Ten Reasons The Economy Is Even Worse Than You Think

Wall Street Journal:

The recent unemployment numbers have undermined confidence that we might be nearing the bottom of the recession. What we can see on the surface is disconcerting enough, but the inside numbers are just as bad.

Read the whole story: Wall Street Journal

Comments

[Tom95134]

This is really bad news and the doom & gloom Republicans are going to have a field day with this information. I can see them now, gleefully jumping up and down squealing they their tax cuts would have been better.

The problem is that small businesses don't hire people because they have been given a tax cut. They hire people when the demand for goods and services makes it a good business decision. The Republicans in Congress would have you believe that if you give a businessman a tax cut he will spend that money by hiring another worker. WRONG! What he does is put the money in investments against a future time when he needs the cash or pays off existing debt. Neither of which generates jobs.

[dobberdoss]

Not every business has overheads relating to debt, your right there must first be a market to generate export jobs or any job for that matter BUT there is also a risk with ANY new business that your product maybe a dud. If we don't support businesses then how do we expect to produce jobs?
The Repugs can go shove it! They only care about the "elite", I'm talking the "small family business exporter with a niche product"

[samjung23]

Republican logic is flawed.

They listen to right wing pundits whose job it is to pontificate over the year, not to actually manage or run a business. My idiot boss said after the minimum wage hike that we had to cut employees on a shift. He was riding the Rush Limbaugh/Hannity train.Lo and behold, he ate crow because the kids couldn't handle the business that was coming in. My solution, which was to raise prices slightly, was the right choice, but since he didn't really know how to run a business, he ended up having to hire all over again.

I don't want to sound like a jerk, but these people are ignorant and have no business running any economy. They believe in economic voodoo, and refuse to listen to people that actually know anything.

In order for any economy to work, wealth has to be shared, consumption has to be widespread. Rich people destroy economies, it is a welfare. The reason why people enrich themselves is to be lazy for the rest of their life. It really is no different from handing out welfare checks to people, in terms of productivity, because the money that rich people hoard in the bank could be used to pay workers to produce something.

Republicans don't realize this though. Notice that whenever anyone brings up hoarding by the rich, the answer is, "wealth is created everyday." People fall for this. Without the "money tree" argument, their ideas fall completely flat!

[samjung23]

Not year, I meant "air", lol!

[lovbug]

I totally agree with you. The wealthy destroyed Rome, Egypt, Africa, and the list goes on.

[slowhand0728]

As a small business owner, this is partially true. But since I need to replace equipment including a Van, A tax break on capital investment at least would help me put a new truck on the road, instead of losing that productivity of a crew. The purchasing of that equipment will help many, including FORD since I buy thier vans.

[PWM]

Republicans keep trying the trickle down economic nonsense - it has led to every depression this nation ever had.

[samjung23]

Amen!

[slowhand0728]

Brutal indictment, but not surprising been saying all this since last summer. Politics and Business, IE Economic expansion do not mix very well when our politicians dont have OUR best interests at heart.

[Shirley Fisk]

7/14/09
1:39am
Sunny Isles Beach, FL

RE: "Ten Reasons The Economy Is Even Worse Than You Think"

It's not worse than I think. I just didn't want to be the one to tell you all.

[mmhlaw]

correct me if im wrong, but isnt unemployment benefits a good thing?

about 100% of that money is spent almost immediately and put into the economy, people go buy food, fuel, and the like, and that gives business money which allows then to maintain, pay, and add new employees, imagine how bad things would be without unemployment. I know some people abuse it but isnt it better than giving billionaires money through tax cuts that they just horde in their bank or invest oversees?

[dobberdoss]

It helps recirculate our tax dollars yes, but how does it produce economic growth? Wouldn't it be more prudent to reduce the taxes of "small businesses" that export their products? Give THEM a tax break instead of the elite tossers who do jack!

[Sean Tisdall]

Actually, Moody's did a report evaluating the economic impacts of each dollar of increased spending/reduced revenue stimulus on the economy and what spin-offs were had. The results?

Business Investment Incentives: $0.33

Extended Unemployment Benefits: $1.64

Food Stamps: $1.73

Quote economist Mark Zandi:

"If someone who is literally living paycheck to paycheck gets an extra dollar, it's very likely that they will spend that dollar immediately on whatever they need - groceries, to pay the telephone bill, to pay the electric bill,"

http://money.cnn.com/2008/01/29/news/economy/stimulus_analysis/index.htm

[ChristianEcon.com]

"It helps recirculate our tax dollars yes, but how does it produce economic growth?"

How would it not produce economic growth? It's being spent into the economy, stimulating business. (?)

