Posted on 10/29/2009 7:28:16 AM PDT by timesthattrymenssouls
There's No Such Think as a Jobless Recovery http://www.wiseandfrugalgovernment.blogspot.com
I have been watching the U.S. markets and the economy for twenty-five years. And I can tell you with confidence: There is no such thing as a recovery when unemployment is rising. I can also tell you that over those twenty-five years (during which I was managing billions of dollars) never have I seen a media so determined to call an end to a recession only to declare with the next bit of economic news that the so and so indicator "unexpectedly" came in below expectations... Unexpected? Only to the wishing on a star crowd.
Look at the chart attached. It is a government chart that shows unemployment registering 7.5% in January of this year. That is the unemployment number (among other things) that prompted Mr. O to declare the worst recession since the Great Depression. We were advised that Congress must pass the economic stimulus package to the tune of some $870 billion dollars to ensure that unemployment not rise above 8%. Well, nine short months and a stimulus bill later we are hovering at 10% and rising. Stimulus of the sort the Obama Administration (and Bush before him) has advocated and employed obviously does not work.
Now, take today's GDP number. Hip hip hooray. The Gross Domestic Product rose by a seasonally adjusted 3.5%--greater than expectations. Why? Because consumer spending rose 3.4% during the quarter and added 2.4% to overall growth. Why? Because the Cash For Clunkers program borrowed demand from the future and incented consumers to make car purchases during the quarter. What has happened since then? Auto sales have fallen of a cliff. This will happen every time sales are managed through government programs that borrow demand from the future. Look at the housing market if you need further confirmation.
There is one thing that is certain from today's report. The consumer is critical to GDP growth and to the Federal Tax Coffers. And without jobs, consumers don't sustain spending.
Here is one prediction you can take to the bank: Until the Obama Administration embraces fiscal responsibility, which includes reigned in spending and tax cuts to incent true growth, the end to this recession will continue to surprise the economically naive.
Sorry, cutting taxes is the anti-thetic belief of a liberal; let alone a Marxist. I believe that Obama wants to utterly destablize this country, to overthrow the Constitution and declare himself Dictator-for-life. Look at his heroes, the people he has selected out of the hundreds of millions of US citizens to surround himself with. Look at his speeches, his writings and his interviews. This man believes that he is the chosen one; the one destined to destroy Capitolism, Freedom and America, and will re-build America in his image after he destroys it.
And the Republican party, too cowardly to confront evil directly, is aiding and abeiting him in his deception.
Sure there is.
If the demand element for the recovery comes from a segment of the population already employed and indirectly from elsewhere in the world (as a function of the expansion of the economies of India and China) and if the supply factor comes from domestic companies that are increasingly automated thereby increasing productivity without the need for addition employment...then you can have an improvement in an economy without an improvement in overall employment.
Unemployment is around 16% if you include those who have given up looking for jobs (what kind of definition of unemployment excludes the unemployed who have given up? A: a government definition). The economy will not recover without job creation and those jobs can’t be created by government.
The issue would be, will it stick? What are we to do with those who become permanently dependent upon the government for food and housing as the jobless recovery marches on? They would by necessity have to raise taxes on producers to fund those without jobs, thereby removing any incentive to produce. It would then drive up costs for those with jobs because production would not keep up with their demand and inflation kicks in. It would be a false start, if anything IMHO.
Have we ever even applied this term to a recovery before in history? I'm not so sure we even thought that was a hypothetical possibility before, much less applied it to a real economic circumstance.
This is not a recovery, jobless or otherwise.
This is, at best a holding action, the objective of a faction that cannot determine whether victory is a good thing, and lacking the gumption to make the necessary hard choices and sacrifices to shift the paradigm, attacking from a different quarter on the problems.
Actually, a very old and reliable tactic is deliberately being left untried - to remove the largely unnecessary artificial constraints on trade and enterprise (thereby making it “free enterprise”), and to make the assumptions that people will do what is in their own self-interest, given the opportunity. Since the human race is of highly acquisitive nature, this translates into satisfying something called “greed”. But this is far beyond merely amassing huge quantities of valuable commodities, it is in using and distributing these commodities for what turns out to be the betterment of a vastly larger multiple of individuals than the simple taking and holding of assets.
Not everybody gets the same amount, but that is only because the person who is outside the general distribution of the wealth has either refused to participate and make the necessary effort to learn how to participate, or is one of the unfortunates for whom no niche may be found readily. And there are not nearly so many of these individuals as we have been led to believe.
Remember, poor people give rich people money. Willingly, happily, and with great gusto. And poverty, just as surely as wealth, is an inherited state of mind.
I can’t ever remember it geing a concern. Seems to me the recent paradigm has been that the more Americans you can put out of work in favor of cheaper foreign labor, the better. Provided, of course, you’re not one of those Americans.
"The phrase originated in the early 1990s in the United States, to describe the economic recovery at the end of President George H.W. Bush's term" - Wikipedia
For those unemployed, living in a world where everyone else is employed is a "personal" depression.
BTW, the word "depression" was basically co-opted (according to William Manchester in The Glory and the Dream) by Hoover to replace the term (economic) catastrophe to describe events of that time. I guess we could call that linguistic bait and switch a Pelosi-ism *snicker*.
Point is that "depression" isn't a technical term, just a descriptive one.
As an aside, this economy is performing well (to the extent it is) in spite of Obama. If our national idiot (Obama) enacts his incredibly expensive socialistic plans, he can still damage the economy and create even greater unemployment.
What is needed to create more employment is the extension of tax relief to small business (companies and individuals making less than $5 million a year) and create a stable and dependable environment (re: taxation and lending) so that businesses small and large feel confident about implementing their plans for growth.
Of course, Obama hates the free enterprise/free market system and will do nothing to help it despite the fact that it, particular small business, creates most of the jobs.
BINGO. Eye of the hurricane is more like it.
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