I started reading this and thought "It's housing buddy!" Great minds think alike.

I'm cautious enough to have gotten the fixed deal, but I can see what was tempting so many to ARMS: their children.

Since your child's educational fate is roughly tied to how expensive your house is, young families must get the most house they can possibly afford.

In 2000 I bought a two flat for $150G, then sold it four years later for nearly double that. It sounds great until you realize you have to just buy another house and it will have doubled in four years too. Some friends here in the city were buying up properties and becoming thirty-something mini-moguls but now that's dried up and they can't even find renters, let alone buyers for their leveraged buildings.

The only other thing I can think of that rise in price even close to that is health insurance. Computers are dirt cheap now. The price of a car, relative to everything else, has been going down for decades.

It would be interesting to know what fraction of those working are now earning less than before. All those involved in layoffs and givebacks have to have gone someplace.

Even when nominal wages have not declined the effective take home has been affected by higher health premiums or reduced coverage or higher copayments. The same thing is true of retirement funding.

Even if only one person in a family has been directly affected the mood of uncertainty can be spread to others. Stories in the press also have a psychological effect. Walmart puts in wage caps and Circuit City fires people for earning too much. People get the picture.

--- Policies not Politics
Daily Landscape

Re: Employment in my field (computer programming) declined by nearly 25% between 2000 and 2004

Using 2000 as a base year in this field is like using the day of a hurricane to measure average wind speeds. Either 1995 (well before both the Y2K panic and the dot.com boom) or 2003/04 (after things settled) would be a better baseline. IT is still a hot employment field and outside the Depression Belt along the Great Lakes IT professionals with current skills should have little trouble finding jobs, as has been my personal experience as recently as last year.
No, my vote is with housing being the main culprit. At least that is my main sour factor since, despite my now making more than ever before and despite a second income from my partner, I still don't see how I can afford to buy a house in our vastly overinflated (S Florida) market.

Yes, yes. But I am talking here about official Greenspan deliberately misleading the borrowers. We hold Bush responsible for the lies he told and tells even if we think only a fool can believe him. Isn't there an obligation on a high official not to mislead the gullible fools (your word). They were flat-out misled and deliberately so by Greenspan.

I'm truly glad to hear you're doing so well but that's not the case for many of us who remain in the field.

With respect to the choice of years to examine, I'm not sure I agree with your point. I've found articles dating back to the period of the dot.com boom years that document the same scenarios that we're seeing now: a labor glut decried as a shortage by employers, high unemployment among older tech workers, an unwillingness of employers to retrain workers in new skills or to accept such training as meeting a skill requirement. Here's a representative link from 1998:

href="http://www.mnforsustain.org/matloff_testimony_myth_of_labor_software_shortage.htm" >Debunking the Myth of a Desperate Software Labor Shortage"

So, it seems that not everyone was participating in the boom and if things have declined since then, it's not the case that everything's fine because there was a lot of room to spare. Older tech workers have always had difficulties and now that the average age of the labor force has probably increased, things are more likely to be proportionately worse.

It's not really a question of "current skills" either as you implied. The problem is that the notion of transferrable skills has been lost (it seems this has always been a problem, but from my own experience I think it's worse now).

For example, there's little reason a competent C++ programmer should not be hired for a Java or C# job because he or she clearly has a transferrable skill and can easily learn the new language. However, that's not the way IT hiring works these days. And having taken classes on the side is rarely considered sufficient either.

Having "current skills" is largely a matter of having had the opportunity to work in an environment where the tools and skills emphasized happen to be the ones that are still in demand when one needs a new job. Most IT workers don't have the latitude to arbitrarily decide to start working with a new tool because it's currently in vogue. They have to work with what's being used in their workplace. If they happen to lose their job and the skills being used in their former workplace are not in currently demand, they're SOL. There's much more of an element of chance and happenstance involved than most people realize.

Finally, "finding jobs" is not the whole story. If the majority of jobs one can find offer less pay, worse benefits, less security and are more likely to be short-term, contract positions rather than regular, full-time employment then the trend is clearly downward.

what is your point about that document on software engineering? Even though I have an EE masters degree, I know that I was only booksmart in it....

However, I was always good with logic and software systems so I've made a fair amount of money in software because I've always landed with my feet on the ground.

At one point, I wanted to go into teaching, because it wasn't military related and more humanistic, but I found out that those jobs, too, were getting tougher to get since student enrollments were going down and the media was hyping a teacher shortage!

