The most recent unemployment report was viewed very pessimistically by many economists even though the unemployment rate stayed at 10%. Why the concern? Let’s explain and do the numbers…
First, there are two employment surveys regularly conducted, but only one of them is used for the “official” unemployment number – the Household Survey.
The Household Survey rate is defined as the number of unemployed, 15.267 million, divided by the civilian labor force, 153.059 million. This easy calculation comes to 9.997% — close enough to 10% for government work.
To make it a bit more confusing from November to December Household Survey both employment AND unemployment dropped (by 589,000 and 73,000, respectively). This means that the overall civilian work force dropped by 661,000. Simply put, almost 0.5%. of the workforce dropped out last month — they’re not working, but are not considered “unemployed” in official parlance.
Let’s go a bit further.
There are 2.486 million workers in December 2009 classified as “Marginally Attached”, which the Government defines as not in the labor force, but who wanted and were available for work, and had looked for a job sometime in the prior 12 months. This number increased 153,000 people in the last month.
There are 929,000 people that are classified as “Discouraged” in December 2009, which the Government defines as persons not currently looking for work because they believe no jobs are available for them. This number increased 68,000 people in the last month.
Neither “Marginally Attached” nor “Discouraged” are included in the Household Survey number.
If these numbers were added to the Household Survey, the unemployment rate would now be right between 11% and 12%. The reason that there was a strong negative reaction to the reported “unemployment” number is that most economists were able to run these numbers and see this result.
For some perspective, on March 16, 2009, I ran through some numbers on this blog that estimated an eventual unemployment rate of between 11% and 12% (The source of the numbers was from Duke Economics Professor Campbell Harvey). In July, I revisited those numbers and confirmed my original post. It has now been 10 months since last March, and Professor Harvey was right.
So, while there is good news on the employment front – job losses are increasing less rapidly (How’s that for good news!). The numbers are what the numbers are – which is what I’ve been saying all along, much to the annoyance of some.
The “fly in the ointment” to all of this is that continued efforts by the liberals and progressives in Congress on job destroying legislation will continue to be a drag on the economy – and continue to push people out of work. Please stop and let the job losses stop before we break 12%.
“The greatest derangement of the mind is to believe in something because one wishes it to be so.”
-Louis Pasteur
Why, after years of implementing “conservative” anti-progressive economic policy – e.g. slashing income tax, capital gains tax rates, de-regulating the financial sector, a hands off policy for health insurance and energy inflation etc. etc. – after experimenting with all of that conservative policy – why did jobs, banks, the auto industry, the whole economy simultaneously collapse in 2008?
So bad the conservative Bush Cheney White House begged for $700 billion TARP to buy into, bail out banks, and lobby for the bail out of General Motors? That’s the last thing the “conservative” government did before being chased out of town by the voters in 2008. Now they’re baaaaack? Yikes.
We’re trying to dig ourselves out of that deep dark hole of debt collapse and bail out “conservative” policy dug for us. That’s not anti-GOP. That’s just the facts of the matter. It’s ludicrous for anyone to suggest we go back to the old “ideology” like nothing even happened. All of the sudden, it “progressives” that are the problem? Not so fast. Memory may be short, but it’s still bitter.
We had a good thing going. We wrecked it with reckless ideological experiments. Is anyone really suggesting we need some more of what made us sick?
A conservative Congress from 1994 through 2006. A conservative President from 2001 to 2009. All selling us “conservative” snake oil. Lower taxes. Trust the market. Get the government out of the way. What did we get? The worst economic disaster since the Depression. That’s the unfortunate fact, the legacy of an ideology way past it’s expiration date.
Among the chief systemic drags on job creation are the cost of energy and health insurance. Two basics of our economic foundation that need serious fixing. Both inflating at unsustainable rates. Dragging everything down. New “progressive” policy stands a better chance of taking us to a brighter future than the same old stuff we got from Bush Cheney McCain Palin Bonier. Just because we’re Republicans doesn’t mean we can’t have progressive ideas.
