Sunday, March 11, 2012 The Big Petrovski Has a Question

Robert Wenzel of Economic Policy Journal takes the time to address my inquiry: The Big Petrovski Has a Question:

The Big Petrovski emails:

I would really appreciate a comment either directly or in a post:   Lately you have frequently been putting up posts similar to "Krugman Sees His New Book Sales Crashing" where you talk about improving jobs numbers. Do you see those stats as genuine improvements or number fudging by the government?
I don't think the BLS numbers are very accurate as far as exact detail. They use antiquated collection methods, but they generally catch the trend right and in that sense there are in line with the employment data from the private sector, e.g. ADP numbers and the Monster Index.
 Click on the link above to see the whole post.


My comment to Wenzel's post:

Thanks for the post Bob!

(and especial thanks for linking to my blog!!)

I'm on the Canadian side of the Niagara River. Most of us here are so dependent on American trade (both import and export) that it basically means that we live in the US, except we pay higher taxes. (Not to mention that we get US TV and radio.) Since I keep in touch with many of my competitors I get a pretty good idea of how the whole industry is doing. The nature of our industry is such that we are quite evenly spread across the economy, consumer goods being the most common use. Since we are recyclers, we both sell pallets and collect discarded ones from retail stores and distribution warehouses. As I indicate in my email, things now are much worse now than they were 4 years ago. The freight industry is in even worse shape; again this is an industry that deals heavily with the US. In the tourist industry: Niagara Falls, ON, ten years ago used to be 9/10 Americans, now they are 1/5. Now, of course Canadian businesses could be just becoming less competitive due to our higher taxation, but our ratios have been pretty constant over many decades. The exchange hitting parity is a phenomenon of the past 6-7 years, but even then for the first 2-3 there was no significant change in the trade.

I think the Krug would be pretty safe the kick off his tour in the Western New York area, since it has been bust since about the early 1990s. A big statist like him will be well received in Southern Ontario (especially Toronto), too.

In terms of your constant warnings about monetary inflation: the industries I talk about above have all had to DROP prices (as a result of increasing competition: when a company moves operations overseas most people become pallet recyclers, truckers or restauranteurs) while the costs, have been driven UP mostly due to inflation. So here is a perfect example of how inflation DOES NOT increase all prices uniformly.
I am working on a serious paper on the deleterious effects of monetary inflation. 

Peter Schiff's article, "Recovery, What Recovery?" for gives further confirmation to my and Wenzel's views:

The Commerce Department reported that, after surging for much of the last year, the U.S. trade deficit expanded by $4.3 billion in January to $52.6 billion. This is the largest monthly trade gap since October 2008, and it comes with record imports. So in terms of trade, the U.S. is in exactly the same position we were during the opening act of the financial crisis.
While it may be true that we are adding jobs, it is also true that we are not adding the kinds of jobs that will put us on a sustainable path. Large and persistent trade deficits were a primary reason that the U.S. economy imploded in the first place. If we fail to build an economy that can pay for imports with an equal number of exports, we will simply revisit the pain of last few years.

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