Economy is Not Getting Better

[Orwellian_Ghost]

We are now looking at unemployment numbers that undermine any confidence that we might be nearing the bottom of the recession. The appropriate metaphor is not the green shoots of new growth. A better image is to look at the true total of jobless people as a prudent navigator looks at an iceberg.

What we see on the surface is disconcerting enough. The estimate from the Bureau of Labor Statistics of job losses for June is 467,000. That increases by 7.2 million the number of unemployed since the start of the recession. The cumulative job losses over the past six months have been greater than for any other half-year period since World War II, including demobilization. What's more, the job losses are 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 employment growth from the previous business cycle.

That's bad enough. But here are nine reasons we are in even more trouble than the 9.5 percent unemployment rate indicates.

One. June's total included 185,000 people who were assumed to be at work, many of whom 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: finance, for example. When the official numbers are adjusted over the next several months, look to some of the 185,000 boosting the unemployment totals.

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

...

http://finance.yahoo.com/news/Nine-Reasons-the-Economy-is-usnews-1021116601.html?x=0&.v=1

[SpiralHawk]

1. "Smirk. Shock & Awe, baby. Smirk." - xCommander AWOL & Republicon Cronies

"While we were, um, running the show, we Republicons screwed things up to last and last and last. Bwaaa ha ha ha ha. Too bad America. Smirk."

- xCommander AWOL & Republicon Cronies

[JVS]

2. "but it's a lagging indicator" in 5.. 4... 3... 2..

[SemiCharmedQuark]

3. He's arguing for a second stimulus package.

I'm not sure how that is going to fly.

[timeforpeace]

18. It won't fly. It will be seen as an admission of failure, rightly or not.

[MadHound]

4. But the market soared yesterday

And a bank hasn't failed in a while. And we're feeling better about ourselves, right, right?

I agree that the full effects of the stimulus hasn't hit yet, but the fact of the matter is that the stimulus was weakened, possibly fatally, by the fact that in Obama's rush to be bipartisan he was willing to sacrifice one third of stimulus dollars to the 'Pugs and their precious tax cuts, thus muffling the effects of the stimulus.

Furthermore, the banks are still holding hundreds of billions of dollars in toxic assets. The recent rule changes allowed them to reclassify, and thus hide those toxic assets on their books, thus taking them out of public view, but those assets are still corrosive and eating away at our banking system. Krugman was correct that we should have nationalized the banks, cleaned them out and then reprivatized them. Instead, we're stuck with a bunch of zombie banks that we're going to have to prop up, while a few of his buddies at Goldman Sachs and BofA make out like bandits. More corporate cronyism.

But the real ticking time bomb is inflation. We've essentially been cut off of credit by China, thus we're now simply printing money in order to finance these efforts to restore the economy. This is OK, but only for right now while there is a threat of deflation. But the thing is, playing this game is tricky, and one misstep could easily mean hyperinflation. Last month's CPI numbers are a warning, and I hope that somebody is listening.

We might as well face it, we're going to be in the shitter for a few years. Obama was handed a huge mess, and so far his efforts at cleaning it up haven't been terribly effective. Hopefully we'll start to see some effect as the full effect of the stimulus takes effect, we'll see.

[Grinchie]

22. Today's rally is because of a Phony story on Roubini having good news.

There is another thread here on DU about it, but later, Roubini came out, denied what was reported, and claimed his words were taken out of context.

Personally, I think it's fraud that caused the rally. A good old Kramer technique.

And don't forget, what worked so well for GMO Food, the doctrine of "Substantial Equivalence" is now rebranded to apply to the Gold market with "Substantial Economic Equivalence" - http://www.financialsense.com/Market/daily/monday.htm
- The Alchemists 7/13/2009

[mdavies013]

5. A friend of mine has been talking about the rise and fall of the Roman empire...

and basically said that it is our time of decline and that we will be replaced by some other country. I don't like to think that

[raccoon]

16. Your friend is right. No empire has ever lasted forever, and never will. nt

[Coyote_Bandit]

6. Of course it's not

and all those stimulus dollars were largely wasted in terms of creating employment. Those trillions of dollars could have been spent on jobs programs or encouraging the creation and development of small business. Instead we recklessly threw those dollars are the bakers and financial professionals largely responsible for the irresponsible practices that led to this meltdown.

If you didn't know better you might think that our politicians had sold out to the bankers and to corporate America. Maybe they did. Maybe they are just stupid. Maybe they just value their own position and the power and prosperity it brings over everything else.

[DemocratSinceBirth]

7. The TARP Money Was Separate From The Stimulus

I am not a fan of the bankers but a sound financial system is a necessary condition for economic growth.


Maybe the stimulus wasn't big enough or aimed at the right folks... This is depressing...


I'm hanging on by a string...

[Coyote_Bandit]

10. Of course it was

but our fucking politicians had the funds available to throw at those corporations where their loyalties are strongest. Meanwhile, job creation through that stimulus package was largely based on the theory of trickle down economics. And there sure as hell isn't any money available for a single payer ealth care system. Bastards all need to be kicked out of office.

