The Incredible Shrunken Economy
You wouldn’t know it from reading the wire services’ headlines, but the government’s Employment Situation Summary released on Friday contained nothing which would cause any sane person to believe that the nation’s economic trajectory has somehow changed for the better.
The official unemployment rate increased to 8.3 percent. Alan Krueger, who knows better and apparently doesn’t care, harped on the fact that it was “really” 8.254 percent, when he knows darned well that one decimal point is as far as you can take the statistical significance of that rate in the government’s Household Survey. But since he insists on playing that immature game, Krueger’s three decimal point figure represents the third straight unemployment rate increase — specifically, from 8.098 percent in April to 8.206 percent in May to 8.217 percent in June to that 8.254 percent in July.
A deeper data dive into the Household Survey reveals almost nothing encouraging (all references are to seasonally adjusted figures):
- Contradicting what the Establishment Survey primarily used to report job growth and contraction contained — namely that 163,000 more Americans were working in July than were in June — the Household Survey showed an employment contraction of 215,000 and job growth of only 186,000 in the past four months.
- The civilian labor force, workforce participation rate, and employment-population ratio all dropped, reflecting an economy where a growing number of Americans sees little opportunity, and where the benefits of staying on the dole in its various forms all too often outweigh those involved in trying to get away from it.
- Not coincidentally, the number of adults not in the labor force increased by 348,000. That number has ballooned by over two million in the past twelve months to 88.34 million, and is a shocking 7.4 million higher than when the recession officially ended in June 2009.
- Everyone seems to be assuming that the looming disaster known as ObamaCare is something that, other than its obvious contribution to the “Taxmageddon” visiting us on January 1, 2013, won’t otherwise harm the economy until 2014. Really? Then someone needs to explain why the economy is shedding full-time jobs. Full-time employment has dropped by 945,000 in the past four months, while the number of part-timers has increased by over a million.
The above points, especially the cratering in full-time employment, which is now 7.5 million below its November 2007 peak, make a mockery of the establishment press’s crowing about how supposedly wonderful the 163,000-job pickup mentioned earlier was. Let’s look at the raw (i.e., not seasonally adjusted) data and its seasonal conversions for confirmation:
Overall, the economy actually lost 1.2 million jobs in July, which in historical context is at least somewhat fewer than the past several years, but still more than were lost in July 2004, 2005, or 2006. Oddly, the private sector’s July raw employment increase is better than anything seen in the previous decade, but basically no better than last year, which at the time impressed no one.
Both of this year’s raw numbers benefitted from an unusually high “birth/death adjustment.” The government estimates that 52,000 jobs were created (net of undetected companies going out of business) by individuals and at small companies under their radar. The July 2011 birth/death adjustment was only +5,000. Without that big birth/death boost, July’s job additions would more than likely have ended up within the 100,000-125,000 range most forecasters predicted before the report’s release, and the press would have had to find some other reason to pretend to be happy with truly miserable results.
The labor market seen since the POR (Pelosi-Obama-Reid) economy began wreaking its awful havoc in the late spring of 2008 has had awful consequences for the American people…
Yet President Obama’s deceptive assertion that he “inherited this mess” is left unchallenged, by the news entertainment industry of course, but also by the RINOs, including that party’s current leader Mitt.
What should be noted most is the socialist law enforced under pain of fine and even prosecution that the banks lend to unqualified persons was supported by Nance, Hussein and Harry.
Is the silence because speaking out on this all subsuming point would require a two logic leaps, where the American people are capable of thoughts requiring only single leap thoughts? Don’t wanna overwhelm the folks with complicated technical gubmint stuff, eh? These same self-defeating simplisms prosper on Fox News, so why not?
Actually, the carnage began in 2006 when the left took both houses. That they had a super-majority after 2008 and their agitator in cheif only makes it more laughable.
Yes – He inherited the mess from Senator Obama.
He inherited this mess.
