Pope Francis claims global economy is close to collapse and describes youth unemployment rates as an ‘atrocity’ in damning message

[ralfyman]

Recession does not explain the divergence. There have been recessions, even depressions, throughout history but none had the effect of disproportionate youth unemployment. In fact, until recently, it was generally assumed that youth held an advantage in the labor market for a variety of reasons. You are not grappling with what is new and unique about the youth unemployment problem.

The recession definitely explains not only increased youth unemployment but increased unemployment worldwide, as the three factors that you mentioned are hardly present in developing countries. All of the data showing increased youth unemployment only after 2008 and others have been presented to you.

Risk and bubbles were not invented after deregulation and regulation has never prevented risk and bubbles. Bubbles are as old as money.

Regulation has prevented such bubbles, as seen in countries with better economic performance than the U.S. and various EU countries today. Unfortunately, they are not immune to what affects the global economy, which is an unregulated derivatives market with over a quadrillion dollars in notional value.

More importantly, the idea that risk needs to be regulated out of existence is foolish and dangerous. Minimizing risk has two negative effects: it depresses growth and it leads to systemic risks. And empowring politicians to regulate risk is what leads to cronyism.

Minimizing risk lowers grows but does not lead to systemic risk. It’s the opposite that leads to the latter, and we are seeing that right now.

Bailouts are a serious problem because they create moral hazard. The natural and necessary risk that is inherent to the human condition is forcibly transfered to people who have no control and away from those who do.

Exactly, which is why regulation was needed.

But bailouts did not create the youth unemployment problem.

As explained carefully in previous messages, it is not the bailouts but the fact that they were used improperly which was what led to worsening unemployment. This was explained by Pope Francis and confirmed by organizations like the ILO.

It is very debatable that youth are " the ones most vulnerable". Typicaly youth have fewer obligations and are more flexible. There are far more vulnerable groups. Often unemployed youth simply stay home with their parents, an option not available to most other labor groups. They are probably the least vulnerable.

Only among the middle class, which makes up the minority of the world’s population. For most youth, there are lots of obligations and very little flexibility. More details are given in the articles shared earlier.

The focus on youth is valid for the fact that they are the future.

But this obscures the fact that youth unemployment only recently diverged from general unemployment. People started worrying about youth unemployment because it has become a unique problem and not merely

It did not diverge from general unemployment, as the latter remains considerable today. More details are given in the article shared earlier.

 

[Bubba_Switzler]

The recession definitely explains not only increased youth unemployment but increased unemployment worldwide, as the three factors that you mentioned are hardly present in developing countries. All of the data showing increased youth unemployment only after 2008 and others have been presented to you.

No, it only explains increased general employment. Youth unemployment spiked after the last recession but it diverged long ago.

Regulation has prevented such bubbles, as seen in countries with better economic performance than the U.S. and various EU countries today. Unfortunately, they are not immune to what affects the global economy, which is an unregulated derivatives market with over a quadrillion dollars in notional value.

The EU is the worst performing area and the worst hit by youth unemployment. They are not merely bystanding victims of the global economy, they are dealing with severe structural problems of their own creation.

Minimizing risk lowers grows but does not lead to systemic risk. It’s the opposite that leads to the latter, and we are seeing that right now.

What we are seeing now is the attempt to eliminate risk which leads to a risk of a much greater collapse. The most extreme example of this was the Soviet Union.

Exactly, which is why regulation was needed.

Government, regulate thyself.

As explained carefully in previous messages, it is not the bailouts but the fact that they were used improperly which was what led to worsening unemployment. This was explained by Pope Francis and confirmed by organizations like the ILO.

What else would you expect from crony capitalism? Always, it seems, those who advocate more government pretend to be surprised when it doesn’t have the desired outcome.

But recession doesn’t cause long-term unemployment, that is a gift from government regulation and Europe is the worst. Employers don’t dare hire because they can’t fire.

Only among the middle class, which makes up the minority of the world’s population. For most youth, there are lots of obligations and very little flexibility. More details are given in the articles shared earlier.

In fact, in most societies, extended families live together. But the problem of youth unemployment, the divergence from general unemployment, is most extreme in the most developed and regulated countries, Europe especially.

It did not diverge from general unemployment, as the latter remains considerable today. More details are given in the article shared earlier.

Youth unemployment has grown far faster, and more stubbornly, than general unemployment. It is a unique problem that will not be solved merely by reducing general unemployment.

