The U.S. unemployment rate rose to 9.8 percent in September, the highest since June 1983, as employers cut far more jobs than expected. The report shows that the worst recession since the 1930s is still inflicting widespread pain and underscores one of the biggest threats to the nascent economic recovery: that consumers, worried about job losses and stagnant wages, will restrain spending. Consumer spending accounts for about 70 percent of America's economy.
In a truly astounding turn of phrase, check out the next line from the AP (emphasis mine):
Most analysts expect the economy to continue to improve, but at a slow, uneven pace.
How is the highest unemployment rate in the past 26 years an improvement that should be continued?? Can there be any doubt that they're just dying for some good news for their Dear Leader?
But at least they actually mention a much-underreported but critical factoid (emphasis mine):
If laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the unemployment rate rose to 17 percent, the highest on records dating from 1994.
All told, 15.1 million Americans are now out of work, the department said. And 7.2 million jobs have been eliminated since the recession began in December 2007.
That's something we heard about a lot under the Bush administration (when unemployment hovered around 5-6%, they used these 'discouraged workers' to make it seem worse than it really was), but suddenly disappeared from the conversation once the Obamessiah took office. At least now we're starting to see some legitimate comparisons again. Even so, the news is anything but good.
Here are a couple other interesting bits:
...the number of people out of work for six months or longer jumped to a record 5.4 million, and they now make up almost 36 percent of the unemployed -- also a record.
Just pointing out another record high in this 'recovered' economy of Barack Obama's. Then there's this:
Persistent joblessness could pose political problems for President Barack Obama, who pushed through an ambitious $787 billion stimulus package in February intended to "save or create" 3.5 million jobs by the end of 2010."We still think the overall trend is moving in the right direction," said Christina Romer, chair of the President's Council of Economic Advisers. "We're going from much larger job losses earlier this year. They are moderating. We want them to moderate more."
I point this out to illustrate two things. First, this administration is horrendously disconnected with everyday working Americans. The fact that our economy has shed over 7 million jobs -- 2.7 million of which happened since the stimulus was signed into law -- despite their efforts at 'stimulating' 3.5-4 million jobs is quite audacious indeed. One might say they're full of crap, if one was inclined to avoid political correctness. Anyway, this also brings up a humble hypothesis that has been forming in my mind for a few weeks now.
I've heard numerous outlets stating that only a small fraction of the stimulus money has been spent so far, anywhere from 4-10%. Never mind the fact that the stimulus was supposed to be all about creating jobs, and never mind the fact that it was supposed to have an immediate effect - even a braindead moron can see that it was not, and it isn't. The few jobs that have been created are either temporary (they'll go away as soon as the stimulus money runs out) or government jobs (which won't help the economy because the government doesn't actually produce anything). But, even Obama's own website -- which we could reasonably assume puts its own best foot forward -- says that only about 14% of the money has been allocated so far. If this was really about jobs, and if it was really about making an immediate impact, then why the lead feet on the spending? There must be a reason for this, right? Here's what I think is going to happen.
Sometime early in 2010, they're going to start throwing money all over the place. They're going to dump cash into a lot of industries (mostly to favored companies) to create a huge swell of sudden job creation, and sustain it throughout the summer. The unemployment numbers will drop, the economy will appear to have turned around, things will finally appear to be getting back on track, and Obama will take credit for fixing everything. But...it will be smoke and mirrors, nothing more.
The jobs will be temporary ones that will dry up when the stimulus money runs out. The sudden creation of projects, construction, and so on will be largely 'green' ones or things directed specifically toward liberal pet projects that cannot sustain themselves without continuous injections of government assistance (like ethanol or wind power). In short, it will appear that we've gotten over the hump, but the truth will be something quite different.
Bottom line: I believe it will play out exactly like the Cash for Clunkers program.
While the program was in progress, it appeared that the auto industry had revived, and sales were up. But, when the program ended, things took an immediate dive. Comparing month to month, sales for all of the Big 3 auto makers dropped by over 30% after C4C ended. Why? Because the government-injected money artificially boosted the industry. It was not sustainable, however, and it stopped immediately when government money was taken out of the picture.
Bottom line: I believe it will play out exactly like the Cash for Clunkers program.
While the program was in progress, it appeared that the auto industry had revived, and sales were up. But, when the program ended, things took an immediate dive. Comparing month to month, sales for all of the Big 3 auto makers dropped by over 30% after C4C ended. Why? Because the government-injected money artificially boosted the industry. It was not sustainable, however, and it stopped immediately when government money was taken out of the picture.
I predict that's what will happen with the jobs numbers.
Why would this be beneficial, you ask? Think about the timing: it's an election year. And, by all accounts, an election year with the potential of a landslide shift in the makeup of Congress. At this point, even some major Democrat analysts are predicting a 50% chance that the Dems won't just lose their bulletproof majority, but their majority, period. By continuing to push their radical Leftist agenda -- government-run health care, cap-n-tax, disarmament, etc. -- the Democrat leadership is only stoking the flames of opposition against it. They know full well their values do not reflect those of the majority of the country, so they've got to have some way to counteract that shift. By opening the floodgates of stimulus money, they're going to artificially pump economic steroids into America just long enough to stave off the blistering anger of millions of Americans who suddenly have jobs (for the moment) in order to minimize their electoral losses. The economy is what got Barack Obama and the Democrats elected to such big majorities in 2008, and that's what people will once again be voting on in 2010. They're gambling that they can blow enough smoke to sucker enough people into giving them a pass (you can bet they'll also whine a lot about what they inherited from Bush, too, which is another load of crap) to minimize their losses. Losing ACORN will hurt their astroturfing efforts, but most of those people will migrate to other community organizing groups and continue the fraud. If they can pass amnesty in the meantime, they're golden because that's another 10-15 million votes all by itself.
And here's the problem with that tactic. First, it's not addressing the root cause, so the underlying problems will remain. Second, they're throwing hundreds of billions of taxpayer dollars that we can't afford to mis-spend right now into a black hole, because we'll be in the same position after the stimulus money is gone as we were before. Third, the way these things normally work is that, after the artificial boost plays out, the system crashes to a point even lower than it was before it started. Back to Cash for Clunkers - when the program ended, sales crashed through the floor on year-to-year numbers even worse than the month-to-month comparison, with GM dropping 45%, Chrysler dropping 42%, and so on. Is that really what we want to experience? An economic crisis worse than last fall, and with $787 billion more debt thrown on top of the pile?
I could be wrong. I'm not a professional analyst...but nothing else makes much sense. Feel free to share your own thoughts in the comments.
There's my two cents.
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