One unemployment number doesn’t make a trend, but today’s was about as bad as they get. Hope you didn’t follow my advice yesterday and sell premium.
This number was outside the standard deviation of expectations. I really can’t stress how ugly it is. There is no way to sugarcoat it. The economic policies used since October of 2008 are an abject and total failure. Not only that, but they have put the finances of the country in a precarious position that was not unforeseen.
Table A-15 in the BLS report is really all you need to look at. There are no silver linings in this report. U-6 jumped by .4%. 16.2% of all Americans that want to find a job can’t. Those are Americans that are actually seeking work. Thousands have gotten frustrated and simply stopped looking and aren’t included in those numbers.
Table A-12 shows how bad it is. The mean time looking for work is 39.9 weeks, with a median duration of 22.5. Both numbers up from 39.7 and 22.0. There are only 52 weeks in a year, the average job hunt takes the better part of it. The labor force participation rate is at a 25 year low, 64.1%.
Progressive/Liberal/Keynesian Economists will call for more stimulus. This will make it worse. Government spending, and activist government policy at all levels are putting a chokehold on private expansion. The competition for an investment dollar between government and the private sector is being won by government. That’s why T-bill rates are so low.
This number puts a huge focus and pressure on politicians debating the debt ceiling. What is obvious is that gridlock is not good. The other obvious point is that Keynesian economics is a total fail. Fred Barnes quoted FDR Treasury Secretary this morning in the WSJ
“In FDR’s time, a surge in spending by Washington was a cornerstone of New Deal efforts to lift the country out of the Depression. But unemployment never dropped below 14% in the 1930s and rose to 19% by the end of the decade. “Now, gentlemen, we have tried spending,” Henry Morgenthau, FDR’s Treasury secretary, confessed to House leaders in 1939. “We are spending more than we have ever spent before and it does not work.”
Combine that with James Pethokoukis column yesterday that lays out exactly how dire the future budgeting and debt of the US is and you have an actual, not manufactured, crisis that needs to get resolved today.
This isn’t rocket science. But it does require the progressive wing to give up their reliance on economic theory that only works in a textbook. Economics is a social science and a study of human behavior. Keynes postulated a theory and we have numerous empirical examples of that theory failing miserably. How long will it take?
Einstein said the theory of insanity is doing the same thing over and over again, and expecting different results. There, my friends, is the core principle of Democratic policy. Insanity.
The way out is through aggressive tax cuts, privatization of large swaths of all governments, and reform of benefits. Without it, we will go broke. The math doesn’t add up.
tip of the hat to Instapundit
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A reader informs me that I incorrectly defined U-6. Here is the textbook definition.
“The unemployment number that is most often used in the media (and by the government) is known as the “U-3”. This number was 8.1% in February of 2009.
The “U-6” is considered to be a broader measure of the unemployment situation in the United States.
The “U-6” includes two groups of people that the “U-3” does not:
1. “Marginally attached workers” – people who are not actively looking for work, but who have indicated that they want a job and have looked for work (without success) sometime in the past 12 months. This class also includes “discouraged workers” who have completely given up on finding a job because they feel that they just won’t find one.
2. People who are looking for full-time work but have to settle on a part-time job due to economic reasons. This means that they want full-time work, but can’t find it.
The reader’s quibble was my last sentence, “Thousands have gotten frustrated and simply stopped looking and aren’t included in those numbers.”.
I will concede the point, although I think my phrasing is pretty close to the textbook definition. Now the reader has to concede that the Democratic agenda, and the Obama Economic team is a load of crap. How do they say it? “And the horse you rode in on.”