Here’s how a successful economy thrives. Go to work. Get paid. Spend the money. Entitlements short circuit the system. Illegal aliens not paying their way hurts. Paying industries not to produce hurts. Large unionized industries such as steel and auto are dragging us down. When Bethlehem Steel went bankrupt they had 7.5 retirees for every worker. In Delaware $.26 out of every health care dollar goes to indigent care. Newt’s Congress got caught up with their own importance and lost their way. Bush and Cheney wouldn’t make a pimple on a conservative’s ass. Here’s one conservative’s idea. Government stick to bombing other countries and stay out of business. Everyone else just get the jobs created by lack of government involvement in the private sector. Leave a few shekels in my pocket after taxes so I can go out and buy something that America produces. Hell, I could be a Duke economics professor.
The following is a quote from Bill Buckley: “I think Mr. Bush faces a singular problem best defined, I think, as the absence of effective conservative ideology — with the result that he ended up being very extravagant in domestic spending, extremely tolerant of excesses by Congress. And in respect of foreign policy, incapable of bringing together such forces as apparently were necessary to conclude the Iraq challenge.”
Eventually, President Bush brought together the forces needed to win in Iraq — the other areas, he failed.
Many on the left, like Mr. Holt, have a confused view of conservatism — they don’t understand it or choose to mis-characterize it to fit their elitist ideology (leadership by the wise and gracious for the huddled, uneducated masses to protect those masses from the greedy capitalist). George Bush allowed a Republican Congress to expand government. I’ve said repeatedly that his primary failure was not vetoing Republican spending bills. “No Child Left Behind” was not conservative legislation. Medicare Part ‘D’, while better written and implemented than any other entitlement program, was still an expansion of entitlements — hardly conservative. I like to let Bill rant — it is illuminating to everyone else.
It is a pity that the Republican Party had morphed into the “less Socialist” Party during the Bush era and allowed the Government to continue to expand and interfere with our lives and our liberty. That era gets pinned to the Consevative movement. It gives people like Mr. Holt a seemingly legimate argument to put forth. There is no excuse for it and the Party must now somehow morph into a new strict Conservative/Libertarian party that promotes both economic and personal freedom in both word and deed. To do otherwise will only slow our rapid decent into Socialism and not reverse it.
Charlie, there is much to rant about, and what better place to do it?
You write – “leadership by the wise and gracious for the huddled, uneducated masses to protect those masses from the greedy capitalist”. Dark thinking there. Who the heck talks like that?
You might think the words “opposition” and “Left” are synonymous, but there’s more to it than that.
I still vote Republican most of the time. Voted D once. Trying to get us back on track. Away from right wing extremism. Away from phony snake oil promises about getting the government out of our lives.
I don’t think it’s correct for you generalize that progressive ideas hurt job creation. Progress is good. We passed a lot of progressive legislation always followed by a lot of progress in America. It’s been like that for centuries.
Being anti-government only gets you so far when the time comes to govern.
That’s what caused the Great Conservative Debacle of 2008. Ideology met reality. Dog chasing truck. Dog catches truck. Realizes he knows how to bark, not how to drive truck. Crash. Bam. Bail out. Dog wants to drive some more? No.
I worked against the extreme Left all my life. Never thought I would encounter the same kind of righteous airhead babble in my own Party. In the ’60’s the Left were the big know-it-alls. Strident, crass, ideological. They made it clear, they had seen the light, they detested everybody else. Wouldn’t listen to a word anybody said. That’s where we’re at now. Take health insurance for instance.
There’s a real problem with health insurance. Spitting in the face of reform proposals is not going to get us anywhere. Most of what is in the insurance reform will help with job creation, make us more competitive, spur more self employment.
