August 29, 2009
Let’s suppose a business employed ten workers in June. Along came Barack Obama and huffed and puffed and blew six jobs away. Four employees now run a pared-down operation. The next round of retrenchments will invariably entail fewer than six people. The president, or any other wolf in sheep’s clothing, may declare that our proprietor has shed fewer jobs in the month of July. But he may not frame a mathematical inevitability as a sign of economic recovery.
Fewer jobs lost probably means that there are fewer jobs to lose.
Nevertheless, this is exactly how the president spun the static employment market”and, to be fair, aided by statisticians at the Bureau of Labor, past presidents have likewise finessed unemployment.
Thus, the slowing rate of job losses has become the measure du jour of economic recovery. Employers laid off fewer workers in July”247,000 as opposed to 443,000 in June, which led the Associated Press to conclude that, “The jobless rate dipped for the first time in 15 months to 9.4 percent in July, from 9.5 percent the previous month.”
But even the AP has been unable to conceal that the real unemployment rate is 16.3 percent. The discrepancy between the official and the awful numbers has arisen because the former count, conveniently, “only those who have looked for work in the last four weeks.” “Hundreds of thousands of people, some discouraged by their failed job searches, left the labor force. The labor force includes only those who are either employed or are looking for work.”
Not in the habit of pandering to power, the Center for Immigration Studies explains that the broader measure of employment, referred to by the Bureau of Labor Statistics as U-6, includes the unemployed and people who would like to work, but who have not looked for a job recently, as well as those involuntarily working part-time. According to the U-6 measure, close to twenty two million Americans are without work.
Alas, the economic “experts” have a lot riding on the recovery ass. To that end, they are in the habit of conjuring constructs that help their political masters to mask economic reality.
Yet another unbeatable bit of political fraud is the fig leaf of a “jobless recovery.”
A jobless economic recovery is the equivalent of a housewarming for the homeless.
This sophistic figure of speech serves to coat with a patina of scholarly respectability the systemic effects of employment-killing government policies.
Typically, establishment economists will waffle about “structural changes “ permanent shifts in the distribution of workers throughout the economy”” causing job losses. At the same time, these stooges will genuflect to GDP growth”a highly manipulable indicator”as proof that the jobless are fussing needlessly, and should eat cake, if bread is unaffordable
The gross domestic product, however, is a consumption-driven statistic: It measures precisely the kind of economic Brownian motion of which much less is required if a genuine recovery is to take place.
“This statistic is constructed in accordance with the view that what drives an economy is not the production of wealth but rather its consumption,” observes economist Frank Shostak of the Mises Institute. “What matters here is demand for final goods and services. Since consumer outlays are the largest part of overall demand, it is commonly held that consumer demand sets in motion economic growth.”
A slow-down in the shedding of jobs, or “a jobless recovery””these semantic exercises in obscurantism conceal that the conditions for an economic bounce-back are nowhere apparent.
Having just received Barack’s blessing for a second term, Fed supremo Ben. Bernanke has yet to raise interest rates as he ought to. Americans have not begun saving in earnest. Prices are not being allowed to fall to reflect reality, and permit people to purchase the same amount of goods with less available funds. Legislative intervention is delaying the liquidation of bad debt and worthless, illiquid assets at prices set by the market, not manufactured by government. We”re still a broke and bankrupt consumer economy, increasingly penetrated and enervated by a tentacular bureaucracy.
Absent the conditions for an economic rebounding, sustainable jobs”and no job generated or granted by the government qualified”will not materialize.
