Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
The Three M's of Hyperinflation : Milosevic, Mugabe, And Maduro - 26th May 19
Global Multi-Market / Asset Charts Review - 26th May 19
An Oil Shock Could Be the Black Swan That Finally Drives Gold Higher - 26th May 19
Brexit Party Forces Theresa May to Resign, Boris Johnson Next Tory Prime Minister? - 26th May 19
IBM - Investing in AI Machine Intelligence Stocks - 25th May 19
Seasonal Dysfunction: Why Generations of Gold and Silver Investors Are Having Such Difficulty - 25th May 19
Employment - The Good and the Bad of Job Automation - 25th May 19
Gold Mining Mid-Tier Stocks Fundamentals - 25th May 19
Buy This Pick-and-Shovel 5G Stock Before It Takes Off - 25th May 19
China Hang Seng Stocks Index Collapses and Commodities - 24th May 19
Costco Corp. (COST): Finding Opportunity in Five Minutes or Less - 24th May 19
How Free Bets Have Impacted the Online Casino Industry - 24th May 19
This Ultimate Formula Will Help You Avoid Dividend Cutting Stocks - 24th May 19
Benefits of a Lottery Online Account - 24th May 19
Technical Analyst: Gold Price Weakness Should Be Short Term - 24th May 19
Silver Price Looking Weaker than Gold - 24th May 19
Nigel Farage's Brexit Party EU Elections Seats Results Forecast - 24th May 19
Powerful Signal from Gold GDX - 24th May 19
Eye Opening Currency Charts – Why Precious Metals Are Falling - 23rd May 19
Netflix Has 175 Days Left to Pull Off a Miracle… or It’s All Over - 23rd May 19
Capitalism Works, Ravenous Capitalism Doesn’t - 23rd May 19
The Euro Is Bidding Its Time: A Reversal at Hand? - 23rd May 19
Gold Demand Rose 7% in Q1 2019. A Launching Pad Higher for Gold? - 23rd May 19
Global Economic Tensions Translate Into Oil Price Volatility - 22nd May 19
The Coming Pension Crisis Is So Big That It’s a Problem for Everyone - 22nd May 19
Crude Oil, Hot Stocks, and Currencies – Markets III - 22nd May 19
The No.1 Energy Stock for 2019 - 22nd May 19
Brexit Party and Lib-Dems Pull Further Away from Labour and Tories in Latest Opinion Polls - 22nd May 19
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Memo to Obama: "Create More Jobs or Resign"

Politics / Employment Jul 13, 2011 - 04:26 AM GMT

By: Mike_Whitney

Politics

Best Financial Markets Analysis Article"Abysmal".

That's the only way to describe Friday's job's report. The whole thing stunk. And, on top of that, the unemployment rate has been heading higher for the last 3 months. It's now at 9.2 percent a full two years into the recovery. That's unprecedented. Where are the jobs, that's what everyone wants to know.


This is beyond disappointing. The stock market has regained most of the ground it lost since it touched bottom in March 2009, but the real economy is still stuck in the mud. Just look at the data. Here's a clip from economist Tim Duy who sums it up perfectly:

"...the labor force fell, the participation rate fell, the employment to population ratio fell, the number of employed plummeted, and the number of unemployed climbed. Private nonfarm payrolls gains a paltry 57k, and the drag from government cutbacks pulled the overall jobs gain to just 18k. Far short of the numbers needed to even hold unemployment steady." ("Grim", Tim Duy, Fed Watch)

Get the picture? It's all bad. And guess what? Those "18,000 new jobs" falls within the Labor Depts margin for error, so there could actually be "no new jobs". Will that wake up Obama? Probably not.

How do you light a fire under Washington, that's the question? Is Congress even aware that we're undergoing a major jobs crisis or are they too busy bickering over tax cuts for fatcats or how much money they can divert from Social Security to Wall Street?