[urweatherman]

If its such a good thing, then why doesn't everyone just not work, stay home, and collect unemployment benefits? Doesn't seem very logical to me! Who decides who has to work and who gets to stay home? And if someone is hard working and wants to produce and be successful, why should that person pay the other who wants to stay home and do nothing?

[faceplant]

Because that's not how it works, you need to get laid off, or prove that you were unfairly fired before you collect. If you walk away from your job, or they can you for being a d.ol.t, you don't get to collect. While there are some people, I suppose, who once laid off milk the system, it isn't a terrifically generous benefit, nor is it of unlimited duration. The vast majority of people collecting unemployment will take whatever job is offered. Besides, just letting laid-off workers starve to death delivers no economic benefit to anyone whatsoever.

[vippy]

No one really wants "unemployment benefits over not working."

[senorlou]

Yes, it is pumped right away into the economy. It is certainly better to give $600K to 30 people, rather than as a bonus to one Goldman Sachs stock trader.

[MarcusT]

It's a very "good thing" if you've lost your income and it does go right back into the economy so it slows the decline somewhat. But the "plan" is to re-inflate the bubble and unemployment doesn't help. You might ask how re-inflating a bubble will help fix the problems that we inherited when the bubble popped but then that would really confuse people.

[MikaS]

The Dems wanted a larger infrastructure package to begin with the Repubs chipped it down, now the WSJ wants a larger infrastructure package to pump up investors (to put more money in the pockets of the TARP recepients). I just don't see a second stimulus package any time soon.

[dobberdoss]

A second "stimulus" package with borrowed money and interest to pay? how will that help exactly? We are bankrupt!

[MikaS]

Where was I advocating a second stimulus?

[barkrudedog69]

The Republicans wanted a REAL package not a reward package to the Democrats for their support for the election.

[MikaS]

The Rebubs wanted to continue their failed policies of tax breaks.

[RogerHWerner]

The Republicans wanted status quo what heck are your talking about. If they had their way there would be no TARP, no stimulus, more tax cuts for the rich, and a situation more dire than it is today.

[viewfromuphere]

no they wanted tax cuts....for goodness sake...how ADD do you think the reading public is?

[PWM]

Must be why Bush gave all that money to the banks before Obama became POTUS.

[Douglas90723]

In round figures the worst unemployment of the Great Depression was 24%.

At this time about 25% of US industrial jobs have been shipped overseas....probably never to return.

I ask you....does this sound like recipe for a catastrophic economic disaster?

I think you know the answer.

[RonVandenBergII]

There will be NO recovery until the USA starts manufacturing things for export and people stop living on credit.

[dobberdoss]

100% true. Problem most of our customers were doing the same as us! See the problem? How do you get out of that? Did anyone note that at the G8 meeting some of the discussion was on removing the USD as the number one Reserve currency?. China,France, Germany and the UK hinted at it.

[3dtrix]

Never forget - the USA is still the Saudi Arabia of food - we have more and better productive soil than anywhere on the planet. The world is getting hungrier and hungrier - you can't eat oil or coal, but...

We GAVE AWAY our manufacturing base - it's plain to see what the "service economy" has done for us - at the end of the day, there is always the earth and sun...

[urweatherman]

Yes...but don't forget about the environmental lobbyists.....they already had their hand in our manufacturing moving overseas.

[RonVandenBergII]

We won't allow beef to be imported into our country from the USA (NL).

People don't want GMO foods that PIGS won't even eat. Think that is crazy? research it.

Tell us why your bees are dying.

[sueinmn]

The job losses are also now equal to the net job gains over the previous nine years, making this the only recession since the Great Depression to wipe out all job growth from the previous expansion.


I think Obama should rethink some of his efforts and how it helped the banks - per helping restart the economy!

The stimulus was too small to jump start anything other than hekping fund a few budgets. Has California felt any of the stimulus being in its present disaster? MN Govenor FIXED our budget shortfall by vetoing 1/2 the budget right out of existance!

What will we feel with the stimulus?

Save the banks, let the country fail. Really doesnt add up from a Democrat Pres!

[Imago]

Hey Sue:

I work with an elementary curriculum publishing company, and we've been tracking ARRA monies coming to states for education.

As of a few weeks ago, only a handful of states had begun receiving first wave funding, and only a few more had actually gotten their proposals in yet. I was really surprised to see this!

It's taken states a lot longer to get on the ball to go after the stimulus money than anyone expected.
Most of the stimulus money hasn't hit the streets yet.

[martiniandabotoxchaser]

Money going into things like schools and hospitals will not get us out of this depression. We need to make stuff that can be exported to other nations and replace those goods we currently import. The stimulus plan needs to focus on manufacturing and creating new industries and technologies.