No, he did not “inherit” it. He campaigned for the job. No one died and made him President.
Yes, the mess began before him, which is what got him elected. The thing is, he hasn’t made it better! He was hired to make it better, not make excuses.
I always wondered how FDR could keep getting re-elected, when his policies were such demonstrable failures. Now I know. According to even the unbiased polls, Obama is still in this race. Amazing. Even with the Internet, folks are still amazingly ignorant.
Honestly, though, I think folks are lying to the pollsters. I live in WA, and every time I talk to anyone and mention the forthcoming elections, they all say they cannot wait to vote Obama’s butt out of office. And this is a Blue State! I think it’s gonna be a landslide. “Boom! Taste my nightstick!”
Actually, the carnage began in 2006 when the left took both houses.
True, but it really started even before that, when Bill Clinton decided to begin enforcing the moribund CRA. As I recall, it was in 2006 when the pompous RINO John McCain went to the socialist leadership hat in hand to warn them that forcing banks to loan to people who couldn’t pay back their mortgages was probably a bad idea, and that the country was in a real estate bubble that would burst sooner or later. At least McCain was right on one thing. And, as was his habit, uber RINO Prez Dubya offered McCain and his colleagues no backing or leadership on the CRA non-issue.
No, he did not “inherit” it. He campaigned for the job. No one died and made him President.
I would add that he publicly favored CRA loans way back when he was a mere Chicago pol every bit as much as he supported it as senator. How does one inherit something that he supported?
Maybe Bob or Oprah or Chis or Diane or Matt or Ba Ba or Jon or Ellen can do an investigative report on that one.
Marc, I live in Virginia, and commute into Northern Virginia every day. Obama bumper stickers are everywhere.
I’ve seen fewer than a dozen Romney stickers.
You may be talking to the choir.
If bumper stickers are a valid poll, Romney hasn’t got a chance of taking Virginia.
Here’s an interesting observation: I live in northern Idaho but, for the past several years, my work has occasioned travel throughout the Willamette Valley in Oregon. I’ve spent a fair amount of time in the Salem and Eugene areas, often traveling back and forth between them.
In early 2009, you could have stood in virtually any parking lot in Eugene, closed your eyes, thrown a rock in any direction and you would have had a near 100% certainty of hitting a vehicle with an 0bama sticker of some sort plastered on it. They were about as common as UofO stickers.
Fast forward to 2010. A noticeable drop in Zero/Biden sitckers. Interesting.
2011 – gone. You now had to really look to find someone proud enough of their 0bama love to put it where all could see.
2012. None to be seen, although you could occasionally spot a Kerry/Edwards sticker on some die-hard’s ride.
The thrill is gone, baby. Although, given the prevailing ideologies of the area, it’s probably because the Won didn’t usher in the New Socialist Millenium as they thought he would. Funny thing is that these morons never see coming the grim concentration camp culture of the Gramscian, Machiavellian Marxists they enable before it’s way too late and they’re looking at the world the wrong way through razor wire.
The ratio of Left to Right bumper stickers is misleading; bumper stickers supporting a GOP candidate gets your car keyed–ask any body shop owner.
From the diversity of opinion crowd. Free speech so long as it is their speech.
That’s true. Having a sticker for a Republican got my side view mirror torn off my car in a teachers’ parking lot. I keep my mouth shut and only talk politics with the very few teachers whose politics I know. I don’t discuss my politics with students, because I think its unprofessional, but evidently those kinds of ethics don’t go a long way with liberal teachers who discuss politics in classes where it’s not the topic at hand. Most conservatives avoid having bumper stickers or yard signs because of the random acts of vandalism perpetrated against them.
OK, I can’t resist: why are the pigs alarmed?
When the Moslems take political control over postmodern America, many think the long-term prospects for the pork industry will go dark as a result.
No more bacon?
