Sunday, March 11, 2012

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 run a small pallet recycling company, and in the past 10 years I have always had a good sense of when things are really up and when they are down. To me it feels like things are much worse now than they were in September 2008, or even September 2009. I get that you are slighting "the Krug-man" for his mistaken predictions, but I'm curious as to what do you make of the current state of the economy.
 Thanks,
DuĊĦan PetrovskiTheBigPetrovski.blogspot.com 

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.

The unemployment number is also a macro number in that it is a report across all sectors of the economy. I am trying to envision the pallet business and it would seem to cover many sectors, but if you are dealing with pallets  from specific sectors, it might explain the discrepancy. Money is going into the economy, stock prices, oil and other commodities are evidence of that along with the jobs number.

What part of the country do you live in and what industries are you dealing with. Answers to these questions  would give me a better idea of what is going on in your region and industry? And it might help determine if your area would be a good area for the Krug to schedule a book signing.

1 comment:

  1. Thanks for the post Bob!

    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.

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