Wednesday, March 13, 2013

Not Really

(Political cartoon by Matt Bors and published 3/12/13 at the Daily Kos.  Click on image to enlarge and then kindly c'mon back.)

There's all sorts of news to pick from:  the selection of a new pope, the saber rattling by North Korea, Karzai's temper tantrum, and the "good" economic news in this country.  The stock market is up and unemployment is down.  It's the last item which concerns me today.

Yes, the Dow Jones is up, higher than it's been since Obama took office in 2008.  And, yes, national unemployment figures are down.  As Matt Bors illustrates in his cartoon, however, all is most definitely not well.  Dean Baker explains why (via Eschaton).

More than five years into the downturn, it doesn't take much to get people excited about the state of the economy. The Labor Department's February employment report showing the economy generated a better than expected 236,000 jobs and the unemployment rate had fallen 0.2 percentage points to 7.7% was sufficient to get the optimists' blood flowing. Unfortunately, they are likely to be disappointed.

First off, if the 236,000 jobs number sounds good to you, then you probably are not old enough to remember the 271,000 number reported last February, or the 311,000 number reported in January of 2012. The strong winter job growth in 2011-2012 was followed by a dismal spring, in which job growth slowed to a trickle. ...

The drop in the unemployment rate is also not as good news as it may initially seem. The Labor Department reported that 130,000 people left the labor force during the month – so they are no longer counted as unemployed. The percentage of the adult population that is employed (the employment-to-population ratio, or EPOP) was unchanged at 58.6%. This is just 0.4 percentage points above the low hit in the summer of 2011; and it is unchanged over the last year.  

While the unemployment rate has fallen back by 2.3 percentage points from its peak, reversing more than 40% of its increase, the EPOP is still down by 4.5 percentage points from its pre-recession level. The drop in unemployment is much more the result of people giving up the search for employment and leaving the labor force, than it is of workers finding new jobs. ...

In short, we have an economy that had been growing at a not-very-healthy pace through the second half of 2012 – and which is virtually certain to be slowed by contractionary fiscal policy through the rest of 2013. Unless there is a rapid reversal of policy, the 7.7% unemployment rate is likely to represent a low we may not see again for some time.    [Emphasis added]

Yes, some folks are doing well, but most of us aren't, and won't be if we fall into even more austerity-driven cuts.  What we need are jobs, and if takes a budget deficit for a few years to accomplish that, then so be it.  We've seen what the contractionary policies have done to the EU.  There is no reason to believe the US will be any different unless we come up with a different approach.

Congressman Ryan and Senator McConnell don't seem to care (no surprise there, eh?) and will be pushing for steep cuts to programs which would make jobs available.  McConnell is already pushing for a vote to defund Obamacare and Ryan will be pushing for destruction of Medicare for those 55 and younger, all to save money so that the Wall Street Banksters can continue to rake in the dough.

Get your dialing fingers warmed up.  It's time to let your congress critters and the White House know what we think of these plans.

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Blogger John Gardner said...

I blame high frequency computerized trading.

If there's taxing to be done, it should be on the crazy robo-trading done these days.

The stock market wasn't designed for holding a stock for a fraction of a second, it was for long term support of companies you believe in.

I'm all for Mark Cuban's idea to tax every single trade. It won't affect normal investers, we're only making a few (hundred?) trades per year.

6:03 PM  

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