 

[freeRadical]

We have to keep in mind that the Fed is a consortium of private banks.

What does that have to do with anything? The FED is in charge of all monetary policy in the US, they control the money supply, and the are given enormous power and latitude by the federal government.

 

[Bubba_Switzler]

What does that have to do with anything? The FED is in charge of all monetary policy in the US, they control the money supply, and the are given enormous power and latitude by the federal government.

The FED is, in fact, a quasi-public/private institution. Just as we previously discussed the “mixed economy” which is a compromise between capitalism and socialism, so the federal reserve system is a compromise between private and public money.

 

[freeRadical]

The FED is, in fact, a quasi-public/private institution. Just as we previously discussed the “mixed economy” which is a compromise between capitalism and socialism, so the federal reserve system is a compromise between private and public money.

I understand that. I don’t get what that has to do with the post I made…

 

[ralfyman]

No, it only explains increased general employment. Youth unemployment spiked after the last recession but it diverged long ago.

It’s the other way round: increased general unemployment.

The topic of this thread is the spike.

The EU is the worst performing area and the worst hit by youth unemployment. They are not merely bystanding victims of the global economy, they are dealing with severe structural problems of their own creation.

This does not counter Pope Francis’ argument.

What we are seeing now is the attempt to eliminate risk which leads to a risk of a much greater collapse. The most extreme example of this was the Soviet Union.

It’s the other way round: what is taking place is non-elimination of the risk. And what happened to the Soviet Union is not the same as what is happening now to OECD countries.

Government, regulate thyself.

The government has been regulating itself, i.e., by allowing financiers to do what they want. Hence, the 2008 crash.

What else would you expect from crony capitalism? Always, it seems, those who advocate more government pretend to be surprised when it doesn’t have the desired outcome.

Crony capitalism is the result of free market capitalism, where some become stronger, take over, then ensure that government works in their favor.

But recession doesn’t cause long-term unemployment, that is a gift from government regulation and Europe is the worst. Employers don’t dare hire because they can’t fire.

It does, and for very obvious reasons. And what we are seeing now is not the result of government regulation but the opposite.

Employers don’t hire because most of the bailout money was used for further financial speculation. This was explained several times in previous messages.

In fact, in most societies, extended families live together. But the problem of youth unemployment, the divergence from general unemployment, is most extreme in the most developed and regulated countries, Europe especially.

That’s because the result of free market capitalism is greater prosperity, which in turn leads to less dependence on families.

Youth unemployment has grown far faster, and more stubbornly, than general unemployment. It is a unique problem that will not be solved merely by reducing general unemployment.

Youth unemployment grew faster because of the current recession. That’s been proven.

 

[ralfyman]

What does that have to do with anything? The FED is in charge of all monetary policy in the US, they control the money supply, and the are given enormous power and latitude by the federal government.

Exactly. Who received the bailouts?

 

[ralfyman]

The FED is, in fact, a quasi-public/private institution. Just as we previously discussed the “mixed economy” which is a compromise between capitalism and socialism, so the federal reserve system is a compromise between private and public money.

The presence of the Fed is not a compromise between capitalism and socialism. It is a takeover of money supply by the private sector.

A mixed economy is not a compromise between capitalism and socialism. It is a combination of private corporations and state capitalist corporations.

The only “public money” in the U.S. consists of coins.

 

[sallybutler]

The presence of the Fed is not a compromise between capitalism and socialism. It is a takeover of money supply by the private sector.

A mixed economy is not a compromise between capitalism and socialism. It is a combination of private corporations and state capitalist corporations.

The only “public money” in the U.S. consists of coins.

Coins are minted by the U.S. Mint. Paper money is printed by the U.S. Bureau of Engraving. Both then enter circulation through the banks, which get them from the Federal Reserve.

 

[ProVobis]

What does that have to do with anything? The FED is in charge of all monetary policy in the US, they control the money supply, and the are given enormous power and latitude by the federal government.

A few Fed-produced electronic dollars have been known to wind up with other central banks as well.

 

[ProVobis]

The FED is, in fact, a quasi-public/private institution. Just as we previously discussed the “mixed economy” which is a compromise between capitalism and socialism, so the federal reserve system is a compromise between private and public money.

Private money is almost completely squelched by the FED, whose status is artificial anyway. The FED is definitely not capitalism, not by Ayn Rand standards anyway.

