So much for the slight good news. Jeff Cox reports:
According to a Bureau of Labor Statistics breakdown, there were 139,296,000 people working in July, compared to 139,334,000 the month before, or a drop of 38,000.
But the job creation number was positive and the unemployment rate went down, right? So how does that work?
It’s a product of something the government calls “discouraged workers,” or those who were unemployed but not out looking for work during the reporting period.
This is where the numbers showed a really big spike—up from 982,000 to 1.119 million, a difference of 137,000 or a 14 percent increase. These folks are generally not included in the government’s various job measures.
So the drop in the unemployment rate is fairly illusory—stick all those people back in the workforce and you wipe out the job creation and the drop in unemployment….
The average duration of unemployment rose for the third straight month and is now at a record 40.4 weeks—about 10 months and now double where it was when President Obama took office in January 2009. The total number unemployed for more than half a year now stands at 6.18 million, 130 percent higher than when the president’s term began.
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Yet my brother vociferously defends, in the same conversation, tax hikes and greater regulatory burdens on the one hand alongside stimulus spending and social insurance on the other. That the two might somehow be related never crosses his mind, and in fact, his conception of a strong economy is one of both invasive market intervention and profligate social subsidies. These are things he suggests we do not already have in abundance. This, despite the numbers given above, the years of stagnation since the bust, the massive regulatory packages passed under both administrations, the looming specter of proto-nationalized healthcare, and the burgeoning distrust in the mismanaged dollar. I can’t imagine except through the narrowest tunnel vision possible how a modern observer can witness interventions “not seen since the Great Depression!”, our last lost decade of fruitless government hubris, and persist in thinking that this heralds prosperity.
Frustrating.
People form their own opinions and only they can change them. Show evidence.
And the well-aired AP story, replicated across most media outlets reports Jeffrey’s disclosure in this fashion: “The unemployment rate fell from 9.2 percent in June **partly** because some unemployed workers stopped looking for work. That means they are no longer counted as unemployed.” [Emphasis my own]
Partly. Indeed, “partly.” Cripe….
Now tell me, how can it be “partly” if the discouraged worker figure is 137,000 (those not counted) vs. the alleged 117,000 new jobs?
Isn’t 137,000 bigger than 117,000?
Partly, my eye.
What a disgrace, an utter disgrace, that a journalist would characterize the unemployment reduction as “partly” due to those who stopped looking. No care, no thought, no responsibility for their choice of words. No rudimentary analysis at all.
“Partly.” It’s just shameful.
Never mind – the solution is at hand:
http://www.realclearpolitics.com/video/2011/08/05/obama_extending_unemployment_benefits_will_help_create_jobs_right_now.html
Storm clouds from Reuters today on the S&P US rating downgrade:
“In the Xinhua commentary, China scorned the United States for its ‘debt addiction’ and ‘short sighted’ political wrangling.
‘China, the largest creditor of the world’s sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China’s dollar assets,’ it said.
It urged the United States to cut military and social welfare expenditure. ‘Further credit downgrades would very likely undermine the world economic recovery and trigger new rounds of financial turmoil,’ it said.”
France of course was quite astute in flagging the silver lining:
“In contrast to the Chinese criticism, France’s Baroin said France had faith in the United States’ ability to get out of this ‘difficult period.’ Friday’s U.S. unemployment numbers were better than expected and so things were heading in the right direction….. one should look at the fundamentals.’ ”
http://www.reuters.com/article/2011/08/06/us-eurozone-idUSTRE7712HB20110806
I guess in looking at fundamentals, he didn’t look at Jeffrey’s “That Job’s Report” piece exposing the statistical slight of hand in current US unemployment.
And the institutions themselves?
“S&P blamed the downgrade in part on the political gridlock in Washington, saying politics was preventing the United States from addressing its deficit and debt problems.”
We’re back to that “in part” stuff. Ah, yes, it’s the gridlock. That’s all it is. If we can just address gridlock we’ll be fine. Maybe put a cop down there to reroute the traffic, put in a detour sign or two. If that pesky ‘gridlock’ were removed, happy days would be here again.
Even better news on the military front, 31 US troops are dead after their helicopter was shot down in Afghanistan.
A hell of a Saturday. Bush’s fault, I guess.
S&P Downgrade: could that be the piper knocking at the door wanting to get paid for stimuli, Obamacare, cash for clunker, Fannie Freddie bailouts, AIM bailout, Goldman, Morgan, BOA bailouts, GM & Chrysler bailouts, QE 1 & QE 2, Cash-for-Klunkers, foreclosure prevention, etc., etc., etc.? Don’t answer! It may not be the piper but the Grim Reaper.
S&P Downgrade: will harm the holders of Treasury securities when the value of their holdings decline. We need a program to compensate them (Goldman, Morgan, BoA, etc.) for their loses.
S&P Downgrade: Its all political, or else retribution for Dodd-Frank. The Tea Party and Bush are also responsible. Obama should order S&P to restore its AAA rating–or answer to Barney Frank.
Krugman points out that the downgrade and stock-market plunge show that the federal government isn’t spending fast enough and he says Ron Paul is to be blamed. Says we may need more cash for clunkers.
Hey, S&P is the only rating agency that downgraded….well, er…except some others that are too small to notice, the same ones who downgraded those darn mortgage backed securities before the roof caved in. You know, the same ones Rep. Frank and Sen. Dodd praised when they were whacking Moodys, Fitch, and S&P for missing the housing bubble government programs and mandates created.
Not to worry, because U.S.T. securities remain the envy of the world and the only place large investors can go for safety. (All the gold having been sold out.)
Krugman points out that interest rates on T-bonds are at historic lows, showing that the government needs to spend more money. (I wonder if the Federal Reserve has anything to do with those low interest rates? Or maybe no one wants to borrow. Hmmm. I’ll have to ask Krugman. I’m sure he’ll say Ron Paul had something to do with it.)
Of course the $16 trillion the fed gave to the domestic & foreign banks isn’t mentioned.
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