Nope. It’s alarming to think of one day going to dine at Perkins and flipping open the menu to see no BLT there anymore. But if that happens, you can’t blame the Moslems; they have their rules. Divine rules.
- the Holy Prophet APF
Reagan’s numbers may actually be better. The comparison of the dollar to gold to get an inflation rate, rather than the ‘basket of goods’ method which subtracts productivity increases from the inflation rate, would show that the dollars per ounce of gold decreased under Reagan’s administration.
All you have to remember is that they are nitpicking about rounding up now when it looks bad for them, but there are obviously times when they have also benefited from the obvious equal practice of rounding down; it works both ways.
Typical smarmy specious rhetoric chopping by the increasingly desperate Democrats. Machst nicht.
Can there be any doubt that the contraction of the labor force is deliberate?
The odds of voters totally dependent on Uncle Sugar voting against the dispensing machine approach zero. This is one of many reasons that Lenin’s descendent might actually win again. Its his strategy after all, and there is good reason to believe it can work.
If I was Romney I would shamelessly lie that everyone older than 21 but without jobs will remain hooked up to Uncle Sugar’s cash machine indefinitely. That would at least suppress their vote. Once elected, I would immediately renig, thus forcing many back into the workforce at any price. In four years, some of them would have discovered that wearing diapers wan’t much fun anyway and a few would actually begin to vote as adults. That happened when welfare was reformed in the 90′s before the king decided that the legistlative branch is racist.
May 9, 2012 by LarkenRose The Jones Plantation One cannot change reality by changing the words you use to describe reality. Look beneath the rhetoric, and glimpse the truth.
http://www.youtube.com/watch?v=vb8Rj5xkDPk&feature=player_embedded
Gubmint dependency is an addictive drug that makes heroin and its consequences look tame in comparison.
Rugged individualism (contrary to ObamaRx) built this country. Brisk capitalism built this country. You didn’t build this country, Mr. President. In fact you have done everything in your power to tear it down.
Time for the far left RBC’s to get the old heave-ho onto the ash heap of history where they and their failed philosophy belong. I thought Communism was dead when the Berlin Wall came down. Alas, there are always people willing to believe in the wonders of fascism.
25 years ago we had Reagan, Johnny Cash & Bob Hope. Today we have Obummer, No Cash & No Hope
There was an economic collapse in 2008 that some right-wing commenters on this site appear to be completely unaware of! The economy stinks because of inadequate aggregate demand in the private sector. Even with interest rates at 0%, businesses are not spending and expanding. Government spending is the only way to revive an economy in this situation. And incidentally, government spending is something the sainted Reagan did tons of.
Government spending is the only way to revive an economy in this situation.
As is proved in Arthur Laffer’s column in today’s WSJ, there is a direct inverse relationship between gubmint spending and economic growth. Laffer’s proof was not news to those who’ve been keeping an eye on the reality of political economics.
… government spending is something the sainted Reagan did tons of.
My guess is that the only reason Reagan was sainted is that, deep down, we know that he’s the last we’ll ever see of lawful government in this country. At least until the Constitution is struck down, which, legally speaking, can only be done through a constitutional convention that eliminates the articles and sections that are ignored nowadays.
So you’re right, but for the wrong reason; he spent, we prospered. By contrast, when Prez Hussein spends, we get porrer, and we’ve still gotta pay the bond holders for the hopeless joyride he plans to take us on.
It should also be noted that at this juncture under Reagan’s leadership we’d have GDP growth around 8% right now. Prez Hussein claims 1.5% recently, but that will be adjusted downward (with no press coverage, of course) it more likely will go down in the history books somewhere in the 1% range.
It may be news to the obsessive righties who are commenting here but Arthur Laffer is a largely discredited economist whose aptly named “laffer curve” has been debunked as one of the most idiotic ideas ever floated by an ecoomist, at least one with a Phd.
