Worse Yet

Mortimer Zuckerman in The Wall Street Journal: It’s worse than you think.

- June’s total assumed 185,000 people at work who probably were not. The government could not identify them; it made an assumption about trends. But many of the mythical jobs are in industries that have absolutely no job creation, e.g., finance. When the official numbers are adjusted over the next several months, June will look worse.

- More companies are asking employees to take unpaid leave. These people don’t count on the unemployment roll.

- No fewer than 1.4 million people wanted or were available for work in the last 12 months but were not counted. Why? Because they hadn’t searched for work in the four weeks preceding the survey.

- The number of workers taking part-time jobs due to the slack economy, a kind of stealth underemployment, has doubled in this recession to about nine million, or 5.8% of the work force. Add those whose hours have been cut to those who cannot find a full-time job and the total unemployed rises to 16.5%, putting the number of involuntarily idle in the range of 25 million.

That’s only a few of the ten reasons Zuckerman points out. Do go over and read the rest. Into this reality Nancy Pelosi and the House Democrats have launched economy-killing spend and tax proposals to over-regulate – or kill – darn near every engine of wealth expansion in America. And it is getting worse daily.

Had enough change yet?

Unemployment was under 5% for much of the Bush presidency. In just six months, the economy has sagged to a level not seen in decades.

How’s that hope holding up?

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11 Responses to Worse Yet

  1. Neo says:

    I think Obama and his economic team thought that this was merely a “crisis of confidence,” meaning the economy would resume as soon as the feeling of “panic” was abated, so targeting the “stimulus” just was that important. As a matter of fact, I think you could have sold that idea up until GM went into bankruptcy. At that point, the banks had been tested and GM and Chrysler were “dealt with” so the feeling of crisis had abated, but it set the stage for the current situation.
    Once there was a feeling that the worst of the crisis was over, the Obama agenda was left there, naked for all to see.
    As the weeks have progressed, the unease of the underlying future consequences of the current “cap and trade” (somehow called an energy bill) and Obamacare bills started to suck the oxygen out of the normal recovery process. Every new tax proposal has employers holding on even tighter to their wallets, instead of creating new jobs.

    The “big lie” was calling it a “Recovery Act” .. it was merely another spending bill, hardly targeted to stimulate the engines of the American economy, but rather the engines of the political agenda.
    Obama lied, the recovery died.

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  3. Count me among those underemployed who have accepted part-time work out of desperation. After taxes, I’ll be taking home almost exactly what I was drawing from UI each week, but there’s something psychologically lifting about earning it as opposed to “receiving” it.

    One of the things I’ve noticed that I don’t hear being discussed is how this unemployment level is allowing the few employers who ARE hiring to be much, much pickier about whom they hire. On one end of that spectrum, I can recall at least 2 or 3 jobs where I was told that htey really really liked me, but that someone else had been JUST THIS MUCH more ideal for the job. On the other hand, one place where I interviewed later informed me they had decided to reject ALL their interviewees and re-post their ad, confident they’d get a new crop of applicants.

    This means that less experienced workers, entry-level people (even people like me who have just recently finished training in a new career) have to compete with more seasoned workers for jobs that used to be our chance to get a “foot in the door”.

    It also means that employers can, and do (often of necessity) offer lower per hour wages for jobs that used to pay much better.

    So yeah, the official unemployment figures alone do NOT tell the complete story. And that story is even bleaker.

  4. Plumpplumber(balding) says:

    When folks understand what Obama has done, and the jobs aren’t coming back, then civil insurrection isn’t out of the question. We are at the edge of some seriously bad times, and our government is the problem.

  5. crosspatch says:

    Things aren’t looking good here in Silicon Valley. Venture funding is drying up.

    http://www.mercurynews.com/ci_12827981

    There are a lot of companies that are ongoing but not yet quite profitable that are going to need second and third venture fund rounds of financing (pretty typical) that aren’t going to get it. In the meantime, Santa Clara county foreclosures are still rising.

    We are seeing venture capital conditions this quarter that are on par with conditions in the worst part of the “dot bomb” tech bust.

  6. wolfwalker says:

    Unemployment was under 5% for much of the Bush presidency.

    You should know better than this, Gaius. The economic “growth” of the Bush years was largely a sandcastle built on the myth of easy credit. We should have seen this crash coming years ago. Many of us did. For that matter, some of us have been warning of an eventual Day of Reckoning on the issue of cheap credit since Reagan was in office. The bill finally came due last year, and the inevitable tide of defaults washed the sandcastle away.

    The fermented amalgam of narcissistic proteins that is currently befouling the White House deserves to be condemned for doing all the wrong things in response to the crisis … but it cannot be fairly said that he caused it, or that things were just peachy before he got in.

  7. crosspatch says:

    “The economic “growth” of the Bush years was largely a sandcastle built on the myth of easy credit. ”

    Easy credit mandated by Congress. Congress was warned several times during the Bush administration that the housing market could implode with the irresponsible lending going on. Geithner made it worse when he was head of the NY Fed by ruling that lender reserves were not required as government backed loans were “riskless”.

    The policy that resulted in this implosion was made during the Clinton administration. The Bush administration attempted to crack down with tougher regulations but in the words of certain Democrats in Congress … “worries about the future of the mortgage industry are simply figments of the imagination of certain Republicans”. I believe it was Barney Frank who said that in 2005.

  8. crosspatch says:

    Here’s the timeline wolfwalker in this short youtube video. Bush began warning Congress in 2001.

    http://www.youtube.com/watch?v=LPSDnGMzIdo

  9. wolfwalker says:

    Easy credit mandated by Congress.

    Never said otherwise, did I, crosspatch? I know Bush and his allies on the Hill tried to do something about the looming real-estate/mortgage disaster. He also tried to do something about the second disaster looming in the near future: Social Security and Medicare. He gets points in my book for both actions.

    But that doesn’t change the fact that the “economic growth” of 2001-08 was a sandcastle.

  10. crosspatch says:

    wolfwalker: Sorry, I took your original comment, in a round about way, as saying the Bush administration should have seen it coming for years when in fact they did. We basically had a ponzi scheme where more and more buyers were being poured into the market bidding prices up and creating a huge amount of wealth for average folks.

    The problem that made everything worse is what I will call the “secondary” financial market. I will use numbers from around here which might be different from your region … lets say you buy a house in 1999 for 650K. In 2005 it is worth 1.2M and you are being bombarded by home equity commercials that convince you that the equity is being wasted just sitting there. So you refinance, pull all that equity out and now have a 1M mortgage and 350K cash. You use the cash to buy an RV, remodel the house and send your kid to Stanford. Then in 2008 your 5 year option ARM expires, is due to reset, the house is worth 700K and still has a 1M mortgage. You have already blown the cash and you are nearing retirement.

    If people had not refinanced their homes pulling all that bubble equity out, things would not have been so bad … but by the same token, things wouldn’t have been so good economically either because all that equity cash was being dumped into the economy.

    Now we have a huge destruction of wealth for a lot of average people. And Barney Frank wants to re-inflate the housing market by going back to easy money while Obama wants to inflate the entire economy with cap and tax.

    There is no good way out of this. The good old days aren’t coming back.

  11. crosspatch says:

    “Then in 2008 your 5 year option ARM expires”

    Meant in 2010. A boatload of option ARMs are going to reset in 2010 and 2011 … about twice as many as reset in 2006 and 2007. Those will be people that bought at the very “top” of the market.

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