Posts Tagged ‘unemployment’

Enough of the Happy Talk

Sunday, May 17th, 2009


Do you hear this from time to time? ‘The economy is stronger than expected,’ or ‘the economic indicators are better than expected.’ You can ask, “Whose economy are we talking about?” “Whose expectations are those?” Here are a few facts that would seem to anchor us in reality.

Bankruptcy Filings: 5,300 per day from JAN-MARCH, 2009. For the entire year of 2009, that would add up to over 1,300,000 bankruptcies. In 2006, the rate was about 2,000 per day. The rate had been rising steadily since then.

Official Unemployment Rate: 8.9%. It’s rising steadily. The Dept. of Labor says, “The number of unemployed persons increased by 563,000 to 13.7 million in April.” Economist Mark Zandi suggests it will level off at 10% a year from now. Obama advisers are forecasting the unemployment level will not decline until the end of 2010, i.e. NEXT year. That’s a year and a half from now.

Official Underemployment Rate: 15.8%. This is called U-6, the estimate of the Bureau of Labor
Statistics. It’s more realistic than the official rate reported.

Home Prices: “Four years of gains in home prices wiped out.” That’s the national estimate using the S&P Case-Shiller Index for the top 20 cities.

Home Foreclosures: 342,000 households received at least one foreclosure-related notice in April. That’s a 32-percent increase compared with April of last year.

Stock Market Crash: Last November, Market Watch said the S&P 500 Index was at its lowest level in more than a decade and had lost almost half of its value in a year. Today, the index is 883, down further from last November when it was 929. The market watch reporter said, “Call it the Great Give-Back.”

NEW Unemployed People: 637,000 workers lost their jobs and filed a first-time claim for unemployment money in the week ending May 9. This is what’s going on every week. Never mind the academic talk. It has the feel of a humanitarian disaster . . . each and every week.

President Herbert Hoover, a great believer in statistics, said that the 1930 census would “show the first real determination of unemployment” and would prove his contention that “the worst effects of the crash . . . have passed.”

Click here to contact your representatives in Washington, D.C.:
Our Elected Officials. Tell them you’re looking for their replacement.

– Byron


References:


New York Times, May 10, 2009.
The Jobless Rate, Slow to Improve, Tests Obama.


Market Watch, May 16, 2009.
Four years of gains in home prices wiped out.


ABC News, May 13, 2009.
RealtyTrac: April Foreclosures Rise 32 Percent.


Market Watch, Nov 21, 2008.
Are stocks cheap? It depends on earnings..

American Reconstruction

Monday, December 1st, 2008

Typical working Americans are reeling from the decline in
jobs, income, and savings. Our country is now setting a new
record in the number of people receiving foodstamps. It’s
at 30 Million people qualifying for a welfare benefit now.

Second, the Medicaid medical safety net is covering
65 Million. This program alone represents a fortune in
taxpayer expenditures.

Third, one in 10 mortgage holders was either delinquent on loans in September or in foreclosure. In this fragile American economy running on credit, it is clear that the men and women who lose their jobs
simply cannot pay the mortgage.

Fourth, there are over 10 million people unemployed. That’s what’s used by the media to report the official “unemployment rate” of 6.7%. But that’s not the best measure. Here’s why. Remember, if you mowed a lawn for your brother-in-law last month, and he gave you $10, you are counted as “employed” by the government. Are you just working a half-time job when you need and seek full-time work? What if you have given up finding a job? The “unemployment rate” does not count you as unemployed.

The Labor Department does have another statistic that includes all of the unemployed and underemployed. Today it’s at 12.5%. My rule of thumb is to double the traditional measure to get to the American “misery rate.” Thus, there are over 20 million men and women who have been jettisoned from the workforce.

What’s the way to lift this burden on millions and millions of people in these dire straits? What’s the best way to drastically reduce the government pay-outs?

JOBS! Put these people to work, and they won’t need food
stamps, Medicaid, and the unemployment insurance benefits.
Solving the JOBS PROBLEM is a win-win-win approach.

Jobs should be the primary goal of any fiscal stimulus package
which Congress creates. And, that can also be the goal
of state and local governments. They just don’t get enough
bang for the buck when they give away tax credits. That’s
a proven fact.

If the federal government is determined to “borrow and spend,”
then wouldn’t we like to have full confidence that we Americans
get something worthwhile? Something of permanent value?

The only way to do that is to guarantee that the money
is all spent in the U.S. and employs Americans. That will
create jobs. Second, to get a benefit of truly lasting value,
the first and best solution is to repair and re-build infrastructure.
“Infrastructure” means physical, visible, long-lasting
improvements. That includes highways, railways, bridges,
water systems, and sewers. There has been a growing backlog
for years. And, it’s so democratic. Infrastructure benefits everybody.

Example 1: I am personally familiar with a small town which
has water lines 105 years old. When it was built, the life
was estimated to be 110 years. Goodness! What would life be
like if you couldn’t get water out of your faucet? What if
you couldn’t flush your toilet?

Example 2: Who can tell me what it costs to commute to work on roads and streets that feel like washboards? Ever break an axle or a shock absorber? I have. And, during your daily commute, your vehicle itself vibrates, shortening its life.

Example 3: How about that bridge in Minnesota that collapsed? The backlog of bridge repair and replacement is huge. When will the
next collapse occur?

In summary, if some work is done sooner than absolutely necessary, then that’s okay, too. It’s not frivolous make-work. Better sooner than later. Better safe than sorry. Building infrastructure is the way to get America moving.