The Laffer concept is true under certain scenarios. The most telling is the capital gains tax phenomenon. When the tax rate goes up, government revenues go down. Obama was asked about this in the debates before the last election, and he had no answer except he thought raising the rate was more “fair.” Asked how that helps the poor when there is less revenue, he chose not to answer.
Um….nice try….we had green energy failures like Solyndra (one of quite a few) cash for clunkers (worthless), a shut down of gulf oil wells, continuing attacks against shale oil (and now possibly natural gas)and of course Obamacare with heaps of regulations, higher costs to private industry especially small business and what you are proposing is greater government spending at a time of massive deficits. If interest rates go up you will of course choke business, if they stay down of course government buys cheap debt and there are no savings and investment because there is no reward for it.
Please trust the American people for once instead of the left wing white trash orthodoxy.
Yes well………the dims took over both houses of Congress in 2006 and it took them exactly 18 months to tank the economy.
To date we have around 17.5 % unemployment (counting those who have exhausted their unemployment and those who have given up even trying to get a job) and a dim held Senate that has yet to pass a budget.
With that being said I think it is pure insanity to EVER allow the dimbulbs to hold any sort of power ever again.
Oh, we’re aware of it. We’re living through it now, thanks to the Obama administration.
The economic collapse was a direct result of the marxists’ Loans to Deadbeat program, the stupidest gubamint program of all time. Except, of course, they WANTED to ruin the economy so they can loot the country. It’s working out as planned, btw.
There is no chance the economy will recovery with the marxists in charge. No business person, other than the fascists’ coddled patners in crime, is going to fly into the teeth of a hurricane. The marxists could lower taxes to zero and business peole are still not going to risk their capital; they will wait it out until all their capital is exhausted. They may not be historians, but they sure as hell know their history when it comes to fascism and totalitarianism.
You can increase aggrate demand by tithing to the poor without government debt to rich people. Why wait for a slow democratic government to take action when you can act now.
There is insufficient aggregate demand because people are not productive enough, not wealthy enough, to afford to buy all the crap the bubble-ized economy is producing due to malinvestment. If you can understand that, as one example, that a business like Stone Cold Creamery which tries to sell $10.00 ice cream cones is a bubble-business that would not exist without artificially low interest rates created by the central bank.
OF COURSE THERE IS INSUFFICIENT AGGREGATE DEMAND FOR A BUNCH OF OVERPRICED CRAP WE CAN’T AFFORD!!!
If people were more productive as a result of investing more capital more intelligently, and laboring to produce high quality goods and services that people really wanted to buy, then the fake problem of insufficient aggregate demand would disappear.
Got that?
And by the way, the majority or the “spending” of the Obama stimulus, which you are claiming did not work, was tax cuts.
No prudent business manager, whether it be a mom and pop store or a corporation, spends money creating jobs or improving facilities or expanding when they fear getting hit with taxes and penalties in the near future. If companies are stockpiling bucks it is because they have analyzed the cost of employment and the fees involved and found that it’s going to cost them. In a similar manner, the lack of comprehension of the basic rules of economics seems to elude the White House. This is a fact, every fee, every tax, every penalty, every imposed requirement or limit is reflected down the line as higher costs of goods and services to consumers. It is not corporations that pay, it is not employers, it is always and forever consumer who are stuck paying for the costs imposed on commerce.
And by the way, the majority or the “spending” of the Obama stimulus, which you are claiming did not work, was tax cuts.
This is, of course, not quite true. But, as it is with Barack Hussein himself, to socialist voters the facts of the matter matter nothing; it’s only the effect that counts. At most, the $350 billion in tax cuts in the $840 billion American Recovery & Reinvestment Act was tax incentives. That’s 42%, which the last time I looked ain’t a majority.
More important, tax cuts done financed by bond borrowing without accompanying spending cuts are not cuts at all; they’re only deferred taxation plus interest. This can only be made worse in the absence of economic growth, which is now the definite outcome Obamanomics.