Specifically, I'll never forget the initiation session (at the University of Minnesota) where I saw over 400 students wishing to become elementary teachers! And, please remember, this was just a single training program at one university!

well, I sobered up quickly and decided to go back into the software and systems engineering field because I was at the peak of my earning potential.

now, even though I'm making around six-figures a year-- at this point, I know that my mind is getting older and I have no clue if, five years down the road, it will still want to programm all day. I've worked with older programmers and many of them were forgetful and slow. at my age, I know that I can't work late into the night or on the weekends because I have to relax.

so far, I've been blessed with the ability to keep my clients happy and they typically tell me: "you outclass the other guys we have."

however, I know that the world is fickle and so I am very carefull with my money and I am becoming a better saver each day.

since I've taken advanced math classes, I understand that the most important thing to worry about is "average salary" and if I can't work in a high paid job, all I hope to do is take a pay cut and bring in enough to stay cash flow positive and preserve my retirement wealth.

in general, I'm not sure what I think about hiring younger people because we typically raise our kids to work with kids their age and older employees don't like taking orders from younger employees.

younger employees also have student loans to pay off and they'll probably spend almost all of their paychecks buying all the unnecessary things that the young buy.

I'm typically not mad about layoffs because employers, I think, look for workers like one looks for a diamond: they sort through a lot of stuff in the process.

And, I'll admit: I've worked for employers that I've ultimately hated, like being a contractor at IBM, and it was a blessing to leave!

over the next few years, I plan to do a little freelancing, to build up contacts, and get certified in the latest technologies.

while many people say they keep up, they just don't. The guy I work with has said that he won't learn something new unless he gets paid to do so...

I've retrained myself and it's been beneficial and that includes learning a lot about being a good investor...

I agree with you about transferability of skills: employers are far too picky about this (and all too often "hot" new technology isn't even better, it's just newer-- indeed, my opinion of VB.Net replacing older VBs is that the Microsoft design team was on crack or something worse: they got rid of lots of useful features and introduced a lot of bizarrely opaque ones).
By the way a good way to gain new skills is to have a sideline business where you can use them. You may not make much money, but this does work as a resume enhancer.
That said, the late 90s IT boom really was a unique event not to duplicated and we should not use it as a benchmark-- on one hand, lawyer-panicked companies threw vast piles of money at the Y2K bug, on the other every person, business, government entity, church, charity, school in existence rushed to get online, frequently involving major hardware and software upgrades.
Finally, while I have put in my time contracting, that's always been a stopgap until something better came along. Only once (the late recession) did I actually go to work for less money, and even then I was right backup there after two years (though I had to move across the country). In short, I don't share your pessimism, and I wonder how much of it is politically conditioned: were we not governed by the current regime of idiots, but by a more progressive and capable gang, might you not be looking at a glass half-full instead?

If you have to ask what the point of the article I cited was then you obviously didn't read it.

The article not only demonstrates that age discrimination has been rampant in the tech field (even in the boom years), that claims of labor shortages in the programming field are not only disingenuous but actually created by employers' hiring practices and that retraining and education are not solutions to these issues.

There were many cases cited of highly motivated folks who had retrained themselves but were not even considered for jobs and outright admissions by corporate officials involved in hiring that they would routinely reject retrained job seekers.

But since you clearly buy into the worst stereotypes about older workers, despite being one yourself, you obviously don't think that age-bias and outright age discrimination in hiring are a bad thing. Shame on you.

I can't necessarily endorse the viewpoint that one of your colleagues evidently expressed about not learning anything unless he was paid to. However, there is a certain logic to that position, since, as Dr. Matloff documented, he would most likely be wasting his time if the point were to use that knowledge to get a new job. If the time and cost involved in learning a new skill is not going to increase one's income, then it's rational not to undertake the investment. Companies make decisions like this all the time (ever heard of the term ROI?). Why should workers not also behave as rational economic actors?

After all, the data do indicate a serious downward trend in employment in the field.

no, the numbers might indicate a trend in efficiency...

as I recently told my boss, who needed an application: "5 years ago, I would have been given 6 months to create the application that I just created for you in days!"

legacy programming methods like C/C++/java awt/MFC/ActiveX, etc... are over... as I noted, web applications are both graphically robust, scalable and quick to do. the only way the work takes longer is if you have some imagination and sell your client on the additional functionality.

many college grads found getting work in the field difficult or impossible and the constant churning of the skills market reinforced all of these problems.

the question is, "did these college grads bring value to their employers?"

