Why are there so many people unemployed?

Quote from DallasTrader:

I think your answer might signify how many of us really don't know where this all began because that has been going on for years, even during some very prosperous times!

Part of me feels it's because of the perpetuated fear. In 2000 people thought the world was going to end with Y2K. Then we had 9/11 and people were afraid. Then we had a series of wars. There was the constant uneasy feeling that Bush and the Republicans perpetuated from the war on terrorism to the stuff the media pushed. Then we had the banks that collapsed and had to be bailed out.

I think part of it killed some of the capitalism spirit in many people. A lot of people I know went through some of the worst periods in their life during this period of time. Many people became jaded, lazy, cynical, not trusting of the government or "the system". We had movies like "The Matrix". I think all this fear also killed the consumerism mentality.

If you look at the period before that, it was a cleaner period. Clinton was balancing budgets, overall the confidence in America was higher. People were freeing their minds, there was an internet tech boom with all the creativity. Many people had some of the best years of their lives during this period.

That's just my theory. It all seems to originate from the constant fear that seemed to be perpetuated. No liquids on airplanes. Watch out for shoe bombers!
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1990s were a bubble

the bubble burst

bubbles cause real damage

you seem to think it's all just in people's heads

it's not
 
Quote from DallasTrader:

Would you mind highlighting key points of what that video says?
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I watched a long time ago so I wouldnt be able to sumarize it here and now but imo it's a nice (though slightly controversialdue to its Austrian origin) analysis on that breaking point between good times and bad times.

If you have the time you should watch it.

Better yet start here.

http://video.google.com/videoplay?docid=2786446863132957274#

Economic cycles an introduction.

It's really very understandable to all.
 
In the late 1990's all the consultants were telling business that the would soon run out of employees (baby boomers retiring).

So business got the government to flood the labor market with visas, illegal workers and off shoring of production.

I guess they over did it.
 
Quote from indexer:

In the late 1990's all the consultants were telling business that the would soon run out of employees (baby boomers retiring).

So business got the government to flood the labor market with visas, illegal workers and off shoring of production.

I guess they over did it.
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I do remember hearing that back then.
 
Quote from swtrader:

1990s were a bubble

the bubble burst

bubbles cause real damage

you seem to think it's all just in people's heads

it's not
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There is not some mystery to be solved: we don't make anything anymore. The 90s bubble was caused because the progress was confined in the economy to the IT sector instead of being spread out acress the economy. We lost manufacturing innovations because that was moved offshore. As long as we have limited verticals of innovation we will continue to have violent bubbles.
 
Quote from DallasTrader:

haha, yes, that is my point exactly! Where did it all start, what was the trigger point. Suddenly we have 10%+ unemployment, some say 20%! I would have never imagined such a thing could happen unless there was some sort of catastrophic event.
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The "catastrophic event" as far as the USA is concerned is globalization and outsourcing bringing 500 million workers in off their peasant farms to compete for our middle-class wage jobs.
 
Quote from krazykarl:

There is not some mystery to be solved: we don't make anything anymore. The 90s bubble was caused because the progress was confined in the economy to the IT sector instead of being spread out acress the economy. We lost manufacturing innovations because that was moved offshore. As long as we have limited verticals of innovation we will continue to have violent bubbles.
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How is that the US is the largest manufactoring country in the world then?
 
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