As Ludwig von Mises taught us, there is no such thing as a 'natural rate of unemployment:
On a free market wage rates tend toward a height at which all employers ready to pay these rates can find all the men they need and all the workers ready to work for this rate can find jobs. There prevails a tendency toward full employment- Planning for Freedom p.84
Unemployment is a problem of wages, not work.-Socialism p.439
-RW
Conceptually, I'd take an Arnold Kling PSST perspective on it - unemployment will exist to at least the rate at which entrepreneurs can create new sustainable patterns to replace old ones that have been destroyed. Because this reconfiguration takes time, there will always be some natural unemployment
ReplyDeleteTHEY ALL CAN SEE IT…!
ReplyDeleteA couple of names were added to the list this past week, first, the famed hedge fund manager Paul Tudor Jones said the current “market mania will end in revolution, taxes or war“ Most importantly he said, “this gap between the 1% and the rest of America, and between the US and the rest of the world, cannot and will not persist. we’re in the middle of a disastrous market mania“.
Do you understand what he is saying? Have you heard this before on many occasions …in my writings? In plain English without actually using the word, Paul Tudor Jones is forecasting we have a “reset” in our future.
Another name added to the list and far more shocking was former Dallas Fed member Richard Fisher. He was interviewed one day after his retirement and it was a doozy!
Please watch this interview, for the first 2:10 it was mostly niceties and he towed the Fed line quite well. The remainder, while not totally spilling the beans was VERY telling. He said the Fed is “uber accommodative, and investors are lazy for relying on the Fed”. He iced this cake when he said the markets are “hyper overpriced” amongst other goodies!
… And to think, it only took him one day of retirement to start telling some very real truths! (He also immediately joined the board of Pepsi Cola) I could only think to myself, what does he really think? I would love to play a round of golf with Mr. Fisher and get a little bit of cold Rocky Mountain (truth serum) Ale into him to hear the rest of the story. Might the timing of his retirement say anything to the thoughtful?
http://blog.milesfranklin.com/they-all-can-see-it