- Everyone of goodwill wants to see a robust, healthy economy that provides opportunities for all citizens to earn a sufficient income to live well. (We can argue about what “living well” means.) This constitutes a relatively simple proposition, yet there are intractable differences about the nature of the jobs problem and therefore the solutions. These differences of opinion have begun to consume the disciplines of economics, politics, and social services – as well as the conversations at the dinner tables across America.
- So what is the right thing to do? At Job Box Report, we know that good Jobs have become more scarce and incomes have been in a downward trend for a long time. Moreover, most of the so called “new” jobs being created and celebrated are low wage or temporary deals. Denying or hiding the depth of the problem and its causes does not help the vast majority of the people. See the “College Degree = $10 Hour Job” and “The Hidden Unemployment Crisis“.
Anglo economics has constructed a credit based system that puts debt (leverage) at the fulcrum of the entire scheme. Historically, both political parties have long enjoyed a love affair with Keynesian economics because it makes for easy politics as politicians can give away goodies for votes. Today, U.S. Government debt is sold to fill up the shortfall in national income by spending money from the future (which must manifest its damage in future new taxes, devalued money, or inflation). Now the Fed has decided to facilitate the drug addiction by providing the needles and crack house by means of printing the dollars to buy up the debt – because no one else will anymore, not even the Chinese.
Theoretically, this government spending activity is supposed to produce more and better jobs; otherwise, why indenture the nation? This is the rub. The stewards of power have other proprietary reasons than employment economics for their actions. As Europe and Japan have shown, the U.S. is in no ordinary recession. We are not in a normal business cycle downturn that needs a little on going goverenmental lift. President Bush started the lunacy and President Obama wants to finish it with fireworks. Today, to avoid any pain for the millionaires and billionaires, our government spending policies, regulations and Fed Reserve Bank money printing is starting to absorb the economy itself – crowding out entrepreneurs in favor of big corporate and government “solutions.”
This moral hazard ensures a large claim against the prosperity for future generations since most politicians refuse to deal with the fiscal imbalances that favor large corporate interests and hurt natural job creators and average working people. Moreover, the government’s deficit spending does not target Jobs at all – despite the rhetoric of the stewards to the contrary. Instead, the deficit spending policies target Gross Domestic Product (“GDP”) objectives (i.e. “growth”) in general, and the Fed targets money printing to prop up stock prices. You might ask, “what’s not to like?” This approach may sound logical as this is what we are constantly assured by our betters. But there are some interesting alternative, “heretical” arguments that challenge this “growth”measurement thinking and that it is always a “good” thing – which we can explore in another blog. Fundamentally, when did it become the government’s job to create the jobs? Perhaps that is part of the confusion and intractablility of the discourse.
More income (i.e. government spending in Keynesian speak) for the nation as a whole should produce more Jobs, right? President Bush’s second term and Obama’s first term alone will have produced accumulated deficits and debts that will approach $10 Trillion – which will dwarf the prior 200 years of American deficit history. And now our balance sheet looks a lot like Greece. And what do we have to show for it? There has been little real traction on private sector jobs in exchange for the money spent. But the banks have been saved and the money is flowing into stock prices and credit prices again. The fortunate many are singing: “Happy days are here again”, but not the unfortunate majority. Welfare should not be considered a positive result, a solution; and claiming political credit for continuing the cycle of welfare and squalor has become a political apple for some, but a real rotten apple for human dignity.
The celebration of the government’s January jobs number by the mainstream press, the incumbent administration, and Wall Street on Friday was something to behold. Wall Street got much higher stock prices, and the media and the White House had a feel good moment – all in anticipation for Super Bowl weekend. What could be better? Well, the truth for one. With some integrity in leadership and reporting, maybe we can get down to the business of going on the wagon from our debt addiction, or at least focus on strategies to produce good private sector Jobs for the long term, instead of the reelection of President Obama and serving Wall Street’s appetite. See “Why President Obama now Believes he will be a Two Term President“
By looking more carefully at the details and analysis of the Bureau of Labor Statistics data, we can point our finger at the overt manipulation and hyperbole spin around this “Jobs” report. In summary, it says: “this is an election year”. We are not saying that there hasn’t been some private sector job improvement recently, there has been – but after $5 trillion of deficits incurred in this presidential term, there must be something to show for the new debt. This jobs report and the media reaction to it, are calling some people to the confessional. Surely, there have been some modest employment gains in the private sector, but not anything close to even thinking about a celebration or that some watershed event may have occurred. Moreover, the fiscal cost has been far too great to give anyone a pat on the back. We must be able to do better, but the huge debt albatross and related policies are making the structural hurdle worse and will make solving the long term problem even more challenging. More of the same policy is a bad idea. And celebrating or capitalizing this managed report only encourages more of the same policies and reporting malfeasance in the future. Certainly that’s what the beneficiaries want.
Refer to the following articles posted to the Career News on Job Box Report for actual analytical reporting that debunk the mainstream spin on the job numbers.
- Why Today’s Very Very Suspicious Jobs Number is really down 2.9 million jobs in Last 2 Months (TrimTabs)
- Explaining Jobs Report Number (Zero Hedge)
- January Employment Report gets it Wrong (Economic Populist)
- Implied Unemployment Rate at 11.5% (not 8.3%); Spread to Propaganda Number Surges to 30 Year High (Zero Hedge)
- Record 1.2 Million People are Dropped from the Labor Force as Labor Force Participation Rate Tumbles (Zero Hedge)
- Empoyment Report Not as Rosy as Some Want to Believe (Economic Populist)
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