I saw masters students coming from the university of minnesota who didn't even know what malloc was, and so we got rid of them-- quickly.

I brought a good background in math, which I've used to help crunch the numbers, as well as having worked with some of the best computer science folks I ever met at the University of Arizona where I was one of the only students who completed a toy, multithreaded OS in a semester. yes, I was burned out for 3 years after that but I set my sights high and achieved my goal.

In general, I have a hard time finding computer people who've read peer reviewed journal articles in computer science, etc...

when I've talked to community college professors about this problem, of new hires not being aware of the important peer reviewed articles in computer science, they just seem to laugh and think such work is unneeded and that means they produce illiterate students who have no distinguished value over a new hire.

and, in that case, you treat workers like lightbulbs and see which one is the brightest. a worker's job, in my opinion, is to be the brightest lightbulb.

Yes, I did much better in those days but I'm not that guy anymore and my situation and prospects are much different than they were back in the day.

you sound depressed! I've been there, done that and then decided to hell with the darkside and on to the upside!

you're the little train that could! believe in the force! use the force! the world loves you! you'll find something to do-- just don't let yourself be measured by your current success or salary! when I stopped doing that, opportunities opened up... because people saw the chip on my shoulder!

if you love yourself more than your job, people will want you around to perk up the room.

Anyone who believes the real unemployment rate is 4.4% probably also believes in the tooth fairy and a bunny that lays eggs. The economy was supported the past two or three years out of home equity and now that well has been pumped dry. The bill for Globalism’s plant flight, outsourcing and horrendous trade agreements that have produced unsupportable trade deficits is coming due. The record fiscal deficits of the past six years have also eroded the value of the dollar.

Once again, anyone who believes the Bush government's economic statistics is a damned fool.

"Governments are instituted among men, deriving their just powers from the consent of the governed."

Thomas Jefferson

I believe it is some sort of low point for a professional economist to appear in a so-called liberal blog and openly wonder why so many of our fellow citizens are gloomy about their economic prospects.

After six years of fiddling with the numbers, such as removing the “core” from the consumer price index, the economic statistics posted by the Bush regime are a joke. They’ve politicized the “occupation authority” of Iraq, they’ve politicized the command structure of the military, they’ve politicized the EPA, they’ve politicized the Dept. of Justice – you honestly don’t think or suspect they’ve politicized national account statistics?

To get a real sense of the national economy, you have to avoid large urban areas and resort areas for a few weeks. Try spending a few days in towns like Cumberland, Maryland; Zanesville, Ohio; Evansville, Indiana; Corbin, Kentucky; Boonville, Missouri; Yankton, South Dakota; Aberdeen, Washington; Coos Bay, Oregon; and you will be slapped in the face with the grim economic reality that professional economists are apparently unaware of: the industrial base of the United States has been shut down, and nothing has replaced it. Well, that second part is not quite true. Every small town is chock a block full of “antique” stores and thrift stores and second hand stores where the former workers of small town factories, mines, and lumber mills anxiously display their hand-made crafts or estate sale finds in the hopes of attracting buyers. The sense of desperation is palpable.

I have also yet to see or hear of a discussion or study of just how much the national account statistics have been skewed by the financialization of the economy. According to the latest Quarterly Report from the Bank for International Settlements, dated March 2007:

Trading on the international derivatives exchanges slowed in the fourth quarter of 2006. Combined turnover of interest rate, currency and stock index derivatives fell by 7% to $431 trillion between October and December 2006.

So, derivatives trading – mostly futures contracts on interest rates, foreign currencies, Treasury bonds, etc -- is now $1,200 trillion in a year. That’s $1.2 quadrillion a year.

By comparison, U.S. GDP last year $12.456 trillion.
( Table B-1 of the 2007 Economic Report of the President.

So the entire U.S. economy of goods and services produced is traded once every two days. Assume a speculator is able to capture as profit one fifth of one percent of that $1,200 trillion a year in derivatives turnover, and that is $2.4 trillion a year. Surely such monstrous numbers are skewing averages and means significantly.

