Robert Reich:The Bad Job Numbers and the Secret Second Stimulus

[tonysam]

From down in the article:

The most painful political truth for Democrats is the nation won’t possibly be out of this jobs hole by the presidential election of 2012, even if the recovery is vigorous. Do the math. In order to get out of the hole, we’d need an average monthly increase of 400,000 jobs between now and then. But even at the peak of the 1990s jobs boom, the highest we ever got was 280,000 jobs a month. At the peak of the last recovery, in 2005, we got no higher than 212,000 jobs a month. Bottom line: Obama will be going into an election year with a higher total level of unemployment than before the Great Recession. He will have to argue that, were it not for his policies, things would be even worse. Counter-factuals like this do not sit well on bumper stickers.


Almost 40 percent of the jobless have been without work for over six months. That’s a record. People who have been out of the labor force for more than six months have a particularly hard time getting back in. Many never do.

What worries me most about all this is the trend line. If we were coming out of a recession with any potential strength in the job market, we’d at least see growth in the length of the average workweek. But there’s no sign of any growth. The average workweek held steady in December at 33.2 hours. Employers aren’t even giving their own workers more hours.

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[Igel]

1. It's the Bush I syndrome.

The ended in 3/91, months before the '92 elections, but the nation still accepted the "it's the economy, stupid!" slogan and even went for a stimulus package in spring '93. After all, employment lags the rest of the economy.

The leading indicators in fall 2000 pointed to a recession; the response was to accuse many of "talking the economy down", and in 3/01 we entered a recession. That it's difficult to trigger a recession in 6 weeks was imminently ignorable. I'm not sure if anybody bought *'s rhetoric on the point or not--but he was clearly playing CYA and, well, wasn't too far off the mark.

We continue to misconstrue recessions vs. unemployment, who's in office versus who was in office when things started to sour in a giant game of post hoc ergo propter hoc, a game made worse because we insist on making economic policy political. Take the current recession. We love to say it started in fall '08. It started in 12/07. The housing crisis, the bank crisis, the liquidity crisis all occurred months after the recession started, were probably triggered (at least in part) by it, and the recession was greatly exacerbated by the later problems. Repubs often know that unemployment is a lagging indicator (cf. para.1), yet Obama gets the blame for unemployment that predictably lagged the worst part of the recession--and he will get credit for fixing what's predicted, independently, to fix itself.

[bfarq]

2. We pissed all the money away making billionaires on Wall Street

The only good news is there there is still a couple hundred billion unspent from the stimulus package. But after grooving $2 trillion to the crooks on Wall Street AND THEIR PARTNERS IN CRIME AT OVERSEAS BANKS, we are in a position where we don't control our own destiny. We could create a few trillion more of fiat money, but there will be lots of external pressure against that because so much of the current debt is held by parties outside the US (China Saudi Arabia, et al) They don't want their holdings watered down by creation of more fiat money.

So we are seriously screwed. The right economic move was to let the bankster casino operation fail. It contributes absolutely noting to American society. If that $2 trillion would have been spend on jobs, R&D, and infrastructure here in America, we'd be far, far better off right now.