Forget Deficit Costs; What Are The Costs Of High Unemployment?

A jobs bill in Congress is being hacked apart and watered down by so-called “centrists”.  What these folks really are is termed “deficit peacocks”.  No objections to the unfunded occupations of two nations can be heard from these preening birds.  They would rather cut all deficit spending, at the risk of forcing today’s bad unemployment rates even higher.

Harold Meyerson had a good op-ed the other day.  It ended with the following (emphasis my own):

Yet the deficit hawks’ peachocks’ rejoinder is essentially: So what? Government spending is out of control. We need to cut back now.

The problem with this ostensible solution is twofold. First, it conflates short-term deficits needed to stanch the recession with long-term issues of fiscal sustainability. Such thinking risks turning a short-term recession into long-term stagnation, much as Japan did in the 1990s by failing to stimulate its economy sufficiently. Second, it calculates the dollar cost of the stimulus but neglects to factor in the dollar benefit from, for instance, keeping hundreds of thousands of teachers, police and firefighters on the job and paying taxes rather than collecting unemployment insurance. Once such particulars are accounted for, a new study from the liberal Economic Policy Institute argues, the cost of the jobs created in the bill coming before the House this week is more than halved, from $75 billion to $35 billion.

Again, Republicans weren’t held to the same standard when it came to Afghanistan and Iraq.  Why not?  It wasn’t the liberal media that held them to account.  (Because the media doesn’t have a liberal bias.  Duh.)  Voter support for the invasions and occupations would have been much lower had the Cons been honest by telling them nothing was paid for today – that it was our children and grandchildren (that they’re supposedly so concerned about now that middle-class jobs and not ultra-rich tax cuts are on the table) that would suffer.

Since the U.S. didn’t experience the lost decade of the 1990s the way Japan did, we didn’t learn the lesson of their economic stagnation.  What’s worse, however, is the large number of folks who say they studied the problems and solutions of the 1930s Great Depression in preparation for their current stations in our government, controlling public policy.  They’re by and large advocating for more unemployment so their deficit credentials can look better.

Decades of runaway spending under Republican control occurred and now its the Democrats who have to tighten the country’s belt.  Don’t think that happened by accident either.  Republicans hate the programs begun under the New Deal and the Great Society.  They long ago decided to attack them from every possible direction.  If they couldn’t legislate the programs away because of the public revolt that would follow, they would bankrupt the country for their foreign policy disasters so that the programs would be starved for funds.

Way to go, deficit peacocks!  You’ll likely force the country to suffer from chronic unemployment for the remainder of this decade.  But your deficit credentials will be bright and shiny on your chests!  And it’s not like you’ll be held accountable for trashing our future anyway.  Yipee!

Unemployment (U-6) Hits 15.8%

The Bureau of Labor Statistics released April’s unemployment figures.  They aren’t pretty.  They won’t be pretty for a long time.  April’s U-6 figure hit 15.8%, and the U-3 number (commonly cited by the corporate media) hit 8.9%.  This recession is the longest since the Great Depression.  Some have taken to calling it the Great Recession.  I suppose we won’t have a handle on the recession/depression moniker for a while still.  In any event, more numbers include:

The BLS revised job loss numbers upward for February, from 651,000 to 681,000, and for March, from 663,000 to 699,000.  700,000 people lost their jobs in March.  That’s an astonishing number.  700,000 households, just in March, are unlikely to earn as much as they did if or when they get a new job than the one they lost.  That’s the lingering infection that conserative economic policies have left for America.  In such a state are we that a mere 539,000 lost jobs in April was actually received as good news.  Unfortunately, that’s another 539,000 households who will be worse off for quite some time than they were before.  And economists have the audacity to say the economy is bottoming out and that’s somehow more good news.  Note: I’ll have a post on bankers and economists coming up.  I read something that still has me shaking my head.

Back to today’s numbers: over 5.7 million Americans have lost their jobs in this recession.  If the Cons had their way, what little recovery action has already been taken would have been tossed away, just like all those jobs.  You see, a good number of Cons would rather this recession deepend in severity and extended in time.  They want a permanent serf-class which they can keep under control.  They nearly got their wish, too.  Unfortunately, that means the real adults have to spend the next X years cleaning up their mess.

Quick Hit: Job Growth During Bush’s Term

I’ve known for some time that the number of jobs created while George W. Bush was in office would rank among the lowest since WWII.   The Labor Department released numbers recently that confirmed that view and solidified Bush’s domestic legacy.  During George W. Bush’s terms in office, the fewest jobs in post-war American history were created.  During those terms:

3.0 millions jobs were created.

The population grew by 22.0 million people.

3.0 million jobs = 2.3% payroll expansion.

22.0 million people = 7.7% population growth.

Thus, job creation did not keep up with population growth.

There were only 2 Presidencies when fewer jobs were created than during the past eight years.  Unfortunately for the modern American worker, those Presidencies lasted 2.5 years and 4 years, not the 8 that Bush was in office.  This is most evident when the number of jobs created per year is compared between Presidencies.  Only 375,000 jobs were created, on average, per year during Bush’s terms.  That’s 60,000 fewer per year than Dwight Eisenhower’s terms.

