The latest jobs report changes nothing. We had no engine of economic growth when we all woke up on Friday morning, and we still don't have one. We have no operative plan to fix what ails us. We are in a bad place and sliding toward a worse one.
The Republicans are banking on continuing economic disaster as their pathway back to the White House, sabotaging any and all efforts to address the decline. The Obama administration is so beaten up and despondent that it has apparently convinced itself that the Oval Office confers no authority to address the unraveling of American middle class opportunity. A modest nudge downward in the unemployment rate, from 9.2 percent to 9.1 percent, changes this narrative not one bit.
Indeed, it stands as testament to the dismay that has characterized thinking about the economy in recent weeks that a jobs report that presents little change in any key area managed to register as good news on Friday, sending investors into paroxysms of buying.
Before the Labor Department released its snapshot of the job market, the rest of the week had been unsettling to say the least. A slew of lousy data -- a pullback on the factory floor, still-elevated new claims for unemployment benefits, and a fresh decline in consumer spending -- had combined to bring a chorus of worrying about a double-dip recession. (In many cases, the worriers are the same people who were talking about vigorous recovery back in early 2010.)
Meanwhile, the rest of the planet was looking weak, too. In Europe, for example, officials have been publicly fretting that Greece will still be unable to pay its debts, even with a second bailout. Spain and Italy could be next in line for rescues. All of this bad sentiment crystallized on Thursday to produce a global sell-off in stocks.
But in the schizophrenic view of the trader, Friday's jobs report fixed everything all up. The report that showed 117,000 net jobs added to the economy in July, not even enough to absorb new entrants to the workforce.
Not that we needed it, but here was another sign of the yawning gap separating the people who manage money from the people who actually work for it, depending on paychecks to pay their bills. The comfort in the markets came courtesy of a jobs report that repeated the words "little changed" with great frequency.
It is worth noting some of the things that stayed essentially the same: 13.9 million people are still officially unemployed, and 44 percent of them -- more than six million -- have been out of work for six months or longer. This at a time when 30 states are borrowing money from the federal government to keep paying regular unemployment benefits, and six states -- Michigan, Florida, Illinois, South Carolina, Arkansas and Missouri -- have rolled back the duration of unemployment checks.
Also pretty much unchanged: The number of people who are working part-time because they can't find full-time work, or because their hours have been cut, a group that numbered 8.4 million in July, according to the Bureau of Labor Statistics.
Ditto the rate of unemployment among African Americans, at 15.9 percent; among Hispanics, at 11.3 percent; and among teenagers, at 25 percent.
So the report was terrific news in the same way that we might celebrate when a very sick patient ignored by their doctor and showing no sign of improvement manages to get through the night without contracting anything worse.
The simple fact is that the economy is broken down. We used to be able to separate consumers -- whose spending amounts to 70 percent of the economy -- from workers. Even as wages stagnated for the vast majority of working people over the last quarter-century, Wall Street came up with gimmicks to get around this as a constraint on spending. We feasted on stock bubbles fueled by companies with no products but great stories that seemed to justify otherwise insane valuations. We enjoyed a real estate bubble boosted by exotic mortgages that allowed homeowners to turn extra value into cash.
But today consumers and workers are pretty much the same people, and at the moment that means declining fortunes for most Americans.
The only way to change that is to change the thing that didn't change on Friday: the fact that huge numbers of people are unemployed or anxious about joining those ranks, while our leaders are doing little to nothing about it.
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http://jessescrossroadscafe.blogspot.com/
Without demand - there is no reason for business to be in business.
We need to get politicians (mainly GOP) to quit bashing workers/consumers. They are undermining confidence and demand.
There is plenty of money being spent, it's just going to companies that are "cool" instead of companies that are "useful". If people worked less, those companies would need to lower their prices to keep making sales while other people are employed to make up for the rest of the work, and everyone benefits.
http://pastebin.com/Wy8B0hK9
Even the rich, because after all philanthropies don't run themselves. It's a lot easier to find useful ways to spend $1 billion than it is to spend $50 billion, since it takes 1/50 as much effort.
There's alot of lazy people who just won't work and are on the dole hanging fire out there. Go out and look around. An underground economy has sprung up in place of the old one. It's off the books sans bank loans and ridiculous interest gouging. People adjust and evolve and are quite flexible. This is an era of change. The old model didn't work. And once an old model is dispensed with like an Edsel it doesn''t come back.
I wouldn't wish for it to come back either like all of you rich Harvard types seem to be pining away for.
One example. Remember how they used to have hot-dog carts on the streets? Now they have gourmet dining. Think these guys are going to report all of their income and pay taxes to a crooked Mafia government? Naw. They aren't going to take out big loans either and saddle themselves with all kinds of debt either.
Model dead. Done. Finito. Over. We go back to the basics and start again. It's not so bad really. The air has to come ourt of the bubble. The credit downgrade is well deserved and should have been worse.
Using the BLS numbers for July, we need another 7,591,241 jobs if we want to get back to the same 67.1% labor force participation rate we had in 2000. For five years we would have to add 126,520 jobs per month just to absorb that 7+ million.
