Clouding the Issue
Things are looking up … maybe.
The Journal of Commerce put it this way last week: “Leading Indicators Increase Sharply – Recovering financial, labor markets improve outlook for economy.”
“Recovering financial and labor markets caused the Conference Board’s Leading Economic Index, a gauge of future U.S. economic activity, to rise 1.4 percent in March, the index’s sharpest increase in 10 months.
“‘The indicators point to a slow recovery that should continue over the next few months,’ said Ken Goldstein, an economist at the Conference Board. ‘Strength of demand remains the big question going forward. Improvement in employment and income will be the key factors in whether consumers push the recovery on a stronger path.’…”
Mr. Goldstein is equivocating. He should come right out and state that without jobs there are no paychecks, and without paychecks there is no “strength of demand”, and without demand there is no supply. Instead, he – and yes, even the JoC – think they see clouds with silver linings.
But those clouds are storm clouds. The Business Times on April 15th revealed that the Fortune 500 largest US companies slashed a record 821,000 jobs in 2009. Those Fortune 500 companies suffered an 8.7% drop in sales as the recession took its toll and spared few industries. By mid-2009, it was reported, those companies were making fewer goods with far fewer workers.
And again from The Times: “US jobless claims jump in post-Easter volatility – WASHINGTON – The number of US workers filing new claims for jobless benefits unexpectedly soared last week as applications held back during the Easter holiday were processed, government data showed on Thursday.
“Initial claims for state unemployment benefits rose 24,000 – the largest increase in two months – to a seasonally adjusted 484,000, the Labour Department said …”
OpEd commentators are much more candid than economists. Dave Lefcourt pulled no punches with this submission on April 13th: “We are in a Massive Unemployment Crisis in this Country”
“We are in a massive unemployment crisis in this country that a rising DOW above 11,000 has no connection to and, if anything, masks the true state of the American economy.
“Obama’s 780 billion plus stimulus package has all but been depleted. Though some jobs were created and some saved (mostly on the state and local level) the programs did not even keep up with the increase of new workers entering the job market.
“There is a desperate need for a 1930’s type stimulus package of programs i.e. W.P.A. ( works progress administration infrastructure construction and renovation projects), C.C.C. (Civilian conservation corps) development projects for parks and national forests but also a massive influx of public, private and foundation aided efforts to form worker cooperatives (employee managed and controlled) as well as local area, (former) employee owned and operated factories (using existing vacant factory complexes that were closed by their previous owners who moved their labor operations to 3rd world countries).
“Our ‘official’ unemployment level is close to 10% but unofficially is closer to 20% when including those no longer looking for work, people working part time but want (and need) full time jobs as well as those who have exhausted their unemployment benefits. So the reality of joblessness (close to 30 million) doesn’t match the ‘official’ figures.
“In the immediate dire situation, short term deficit spending will be needed to achieve large scale job creation. But over the long haul, considering our existing trillion dollar deficits, where can we find the resources to fund and sustain these type programs long term (as is likely)? The answer; the bloated defense budget of unnecessary military hardware (planes, aircraft carriers, atomic submarines, tanks and other military hardware that are still being built for an enemy (the USSR) that ceased to exist over 20 years ago.
“Couple this unnecessary spending with our undeclared wars in Afghanistan and Iraq (not to mention our clandestine war in Pakistan) funded through Congressionally approved supplements not included in the yearly approved Defense Department budget, there exists yearly well over a trillion dollars in wasteful and unnecessary government spending directed to the military/industrial complex.
“This unnecessary military spending has been all but sacrosanct and virtually untouchable to serious cuts (or for that matter even given to serious political debate).
“But that situation has to change and the American people must be made aware that our endless war driven economy is depleting us financially and is a political straitjacket preventing us from providing the necessary resources that can help us return to and sustain a full employment economy.
“Put simply, our endless war driven and debt laden economy is unsustainable (over the long haul) and is not consistent with a viable full employment economy.
“If allowed to continue unabated we will be broken financially and economically and with chronically high unemployment levels a civil breakdown seems all too likely to occur (even inevitable).
“What is mystifying is there seems no real acknowledgment of the crisis within our midst.”-
[Not a bad assessment. In the 1930s, however, it wasn’t the WPA and CCC that ended the Great Depression – it was FDR’s Emergency Shipbuilding Programs. Shipbuilding, almost overnight, created jobs for more than 40 million Americans – and all it took was the stroke of a pen. A new shipbuilding initiative would bail us out, and the Jones Act and Title XI would make it a slam dunk.]