reserve, the U.S. economy continues to dance on the edge of oblivion. Job growth has stalled. The stock market sits just a couple of percentage points above where it was a year ago. Fed up and fearful, investors are throwing their cash at the seemingly safest asset class of them all -- Treasury bonds -- and pushing long-term interest rates to historical lows. Now, some are wondering whether America is destined to repeat Japan's 20-year battle with deflation, or falling prices, a bear market...

Economists worry that America could be edging closer to the trap that cost the other nation more than a decade of growth. The White House prediction Friday that the deficit would hit a record $1.47 trillion this year poured new fuel on the fiery argument over whether the government should begin cutting back to avoid future inflation or instead keep stimulating the economy to help the still-sputtering recovery. But increasingly, economists and other analysts are expressing concern that the United States could be edging closer to a different problem — the kind of deflationary trap that cost Japan more than...

Despite a chorus of voices claiming otherwise, we aren’t Greece. We are, however, looking more and more like Japan. For the past few months, much commentary on the economy — some of it posing as reporting — has had one central theme: policy makers are doing too much. Governments need to stop spending, we’re told. Greece is held up as a cautionary tale, and every uptick in the interest rate on U.S. government bonds is treated as an indication that markets are turning on America over its deficits. Meanwhile, there are continual warnings that inflation is just around the corner,...

By 2014, International Monetary Fund official John Lipsky remarked March 21, the debt-to-gross domestic product (GDP) ratio of the Group of Seven countries will reach 100%, and the governments of the industrial world will carry the highest debt burden since shortly after the end of World War II. That is bad news; worse news is that governments are shoveling money into the world banking system to finance the debt expansion. Following the great bank bailout of 2008, the global banking system is socialized de facto, shifting its resources towards government debt and away from private sector financing. Governments averted a...

President Obama called the "oughts" (2000-2009) the "lost decade." That was his way, yet again, of blaming Bush. More precisely, it was Obama heeding the advice of Homer Simpson. The three little sentences that will get you through life. Number 1: Cover for me. Number 2: Oh, good idea, Boss! Number 3: It was like that when I got here. It was like that when Obama got there. The whole decade was lost when he got there. Or perhaps President Obama was not channeling Homer Simpson, but was channeling James Carville channeling Homer Simpson. Democrats would not be playing the...

The U.S. stock market today will close out its best year since 2003, an amazing comeback from what felt like Armageddon to many investors just nine months ago. Yet today also ends by far the worst decade for stocks overall since World War II. At 10,548 on Wednesday, the Dow Jones industrial average was up 20% for the year -- but still 8% below its level at the end of 1999. The last time the Dow failed to make any net progress in a decade was in the 1930s, when it sank 39% during the Great Depression. Not surprisingly, Wall...

In February of this year, I wrote a study (co-authored with Mike Flynn) about the lessons of the Japanese “Lost Decade.” At the end of the 1980s, Japan faced a very similar situation to ours: an asset bubble burst, the economy went into recession, and the financial sector stumbled. In that study we argued (as did others in separate publications) that if American didn’t properly learn the lessons of the Lost Decade, that we too would suffer a similar long night of economic malaise. Unfortunately, the warning has not been heeded. Japan spent most of the 1990s screwing around with...