Perhaps it is not easy to get your mind to grasp what an astonishing figure this $1,200 trillion is. If you took just one percent of it, $12.0 trillion, and divided that by the 270 million Americans not in the top ten percent of income, every man, women and child would get over $44,000. Imagine how different the economy would look if every person in the United States had been given an additional $44,000 in income every year over the past few years, instead of this:

The New York Times (Bob Herbert) reported yesterday that the 93 million non-farm production and nonsupervisory workers in the U.S. saw their real earnings go up by $15.4 billion between 2000 and 2006. That's half of the Wall Street bonuses paid by just five firms in 2006.

Personally, I think that $44,000 figure is rather interesting. Because, if the percentage change in wages from 1959 to 1981, when Reagan became President, had held at 5.478% for the past 26 years, average weekly earnings for private industry today would come to $53,802 in annual wages, rather than the $29,473 we now have. Not an exact correlation, but very, very interesting. (These are my own calculations, based on Table B-47. Hours and earnings in private nonagricultural industries, 1959-2006 in the 2007 and 2004 Economic Reports of the President. I have multiplied weekly earnings found in the table to arrive at annual earnings.)

Or how about this: There are 45 million kids in the U.S. aged 5 to 15. With one percent of the annual turnover in derivatives, we could build and staff a brand new elementary school for every hundred kids in th

With one percent of the annual turnover in derivatives, we could build and staff a brand new elementary school for every hundred kids in the US.

well, elementary school buildings don't produce anything.

a homeschooled child costs about $545/year whereas if you go to school in minneapolis/st paul, I think those numbers rise to around $10,000 per year.

part of the "economic gloom" is that the $9,500+ of extra capitol, which allows parents to send their kids to public schools, seems to be a bad investment.

as you know, I'm bullish on the next generation of technology products and think there will be a deflation in costs for education as people choose to use technological solutions over direct human instruction.

primarily because the cost of college is getting so high that future salary growth can't be achieved through taxatation, especially with a graying population on fixed incomes.

the kids will benefit, just like the output of our factories increased because of automation, but their parents will lose their jobs unless they reinvent themselves for the new jobs.

Since when did old ESTers become bible thumpers, or at least Old Testament thumpers? One creates one's own realities and/or victims status right? What's that say about the Holocaust...and every other rotten thing that comes along or is ushered in by arseholes wanting to take advantage of their fellow human beings?

"Governments are instituted among men, deriving their just powers from the consent of the governed."

Thomas Jefferson

J. McCutchen

How to explain the results

M-A-L-A-I-S-E

The public's gloomy outlook on the economy is matched by a slew of findings in general political opinion polls showing a broad decline in confidence in government and elected officials.

The malaise is also confirmed in a recent Foreign Affairs and Public Agenda poll .

The periodic "anxiety indicator" has jumped to 137 on a 200 point scale - up seven points in 6months and just 13 points shy of "overwhelming".

Maybe Bush should dust off Carter's old Malaise Speech (it was actually pretty decent!)

What's that say about the Holocaust...and every other rotten thing that comes along or is ushered in by arseholes wanting to take advantage of their fellow human beings?

if you've read my other posts, I'd probably be called a holocaust denier since I don't buy the lone madman theory for the holocaust.

if you saw the movie "Blood Diamond," then you saw the theory that everyone in life is looking for their 100 caret diamond to buy their freedom.

that might be a good metaphor for this thread because people really want to know if they've found their 100 caret diamond or not! they're so afraid of it being taken away from them--- wether it is, metaphorically speaking, a pension promise, healthcare or whatever.

I love the bible for its message of hope, it gets me through the day. wisdom is wisdom, regardless of where it comes from. MLK started there and had neverending revelations...

I think that, as an economist, you know that happiness cannot be bought with jobs and wages and there is something called utility theory. As I understand it, union organizer Walth Reuther was able to get the best benefits in history, yet the workers went on strike anyway because they wanted more control over their lives, not more money.

France has been interesting to watch: the French have more kids, work fewer hours, produce better healthcare and services and are more productive--- although there is "social strife" because, like everywhere else, political and ecnonomic power isn't widely shared.

I recently listened to an interview by the stepitup07.org guy, and he noted that happyness peaked in 1956, or something like that.

In many fields, less is more-- like art and engineering, but some economists sometimes lead us to think that more is more.

in my life, when I live below my means, I'm happier... because I don't have to produce or consume.

I think studies show that those who eat almost nothing, live longer?