Getting rid of preexisting condition denials, not cutting off coverage to sick people, not having to go bankrupt if you get real sick, opening more community clinics, taking the pressure off emergency rooms, having a national exchange where individuals can shop across state lines at group rates, limiting insurance companies to 15% administration costs, putting the heat on to control costs. Shaking things up. Let’s roll.
It’s reform Republicans should support. It is however, a complex set of problems calling for a complex set of solutions. That should not put reform outside the intellectual realm of our GOP. Presently, our blank eyed reply to all of this is one word “socialism”.
It is kind of funny to hear the excuses people make for the Grand Failure of the Conservative Congress led by the Conservative President pushing the Conservative Agenda that you and I voted for over so many years.
The saddest excuse heard most often, echoed by Charlie here: “they were not really conservatives”.
A hilarious, sad, poignant yet strangely disturbing state of self denial bought on by the sudden bursting of a beloved ideology balloon. When a set of sacred ideas are found to be hot air, the mind can play tricks. Entrepreneurs learn to deal with the disappointment of bad products. Political movements have a much tougher time shedding bad ideology. But we have to do it anyway. Ditch the old. Get with the progress movement.
The conservatives – the ones that took us from prosperity to our economic knees – they were not real conservatives?
They campaigned as conservatives, made all the same promises conservatives make now, were backed by all the conservative organizations, cheered on by all the conservative radio pundits, endorsed by the conservative TV and radio network – but as it turned out they were not true conservatives? Lunacy not at the fringe, but in the heart.
Now we have a new group of unrepentant “authenic” conservatives using the same slogans, pushing the same ideology, promising the same promises.
Smaller government, de-regulating business. Claiming our salvation is best left in the hands of the Wall Street private sector. Saying we can get the government out of our lives, off our back.
It’s all snake oil just as slippery as Marxism was. Belongs on the same last century ash heap.
When I hear somebody on the stump promising they will get government off my back, turn things over to the private sector, I start looking for a wooden stake and a hammer.
Does that make me a bad Republican?
Bill, unfortunately it makes you a typical Republican. The ideas you are proclaiming are the same ideas that the Republicans had been moving toward for decades. Compromise after compromise making us more and more socialist. Yes, Socialism is evil, big government is evil. Our fathers fought against it and we let it slip in the back door. The Republican Party will die unless it changes. You are right that is has failed miserably. But you are wrong in the Progressive direction you want it to go. It doesn’t work, it has never worked because it is flawed at the core. I don’t care what party makes it happen (yes, I am a Libertarian) but the Constitution and the ideas of the founders have got to return to the forefront of the discussion or we are doomed to repeat history.
John S., I mean progressive ideas as in moving forward making progress, not with the capital P of ideology.
It seems to me the the GOP has swallowed an ideology pill that has us saying we do not want to do anything. We want sit back and see what happens if we initiated no new government policy. I just don’t think we can afford anymore experiments.
Your assertion that Libertarian principles, returning to some basic Founders Constitution way of doing things is extremely attractive in theory. For many years it was my credo too.
But that is no longer possible. Our Founders world was so vastly different from ours there is no way of returning to those simple days of yore.
I firmly believe we have been true blue to the Founders ideals. I say that because every single generation of Americans has been faithful to the Constitution. All policy, all taxation, all regulation, is the end product of the People. The Congress, The President, The Courts guided by the People. Free elections, free speech, assembly, protest. All has led us to where we are today.
The past century granted Americans the greatest expansion of prosperity and human rights in history. That progress was the work of a private sector and a public sector expanding hand in hand.
The Founders set in motion a society part socialist part capitalist from day one. That’s why one of the first things the new government did was begin building post offices and roads to connect them. Franklin knew that kind of infrastructure would help private enterprise thrive. They did not have automobiles, ICBM’s, or GPS back then, but I am certain they would have no objection to what we have done.
You can’t argue with success. We are the great Nation they hoped we would be. Not because we are socialist or capitalist or any kind of ism. It’s because we are practical people.