Bright Spots In A Bad Economy
Yahoo HotJobs has a story out today titled Recession-Proof Jobs in 2008. First, I love this old media trick:
Economists at Merrill Lynch and Morgan Stanley say the U.S. is heading for its first-blown recession in 16 years, and a recent CNN poll found that 57 percent of the public believe the U.S. is in a recession already, with the economy topping the list of voter’s worries.
16 years? How about 8 years ago with the tech bubble? Are we in a recession if CNN does a poll and people say we are? Please, I would prefer to read what measurements show that we are in a recession today.
Enough of that. Clearly the economy is slowing down from it’s torrid pace just as it always has and always will. It is cyclical. I am intrigued by the title of the article and when you get past the opening propaganda, you come to some interesting positions (my editing):
However, many employment sectors are expected to remain strong despite a possible recession, and job-seekers may have more success if they focus on recession-proof professions.
* Education. The U.S. Bureau of Labor Statistics has historically shown teaching to be relatively recession-proof. But demographics are important: High-growth areas like the Sun Belt offer much better prospects than the Rust Belt.
* Energy. “This is a major issue for the global economy, and jobs related to oil and gas, alternative energy and even nuclear are likely to see strong growth,” Challenger said.
* Health care. Almost half the 30 fastest growing occupations are concentrated in health services — including medical assistants, physical therapists, physician assistants, home health aides, and medical records and health information technicians — according to the U.S. Bureau of Labor Statistics.
* International business. “If you have a strong knowledge of other cultures, and an ability to work in another country, you’ll find plenty of opportunities,” according to John Challenger. “If you’re first generation Chinese, with business skills and Chinese language skills, you’re in good shape.
* Environmental sector. There is a huge and growing industry geared to combat global warming. “Not only will professionals with skills in sustainability issues be in demand through the end of the decade, we are likely to shortages of professionals with ‘green’ skills,” said Rona Fried, president of sustainable business.com, a networking service for sustainable businesses.
* Security. “Crime doesn’t stop during a recession, and police officers, port security specialists and international security experts will continue to be in demand,” Challenger emphasized.
I think that is an accurate list. The one thing for sure is that talented employees are always in demand no matter what the economy.
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It’s true that reporting on the economy is bad, but information is out there.
Are we in a recession if CNN does a poll and people say we are?
No, the National Bureau of Economic Research (NBER) is the arbiter of that. The NBER does not have a fixed statistic, but uses a multi-metric time series of the historic trend.
Clearly the economy is slowing down from it’s torrid pace just as it always has and always will. It is cyclical.
Yes, but the problem is that it’s been cyclical for over a century, and there are minimal standards of governance that this administration has flunked. Economic management needs to be jugged on systemic response; usually, the response is countercyclical, whereas this administration has been wildly procyclical. That’s the one-sentence explanation for the current account deficit growth and plummeting exchange rate.
The other problem is a common fallacy about economics, that need determines future consumption. The persistence of this fallacy puzzles me. Just because a social need exists, does not mean that money will be spent for that need. For example, almost no modernization of the electrical distribution network has occurred in the last 20 years, yet this network absorbs almost half of all electricity sold by generators to utility retailers. I’m not holding my breath.
Education is notoriously underfunded and always has been. Funding is very sensitive to recessions; it’s not recession-proof at all.
International business? Again, an assumption that US corporate management is responsive to its needs. It’s not. That’s the overarching, long-term explanation for the negative current account balance (as opposed to its recent downward shift): US business management is not interested in selling to foreigners. It’s ceded overseas markets to the Europeans en bloc. That means it’s not Chinese Americans who speak Mandarin who are in good shape, it’s Chinese nationals who speak English who are.
There’s this idea called the “Iron Law of Institutions”:
The people who control institutions care first and foremost about their power within the institution rather than the power of the institution itself. Thus, they would rather the institution “fail” while they remain in power within the institution than for the institution to “succeed” if that requires them to lose power within the institution.
While it’s problematic to call this an “iron” law, it certainly is a strong tendency that becomes more decisive as the economy becomes more oligopolistic.
James, thank you for your comments. I have to take issue with a couple points. First, I have been impressed with this administration’s fiscal policy. They inherited a recession that could have developed into historic proportion following the terrorist attacks of 9/11. Their response (namely the tax cuts) brought us out of the recession and into a boom. The economy of the last 6 years is one of the greatest stories never told.
Here is an article you might find interesting.
US business management is not interested in selling to foreigners? I have no idea how you come to that conclusion - I think it is completely wrong. I would recommend you read the aforementioned article that explains the impact of a plummeting exchange rate.
Thanks, I have a masters in economics.
US business management is not interested in selling to foreigners? I have no idea how you come to that conclusion
Depends on what you’d accept as evidence. The business press (BusinessWeek, WSJ, Forbes, Fortune, etc) is totally US-centric. Tell me when you find an article in one of these publications that refers to China as something other than a “threat.” In my experience, management of US firms is more of an identity cult, in which top management selects for true believers in the ideology. In contrast, managers of successful non-US firms are more likely to accept heterodox world views.
The trade deficit is gigantic; contrary to popular belief, the dollar has been weak since 1986, with intermittent rebounds. That deficit has ballooned anyway. That’s evidence.
All growth sectors, such as the TCIT boom of the 1990’s, are driven by the innovation of start-ups. Large US corporations cannot innovate or sell, or don’t want to. Once data processing technology could be done overseas, non-US customers preferred to get it someplace other than the USA.
If you actually speak to non-US nationals who are able to speak freely (i.e., non-salespeople) then you’d get an earful.
The economy of the last 6 years is one of the greatest stories never told.
Sorry, this is totally incorrect. The article you linked–a dittohead blog post–is simply a series of premises with no logical or empirical support.
*First, the Globe & Mail has writers who are critical of the US president–they also have those who are not. There’s still a strong imprint of Conrad Black, the Canadian version of Roger Ailes. Many have a sort of Celine-esque admiration for Bush.
*Second, the praise is for the US economy as a large, integrated market, not as an industrial system. Most Usonian writers have no idea what the difference between these two things is. As a macro economy, i.e., a space in which transactions can take place transparently, the USA is in moderately good shape. As a congeries of industrial systems, the USA is in disastrous shape.
*Thirdly, the customary magical thinking: it’s necessary, so it will happen; or, “Americans are impatient, so it will happen soon.” The management of US firms are dead set determined to protect their individual standing in the emerging caste system, not revitalize their firms’ core competencies. As individuals, I don’t doubt managers are energetic and focused, and ready to get the job done. But that job is not fixing their firms’ competitiveness; it’s advancing their own careers. I don’t blame them for this. Unfortunately, the complete lack of regard for the greater good is a problem.
I would recommend you read the aforementioned article that explains the impact of a plummeting exchange rate.
I actually know something about FOREX. But unless I’m mistaken, it seems you’re trying to arouse optimism (judging by the context), when my point is that the track record of US managers has been horrible and rapidly deteriorating (contrary to what the article says, the USD is actually undervalued in PPP terms; the business press insists it’s overvalued as a reflexive defense of its own atrocious performance: the dollar is allegedly overvalued because of the trade deficit). Saying so ad nauseum doesn’t make it true, and using anecdotal evidence is a poor rejoinder to the statistical evidence.
The fact that you linked to this article and respect it is very depressing to me. It’s Kool-Aid.