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The U. S. Bureau of Labor Statistics reported this morning that, in November, the unemployment rate jumped from 9.6% to 9.8%. And perhaps in anticipation of the bad news, President Obama flew off to Afghanistan to chat over the phone with Hamid Karzai and pose for photo ops with the troops. Back in Washington, Joe Biden was left holding the bag – which, let’s face it, is what he is there for.
Never mind the fact that the figure reported grossly understates the actual number of unemployed – since it excludes those who have given up on the search for jobs. Never mind the fact that it tells us nothing about the underemployed – those who once worked full time and are now relegated to part-time work. In November, we are told, 36,000 people joined the roles of the employed, and they were outnumbered by the young people coming of age and entering the market.
For fun, you should read Peter Whoriskey’s report in The Washington Post. It illustrates nicely what happens when journalists are reduced to flacks.
To his credit, Whoriskey states the facts, and he does not hide the fact that they are disappointing. But this he could hardly do. Non-farm employment went up by 172,000 in October, and for the official unemployment rate to go down to 8% by the first Tuesday in November, 2012 – a date on which folks in Washington are fixated – the job rolls would have to grow by 200,00 a month from now on: which is evidently not going to happen. As things stand, the number of Americans out of work exceeds 15 million.
But after acknowledging the bad news, Whoriskey does what he can to soften the blow. He quotes a fellow from the Brookings Institution who reports that salaries of those employed have increased by 2.3%. “Those are not terrible numbers,” this expert tells. They are “pretty good by post war standards.” And Whoriskey ends his piece with this:
In a post on the White House blog, Austan Goolsbee, chairman of the Council of Economic Advisers, linked the jobs report to the Bush-era tax cuts and unemployment insurance.
“Today’s numbers underscore the importance of extending expiring tax cuts for the middle class and unemployment insurance for those Americans who have lost their jobs. Failure to do this would jeopardize hundreds of thousands of additional jobs, and leave millions of Americans, who are out of work through no fault of their own, on their own.”
Democratic lawmakers have been working to extend unemployment insurance into 2011, but Republicans are demanding spending cuts to offset costs. Without congressional approval, unemployment benefits will run out for 2 million people in December, and several million more will lose them in the coming months.
It seems not to have crossed Whoriskey’s mind of that of his editor that he should call up someone at the American Enterprise Institute, the Heritage Foundation, or the Cato Institute for a comment, and he appears not to have thought it appropriate to consult the Republican leadership in the House or the Senate. It will be interesting to see how The New York Times spins this story tomorrow and on Sunday.
The truth of the matter is that this is very bad news – bad news for the President who is going to be held responsible for the mess he has created, and bad news for the country – which is being made to pay heavily for putting Barack Obama, Nancy Pelosi, and Harry Reid in charge of its economic well-being.
It is not at all clear to me that a genuine, sustained recovery is in the cards anytime soon. There are storm clouds on the horizon.
In Europe, Portugal, Spain, and Italy are likely to follow Greece and Ireland into insolvency, and this could break the German bank. In the US, property values have not hit bottom. They cannot do so until the 1.5 million homes awaiting foreclosure have been dumped on the market. And, of course, there is the problem of the states. Not to put too fine a point on it, Illinois, New York, and California are bankrupt – and there are a great many other states not far behind. Moreover, as I suggested on Sunday, at the federal level, we seem to have entered a fiscal trap. In the absence of economic growth, it is hard to see how we can cope with the debt we have already accumulated. But if there is economic growth – and interest rates go up – we may have trouble servicing that debt. I have trouble believing that, with the help of a bit of financial legerdemain on the part of Tim Geithner, Ben Bernanke, and some of the other folks who lead us into this mess, we can escape a painful reckoning.