Thing is we still don't have a sound financial system. We still have an economy where the vast majority of GDP is consumer spending - and our consumers are hard pressed to continue their previous levels of consumption. They are unemployed, taking unpaid furloughs, working fewer hours, earning less, facing incrteasing costs on all fronts, and often lacking in basic health care. Most can only dream of securing basic credit to secure a home or start a business. In short, we have an economy that is based on wealth creation through th use of money as opposed to an economy that is based on productivity. Until that changes, we do not have a sound economy. Instead we have an unsustainable economy.

Good luck to you. I've been hanging on by a string for years now. I know the only way I'll ever secure an income is to buy or create that job. I believe that is true of many millions who are currently unemployed. The jobs that have been lost are not coming back anytime soon. They won't be back until our national prosperity exceeds previous levels.

[DemocratSinceBirth]

11. I Agree One Hundred Perecent

I just think if the banks were allowed to fail, wholesale panic would have ensued, with millions of folks trying to get their money out at once...


I really ahould be working rather than waxing eloquently or ineloquently about the economy but the net is a nice and inexpensive diversion.



PEACE
DS

[lunatica]

8. I have a co-worker who has been given her lay off notice this week

And those of us who don't get laid off will be getting furloughs for 12 months (for now)

[DemocratSinceBirth]

9. Twelve Month Furlough

Without pay?

Might as well let the person go...

That's sad...

[lunatica]

12. Not work without pay

furloughs are forced days off in which you don't get paid. So, depending on your salary you get a percentage of time off in which you don't get paid. For me, because I have a low salary I will get 4% of my pay taken out but I'll be forced not to work during that time which comes to 11 days salary reduction.

With furloughs everything goes automatically back to your regular salary because your salary is based on the days you work. As soon as you have those days back your salary goes back too.

[maryf]

13. My one sister has been out of work 10 months...

my one brother lost one day a week, and my other brother has to work whatever he can...K&R keep telling the truth, OG!

[JCMach1]

14. Only 11% of the stimulus package has been implemented

patience!

[TBF]

19. You got a tent for people to live in while they "wait patiently"?

I don't know how long you've been out of the country, but the employment scene isn't very favorable right now with unemployment at 10%. That's millions of people out of work, barely surviving on unemployment (until that is used up) and losing their homes. Patience is for the rich.

[SeattleGirl]

21. Part of the problem, as I understand it, is that some of the money that

should already have been released hasn't been. Apologies for not having a link, but I heard about this on the radio the other day. The person who was talking about it said that some of those with the purse strings have not loosened those strings. That pisses me off.

[marmar]

15. y agua es mojada.....

..... well duh.

[Lerkfish]

17. I'm seriously considering

dying so my family can have the life insurance at this point, after six months being unemployed and not being able to get unemployment.

I feel so hopeless that this will ever improve.

[Orwellian_Ghost]

20. Don't do that

Stick around Lerk.

We're just getting started.

[Grinchie]

24. You actually think they will honor their obligation?

Think again. The only thing it would bring is a lonely, grieving family, and a lot a cold hard interaction with what insurance goon squad they decide to send their way.
It won't benefit anyone other than the Coroner, Undertaker, Cemetary, Real Property Tax office to change titles, the ambulance people, etc. Learn how to work for yourself. Go to the library. Become informed on how the legal system works. Brush up on the law at the library. Learn about Electronics.. There are thousands of things you can do that will benefit you for pennies.

Just remember the people displaced in the Many wars in the last century and consider yourself fortunate that you are not being held in some gulag somewhere. I'm not saying it won't happen here eventually, but for now, one can exist in relative peace while the system collapses.

You'll be much better off if you can break out of the "Poor me" and the helplessness trap. It serve no other purpose than to enable others to control you. Just remember, you are driven by the power of the atom, just like every other life form on earth. Acknowledge your power.

[TBF]

25. It's going to take a little more than people just pulling themselves

up by their bootstraps, or a marvelous self-improvement journey. I do feel that getting up, working on the resume, calling agencies, talking to people - are useful, concrete things we all do to get going again. No argument. But to pretend that this is all going to get better if everyone acts like a "winner" is naive. The layoffs are massive, the money poured into the investment banks is disgusting (million dollar bonuses while thousands of others live in tents???). This is going to take more than people individually pulling themselves up, and Obama has really not even touched it yet. I hope he has further plans because so far we're just in free-fall.

[Hugabear]

23. All that job growth over the past 8 years? GONE.

I read recently that ALL of the job gains since 2000 have been wiped out over the past few months.

No doubt about it. We are in a New Depression.

[SoCalDem]

26. Actually, all that "growth" was an illusion wrapped in a bubble

the ones who cashed out IN CASH, and then put it in a regualr savings account, are ok, but the ones who road the beast into the dirt, are in serious suckitude.