When Congress Saw the Job Loss Number, Blink Blink Blink. 
![[payrolls]](http://s.wsj.net/public/resources/images/OB-CT796_unempl_NS_20081205094901.gif)
Speaking Sunday 7 with my professionals re the joblessness rate announced Friday morning 5 and the extreme despair on Main Street. GM is going to get what it needs, and so will Ford and Chrysler and the UAW. Thaddeus McCotter writes me that "every one with 1/4 brain" knew
that the debate over Detroit was over. So what was the last three weeks about? Why this bloviating about the car makers? Likely just distraction, tendentiousness, left-over anxiety, a lot of guys who want TV time. Michigan unemployment rate before today's number was 9.2 % officially. Throw in the part-timers, the contractors, the real jobs, and now it is likely more than 20%. Panic time. The market rallied late because of the usual contrariness and short-covering. My anecdotal measure of the economy is based upon walking around near upscale stores. Empty glass boxes or near empty counters at the CNN Center on Columbus Circle, on Fifth Avenue from 42nd to 59th. Other observations include a booming business at the 99 cents store on 32nd Street, and the half empty trains from Grand Central after 8 pm. No shoppers. No workers late. The jobless rate is accelerating in the financial district. Chatted with a lawyer who said business is great because his firm does bankruptcy, personal and commercial. And the holiday decorations displays at the super drugstores are untouched. They could slash prices 90% and not move merchandise. We all expect to lose our credit lines in January. End of the world, the prologue. It is becoming familiar territory. The WSJ below says 6.7%. We are headed for 10% by January-March. I cannot find good news. Well. GM is rescued by the worst-case scenario for everyone else. No breadlines (above) on Wall Street yet for the job-seekers. Soon.
Job Losses Are Worst Since '74
The U.S. lost half a million jobs in November, the largest monthly drop in 34 years, pushing the unemployment rate to 6.7%, a 15-year high.
Bailout for Detroit Nears a Reprieve
Democratic leaders in Congress and the White House neared a deal to provide a down
payment to keep Detroit's auto makers afloat until early 2009 (right, Shantytown 1933).
- Toyota Plans Further Production Cuts
- Auto Makers Appeal to Canada for Aid
- Autos Blog: Nardelli on Cerberus's Help
- Complete Coverage: Detroit in Crisis
Aid deal for US carmakers near
Lawmakers and White House said to agree on $15bn-$17bn plan 'in principle'
"Unemployment" figures are a meaningless measure. It represents the nebulous nexus of people not having salable skills to offer and government policies that have killed off private enterprise. The only labor market that's holding steady (even growing) is government itself.
I remember attending the University of Mysore (India) in the early seventies. My Indian class mates all were working hard and studying endlessly, busily collecting honors and academic degrees but knowing full well that, on leaving school, there were no jobs for them in the protectionist, socialist system that characterized the Indian economy at that time. So they stayed in school or made plans to emigrate.
The successful ones were those with a burning vision and the self discipline to pursue it. Money was not considered to be an end in itself. It was a mere by-product of the realization of an ambition; of having been able to identify a need and then exploiting it with some uniquely targeted widget or service. This is and has always been the essence of capitalism.
The drones with nothing more to offer than being able to clank their begging cups in the faces of other drones will always be at the mercy of the political winds. Ironically, there are ways to fix our economy and restore confidence in the system almost overnight. Unfortunately, policies that are currently under consideration would do precisely the opposite. We must assume, then, that our political leaders are hell bent on driving us all out into the fields to grow our own tomatoes, while they tool around in shiny, black cars and wag their stubby fingers at us, trying to determine which of our children will eat and which ones will starve.
It is likely that low-skilled, repetitive jobs will greatly diminish under an Obama administration. Obama, champion of the drones, has made it quite clear that he is no friend of capitalism. Already, in anticipation of increased taxation and government regulation, our remaining industries are retrenching; scaling back their plans for future expansion; hunkering down to await a more favorable climate in which to flourish.
PK said:
"It is likely that low-skilled, repetitive jobs will greatly diminish under an Obama administration."
....This is the first I've heard that they're planning to cut back the size of Congress! Great news.
Peter:
And do you think the New Deal was to get the country moving again? By 1938, unemployment was still over 20% and the market was down. I don't want to sound cynical, but it seems to me FDR was just as interested in acquiring and staying in power than he was in solving anyone's problems. Had he fixed the depression in 4 years, he would not have had 4 elected terms.
Jim - I don't get your question. Of course the New Deal only served to prolong the pain. What I wish you had asked me is about is my recipe for getting the country moving again. Here goes: Reduce capital gains (taxes); lower the tax rate for everybody; scrap regulations, especially those in any way associated with "green"; mandate transparency, and fix it so that our schools actually start teaching again. If that were to happen even I would think of investing my money (currently safely secured under my mattress) in the markets again.
I would get rid of estate tax as well and lower corporate tax to about 10%.