10% As Far As Washington Can See.
The WSJ New Hub, with the swift-reporting Kelly Evans (who joins me Sunday 8) and the ever witty and focused Berman and Newmark, conveys the financial and political gloom and doom (unless you gamble on the market rally year-end) results of the not surprising news that the jobless official rate has now moved above 10 % and will remain above 10% as far as Washington can see. "We knew it was going to happen eventually." "We're going to see 10 % unemployment probably the next six months." "This is a very clear indication that the Fed can stay on hold and stay where they are." "The actual labor numbers may be closer to stable."
"The teenage unemployment rate, 27.6%."
"The unbelievable productivity numbers that we got ..."
"The stock market is driven by corporate profits. As far as corporate profits are concerned, productivity is what matters."
What's The Worst That Can Happen?
The first casualty may be the plan by Mrs. Pelosi to push the healthcare reform vote this weekend. Word arrives that POTUS has resked his visit to lobby on the Hill until Saturday, and that the vote is now postponed until Sunday 8. Not a strong hand signal from the Speaker's office, and the latest report from the Majority Leader, Steny Hoyer, is that he does not have the magic 218 votes, even including the new Bill Owen vote from 23 NY. The worst that can happen with the 10% number is that everyone ditches the old script and starts yelling for rewrites from the White House. POTUS is departing for East Asia presently. The healthcare vote is for fuel. The Ft. Hood news is deepening the gloom at the White House. We can anticipate a lot of reporting on Hassan's background, contacts, family, computer, cell phone, colleagues, and then there is the fact that the suspect is alive, on a ventilator, and has yet to be interrogated or hire a lawyer. The early reports do not promise a clean prosecution of a deranged gunmen. This looks right now as if it may qualify for hate crime, certainly for political crime. Add the Hood problem to the GITMO problem, and there is another endless negative story to run parallel with the joblessnes. Teenaged unemployment at 27.6%, and that is the official number. The big city's and the modest suburbs must be gasping. The worst that can happen includes the fact that the worst hasn't started yet. Ten percent for another six months. The politicians are preparing their resumes to become lobbyists or barbers or some other service industry. It just became no fun to be a politician; and POTUS shows that, out of 208 Fridays in his term, this is may be one of the worst ten.
We sure do need a clear design to move into job creation. As it seems, the best plan long term is to go with energy and water resource fulfillment for the future. But alas, the tendency for decades has been to stall, sequester, and stagnate due to politics and the interested lobby. Edison would be appalled.
We should be leading the world in lighting the world.
“What’s in store for me in the direction I don’t take?” Jack
The "H" in Obama's name doesn't stand for Hussein.
It stands for "Hoover."
The most glass is half full I caould find today over at the trenchant Calculated Risk:
All will not be grim forever. The number of housing units currently being completed (single family and apartments) is significantly below the level normally required for population growth. This level of completions would usually be reducing the excess inventory, however the improvement is being masked by the loss of households due to the recession. Once the job market starts to improve, I'd expect a surge in household creation (mostly renters).
http://www.calculatedriskblog.com/2009/11/consumer-credit-declines-sharply-in.html
Cue the survivalist harping the benefits of stockpiles of rice water ammo and guns!
Are we still all Keynesians?
A temporary tax cut would have been more effective than the ineffective Stimulus spending. Friedmanistas are few and far between.
I was in Silicon Valley last week for a corporate event. 5 of my co-workers around the country are "underwater" with their mortgages, where the Mortgage is bigger than the value of the house.
I only spoke to five colleagues about housing prices, five out of five is a shocking statistic.
I personally am not spending much, staying as liquid as possible. the DVDs and Books at the Public Library are just as good as Blockbuster or Borders. 6 dollar beers versus 15 dollar martinis, Wal-mart versus Macy's.
Who in the GOP will pick up the Mantle of Reagan and go after this reckless Tax and spend governement?
JB, This is not just a Federal, but a state and local issue as well. You point to Westchester County, a Mini-NYC when it comes to social programs and spending. Colleges, Parks, Golf Courses, Amusement parks, parkways, and hospitals are run by the county. Next door is Fairfield County, CT which has no County Government, no Hospital, no Parks, etc. Lower taxes and higher prosperity.
Californians do not understand the brutal taxes and unending spending they have, the Nearest state is typically 200 miles away.
New Jerseyites are flocking to Pennsylvania, and Delaware to escape the taxes.
"Next door is Fairfield County, CT which has no County Government, no Hospital, no Parks, etc. Lower taxes and higher prosperity."
By your standard, Iraq and Afghanistan are smashing success stories of prosperity and abundance. God Bless the Holy Free Market and The Invisible Hand.
