Best of the Week
Most Popular
1. Crude Oil and Water: How Climate Change is Threatening our Two Most Precious Commodities - Richard_Mills
2.The Potential $54 Trillion Cost Of The Fed's Planned Interest Rate Increases - Dan_Amerman
3.Best Cash ISA Savings for Rising UK Interest Rates and High Inflation - March 2018 - Nadeem_Walayat
4.Fed Interest Hikes, US Dollar, and Gold - Zeal_LLC
5.What Happens Next after February’s Stock Market Selloff - Troy_Bombardia
6.The 'Beast from the East' UK Extreme Snow Weather - Sheffield Day 2 - N_Walayat
7.Currencies Will Be ‘Flushed Down the Toilet’ Triggering a ‘Mad Rush into Gold’ - MoneyMetals
8.Significant Decline In Stocks On The Cards! -Enda_Glynn
9.Land Rover Discovery Sport Extreme Driving "Beast from the East" Snow Weather Test - N_Walayat
10.SILVER Large Specualtors Net Short Position 15 Year Anniversary - Clive_Maund
Last 7 days
Bitcoin Price Trend Forecast, Paypal FUD Fake Cryptocurrency Warning - 17th Mar 18
Strong Earnings Growth is Bullish for Stocks - 17th Mar 18
The War on the Post Office - 17th Mar 18
GDX Gold Mining Stocks Fundamentals - 16th Mar 18
Nationalism, Not the Russians, got Trump Elected - 16th Mar 18
Has Bitcoin Bought It? - 16th Mar 18
Crude Oil Price – Who Wants the Triangle? - 16th Mar 18
PayPal Cease Trading Crypto Currency Bitcoin Warning Email Sophisticated Fake Scam? - 16th Mar 18
EUR/USD – Something Old, Something New and… Something Blue - 16th Mar 18
DasCoin: A 5-Minute Guide to How It Works - 15th Mar 18
Stock Market Downward Pressure Mounting - 15th Mar 18
The Stock Market Trend is Your Friend ’til the Very End - 15th Mar 18
6 Easy Ways to Get What Women Want, for Less! - 15th Mar 18
This Isn’t Your Grandfather’s (1960s) Inflation Scare - 15th Mar 18
Eye Opening Stock Market Index, Volatility, Charts and Predictions - 15th Mar 18
Gold Cup At Cheltenham – Gold Is For Winners, Not For Gamblers - 15th Mar 18
Upcoming Turnaround in Gold - 14th Mar 18
Will the Stock Market Make Another Correction this Year? - 14th Mar 18
4 Ways To Writing An Interesting Education Research Paper - 14th Mar 18
China Toward Sustainable Economic Growth - 14th Mar 18
Stock Market Direction Is No Longer Important - 14th Mar 18
Trade Tariffs Defeat Globalists and Return Prosperity - 14th Mar 18
Stock Market Crash is Underway and Cannot be Stopped! - 14th Mar 18
Are Energy Sector Stocks Bottoming? - 14th Mar 18
Nasdaq Stocks Soars to New Record High After Strong Job Reports - 14th Mar 18
Bitcoin BTCUSD Elliott Wave View Calling for Rally toward $15,000 - 13th Mar 18
Hungary’s Gold Repatriation Adds To Growing Protest Against US Dollar Hegemony - 13th Mar 18
Record Low Volatility in Precious Metals and What it Means - 13th Mar 18
Tips for Writing and Assembling the Classification Essay - 13th Mar 18
Gerald Celente "If Rates go up too High, the Economy goes Down, End of Story" - 13th Mar 18
Stock Market Selloff Showed Gold Can Reduce Portfolio Risk  - 13th Mar 18
Silver Does it Again! Severe Consequences - 12th Mar 18
Has the Stock Market Rally Run Out of Steam? - 12th Mar 18
S&P 500 at 2,800 Again, Stock Market Breakout or Fakeout? - 12th Mar 18
The No.1 Energy Stock To Buy Right Now - 12th Mar 18
What Happens Next When Stock Market Investor Sentiment is Neutral - 12th Mar 18
Economic Pressures To Driving Gold and Silver Prices Higher Long-Term - 12th Mar 18
Labour Sheffield City Councils Secret Plan to Fell 50% of Street Trees Exposed! - 12th Mar 18
Stock Market Uptrend Resuming? - 11th Mar 18
Bond Market Interest Rate Yields Are Rising Again… Stocks Are on Thin Ice - 11th Mar 18
Death of Europe's Greenest City, Police State Sheffield Labour Council to Fell 50% of Street Trees - 11th Mar 18
Do All Bull Stocks Markets Need to Have a Bearish Divergence? - 11th Mar 18
An Inflation Indicator to Watch, Part 3 - 11th Mar 18
Online Stock Trading Tips - Tips about Online Trading & Day Trading - 11th Mar 18
NDX makes a new high. What does that mean? - 10th Mar 18
Blue Chip Companies on Track for $800 billion Buyback Record in 2018 - 10th Mar 18
Cheap Gold Stocks Basing - 10th Mar 18
An Introduction to Online Forex Trading - 10th Mar 18

Market Oracle FREE Newsletter

Urgent Stock Market Message

Memo to Obama: "Create More Jobs or Resign"

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

By: Mike_Whitney


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


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

© 2005-2018 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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