The Economy Is Even Worse Than You Think
The average length of unemployment is higher than it's been since government began tracking the data in 1948.
Wall Street Journal
July 14, 2009
By MORTIMER ZUCKERMAN
Chairman and Editor-In-Chief, US News and World Report
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.
The Bureau of Labor Statistics preliminary estimate for job losses for June is 467,000, which means 7.2 million people have lost their jobs since the start of the recession. The cumulative job losses over the last six months have been greater than for any other half year period since World War II, including the military demobilization after the war. 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.
Regrettably, like so many other quasi-wingers, he fails to mention the basic concept that most (not all, but most) of this mess on which he comments is courtesy of the previous administration's unbridled, laissez faire management of our economy. Furthermore, Main Street's pain is being exacerbated right now by the rants of fiscal deficit hawks that have all-but-logjammed additional stimuli for Main Street to the point where sufficient votes in our Congress and Senate are not there to address the matter at the moment.
But, I'll re-reference that truth later on herein.
What is worthy of note, however are the statistical facts, formed into "10 reasons," that Zuckerman brings to the foreground, as to why the economy's in a much greater abyss than we realize--due to Bush's doodoo economics--which I will now review, paraphrasing Mort's own words:
1.) The US Department of Labor's Bureau of Labor Statistics ("BLS") assumed, in June alone, that 185,000 people were working who "probably were not." Zuckerman tells us it's due to assumptions the BLS makes about trends. We're reminded that the government's numbers assume there was job creation in sectors such as finance, which is downright incredulous. We're told the adjustments over future months will account for this stretch of fiction.
2.) Companies are asking employees to take unpaid leave (I'd also add that numerous state and municipal governments are also doing this to hundreds of thousands--if not millions--of people.)
3.) 1.4 million people were, simply, uncounted because they did not look for a job over the previous four weeks. (Partially covered in the BLS' U.6 index, but not in their much more widely-quoted U.3 index.)
4.) There are 25 million "involuntary idle" folks in this country, as measured by the BLS' U.6 index. 5.8% of the workforce, the underemployed, have found part-time work of some form or another.
5.) The average work week statistic has dropped to 33 hours, which is the lowest level ever recorded since the government started tracking that metric, 45 years ago. As a result of this chicken-or-the-egg number, factories are operating at 65% of capacity. Zuckerman points out if it wasn't for the shorter work week, there'd be 3.3 million more unemployed, which would bring the U.3 indext up to 11.7%, instead of the 9.5% level, where it's at now.
6.) The average length of unemployment has increased to 24.5 weeks. We're reminded that this is also the highest measurement that's ever been recorded since the feds started tracking that data, since 1948. Long-term unemployed (27 weeks or greater), 4.4 million folks, is also at the highest level ever measured.
7.) The average worker's hourly compensation remained flat in June, at $18.53 per hour.
8.) The "goods-producing sector" is losing more jobs than any other, which accounts for 223,000 of the jobs lost in June.
9.) The reality is that when the economy does pickup employers will increase the hours of their full- and part-time employees before they consider hiring of new employees.
10.) The escalation of job losses may extend well into 2010, peaking close to 11%; and this level may remain somewhat static for a lengthy period thereafter.
Perhaps, what I found most interesting about Zuckerman's comments was a reiteration of something I've been talking about for quite some time:
Can we find comfort in the fact that employment has long been considered a lagging indicator? It is conventionally seen as having limited predictive power since employment reflects decisions taken earlier in the business cycle. But today is different. Unemployment has doubled to 9.5% from 4.8% in only 16 months, a rate so fast it may influence future economic behavior and outlook.
Earlier in this diary, I referenced Zuckerman's status as a "quasi-conservative," because he continues on in his opinion piece to strongly support the immediate implementation of additional stimulus spending to address these matters. That's pretty neo-Keynesian/progressive thinking, IMHO.
He also reminds us of something I've been posting diaries about for months now, and that's the reality that much of the current stimulus budget--many of the pieces of it allocated for distribution by the states--have been redirected by various states' legislatures to extend unemployment and healthcare benefits. This is a credible and factual observation, unfortunately.
But, this is also where Zuckerman's argument concludes with a reality that flies in the face of most conservative commentary about these matters, too, and it's this: More stimulus spending is needed--and must be approved--right now.
Instead of bloviating from a politically expedient bully pulpit about this, it's time for conservatives of all stripes, not just Zuckerman (including pseudo-conservatives who now speak like fiscal moderates or, dare I say it, pseudo-liberals), to face up to the truths behind their political bullshit--a line of revisionist crap that attempts to distort the basic truth that job creation, or the implementation of any type of WPA-like program, requires the authorization of additional expenditures of significant funds by our Legislative Branch--at least if this matter is going to be addressed honestly and effectively, anytime soon.
Zuckerman concludes this hypocrisy by making statements relating to this irrational, two-faced game that many on the other side of the aisle (as well as some DINOs) are playing now, and it's framed in stereotypical fashion as a bogus attack on the current administration:
No wonder poll after poll shows a steady erosion of confidence in the stimulus. So what kind of second-act stimulus should we look for? Something that might have a real multiplier effect, not a congressional wish list of pet programs. It is critical that the Obama administration not play politics with the issue. The time to get ready for a serious infrastructure program is now. It's a shame Washington didn't get it right the first time.
The truth is much different. Washington "didn't get it right the first time" because the GOPers and the DINOs wouldn't let us get it right!
The historic pain that's currently being felt on Main Street--those truths which are more self-evident now than they were just months ago--will only be resolved if our government releases more funds to address these matters now.
...when we finally muster the courage to take control of the situation, do we use our new found power to change things for the better? No - we just let them start abusing us again, even though they're only in control of 40% of the Senate, we let them keep bullying us over and over and over and OVER.
Too often, we are the masochists.
And we never learn. Maybe we don't want to learn. Maybe we just want to be bullied and abused and kicked and spat upon. Maybe we don't really want to make the world better. Do we want to let the @$$h*les win?
Is this just wishful thinking, or could it be that even some of the GOP, not to mention DINOs within our own party, are painting themselves into a corner with regard to the current level of despair on Main Street, at least to the point where a bloc of these so-called conservative legislators are feeling the heat about unacceptable levels of unemployment right in their own backyards?
It's up to progressives everywhere to call out these mealy-mouthed, two-faced, bloviating hypocrites for what they are! Giddy-up! Scores of millions of Americans are suffering because of it!