Celebrating and Capitalizing on Our Misery
The economy, as measured by growth in the nation’s gross domestic product (GDP), finally grew again in the third quarter. That bit of decent news only papers over an otherwise dreadful situation.
Of course, compared to the alternative, the positive GDP report is welcome. Barring drastic subsequent downward adjustments, it brings an end to the recession as normal people define it. Whether it concludes the recession as determined by the National Bureau of Economic Research (NBER), which was inexplicably allowed to hijack the dictionary and substitute their arbitrary judgment as to what an “official” recession is decades ago, is anyone’s guess.
NBER’s alleged experts “determined” that the current recession really began in December 2007, during a quarter when the economy grew at an annualized 2.7%. The NBER-defined recession somehow continued during the second quarter of 2008 while GDP was growing at an annualized 1.5%. If the group ultimately declares that the recession ended during the past quarter, it will be the first time it has done so while the economy was shedding so many seasonally adjusted jobs (768,000, or almost 0.6% of the workforce, pending possible adjustments).
While GDP is up, many economic metrics that matter more to the average person are down, so much so that it’s probably fair to say that the economy as most Americans experience it is still shrinking. This explains why, despite the “it’s not that bad” hymn the choir known as the nation’s establishment press continues to sing, the Conference Board’s consumer confidence index fell sharply in October and is below where it was in September 2008.
The most obvious problems are soaring unemployment and growing underemployment.
The seasonally adjusted unemployment rate in September was 9.8%. Even that horrid figure, which Christina Romer of President Obama’s Council of Economic Advisers expects not to change much between now and the end of 2010, masks how bad things really are. That’s because many potential workers are dropping out.
If you compare the sum of the civilian labor forces of all 50 states and the District of Columbia at this Bureau of Labor Statistics table as of September 2009 to a year earlier (separately calculated here), you’ll find that the workforce shrunk by almost 600,000. Take out Texas and the shrinkage is almost 900,000. Perform the same operation on this seasonally adjusted table (again shown here), this time comparing September 2009 to July, and you’ll see a decline of 351,000 in just two months (almost 400,000 if you again take out Texas). Meanwhile, during the past year the nation’s 16-and-over population has increased by almost two million. It’s clear that a lot of people who would prefer to be working have taken themselves out of the job market, thus disappearing entirely from the government’s jobs analyses.
This trend has already twisted the impact of official state and local employment reports. In Ohio, for example, the seasonally adjusted unemployment rate dropped from 10.8% to 10.1% in September. Big deal; the change occurred not because more people found work, but because more people dropped out.
Beyond that, those who are still working are on average working less and taking home less. The average work week, at 33 hours, is at a record low. The government’s September index of real average weekly earnings was down 1.9% from December.
One quarter of positive GDP growth hardly makes up for all of this. That there is a palpable sense of misery permeating this economy -- and that it is not dissipating -- is undeniable.
Now that this malaise has arrived and appears likely to remain in place for a while, many members of the Democratic Party are glad it’s here. That’s because they believe that the currently awful economy will help them pass government-controlled health care and other elements of their statist agenda.
I’m not saying it; they are, up to and including the president himself:
The bad economy is good for President Obama and Democrats as they try to reinvent the health care system with scant Republican support.
… Congressional Democrats … say that economic insecurity and high unemployment stoke public support for their proposals to guarantee insurance for millions of Americans. …
[Washington Congressman James McDermott said that] "in 1993, we were talking about the uninsured as ‘them.’ Now it turns out this is for us. When a bank like Washington Mutual in Seattle lays off 3,000 people, they lose health insurance. Millions of people with insurance are asking, ‘What if I lose my job?’”
Mr. Obama is doing everything he can to highlight this sense of insecurity as he tries to persuade people with insurance that his proposals would help them. Worries about insurance are “keeping more and more Americans awake at night,” he said last month.
The fate of health legislation may hinge on whether those anxieties trump concerns about the effects of the Democratic proposals.
Massachusetts Congressman Barney Frank, sensing a historic control-enhancing opportunity, is doing his part to capitalize on the widespread economic stress. Recently on MSNBC, the Frank said that in regards to the nation’s financial system, “we are trying on every front to increase the role of government in the regulatory area.” This comes from a guy who for the past year has stood idly by while the Federal Housing Administration has proactively (I would argue deliberately) repeated the mistakes that sent Fannie Mae and Freddie Mac over the cliff to the tune of what will ultimately be hundreds of billions of bailout dollars.
Thus, the very people who over a year ago brought about what I have since July 2008 been calling the POR (Pelosi-Obama-Reid) economy now want to capitalize on it to enact their power-hungry, commerce-crippling agenda.
Beltway Democrats’ detestable, ghoulishly opportunistic, and barely disguised euphoria over how bad it is for so many of us is enough to make you wonder if they set out to create this mess in the first place. The way they are now attempting to take advantage of it lends strong credence to that belief, almost to the point where you don’t really need to wonder any more. After all, if taking down the economy wasn’t their original goal, you would expect that they’d be reacting very differently now -- and they’re not. Our national nightmare is Rahm Emanuel’s and his party’s dream come true.