Monday, July 11, 2011

Depth of the Recession Measured in Job Loss

The recession continues, no matter that the experts say that, well, technically, we have been out of it for some months now.  Yes, there is positive growth in the economy, but it is faltering, slow, pathetic:

The Labor Department reported that employers added just 18,000 net jobs in June, the fewest in nine months. The jobless rate ticked up to 9.2 percent from 9.1 percent. The pace of job growth is not even enough to keep up with population growth -- it would take about 125,000 jobs per months to do so -- and certainly not enough to bring down the unemployment rate.
While Obama offered a series of excuses about why the economy is not showing any real signs of progress, he made an attempt at shoring up morale: “I’m ready to roll up my sleeves.”  Really – after unemployment being over 9% for 24 of the last 26 months (after promising that it wouldn’t rise above 8%), now he’s ready to start tackling the issue?

He has an enormous amount of inertia to overcome.  To understand the magnitude of the unemployment slump (in my mind more like a crater), examine this (click to enlarge):

The chart measures the unemployment results during each of the recessions since World War II, as measured by the depth of each of the unemployment periods (the present one also includes a correction for the temporary hiring of census workers).  The red line noted is for the present one, and is easy to see in comparison to the other tracks because of its size.

It’s interesting to see the same information re-set to the beginning of the slumps.  Notice how the present situation starts to accelerate at about the 10-month mark, which corresponds to when the Obama ‘stimulus’ starts taking effect:

Another shot at the perspective is a measurement of duration of time on unemployment measured in weeks, showing a “significant chunk of the population permanently out of the workforce”:

The sources describe the trends as 'scary'.  I can't really disagree with that assessment.

So, here I have written on the topic, and you find yourself here reading about it after having sought it out.  Contrast your interest, then, with this statement from White House advisor David Plouffe:
The average American does not view the economy through the prism of GDP or unemployment rates or even monthly jobs numbers.  People won’t vote based on the unemployment rate.  They’re going to vote based on how do I feel about my own situation.  Do I believe the President makes decisions based on me and my family?
As well as these comments from Press Secretary Jay Carney when asked about Plouffe’s assessment:
I don’t know where the voters that some other folks might be talking to -- but most people do not sit around their kitchen table and analyze GDP and unemployment numbers. . . . They do not sit around analyzing the Wall Street Journal or other -- or Bloomberg to look at the -- analyze the numbers.  Now, maybe some folks do, but not most Americans.  I think that’s the point David Plouffe was making.  That’s the point the President was making just moments ago in his statement in the Rose Garden.
As Charles Krauthammer said, this falls into the category of ‘those people’ who cling to their guns and religion.  Imagine, those of us outside the beltway, in fly-over land, simply don’t have the capacity to understand or care about how the economy works, or how a consistently high unemployment rate affects one of ‘us’ in trying to find a job.  We might as well sit quietly at the back of the bus.  The Obama White House just keeps sounding an elitist tone in the string of otherwise tone-deaf comments about the voters.  Add this to the on-again/off-again claims of owning the economy (such as here and here) and then blaming the previous administration of two and a half years ago.

The administration is both floundering and foundering with the economy.  It does not and can not explain what should be done other than to blame Bush and to resort to class warfare which, even if they succeeded in taking every cent of income of households making over $100,000, would not make an adequate dent in the debt.  

Obama said at the beginning of his term that he should repair the economy within three years or be a one-term president.  He has six months left. 

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