Mumbo-Jumbo

Remember the little fourth-grade girl we talked to back in Vol. XX, Art. 6 – the one who said that the decreasing amount of jobless applications only showed that we were rapidly approaching that month when no jobs would be lost because there were no more jobs remaining to be lost? That was in mid-July of 2009. She’s in the seventh grade now and she just sent me the following article.

“Unemployment Mumbo-Jumbo and Rank Propaganda” By Dave Lindorff. [“Didn’t I tell you this would happen?” She scribbled at the top.]

“The US stock market jumped up today on word that the number of new unemployment applications fell to the lowest level in four years. Sounds good, right? It’s meant to sound good, but if you look at the number, and if you think about what it really means, it’s not good news at all. What the US Labor Department reported was that new unemployment claims filed for the week ended Feb. 24 totaled 351,000, which was slightly lower than the 353,000 new claims filed the prior week. ‘Slightly’ indeed! A better term for this 0.57% decline is ‘statistically insignificant’! The idea that such a ‘drop’ in new claims would spark a jump in the Dow or the S&P shows how completely divorced from reality investors really are.

“But it is worse than that. The number, remember, is new unemployment claims. That is to say, over a third of a million more Americans were laid off last week. Anyone who sees that as some kind of good news is really stretching to find a silver lining on a pretty dark cloud. Now I’ll grant you that from one perspective it’s good to see ‘only’ 351,000 new people getting on the nation’s unemployment lines rather than the 589,000 who joined a line in December 2008. But the reason the number is smaller now is not that things have been getting better. It’s that there are fewer people to lay off. Companies and employers have already cut back their work forces to the bone, so for them to find another 351,000 people to sack, as they seem to be doing week after week, suggests they are really struggling …”

“By the way, the same day that the Labor Department reported that 351,000 new unemployment claims had been opened in a week, it was reported that in January US employers added a net 241,000 new jobs. That was in a month! … How you get there to seeing 351,000 new unemployment claim filings last week as good news is simply beyond me … One way is to trumpet a decline in the size of new unemployment filings as a positive. Another is to point to the stock market hitting a new high, when obviously corporate profits have become almost completely untethered from the state of the national economy, and in any case have been achieved by precisely by laying off record numbers of American workers and shipping millions of jobs overseas to low-wage countries, while making those workers in the US who still have jobs work harder and longer for the same or lower wages. And a third is to count on ignorant or lazy journalists and editors of the corporate media to follow the lead of the happy talk folks in the White House and the Labor and Commerce Departments and paint bad news as good.” –

[“I told you so!” she scribbled at the bottom.]