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Is The Economy Getting Better? Notes From an MBA Econ Class

February 22nd, 2011

In a comment on my job search depression post, “Blissful” shared some very interesting thoughts from her MBA level econ class regarding the economy:

>> What I learned in my Economics class is quite disturbing. The economy is actually not getting better.

Any surprises here?

>> When you hear on the news that unemployment rate decreased, well it’s not because people are getting jobs it’s because people become so discouraged that they dropped out of the labor force and stopped looking for work so the #unemployed/labor force = a lower percentage.

I’ve been saying this a lot – glad to hear the econ profs are talking about it frankly!  Newspapers and politicians have to know this but they always seem to paint a rosy, misleading picture. It’s practically right out of Atlas Shrugged :s

>> When you think that the stocks market improved and you’re getting more returns on your investment; well that’s not really the case here.

Oh crap. I haven’t read much on this… explanation from Blissful below…

>> The Federal Reseve purposely devalued the dollar so we appear cheap to the foreigners to invest in us. When there is a high demand for dollars, the price for investing in dollars will go up. That is the law of supply and demand in economics. So now, all of a sudden it looks like your ROI is getting so much better.

Yuck.  This is not a good path.  It is not sustainable.

>> The government is trying to make you think that you’re wealthier so that you can go out and start spending again.

I’m afraid of “so we can go out and start spending again,” considering so many people spent money they didn’t have (aka, loans).

>> That will put more money into the circulation of the economy.

True, but if people aren’t responsible for the money they spend (in other words, they don’t have it, or it’s a loan, etc., than pumping junk money into an economy will only result in more bankruptcy, foreclosures, etc.).  If this is what the government is doing it’s very, very flawed.

>> But what they don’t understand is that we’re NOT going to spend more money if we don’t have JOBS!!!!!!!!!

Spoken like a true unemployed person :)  Jobs is what we need.  Unfortunately, fake jobs is not what we need.  Government spending to create jobs is not what we need because it’s not sustainable, and it’s not the role of government.  We need policies in place that help business thrive.  When businesses thrive, they hire, and spend, and feed the economy.

Scary times?  Yes, indeed.

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One Response to “Is The Economy Getting Better? Notes From an MBA Econ Class”

  1. Kate says:

    This confirms my worries. I’m not an economist. My husband is an electrician and he’s had to work far from home for the last two years because of the tough economy. His friends who refused to move are almost all unemployed…and have been for several years in most cases. I am a school teacher and in my district they are talking about closing schools and increasing class sizes for the second year in a row. It seems as though things are getting worse, but the media keeps saying the economy is better. Neither of us feels that we have any job security and we’re afraid that if one of us is laid off, we won’t be able to get another job.

    It’s uncomfortable to read bad news, but it’s more comfortable than reading lies. Thank you for this post.

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