[rbchilds]

The thing that is killing the country at the moment is small businesses lack of capitol. 90% of the people in this country work for small businesses. All the stimulus money has gone to banks and Wall Street. A lot of the stimulus money has been earmarked for the states, but small businesses have seen nothing. Until small businesses turn around, employment will continue to drop, revenues will continue to decline and cycle will perpetrate upon itself.

[dobberdoss]

I remember growing up with Star Trek where the ideals of individual materialistic goals were long surpassed by the joint interests of all humanity, hence the theme of equality and knowledge.
Now just for argument sake, what if our financial crisis brought this ideal into focus, where we suddenly realised that collecting 'stuff" (including homes) via taking on a DEBT is quite frankly pointless and unproductive?
I'm not promoting "communism" by the way. Just making a comparison. When will "humanity" get beyond "consumerism"? What would it take?

[Konnie]

probably when there is nothing being made to consume.........star trek was spose to take
place after WWIII remember. nuclear holocost and all that...............be careful what you
wish for - little kim is looking for a legacy.................

[dobberdoss]

Yeah, i can see that guy taking revenge on his death bed just out of some wackjob spite

[desertman]

This probably gives insight to many as to why their depression era parents and grandparents refused to take on debt of any sort. The lessons had been learned and are now being re-learned.

[dobberdoss]

too true

[Choicelady]

As an historian by training and former practice, I've calculated unemployment for various periods and decades in our history. This is the very first time the true number has been made public. Why? The WSJ and others want to make this look like the worst mess in human history. But it's still not remotely as bad as under Reagan and, of course, Hoover. If you're going to use statistics in a meaningful way, you have to keep your comparisons parallel; otherwise, you're distorting the truth. The "real" unemployment figures are and always have been much higher than the official presentation. It's only now, with a Black president, that conservatives see fit to talk about them. Interesting, is it not.

[RogerHWerner]

Well, in truth, the federal government began fudging its economic numbers under LBJ and every president since has seen fit to part take in further manipulation. One of the worst offenders was Clinton. Reagan too was appalling with is economic manipulations. As long as the corporate sector got their cut, the WSJ didn't give a damn what was happening on Main Street. Today, corporations and not just in the US are in serious trouble and the US tax payer and consumer can't bail them out as they have in the past. US unempoloyment figures have been the s***s for years. The 4.5% figure is a figment of the imaginations of the Bureau of Labor Statistics to make whatever administration happens to be in office look good. That the WSJ would chose now to publish an article on false government statistics when they have known about them for decades is indeed very interesting.

[slowhand0728]

Not really, think the honest truth is more and more people are now able to better calculate than ever before, there is a wealth of information out there if you are looking for it.

[desertman]

During the Clinton Administration, "discouraged workers" — those who had given up looking for a job because there were no jobs to be had — were redefined so as to be counted only if they had been "discouraged" for less than a year. This time qualification defined away the bulk of the discouraged workers. Adding them back into the total unemployed — unemployment in line with common experience — as estimated by the SGS-Alternate Unemployment Measure, rose to about 20.5% in May, versus 20.0% in April and 19.8% in March.

[urweatherman]

Correction: not Reagan, Hoover.....you mean as a result of policies made by Carter, Roosevelt! Please keep your facts straight!

[Downix]

Carter wrote Reagans economic plans leading to the 1987 crash?

And there were 4 presidents between Roosevelt and Hoover, most likely any of his policies were not in play anymore, and very unlikely to have caused the depression.

[AnotherMcIntosh]

In response to the WSJ and its claim that actual unemployment may be 16.5%, you wrote: "This is the very first time the true number has been made public."

This number may be more true than the lower official one, but what is a true number in comparison to the unemployment numbers of the 1930's?

If actual unemployment is measured in the same way that it was in the 1930's, there is no way that the true number is only 16.5%.

[RonVandenBergII]

When you fight wars of aggression against innocent people you can expect lots of nasty collective karma for your country.

[desertman]

Please list them.

[RonVandenBergII]

Vietnam , Iraq, Aghanistan, Central America etc etc.

NONE of those countries were ever a threat to the USA.

You are warmongers but its catching up to you.

Evil never wins.

[emerger]

The WSJ can't be trusted. One of their mandates is run interference for Big Business which includes throwing bad light on a president or policies that do not support unregulated capitalism.
When Bush was president, the Op Ed pages supported him at every disastrous turn, no matter, because he was a champion of the no-bid no-ask military industrial money machine.

[Imago]

Totally agree!

His unemployment numbers aren't necessarily inaccurate (though he is doing a lot of guessing) but he really lost me at "only 10% of ARRA is creating jobs, like with infrastructure projects."

Big ole conservative talking point -- and simply not true.

[lovbug]

agreed.