Unemployment Numbers: The Long View

[marmar]

from Dissent magazine:


Unemployment Numbers: The Long View
By Colin Gordon - January 4, 2013


The December U.S. jobs report offered little to cheer about. The country counted 155,000 new non-farm jobs in the last month of 2012, a rate of growth that echoed the average monthly job gain for the last year (about 153,000). Much of the early coverage was tinged with a sense of relief. The fiscal cliff noise did not deter hiring. The post-Sandy devastation in New York and New Jersey did not drag down the national numbers. The economy was finally showing “steady” growth.

But one step back from the monthly scoreboard-watching, the picture is not nearly as reassuring.

Measured against the trajectory of all other postwar recessions (see graphic below), the current downturn is deeper and longer—by an impressive margin—than any that preceded it. Before 1980, the job market never took longer than two years to return to its pre-recession levels. The recession of 1981 and 1990 pushed this out into the thirty month range. It took four years to struggle back to the surface after the 2001 recession. The current recession is over five years old and counting. If we continue to add jobs at the 2012 monthly rate, we will be underwater for about twenty-six more months.

.......(snip).......

Finally, the raw jobs numbers are silent as to the quality of the jobs being added. We continue to lose public sector jobs, and while private sector wages inched up in December, that increase still lagged behind the inflation rate. “Recovery” job growth is concentrated in sectors marked by low wages and meager job-based benefits. The job numbers may be “steady,” but the recession is still very much with us. The jobs deficit is substantial. And the goods jobs deficit is even worse. ................(more)

The complete piece is at: http://www.dissentmagazine.org/blog/unemployment-numbers-the-long-view

[unblock]

1. what seems clear is that politicians simply can't bring themselves to make the deficit big enough.

recessions are readily addressed by running deficits (which need to be paid for in times of growth, but that's another problem).

the problem is that politicians seem to consistently, dramatically underestimate the size of the deficits needed.

and often-made criticism of fdr is that we didn't "really" get out of the depression until wwii -- which, from an economic perspective, was nothing but a gargantuan keynesian deficit spending spree.

but that's just the point. as much stimulus as fdr gave us, they in truth they needed far more to get us out of the mess of the republican presidents in the 1920s.


similarly for today. as much as people wail about the trillion dollar deficits, we've still got minimal growth and are bringing down the unemployment rate at a snail's pace. we would have been better off with an original stimulus package double or triple the size.

politically unachievable, i know, but the economist in me can enjoy a good whine every now and then....

[Lefty Thinker]

2. I came to the same conclusion

I've become a devotee of Modern Monetary Theory because of its emphasis on mathematical consistency with national accounting. It basically says that attacking the deficit directly in a time of low demand will only exacerbate the unemployment situation and, because of the "automatic stabilizers," will never be as effective expected.

MMT (which only applies to fiat currencies) also decouples net government spending from borrowing. Thus, there is not necessarily a need to pay anything back in times of growth. MMT gives good, quantitative rules for responding to observable metrics, both for recessions and boom times.

[jtuck004]

3. The policies are achieving EXACTLY what they are intended to do. We have provided

trillions to support the wealth of those with the most wealth (currently $40 bill a month to people who hold billions in mortgage-backed assets so their value won't go down, while removing 50,000 families from their homes every month in unnecessary foreclosures. We have been and are loaning trillions of dollars to banks at zero cost so they can turn around and screw people with lower incomes on fees, in payday loan shops, with credit card interest rates, etc. The FASB has an accounting rule in place so that banks show their properties at the values they were in 2005, not today, which helps 1) Keep them out of bankruptcy and 2) is artificially supporting the inflated prices of housing.

There is plenty of otherwise politically unachievable stuff going on for people who donated to the campaign. But for 47 million people on food stamps, near 50 million in poverty, 26 million who say they want jobs when the BLS JOLTS survey says there are only 3.4 million jobs available. In other words, for people who could only vote, not contribute, suddenly things become politically unachievable, and those with less money are being sacrificed, purposely, to help keep the wealthy intact.

Go back and look at the history of labor between1870 and 1932, the hungry schoolkids marching in the streets, the strikes and labor's struggles, the racist AFL scumbag Gompers and his crushing of the industrial unions for and conspiring with the business interests to get profit and power, the many people who died just trying to get us 8 hour work days. The pols aren't underestimating. They know exactly what they need to spend to accomplish their goals, and they are doing it purposely and deliberately. It's always been easier to side with the wealthy against everyone else, especially if the people who would otherwise change it content themselves with making excuses for the politician's behavior instead of joining with their neighbors to demand change.

[mother earth]

4. I couldn't agree more. I don't think the masses get it that this "new normal" is with us

indefinitely, or until we all realize and acknowledge the system is rigged & we must make demands. We sit quietly thinking something will change, we've left the door open and are watching the looting, still paralyzed...the greedy are not yet satisfied, nor will they be, certainly has been by design. Why not? There are no consequences for them.

[Mitch777]

5. Things aren't as bad as they could be!

Some people are getting their girlfriends pregnant now. The child needs to be born in 2013 to get the max pay on 2014 check. Food Stamps, HUD vouchers and Medicaid are also great reasons to have children.
The government will only provide grants and loans for education if you attend classes and pass. Obama must fix this. The policy is racist. Also, mass transit here is horrible. The bus will drive right by a building but not stop and beep to let you know they're waiting for you to get ready.

I can't believe people care about jobs. There are plenty of programs.