Monday, August 10, 2009
Unemployment Turnaround? Not Just Yet …
THE EMPLOYMENT SITUATION -- JULY 2009
Nonfarm payroll employment continued to decline in July (-247,000), and the unemployment rate was little changed at 9.4 percent, the U.S. Bureau of Labor Statistics reported today. The average monthly job loss for May through July (-331,000) was about half the average decline for November through April (-645,000). In July, job losses continued in many of the major industry sectors.
Household Survey Data
In July, the number of unemployed persons was 14.5 million. The unemployment rate was 9.4 percent, little changed for the second consecutive month….
The change in total nonfarm payroll employment for May was revised from -322,000 to -303,000, and the change for June was revised from -467,000 to -443,000….
(Source: Bureau of Labor Statistics) (Emphasis added)
Note that these figures do not include persons who have given up looking for work or who have accepted part-time positions.
Oh, yes! The stimulus is working! Unemployment didn’t rise as much as in the previous month! I’m happy it isn’t worse.
But it did rise. For anyone who’s looking to the Obama Administration to do something about the economy, here’s what they’re doing:
1. Claiming that the ineffective stimulus is going to work.
2. Hoping you’ll believe the “cash for clunkers” program is really helping the economy and the environment.
3. Studying what additional bailouts and government equity positions might be “needed.”
4. Attempting to pass the following new legislation:
A. Health care or health insurance “reform” – If anything resembling the House bill passes, we will soon see very significant tax increases. Obama says it will be “deficit neutral,” which means that its estimated $1-1.5 trillion cost will necessitate broad tax increases. Obama’s “firm pledge” not to raise any taxes on people making less than $250,000 per year will and must be scuttled. Of course tax increases will further increase unemployment and reduce revenues to the government.
B. Cap and trade – This is supposed to be a big revenue raiser for the government, accomplishing this by massive taxes on all businesses that use fossil fuels or allegedly contribute to environmental greenhouse gases. This totally fraudulent bill will contribute nothing helpful to the environment, yet will drive manufacturers and others out of business or overseas, and greatly increase unemployment.
These measures haven’t passed yet. Maybe they won’t and government will do little enough that some recovery can take place.
Why would the Obama Administration adopt policies that would hinder the economic recovery they’re supposedly so anxious to produce? There are only two answers that are reasonably possible. Either,
(1) They have no clue how to help the economy, or
(2) They aren’t trying to help the economy since continued recession and turmoil will (they think) help them politically, causing people to more and more ask for, and think they need, government help.
Since I don’t think they are stupid, I have to choose the second explanation. When government offers some kind of slight relief somewhere, and publicizes it, some people will see the government as “compassionate.”
In fact, government in general is not compassionate. This government, in particular, in its leadership, is cold and extremely cynical. They often show contempt for the people, especially any who question their policies or raise doubts about their motives. Politicians in general are, these days, focused first on re-election and don’t mind buying votes through various aid programs. But they are doing nothing that can help. Here’s Mr. Obama speaking on the economy:
1. Notice he’s quick to blame the previous administration. That’s his excuse for his people not doing their homework and for not being able to help much of anything. “Many months” of hardship lie ahead.
2. Notice he talks about a “new foundation,” i.e. socialized medicine and cap and trade, both of which would be extremely deleterious to our economy and will produce great increases in unemployment.
3. To Obama, a “new foundation,” involves greatly expanded government control and regulation, reduced freedom, and socialistic “innovations.”
4. He hopes the American people will buy the lie that the recession is the result of failed Bush policies and the free market, when in fact it has its main roots in congressional malfeasance, meddling, and incompetence. The Congress, not Bush, failed to rein in the Fannie Mae and Freddie Mac boondoggles. Barney Frank and Chris Dodd saw to it that their Clintonite friends in these government-sponsored entities were able to be protected while cooking the books so that they could receive multi-million-dollar bonuses. Nothing was done even when it was apparent that a mortgage meltdown was coming; until it was already in full swing, that is.
5. The ones in charge of cleaning up the mess are the ones who made it and continue to make it today.
6. Obama’s Administration could do several things to help the unemployment situation now. I and others have suggested these things before. They involve tax cuts, tax incentives and clear policies that encourage economic activity, not penalize it. But don’t look for anything like that. Instead, at the rate things are going, we’re truly in danger of another depression. But Obama doesn’t care, if it helps him gain power.
Photo: Roosevelt Memorial unemployment bread line