In a few years we will wish that it was 1922.
Authors contend :
While both months were disappointing when compared with previous recoveries, the data shows six consecutive months of private-sector job creation.
The authors then attempt to tackle the under counting of those unemployed argument :
When 805,000 more people said they were looking for a job in April, the pessimists said, “See how many people had been discouraged ... the unemployment rate will never fall as they start looking again.” And in June, when the labor force fell by 652,000, they said, “This is the only reason that the unemployment rate fell.”
This is crazy. It defies common sense. Economic data is volatile, so quarterly data might be better. And in the second quarter the U.S. added 357,000 private-sector jobs—more than 50% greater than the 236,000 added during the first quarter.
Authors then point towards other indicators ....
* New orders for durable goods, a leading indicator, are up 10% at an annual rate in the past three months. Excluding transportation, they are up 25%. If we look at just machinery orders, they are up 63% in the past three months and 23% in the past 12 months. This is not a depression.
* Fears of a repeat of 1932 are based on a faulty comparison with history. In 1932 the M2 measure of the money supply fell by 16.5%—the third of four consecutive yearly declines between 1929 and 1933. Meanwhile Herbert Hoover pushed through the largest tax hike in American history. The lowest tax rate rose from 1.5% to 4% (at $1 dollar of taxable income), the 6% rate (which kicked in at $10,000) rose to 10%, and the top rate more than doubled from 25% to 63%. WE ARE NOWHERE NEAR THAT RATE.
* Today the M2 measure of money is growing, and tax rates, while scheduled to go higher in 2011, are nowhere near the levels of the 1930s. And there is no Smoot-Hawley Tariff Act.
* Productivity is so strong that the economy is growing despite massive increases in the size of government.
* The U.S. is creating jobs, even if the rate of growth is less than previous recoveries. Profits are still rising. In fact, analysts are still raising earnings estimates.
* The Stock market has so much negativity priced in that it is cheap on just about any basis. Based on forward earnings, the PE ratio for the S&P 500 is under 12. And our capitalized profits model shows that stocks are severely undervalued.
Forbes magazine helped elect Obama. They helped make one of their money manager columnists rich. He became one of Obama’s closest advisors and earliest funders. Thanks Forbes.
I agree that we are not headed toward another 1932. However, our nation is not as resilient as it was in 1932, so I’m afraid if we even have a third of what we had in 1932, we might not withstand it. IMO.
It's 1930.
There are some incredibly dangerous people out there eager to convince investors that debt doesn't matter; it never has to be paid back, government can print money and expand credit without any negative consequence, as long as everyone joins the party and throws all their money back in the stock market. When you hear people talk like that: do yourself a favor: turn off the TV and read The Road to Serfdom instead.
I think that this year they are spending a lot more than usual on the census, hiring more people, and making sure that more are part timers because three people working 15 hours a week helped Obama's unemployment numbers much more than one 40 hour a week full timer.
Now we have a $1.3T deficit, 10% unemployment, and DJIA flirting with 10,000. And it's not 1932?
Journalism needs to grow up. If you use hyperbole when a Republican is in the White House, then be prepared for hyperbole when a Democrat is in the White House.
It’s 1775 & 1860.
Smoke and mirrors. Lies, damnable lies, statistics...slice and analyze anyway you want. Bottom line: I can’t sell my house or retire. Indications are that I’ll soon lose the house. At this point, I’ve grown weary of people urinating on my shoes and telling me it’s raining. No. Happy days are not here again. Yet.
What about the 100,000 illegals that enter each month? It’s good to know we have them (almost) covered. We need to create 150-200 thousand jobs per month to even begin to climb out. At that rate, we would be back to where we were in about 10 years. Without illegals, maybe half that length of time.
Pouting Pundits of Pessimism = Nattering nabobs of negativism?
Hmmmmm.... I don’t know, maybe the fact that Fannie and Freddie “forced” a bailout to save the economy from total destruction has something to do with the pessimism? Especially since NOTHING has been done to prevent the same thing from happening again.
I don’t know... the fact that $1 trillion dollars did absolutely nothing for creating jobs... maybe that has caused just a tiny bit of negativity.
Or the fact that the federal government felt it necessary to take over the health insurance industry in the name of, “saving the economy”. Or taking over financial institutions and car companies to also “save the economy”.
I don’t know. Maybe just maybe the hijacking of the flow of money through a bogus financial reform package in the name of “saving the economy” is causing a little uneasiness as well.
Or the future prospect of state, federal, and local taxes flying through the roof, to “save the economy” has caused just a little gloom and doom.
Unemployment through the roof... Europe facing a HUGE uphill battle... Elected officials as corrupt as banana republics... an aging population expecting gold plated benefits... two wars... oil disasters... border drug wars...
You’d have to be a real fool to stand there calmly and think the future of this economy is candy and roses.
1932 nope .... we’re at about spring 1931 levels when they were still thinking they could pull out of a deflationary death spiral back in the day ... the ultimate reality of how f#$%ed we actually are has not hit yet.
yet they ignore the vast amount of people who are just giving up every month...not even continuing to look for work and on top of that...no discussion of the cost of stimulus, etc...
Each one of these jobs is costing an enormous amount of money to create and when the stimulus ends it will all crash.
It is more like 1932 than not...
In 2012, many will be longing for the ‘good ole days’ of 2010:
1) gas was 3.00 a gallon rather than 15.00
2) there was no 3 hour wait just to enter a grocery store in order to select one of two items on the shelf
3) water ran all day
4) the north had heat for the winter and the south had air conditioning in the summer
5) you could still swim in the Gulf
In 1932 how much of our debt was owned by China?