Last Friday (February 3, 2012), the MSM treated us to the latest Bureau of Labor Statistics (BLS) unemployment rate, the “official” U-3 rate of 8.3%. That rate, while not the best in the world, is getting better. But does the U-3 rate fall mean that the economy is improving? Does anyone, besides Kool-Aid drinkers, believe an unemployment rate of 8.3% mean that the economy is really improving? Well, this article presents facts and opinions of economists so that you can decide.
Paul Krugman, who called in September, 2011, for more spending. His observation is that while the latest unemployment report is favorable, it should not be a clarion call for ceasing efforts. He said, “…for once falling unemployment was the real thing, reflecting growing availability of jobs rather than workers dropping out of the labor force….” Really? I ask you to keep reading.
Let’s now turn our attention to CNN’s Candy Crowley. On Sunday’s (February 5, 2012) State of the Union program, she had on to discuss the economy in general and unemployment in particular:
- Alice Rivlin, director of the Office of Management and Budget in the Clinton administration. About Friday’s report, she said: “The unemployment figures and the new jobs in the Friday report were good news.”
- Douglas Holtz-Eakins,chief economist for President George W. Bush’s Council of Economic Advisers. He said: “…it has to assume an enormous tax increase [letting Bush-era tax cuts expire] next year, and that means it has to assume that we have bad economic growth. And that gets you high unemployment.”
- Ron Brownstein, senior political analyst at CNN. He said: “…and I think almost all political strategists agree that kind of direction matters more than level.”
During the two segments, eight minutes, that Crowley devoted to these subjects, not once were the subjects of the decline of work-force participation rate or the record 1.2 million people one month increase in the number of people not in the labor force, discussed.
Now let’s turn our attention to what Candy Crowley left out, to Zero Hedge. Here are some inconvenient truths (to quote AlGore) that Krugman, CNN, and the rest of the MSM forgot to include:
- 1.2 Million People Drop Out Of Labor Force In One Month – a record
- Labor Force Participation Rate Falls To 30 Year Low
I encourage you to examine the graphs that Zero Hedge has compiled.
Finally, let’s examine the tables of employment numbers from the BLS itself. First, this observation: for both the duration of unemployment (table A-12) and rate of unemployment (table A-15), the “seasonally adjusted” numbers, rather than the “not seasonally adjusted” numbers, were published. I’ll wager that few, if any, in the MSM can explain the difference. I can.
Second, from December, 2011, until January, 2012, table A-12 shows, for all categories, the number of unemployed people increased. Similarly, table A-15 illustrates an increase in the unemployment rates for all categories, particularly the U-3 and U-6 rates. Further, the U-6 rate, some say a better indication of unemployment, increased from 15.2% to 16.2%. These are “not seasonally adjusted” figures.
Gosh, how did Krugman and Crowley and the MSM and this administration miss these figures?
So, to quote Dr. Krugman, “Things Are Not O.K.” One month does not a trend make. Tax increases equate to higher unemployment. The MSM, who cannot consult economists, continue to report only what they (IMHO) want to report. As Henry Morganthau, Secretary of the Treasury under FDR, said: “We have tried spending money. We are spending more than we have ever spent before and it does not work. …we have just as much unemployment as when we started. … And an enormous debt to boot.” In order to reduce the deficit, he also said: “We have never begun to tax the people in this country the way they should be….. I don’t pay what I should. People in my class don’t. People who have it should pay.” Isn’t it interesting that he used the word “class?” But that is a subject for another post.
The U-3 unemployment rate would be 11.0% if the size of the labor force as a share of the total population was the same as it was when in January, 2009, when Barack Obama took office. The labor force share in 2009 was 65.7% Now it is 63.7%. The unemployment rate is falling because economic growth is so slow that nearly 4 million Americans have quit looking for work and the Labor Department has ceased to count them.
Please don’t get me wrong. I am in favor of full employment, for everyone who wants a job to have one. What I am against is how the current administration, as well as Dr. Krugman, cannot/will not learn from history, how this administration will mortgage my grandchildren’s futures, and how ideology trumps reality. And how the MSM goes right along with this administration.
But that’s just my opinion.