I am curious about a few things. Has anyone else noticed that once government embraced “green” alternatives, the wheels began really to come off the economy? The shrunken economy seems to me to coincide with our shrinking carbon footprints imposed by draconian government action. Consider the actions imposed, allegedly on our behalf, by uncontrolled groups like the EPA. Right now, they are trying to fast track four elusive breeds of salamanders in order to prevent development in Texas. They’ve essentially paralyzed coal producing and consuming states like Pennsylvania and West Virginia. And heaven help the Rust Belt if our sweltering summer gives way to a record cold winter because the shut down of coal fired energy sources has created a consumption gap that wishful wind and sometime solar just won’t fill. Add to this situation two years of drought that have decimated the corn crop driving it to record highs. This impacts not just human food sources, but makes it where farmers and ranchers in drought areas have to choose between selling herds and flocks low or watching them die as corn is a feed source as well. Last year’s drought in Texas led many ranchers to sell off herds including breeders. That means for the next four years at least, beef is going to soar. I would imagine similar things are happening now with pork and poultry. Our own government reports that we have record high stocking of gas and oil so why are we still using corn for fuel? It’s costly to refine, costly to handle, reduces fuel efficiency and damages older engines. Yet the liberals continue to pay extortionary subsidies for corn destined for ethanol. It is time for the dogooders and pie in the sky thinkers to go. We cannot afford four more years of the Obamaconomy.
When Communism fell in Eastern Europe, the communists all became environmentalists. Turns out that, other than not having immdiate absolute power over the lives of millions, it’s a close second for eager mass murderers. Within a few year they had mind-melded with the socialist tyrants in the West.
The words “communist”, “environmentalist” and “totalitarian” are interchangeable.
The so called ‘green economy’ initiatives so beloved of this America-hating regime are more aptly seen as ‘bleeding out the patient’: capital, trust, entrepreneurial spirit and creativity – all down the drain.
Now ask yourselves: who benefits from this? And to what end?
None of us will like where the answers take us.
Of course the hidden part of environmentalism is Zero Population Growth which is nowhere better demonstrated than the tragedy of the one child policy of China. Several “greens” have openly advocated for reduction of the population. The problem is, it won’t be inner city meth addicts that are “chosen.” But they will vote for them anyhow thinking that Daddy Government will save them. Daddy government doesn’t really like them very much at all.
The communists hate us very very very much and want us dead dead dead.
It’s really that simple.
James Solbakken
can someone explain this statement
Full-time employment has dropped by 945,000 in the past four months
how so?
The article’s link has the numbers, and it’s roughly offset by an big increase in part-timers.
Here’s a bit of anecdotal evidence for you. I know someone who went to volunteer at an LDS Church cannery. That day they were canning meat. This stuff goes to members of the LDS Church who are having rough economic times. It came up in conversation that the number of aid requests the Church received last year quadrupled from the prior year, which itself was greatly increased over 2009.
Our economy sucks, folks, and you can lay the blame directly at the feet of The Won. Until he’s gone we’re not getting off the deck. Let’s hope enough people understand that in November.
Our local food bank relied on churches, stores and more to donate goods. They did a great job. But they are struggling now because those same churches who used to donate goods are having to use them in their own food pantries for church members. In the meantime more people are relying on low cost alternatives. Krogers and Tom Thumb(Safeway) are out of reach and more folks who previously wouldn’t be caught dead at Walmart are shopping the sales. I’ve had good luck with Aldi’s although their produce doesn’t have a very long shelf life even in the fridge. I’m thinking seriously of getting some survival rations because I just don’t see anything good coming for us soon. And I’m not some far right wing survivalist, just a middle class wife and mother who is concerned about what is happening to my nation.
It goes much further than the Won. The problem is systemic and it goes back decades. We are not creating enough wealth. A service economy is doomed to the failure we are living in right now. The riches, true wealth we amassed over many many decades is being drained off by the Saudis and the Chinese. Actually its all gone. Now we are borrowing from them. See post below.
