The Dems are crowing about the drop in unemployment numbers.
But if you look a little further into the numbers, you see that the American job market is not better off than it was four years ago. Indeed, it’s a lot worse.
On Inauguration Day in 2009, when Barack Obama took office, the unemployment rate was 7.8 percent (up from 4.4% as recently as May of 2007). Notwithstanding his promises that Porkulus would cap unemployment at 8.5%, it soared to 10% in October of 2009, and didn’t dip down below 9% in any sustained way until last fall. Last month, after three years of Obama, it was at 8.3% – or .2% lower than where he said it’d never get above if we spent what he proposed.
That’s bad.
“But 8.3% is better than 10%, right?”
Sure – if all you’re doing is comparing numbers straight-up. But by itself, the unemployment rate is meaningless. It’s a percentage of people out of work – but who are those people? They are the ones that are participating in the labor market.
And fewer Americans than ever -ever! – are doing that!
So let’s figure the actual percentage of Americans working, overall.
January 2009: According to the Bureau of Labor Statistics, the Workforce Participation rate when Obama took office was 65.7%. That means 34.3% of the workforce wasn’t even trying to participate, through discouragement, disability or whatever case. Add to that the 7.8% unemployed, and you reach a figure of 57.1% of the American workforce actually working.
October 2009: At this point, the “low point” of the Obama recession, the participation rate was an even 65% just in time for unemployment to hit an even 10%., 55% of the American work force was working.
January, 2012: As unemployment stood at 8.3%, the workforce participation rate was 63.7% – the lowest since records have been kept. That means that overall employment in the American workforce is now a whopping…
…55.2%.
That’s a fifth of a percent higher than it was at the lowest point of the Obama recession.
Almost two full points lower than it was when Barack Obama took office.
(And five full points lower than June of 2003, the worst month of George W. Bush’s before the GOP lost the Congress. That’s five percent lower employment overall. Six and change if you take one of Bush’s better months. And I know, Bush benefitted from a bubble, yadda yadda. But…five points!).
The media is spinning nonstop about the “Obama recovery”. It’s vapor; in terms of percentage of the American workforce actually working, there is no recovery.
Are you better off than you were four years ago, America? No – you’re doing two percent worse.
Here’s the problem: you can stimulate the economy by using fiscal tools or using monetary tools. Fiscal tools means deficit spending.Not government spending, deficit spending by the government. It has to be borrowed money.
Keynes recognized that this wouldn’t work if debt was already high and people were forward looking. We seem to be in that predicament; the larger the deficit, the less people spend in anticipation of higher taxes or reduced, say, SS & Medicare benefits to come.
Monetary tools haven’t worked much better. Interest rates are near zero. Weird things happen when interest and inflation rates are that low. Since your money isn’t losing value over the year, why lend it out? You can just park it in T-bills at 0.5% and be guaranteed of not losing purchasing power and your money is safe.
One thing the Fed could do would be to lower the fractional reserve that banks have to keep on hand (currently 8.5% of deposits, I believe). If they do that it injects money into the economy, but banks are sitting on a mountain of bad debt and lowering the reserve might spook the markets because banks will have on hand even less cash to make up for bad mortgages. Over-leveraging is supposed to have contributed greatly to the current problem.
One thing that might help is to encourage economic growth at the expense of other considerations like the environment, income equality, and “labor fairness”. Not because prioritizing GDP growth is always the best thing to do, but because it is a silver bullet. High growth can make up for a lot of bad policies in the past the way a constantly increasing salary can make up for a lot of poor financial decisions.
The Obama administration seems opposed, however, to all the tried and true methods of increasing GDP growth beyond the tepid 1%-2% per year that has marked his administration.
From “Fair and Balanced” Fox News <= Note: No claim of objectivity
Summer students get taste of Occupy movement at Maryland community college
Students in ninth through the 12th grade attending summer programs at a community college outside Washington, D.C., will get a taste of the Occupy operation in a new course that aims to get them interested in “the movement for justice.”
“Occupy MoCo!,” one of the newest courses at Montgomery College in Montgomery County, Md., is part of the Summer Youth program offered for 2012.
http://www.foxnews.com/politics/2012/02/20/summer-students-get-taste-occupy-organization-at-county-college/#ixzz1mxcNkpiQ
According to Wikipedia, which I trust in this case:
Montgomery County is a county in the U.S. state of Maryland, situated just to the north of Washington, D.C., and southwest of the city of Baltimore. It is one of the most affluent counties in the United States,[1] and has the highest percentage (29.2%) of residents over 25 years of age who hold post-graduate degrees.
http://en.wikipedia.org/wiki/Montgomery_County,_Maryland
In my dreams liberals would be as cynical about the motivations of government, politicians, and bureaucrats as I am about the motivations of Koch Industries.
Sorry, that last comment was way OT. Feel free to delete it, Mitch!
It used to be Americans disbelieved Soviet statistics because we knew they were just lies issued by the Commissars to make themselves look good. The real way to tell how badly the Soviet economy was doing was to look at ordinary citizens’ lives. Nobody could afford a car. Nobody had a phone. There were long lines outside stores and little inside to buy. Eventually, the economy collapsed and the lies were revealed.
Now we have the Obama Administration telling us there’s no inflation and laid-off people are being hired back in droves. But gas is $3.55 at the pump and my Journeyman Electrician son-in-law is still looking for work. I’d like to hope we aren’t following the Soviet’s footsteps. I’d really like to.
Obama: who are you going to believe, me or your lying eyes?
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