 

[ProVobis]

Coins are minted by the U.S. Mint. Paper money is printed by the U.S. Bureau of Engraving. Both then enter circulation through the banks, which get them from the Federal Reserve.

Most of the money is created electronically, if it matters, and currently, around $4 trillion is sitting with the 12 member banks. They only wish it gets circulated.

 

[Bubba_Switzler]

Private money is almost completely squelched by the FED, whose status is artificial anyway. The FED is definitely not capitalism, not by Ayn Rand standards anyway.

Agreed, but it’s not straight up sovereign money either. It is quasi-independent and, at least in theory, is supposed to be apolitical. When kings printed money they were concerned only with their own treasury. So we have a compromise.

 

[Bubba_Switzler]

The presence of the Fed is not a compromise between capitalism and socialism. It is a takeover of money supply by the private sector.

Historically, banks issued notes without government oversight. That ended with the creation of the federal reserve which centralized the issuance of notes under the quasi-independent central bank. Supposedly this was to end bank runs and that was largely achieved.

A mixed economy is not a compromise between capitalism and socialism. It is a combination of private corporations and state capitalist corporations.

Your stubborn denial of socialist influence on government is ahistorical. You should read up on WWI and its political aftermath. One place that you will find still find a legacy of many state corporations is China and they called it communism.

 

[Bubba_Switzler]

It’s the other way round: what is taking place is non-elimination of the risk. And what happened to the Soviet Union is not the same as what is happening now to OECD countries.

Not the same, literally, but the same principle at work. What people seem to forget is that Europe has tried to guarantee work. That’s why their labor laws are so rigid. And this has caused much higher unemployment than elsewhere, most severaly affecting the young who are, in many different ways, locked out.

More generally, politicians have been promising to eliminate risk from life in many different ways including, as we are discussing here, the risk of recession. Far from being greedy, the federal reserve is doing what it think it is supposed to do: pump up the economy and prevent economic downturn. Among the perverse effects is growing inequality due to rising asset prices.

The government has been regulating itself, i.e., by allowing financiers to do what they want. Hence, the 2008 crash. Crony capitalism is the result of free market capitalism, where some become stronger, take over, then ensure that government works in their favor. It does, and for very obvious reasons. And what we are seeing now is not the result of government regulation but the opposite.

The absolute absurdity of your position is this: you claim that the government is a captive of the ‘financil elite’ and then you demand more power for the government to reguate business and then you are shocked, shocked, that you get crony capitalism.

Employers don’t hire because most of the bailout money was used for further financial speculation.

Anyone who expected emplyers to hire because they got bailouts is a fool. Employers hire when the value of labor is greater than the cost.

That’s because the result of free market capitalism is greater prosperity, which in turn leads to less dependence on families.

Interestingly, many make the exact opposite claim, that poverty destroys families.

Youth unemployment grew faster because of the current recession. That’s been proven.

If all unemplyment grows then speicfic unemployment will grow. But nobody has shown, much less proven, that any recession causes youth unemployment to diverge. We have had many recession and depressions throughout history and none has ever had that effect.

But there is historical precedence for this. As recently as the 1950s black youth unemployment was lower than white youth unemployment. Then government decided to be compassionate by raising the minum wage and providing generous welfare. Needless to say, black youth unemployment skyrocketed so that today few people can imagine that it was ever otherwise.

 

[ProVobis]

Agreed, but it’s not straight up sovereign money either. It is quasi-independent and, at least in theory, is supposed to be apolitical. When kings printed money they were concerned only with their own treasury. So we have a compromise.

You mean like Uncle Ben’s helicopters?

At least Janet Yellen is honest about trying to starve anyone with private capital/savings or force them to take risks.

 

[estesbob]

My understanding is that reports on youth unemployment and causes of that were raised by various organizations, including the ILO, the WB, and the IMF. Pope Francis is adding his voice to their concerns.

So I assume you oppose raising the minimum wage?

 

[ProVobis]

So I assume you oppose raising the minimum wage?

Not if it helps them get re-elected.

 

[freeRadical]

Exactly. Who received the bailouts?

Who didn’t?

 

[ralfyman]

Coins are minted by the U.S. Mint. Paper money is printed by the U.S. Bureau of Engraving. Both then enter circulation through the banks, which get them from the Federal Reserve.

Most of money supply is not made of paper or coin but are numbers in hard drives.