The lemmings won’t see the rocks until they hit bottom. New Orleans after five days of warnings about Katrina did not worry about evacuation until after the floods. Boiling the frog or kicking the can down the road until the road ends shows that only hindsight works for many. Many are not capable of reading those charts listed above.
Simple may work. “Its the economy, stupid.” “It’s the spending not the taxes that is the problem.” Addicts know that their habit is killing them, and then they take one more hit.
The stock market is betting on Europe resolving its problems and QE3. They will cheer until they are dissappointed. The big bet is on the voters’ picking the direction of the next administration. That would be the correcting direction, in God We Trust.
To be fair, what you saw in NOLA is what you see all around the Gulf. There are those oldtimers who have seen storms come and go and they NEVER think this will be the big one. With developers going past seawalls in places like Galveston and Port Isabel, we will see this happen again. Of course, it would have helped if Ray Nagin had issued a mandatory evac order days before when Pres. Bush called him rather than the morning of the storm when the outer bands were already lashing the outer islands.
As of 6 August, I’ve seen one Obama bumper sticker in San Diego and one in LA, and 2 Romney stickers. There are 10 “for lease” storefronts on Rodeo Drive in Beverly Hills. La Jolla is full of “Bldg for lease” and empty storefronts. With the CA State Parks Dept “finding” $54 million in special funds in July, the voters are unlikely to approve Gov Brown’s tax increase vote in Nov.
Chris, hope you are right and that California will do the right thing.. not approve Gov Browns Tax increase.
Remember Scranton, Pa… where the mayor paid everyone min wage because the town was broke. Well, they caved and will now RAISE TAXES ON EVERYONE to pay for the union workers.
Thats the liberal mindset.
My only consolation is that there are only so many celebrities to vote for Obama.
Hows that “fundamental transformation” working out for you?
Until we open up every mine, drill for all our oil ( including alaska and the coasts ), harvest and maintain our forests instead of letting them burn, be willing to pay more for our own gadgets manufactured by Americans, require 20% down payments for buying a house, cut the fed and its red tape in half and imprison crooked government officials and white collar pirates … we will continue on the path toward Third World Status.
Probably pretty much none of these things is going to happen. We are an empire that has chosen suicide. We have rejected God and he has removed his protection. What is happening to us is just the natural course of mankind. We got used to thinking we were different but we aren’t. At least not any more.
Obama is the greatest failure as President in U.S. history. The damage he has inflicted on our economy will take a generation or more to repair, and that is only assuming that he is defeated for reelection. If over $5 trillion in borrowed dollars used to fuel the greatest bout of wasted corrupt spending in the history of the world succeeds in buying his reelection the damage will become to great and our nation will go into permanent decline.
If you look at the stock market as a forward predictor, about 6 months out, the stock market crash was the direct result of President Obama winning the election and businesses realizing what was coming.
Obama should not be allowed to try to take credit for the stock market rising. As our money becomes worth less, stocks of necessity will rise as they are compared to dollars.
The real issue is that the regulations, not taxes, are killing businesses and startups. That should really be the focus. Todays news about Gibson’s wood and fine just means that they will get rid of some American jobs.
Just saw an anti-Romney attack ad that claimed he (Romney) only paid 14% of his income in taxes over the last 10 years.
Now wait a minute… I thought you guys were saying Romney didn’t pay any taxes at all?
FWIW, they’re getting so desperate over there in Obamaland that they can’t keep their story straight any more.
• July Household-Survey Employment Plunged by 195,000
• Annual Add-Factors in Birth-Death Model Upped to 548,000 Jobs
• July Unemployment: 8.3% (U.3), 15.0% (U.6), 22.9% (Shadow Stats)
Are You Living In A Free Society? Why Not?
http://www.youtube.com/watch?v=1oKDEVhj5tA&feature=g-all-u