Small businesses in California are receiving notices now that we must report any services or supplies we've bought out of state and pay the California sales tax on them if we've not already done so. I started worrying about Home Depot until I remembered it was actually part of the U.S. and not Mexico.
Democrats think "Invisible Hand" refers to keeping it under the table.
There is virtually no history (excepting noted below) that governments can fix economies with any consistency if at all. They are highly leveraged in screwing them up. We are witnessing some of the silliest, adolescent economic interventions a hundred years. Businesses are prepared for the worst (health care taxes one way or the other, cap and tax, increase in tax rates for the "rich" who already bear most of the tax burden, confiscatory and out of control state actions such as CA adding 10% to witholding as a "loan"!!! to the state.) I could go on.
It is obvious the BO policy is failing with no relief in sight. A roll back of payroll taxes may have helped. But mistakes were made 1990 -- 2008 in the form of trying to make every citizen a sucker with large impossible mortgage debt. Big Banking owns every politician in the country.
This is not going to end well, folks. Even though consumer debt has plummeted in last 18 months, it is receding from an incredible height with a long way to go for the average household to reach historically normal debt levels. that means "de-leveraging" for a long time. the market is at about 1932 by my lights. Go look what happened then. Banks make a very nice, very low risk slam dunk profit by borrowing a 0% from the Fed and purchasing Treasuries for a ~2-3% return. that is a money machine at no risk. If I'm a banker, why should I lend some scumbag a few dollars to start an ice cream parlor when I can just sit back and do the "borrow-buy-clip coupon" routine with Ben and the boys.
We (American people) are like a bunch of Apache's waiting for the RainMan to do his dance. There's no rain coming. But its going to be a very expensive dance. We've finally gone past the tipping point of government interloping into the private sector. They've screwed it up possibly beyond repair. I hope I am wrong completely but the rain clouds seem a long way off and blowing in the wrong direction.
As they say, bend over and kiss your wallet goodbye. But some of you will go down with the comforting thought that it is George Bush's fault. :)
"Democrats think "Invisible Hand" refers to keeping it under the table."
1) See, Jack Abramoff, Congressman Bob Ney, and Randy "Duke" Cunningham.
2) Personally, I think "keeping it under the table" refers to receiving a handjob as a token of appreciation at the end of a pleasant date.
Hey you, the jerk in the White House, read this and start packing your bags.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6480289/It-is-Japan-we-should-be-worrying-about-not-America.html
The "I,me,mine" gratification of self indulgence that has taken precedence over all other considerations, even above the welfare of the Nation, will take years to discount and become extinct.
I'm not saying government should be in business. I do believe though that government can set directives (go to the moon) and provide incentives that work towards a conducive environment to achieving those directives.
As an example, we have needed a national energy policy for decades. Yet, the stalemate and inaction caused by political interests have stifled the prospect of producing one. Now, the opportunity to lead the world in solar and wind power generation has more or less been relinquished to firms abroad which enable those countries to make inroads into developing economies and establish trade agreements and diplomatic relations.
The self interested greed of a few with insatiable appetites for fat, ever burgeoning bottom lines has driven industry from the landscapes of our towns and cities sending viable US companies to seek even more profits abroad to the detriment of the vast middle class. Meanwhile, the expense of living and providing for a family unit has continually risen. The contractions of these dynamics has left the US economy weak with the prospects of rejuvenation looming as a foreboding question mark.
Materialism is an empty religion. It makes for misery in pursuit and makes a fool of those who rely on it for contentment. All anyone needs is sufficient sustenance, work, health, friends, family, meaning, and a sense of security and equality. Throw in a dash of national identity and there is the mix for successful living.
Some want to attach failure to proposals and measures that haven't proved to be a magical fix for all the problems that have developed over decades. With another breath, they want to say there shouldn't be any policy imbued with ideas which might help provide some solutions. Sounds like a formula for mediocrity.
Can't a representative actually vote their conscience anymore? Must they always be beholden to lobbies and/or parties? Vote your conscience and be a stalwart instead of a lackey!
Thank goodness there are those who attempt to synoptically inspire US to be extraordinary in extraordinary times and shame on those who have aspired to aggrandize and fill themselves at the expense of the nation's greatness.
What I gather from this is that the 10% unemployment number leads, but is not as important as productivity, profits and stock portfolios. It does not seem to be crucial anymore whether or not people have jobs. Of course the talking heads' jobs will continue, for they must report about people not having jobs. They can laugh about it and take it lightly, switching from markets to joblessness, to shootings, to the Yankees on a dime, making it all seem like so much fluff - just as our current (smartest-ever) president does.
"God bless the child that's got his own" - all others can go to hell.