(If we don't count as working anyone who is underemployed and wants full time work, we would need to find over 13 M jobs.)
We would have to add another 89,914 jobs to cover the projected monthly population increase. To be at the same labor force participation rate we had in 2000 within five years (2016) we need to add 216,434 jobs per month.
We are nowhere near creating the number or quality of jobs we need to keep us from a lost decade or worse.
Our labor participation rate started to decline in 2001 well before the Great Recession and coincided with the number of jobs sent outside our borders. It is now crucial America changes its tax and regulatory structure to re-patriate those jobs. If we don't we will rapidly become a nation of one-earner households and children who live at home until they get married--or longer.
It is very cifficult for a self-employed person to avoid paying taxes if they want to continue in business. They are 1099ed by their clients with a copy to the IRS. Those who provide cash-only services will only get a very small and highly local market share of their particular industry.
If what you are describing were actually the case, we would be Greece.
http://data.bls.gov/timeseries/LNS12300000
Population-Employment Ratio for July? 58.1% of the employable people in the country has a job.
Most recent month that low or lower? July 1983; one of the worst economic recessions.
So the number is still dropping, more than a 25 year low for employment in this country as a percentage of the population.
The same thing you claim the GOP is doing? Yes I would bet the pittance that's left in my IRA.
We are doomed either way!!! It doesn't matter. The best we can hope for is that they all pull their collective heads out of their butts and start working for the American people.
Which means lowering the amount we spend first and foremost by significant numbers. Perhaps getting back to the horrible deficit levels of GWB. That would be a good start. Borrowing 44 cents out of every dollar we spend is recipe for catastrophe.
. . . and if you complained about the Bush deficits perhaps we should keep going lower till we are at the balanced budget. I mean really how can you be against the Bush deficit levels but for Obamas deficit levels which are higher than Bushs?
Also your wrong about the deficites. If you look at the list of Presidents and deficets, you'll be SHOCKED to see the numers (I wish I had the study to post). But it comes up to this. 1. Bush 2. Reagan 3. Bush Sr. 4. Clinton 5 Carter 6 Obama (The LEAST!)
Huggs Becky PS I am suspicious though that one statement of yours is aboslutely correct. Maybe we ARE doomed either way.
*Economists* and the government have no plan. But that doesn't mean the people need to be inactive:
http://pastebin.com/Wy8B0hK9
There is plenty of money being spent in the economy to create as many jobs as we need. It's just being spent on buying status symbols from corporations, because the people spending this money already have everything else they need. When people think that working and spending helps the economy they will continue to work http://motherjones.com/politics/2011/06/speed-up-american-workers-long-hours but their spending does NOT help the economy and if they want it to, they need to work less. It's that simple. Hard to accept, maybe, but if people want to volunteer their time there are plenty of nonprofit organizations in the local community or even globally who would gladly accept any help they can get. The system needs to change if unemployment is to go down, and that means a fundamental change in what it means to work. People need to accept that while working hard benefits their company, which might need the help if there is a large backup of orders, the best way to benefit society as a whole is to stop working so much.
Most of the public is NOT in support of government spending to create jobs, which Peter Goodman doesーnotーseemーtoーrealizeーgivenーhisーcommentsーaboutーtheーlackーofーgovernmentーactionー(noーroomーforーlinks). The only way out of this problem is to fix it ourselves.
Anyway, your comments are correct and well said. By the way, if we changed to a 30 hour work week with income levels that could make sure we could afford it we would have full employment in this country. And yes, the companies can afford it. They are making massive, record profits and shifting the national wealth to their own deep pockets.
Instead of working a 50-hour week and getting paid $90,000, people (who can afford it) should work half the time, accept half the income and spend more time enjoying life.
Like RunningBecky said, corporations can certainly afford to hire people, there's just no work for them to do unless existing employees agree to work less (and be paid less).
Corporate profits:
http://economix.blogs.nytimes.com/2011/06/30/the-wageless-profitable-recovery/ “corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1 percent”
http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm GDP revised down, BUT corporate profits revised up
http://sg.news.yahoo.com/apple-profit-rockets-hot-ipad-iphone-sales-204208498.html Apple's profits up 125%!! Does an iPad really make up for a 50-hour work week?
Spend less. http://pastebin.com/Wy8B0hK9
There's a under current of great force, and it's purpose is to weaken this country from within, to what real end, who nows, our weak economy, with recovery policies, just as weak, unwilling to agree on
the very thing that would help get the economy out of trouble, added revenu. Even ordinary people know they need extra money when the bills are pass due.
Bill C. made me lots and lots of money ( I LOVE the man ).
If you can't solve the riddle, get out of the way and don't play the game ( this thing is for keeps ).
Call Bill C. and follow his advise TO THE LETTER ( also get in touch with Bob Rubin and bring him to Washington for advise - get rid of that Alfred E. Neuman look-alike you have at Treasury, he's useless ).
Tell you BO, you're the first BRO to get elected and you wanna go down at least as a good Prez; so far, EH, EH.
Get it together and start doin' right; lot's of folks are depending on you and you ain't deliverin'.
We like you man, but you have to give us some LOVE.