I admit it. I lean way left and I am a MSNBC news junkie. But I also follow the market. So I also watch CNBC.
I was astonished to hear how surprised my favorite objective analysts seemed to be on Friday following the announcement that the "August US nonfarm payroll report" showed a smaller-than-expected increase in job growth. They seemed surprised that more jobs should have been created and that so many people have dropped out of the job market and are no longer looking for jobs.
The CNBC analysts should turn down the rhetoric and hype and listen to the analysts on sister station, MSNBC. They might learn something. I am also happy to clarify for them:
Dear CNBC Analysts,
Maybe you need to get out of your offices and talk to a larger circle of people if you and your guests were actually surprised that the jobs numbers were disappointing. In case you have not noticed, there is no positive correlation between the consistent rise in the stock market and job creation. If there was a positive correlation, we probably would currently have no or very little unemployment.
There are two areas of the economy that create jobs -- the private sector and the government, or public sector. Generally speaking, the government is a large employer in our country. But in case you have not noticed, Congress has obstructed every bill, including every jobs bill, and any chance to create any new jobs since the 2012 mid-term elections. The Right Wing in Congress and in the local states have worked tirelessly to remove funding for healthcare, education, teachers, police departments, the justice system, and more. And, of course, they are threatening with another government shutdown if they do not get their way regarding removing funding for more social safety net programs, including "ObamaCare." And this was before the Sequester. The Sequester has helped to significantly slow down, or stagnate the economy.
Prior to that time, the stimulus package (TARP), which was passed after the worst man-made financial crisis in the world since The Great Depression, was picking up a small amount of needed slack. But the stimulus was neither large enough, nor long-term enough to make the difference to improve long-term employment. Historically, during and following a recession, the public sector steps in and helps restore jobs; thereby, pumping more money into the economy through job creation. Unfortunately, the GOP's only priority during President Obama's first term was to make him a one-term president. Now the GOP's priority is to obstruct by saying "NO" to everything in order to make the president ineffective, much to the detriment and destruction of our country. So even though the controversial stimulus bill was way too small, it had no chance of being renewed or increased after the 2012 mid-term elections, even though we really need a WPA-II program.
The private sector remains the job-creating sector. But, prior to the financial crisis, most big corporations were outsourcing jobs and moved the majority of manufacturing overseas to save money and avoid paying taxes. The private sector jobs that have been created have been mainly in the service industry -- fast-food. And as everyone else, besides you CNBC analysts, seem to know, these are part-time, minimum-wage jobs with no benefits. These part-time service jobs were never intended to cover a family's needs; and they certainly do not earn enough to stimulate the economy like the good, middle-class jobs of the past, and pay for college and retirement. The government is actually forced to supplement these low-wage jobs by providing many workers SNAP (food stamps), Medicaid, and other social safety-net funds.
In addition, job creation in the private sector is slow, but not because of instability in the tax code. Private sector non-service job creation is slow because of the credit crunch to small businesses. The banks are not lending to businesses or approving mortgages for people who would like to buy homes again.
Since the financial crisis, the banks that were too big to fail have become much, much, much bigger, and are more deregulated. Deregulating the banking and financial services sector by eliminating regulations like Glass-Steagall, helped cause the crisis. If we are being honest, I think we can all agree that financial services companies cannot affectively self-regulate. Some of the people who helped de-regulate the industry and apparently do not see a problem with it are still around, like Larry Summers, apparent hero to many of you at CNBC, for some strange reason.
So, CNBC Analysts, I hope that this clears up a few things for you. If you have any questions, contact me, or just turn on MSNBC.
Respectfully, Leslie.