Comments on: Don’t hire until you see the whites of their eyes

By: The Investor

The Investor — Thu, 11 Feb 2010 09:36:05 +0000

@Ryan – Yes, you’re right – it’s another version of the ‘paradox of thrift’ I suppose, but this time for businesses instead of consumers saving when it’s rational for them to do so, even though overall it’s bad for the economy. That said, if I was a business I’d be thinking about hiring now, all things being equal, since I expect strong growth from here. Not recruiting wildly, but a couple of hires while there are still great people around, so if the economy does falter more than expect from here at least I got the pick of the unemployed and it’s not so painful to hold them over until the upturn.

Thanks for stopping by!

By: Ryan @ Planting Dollars

Ryan @ Planting Dollars — Wed, 10 Feb 2010 23:49:35 +0000

You bring up a good point of looking at percentages and relative points rather than an absolute term, such as 10 million people. Also healthy to look at the American budget deficit in this light (not that I’m saying it’s okay).

It seems to be a little bit of the chicken or the egg dilemma. Should I hire now to make the economy better, or should I wait for the economy to get better and then hire… hmmm
.-= Ryan @ Planting Dollars on: Hiking Diamond Head and Snorkeling In Waikiki =-.

By: The Investor

The Investor — Tue, 09 Feb 2010 09:19:32 +0000

I saw economist elephant Joseph Stiglitz lecture last night, and he was really hung-up on US unemployment. Clearly the current picture is terrible, but he only produced one idea that would suggest anything different is going on in terms of recovery and getting employment back up – hysteresis, which is the idea that longer-term unemployment becomes a self-fulfilling prophecy, as we saw here in Europe in the 1980s. He didn’t provide much evidence that this was going to be a problem though, he just said there were more long-term (more than 6 months) unemployed in the US than normal. More on his lecture in a post today, I hope.

By: The Amateur Financier

The Amateur Financier — Mon, 08 Feb 2010 17:38:58 +0000

An excellent article. Too many people, even people who should know, seem to be of the belief that until unemployment hits 6% (or whatever semi-arbitrary point they believe represents normal unemployment levels), the recovery doesn't count. Don't get me wrong, being unemployed at the moment, I would like to get a new job soon, but I'm not going to think that this is a 'false recovery' just because there are still people who are unemployed. .-= The Amateur Financier on: Financial Samurai’s Alexa Challenge =-.

By: Wojciech Kulicki

Wojciech Kulicki — Sat, 06 Feb 2010 18:22:41 +0000

The argument about unemployment being self-fulfilling is a very interesting one, especially since, as you point out, most people relate unemployment numbers to the state of the economy.

Hopefully, today’s business owners are smart enough to figure out that the numbers won’t get any better until they start hiring, but understandably, no one wants to be the first one to get on the bus.
.-= Wojciech Kulicki on: Lower Cable Bill, More Services: How I Did It =-.