In short, it’s a terrible track record.  It’s a terrible track record for the American worker who has been under assault since St. Ronnie’s Revolution begain in the 1980′s.  For those of you who are more visual, like me, go look at the graph in this diary.

Northwest Flooding, Unemployment Jumps & More Palin

The northwest U.S. has had more than it’s fair share of extreme weather and its after-effects this winter.  Record rains and heavy snowpack have given way to flooding rivers and avalanches as more rain has fallen during a warm spell.  These kinds of events are the kind that are forecasted to occur more often as our climate changes.  Climate models for years have indicated that extreme weather events of all kinds would become more prevalent: extended periods of drier conditions interspersed with events and seasons that would see record rain fall, among others.  The economic impact in Washington state alone this week was millions of dollars per day in stalled transport of goods and widespread seclusion of communities by floodwaters and avalanches.  It’s not just a case of a mm or two of rising sea levels (so far!).  There are and will be real-world economic impacts as a result of the forcing we’ve already put into the climate system.  Those impacts will grow in scope the longer the deniers/delayers hold the country back from taking action.

The preliminary unemployment numbers for December came out this morning.  The narrowest reading of unemployment is reported at 7.2% now, the highest level since 1993.   It is no mistake that the two highest levels of unemployment come at the end of long-term Republican control of the economy.  Con economic policies have demonstrated how badly they fail time and time again.  Over 3.6 million jobs have been lost since Dec. 2007, and it wasn’t like Bush was effective at creating them before then.  Bush presided over the lowest rate and amount of job creation since WWII.  Now, a large portion of those jobs have been lost again.  I will point out that the more accurate unemployment number (U6) stands at 13.5% now.

Paul Krugman asks if we’re prepared to act decisively in the face of the 2nd Great Republican Depression.

Who Benefited Under Bush?

Here are a few numbers to mull over:

Between 2002 and 2006, the wealthiest 10 percent of households saw more than 95 percent of the gains in income. The nation’s 15,000 richest families doubled their annual income, from $15 million to $30 million. And in that same period, corporate profits shot up 68 percent - more than five times the growth seen in the overall economy.

In contrast, the families at the center of the income spectrum saw their incomes shrink by 1 percent over the same time period. In 2000, the average weekly earnings of production and non-supervisory workers (70% of the workforce) amounted to $527 (in current dollars). Six years later, their wages have risen a mere $11.  That translates to an annual income of $27,248 to $27,976, or an additional $728 per year.

What did the richest among us do with their doubled income?  Did they buy stuff?  Did they create jobs?  Not much and no.  Consumed goods didn’t radically change from 2000 to 2006.  Job creation was the lowest since the Great Depression under Bush.  The rich hoard their money.  The rest of us use it to make the economy work.  And it’s actually worse than that.  That doubling of income was money Bush and his Con-buddies borrowed.  The rest of us are going to pay interest on top of that principle for a very long time to come.  It behooves us to remember these tidbits as the right-wing Cons attack Obama’s economic policies.

Afghanistan Personnel Levels; Sen. Lieberman; Credit card defaults; Voter Suppression

Here’s something that got no coverage today.  The requested troop buildup in Afghanistan (set for next year) is quickly growing in size.  The ever-present, mysterious “officials” have said for months that trainers and and two additional combat brigades were needed, or about 10,000 more personnel.  Recently, a third combat brigade appeared necessary, putting the number of personnel at 15,000.  Now, an additional 5,000 to 10,000 personnel might be requested.  That would put the total somewhere between 20,000 and 30,000.  There are, of course, over 150,000 U.S. forces currently occupying Iraq.  If McCain were to be elected (thankfully, an increasingly unlikely scenario), where would the 20,000+ personnel come from?  He has no plans to stop occupying Iraq.  Obama, if elected, will face the leftover question: what about the equipment the troops need?  Under Bush, that equipment hasn’t been maintained.  Current estimates of taking care of the maintenance backlog include years of time and billions of dollars.  Expanding operations in Afghanistan isn’t going to make that task any easier.

Sen. Lieberman might lose his committee chairmanship.  It’s about damn time.  He isn’t a Democrat, as seen by more than his b.s. party he formed in 2006.  As chair of the Homeland Security committee, Sen. Lieberman hasn’t held any meaningful hearings on the status of domestic security.  He has allowed himself to be used as a pawn by the worst President America has ever had.

Credit card defaults on the rise.  Not primarily the fault of either banks or borrowers.  It’s the failed CONservative economic policies of keeping workers’ wages low and offering risky credit as the path toward continued consumer spending.  Those policies have allowed executive pay and stock prices to skyrocket in the past 30 years, while workers’ income hasn’t risen.

Fliers in being distributed in minority neighborhoods in Virginia with false information about a change in election day.  It says Republicans are to vote on Nov. 4, while Democrats are to vote on Nov. 5.  There is only one voting day, of course, and that day is Nov. 4.  I’m sure Fox, Drudge and the McCain campaign are going to be all over this immoral voter suppression effort.  Democrats: vote early.  Do not allow the cons to prevent you from voting.