Look; unemployment is over 9% and rising. The states are firing tens of thousands of teachers and public employees every month because they need to balance their budgets and they're not taking in enough revenue. The stimulus is dwindling (which means that fiscal policy is actually contractionary in real terms) And the 10-year Treasury has dipped below 3 percent (as of Monday morning.) In other words, the bond market is signalling "recession", even while the dope in the White House is doing his utmost to slice $4 trillion off the deficits.

Does that make any sense?

Maybe if you're Herbert Hoover, it does. But it makes no sense at all if you were elected with a mandate to "change" the way Washington operates and put the country back to work. Obama is just making a bad situation worse by gadding about in his golf togs blabbering about belt tightening. It's enough to make you sick.

Get with the program, Barry, or resign. That would be even better. Then maybe we can find someone who's serious about running the country.

Just think of the message Obama is sending our trading partners. By refusing to spend more on stimulus, Obama is announcing to the world that his administration will do nothing to rebuild the middle class and shore up flagging global demand. They've got to love that in China! Instead, he wants to make increase the pain, by cutting off the bloodflow of Federal spending while households are still are still digging out from the losses they sustained after the housing bubble burst. That will just make it harder for people to patch their balance sheets and get back to normal. Doesn't Obama see that?

Do you know what it's going take to find jobs for all the people who want them? According to economist Gary Burtless from the Brookings Institution, "To bring the adult employment rate back to its pre-recession level, we would need to add about 11 million new jobs. At the pace of job growth we have seen since the start of the year, that task may take decades."

And here's more from the New York Times:

"The economy needs to add about 150,000 jobs a month just to keep up with normal population growth. The protracted stretch of weak-to-moderate job creation over the last two years has left many of the people who lost jobs during the recession increasingly desperate. There are now 14.1 million unemployed, with 6.3 million of them having searched for work for six months or longer. Including those who are working part time because they cannot find full-time work and those who have stopped looking, the broader unemployment rate is now 16.2 percent, its highest level since December 2010."
("Job Growth Falters Badly, Clouding Hope for Recovery", New York Times)

So, we're in trouble, right? Big trouble. Not only are we not creating jobs, the administration is not providing sufficient resources to the states so they can keep the people who ARE employed still working. It's madness.

Some of this can be attributed to supply disruptions in Japan or problems in Europe, but not very much. And, yes, the Fed should get some of the blame for fiddling the money supply with QE2, it's wacko bond buying program that sent gas and food prices through the roof. That slowed consumer spending enough to discourage business owners from hiring more workers. But QE2 is not the real problem. The real problem is that the recovery is running out of steam because the government is reducing its spending and consumers aren't in a position where they can make up the difference. So, it gets down to this: Either we get a second round of stimulus or unemployment is going to climb even higher and growth will continue to flag. It's one or the other.

If Obama thinks he can slash spending and create a strong recovery at the same time, he needs his head examined.

By Mike Whitney

Email: fergiewhitney@msn.com

Mike is a well respected freelance writer living in Washington state, interested in politics and economics from a libertarian perspective.

© 2011 Copyright Mike Whitney - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis.
Individuals should consult with their personal financial advisors.

Mike Whitney Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Ernie Messerschmidt
13 Jul 11, 12:06
Worthless Obama's false analogy

Obama has shown himself to be a do-nothing liar and should resign as you say. Jobs are the main issue, as you say. You fail to say that the lion's share of the stimulus money so far has gone to the big banks and that they are not lending to small business, which is the main job creator. (See Ellen Brown's articles.) Obama last week trotted out the simplistic false analogy of the govt. being like a family that has to live within its means and pay its bills. No, the govt. owns the bank. It can and should get enough money out there to put people to work. We have fiat money that does not depend on tax receipts or savings. Constraints on govt. spending are self-imposed. If inflation shows up, money can be appropriately taken out of the economy via taxes or other means. The "fiscal crisis" is an illusion. People need to read Modern Monetary Theory, the work of realists like Warren Mosler and Randall Wray and wake up.. . and get rid of Obama.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules