Thoughts from the Frontline

It’s All About the Jobs… and Gold

By John Mauldin

September 4, 2011

Choose your language

The Flat Earth (Employment) Society
Let’s Do a Little Time Travel
The Implications of an Older Workforce
How Do We “Fix” the Employment Problem?
Some Thoughts on Gold
Europe, New York, Conferences, Etc.

This week we briefly look at yesterday morning’s dismal unemployment report, then drop back and survey some other very eye-opening data on employment. Some groups are (surprise) doing better than others. What would it take to get us back to “normal,” whatever that is? I give you a link to some webinars I will be involved in and finish with the answer to the question I am asked most often, “What do you think about gold?” I tell all. There are lots of topics to cover, so let’s get started with no “but firsts.” (Note: this e-letter may print out rather long, as there are LOTS of charts and tables.)

The Flat Earth (Employment) Society

Unless you were completely out of touch this weekend, you know the jobs report came in flat, as in zero, nada, “0”. The economy was in neutral, at least as far as employment was concerned. But flat is actually down, as we need 125,000 jobs a month (at least) just to stay up with population growth. And, as we will see in a few pages, it may well…

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Dave McKay

Sep. 4, 2011, 9:17 a.m.

Mathias said..”“there is overwhelming scientific evidence that there is anthropogenic global warming.”“

No there isn’t. Average temperature only rose 1 degree fahrenheit during the 20th century. Source..National Academy of Sciences report to Congress. And the same report said that scientists were underestimating the effects of natural cooling and warming of the earth. AGW is vastly overblown. In a debate, climatologist Gavin Schmidt couldn’t even beat author Michael Crichton to convinve people that GW was a crisis..Pathetic..

http://www.npr.org/templates/story/story.php?storyId=9082151

Gerard Longpre

Sep. 4, 2011, 8:25 a.m.

John:  Your comment “get the government out of the way” is simplistic at best and disingenuous at worst.  Big companies have moved out to the East taking much of the small business work with them.  The real outsourcing is the build up of the small businesses in Asia.  The tax and regulatory structure has not changed in the last 30 years and yet where the US has the lowest tax structure of all western countries that is not good enough.  US Has no VAT or GST taxes which create twice the regulatory night mares facing smaller companies in other countries.  Look at Canada where the accounting night mare of GST and Provincial taxes and health plans has not hurt growth and entrepreneurship.

Try coming up with some real reason for the US small company difficulties not blame government or more openly blame Obama like as if regulations he has put in have killed off small companies.  Your writing would be more credible if you did not resort to such silly euphemisms.

George Darden

Sep. 4, 2011, 7:48 a.m.

Edgar Lawton

Dear John,
A most likely result of our jobs dilemma and debt problem, unfortunately, is the end of the republic as when Caesar crossed the Rubicon or a big war to enable us to mobilize as in World War II and solve both problems.  It’s hard for me to see how we can get the necessary austerity in Washington or main street.

Denny Schlesinger

Sep. 4, 2011, 6:32 a.m.

The good news about jobs is that it’s going to get Obama ejected from the White House hopefully to be replaced by a more business friendly administration. Governments can’t create jobs, they can just shuffle money. If governments get out of the way then entrepreneurs can do their job which is to create wealth which needs the input of labor.

Before you think I’m a tin-hat madman, let me say that I believe in government regulations where they are warranted. For example, banks should have had adult supervision and the zombie banks, the walking dead banks, should have been allowed to die in peace. What is generally known as “regulation” really falls into three categories:

1.- Regulation proper which is the government’s proper duty when business cannot self regulate adequately. I’m sure we all want the FAA to make sure that aircraft are safe to fly in.

2.- Micro-management (a.k.a. back seat driving) is harmful for the economy. Examples are the now defunct government backed telephony and aviation rate setting in the name of protecting the public. Once government got out of the way rates dropped favoring the calling and traveling public.

3.- The most insidious of all is social engineering by governments such as creating the incentives for people who could not afford it to take out credits they could not pay back to buy houses that would be foreclosed.

henry adams

Sep. 4, 2011, 1:58 a.m.

as always, thank you for sharing your thoughtful analysis and insight - we are in “uncharted waters”.  i look to reits, closed end funds and mlp"s for income and growth.  all have taken losses along with the overall market decline which seems destined to prevail for ? time.  do you have an outlook on these asset classes you can share with us?  hank

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