The Stock Market Indices lose their diagnostic value in a Recession or Depression. The number that matters is Unemployment, and as we all know, it’s beginning to skyrocket.
Unemployment
[Bureau of Labor Statistics]
In this case, the Unemployment figure is doubly important, because we’re all aware that we’re worried not just about an economic Recession, but an economic Depression [not a slow-down but a halt]. Meteor Blades at Daily KOS has some interesting information about those Unemployment figures from the Bureau of Labor Statistics – interesting and alarming.
Earlier in this last year of Bush’s tenure, I postulated that the biggest damage was going to come from what George W. Bush didn’t do, even though what he did was pretty bad. At the time, that was more of a hunch than anything I knew for sure. It was, unfortunately, one of my better guesses. We now know that his failure to shepherd our economy and monitor the damage from deregulation [even after the heads up of Enron and WorldCom] was disastrous. Now we’re seeing his failures in another realm [even before the financial crisis] – job creation:
As everyone who follows the news knows by now, unemployment was up again sharply in December. Totally expected, of course, and, as nearly every economist is saying, very alarming. For instance:"These numbers, back to back, of more than a half million a month suggest that the U.S. economy is in a freefall," said Nariman Behravesh, chief economist at IHS Global Insight. "It’s scary, and it indicates that unless something is done and done quickly to turn this economy around, we’re looking at an awful situation this year." …
"This is unprecedented," said Mark Zandi, chief economist of Moody’s Economy.com. "It’s coast to coast. It’s everywhere. There’s really no refuge in this job market. There’s no safe place."Not so. Just over a week from now, George Walker Bush will be unemployed, and I suspect his bank account will provide a refuge. Thanks to the Supreme Court, Bush managed to get one of the slightly less than 3 million (net) jobs created during his eight years in office. That’s 375,000 jobs a year, the most pitiful record since 1939 when the Bureau of Labor Statistics started collecting the numbers.Not just the worst record ever, mind you. But far worse. During Dwight Eisenhower’s two terms, only 438,000 jobs were generated annually. But the population was half what it is now. During Bill Clinton’s two terms, 2.9 million jobs were generated each year…
Check it out. In the past 64 years, net job creation when Democrats were President totaled 57.5 million jobs. When a Republicans were, net job creation totaled 36.2 million jobs. But even that stark difference doesn’t show the the whole picture. Republicans held the Presidency for 36 of those years, meaning they accounted for an average of just over 1 million jobs generated per year. The Democrats for just over 2 million jobs a year.
That’s right, average annual job creation under Democratic presidencies since 1944 has been twice as good as under Republicans. Is this correlation mere coincidence?
President Jobs
created
[million]Payroll
expansionJobs/year Population
growth
[million]% change
populationBush II 3.0 2.3% 375,000 22.0 7.7% Clinton 23.1 21.1% 2,900,000 25.2 8.9% Bush I 2.5 2.3% 625,000 12.5 4.8% Reagan 16.0 17.6% 2,000,000 17.3 7.0% Carter 10.5 13.1% 2,600,000 9.8 4.3% Ford 1.8 2.3% 745,000 5.1 2.3% Nixon 9.4 13.6% 1,700,000 12.3 5.7% Johnson 11.9 20.8% 2,300,000 11.3 5.6% Kennedy 3.6 6.7% 1,200,000 8.2 4.3% Eisenhower 3.5 7.0% 438,000 23.3 12.8% Truman 8.4 20.1% 1,100,000 N/A N/A
Most economists ridicule the idea that what we’re experiencing now could ever become anything like the Great Depression. And, says Reuters, they all point to the same statistic: 25% of Americans were out of work in the worst of the 1930s and we’re nowhere near that disaster.
But the definition of joblessness has changed since then. Not just in 1994, but also under Lyndon Johnson in the late 1960s, when discouraged workers out of job for more than a year were erased from the statistics. Out of work, out of luck, and out of sight.Figures collected for Reuters by John Williams, from the electronic newsletter Shadowstats.com, suggest that, while we are not [at Great Depression levels yet], the comparison is not as outlandish as it might initially seem.
By his count, if unemployment were still tallied the way it was in the 1930s, today’s jobless rate would be closer to 16.5 percent — more than double the stated rate.
"I expect that unemployment in the current downturn, which will be particularly deep and protracted, eventually will rival, if not top, the 25 percent seen in the Great Depression," Williams said.Is this all just gobbledygook? Does it really matter since every gauge of the unemployment rate is showing a sharply upward trend anyway? Yes. Because the change in how the official rate of unemployment is now figured over the way it previously was makes it difficult to fairly compare from year to year. And, bad as the picture that the current gauge shows, it’s still way too rosy.
In Psychiatry, there’s a term – the Praecox Feeling [from the term Dementia Praecox, the former term for Schizophrenia]. It’s an undescribable feeling one has around a psychotic person, even if they don’t tell you about their disturbing thinking. One learns to listen for it carefully. I expect the lucky ones had a Madoff Feeling around Bernard Madoff, even without Markopolos’ grasp of the numbers and decided to invest elsewhere. The lucky among us can spot a Sociopath [Crook] quickly and give them a wide berth. It’s a good thing to have in your intuitive tool bag, because a Crook can spot that you don’t have that intuition in a heartbeat, and you quickly become a "vic" [street talk for unsuspecting victim].
In some ways, I think a lot of us already had an inkling that we were living on borrowed time, even before the Stock Market told us so on September 15th. Things haven’t felt right for a long time. Call it the Bush-and Cheney Feeling [it feels like dry skin, or a mild sunburn]. So, as bad as the current situation feels, for a lot of us, it’s not as big a surprise as one might have thought. My guess is that it’s that feeling that swayed a lot of votes in this last election. It’s a crying shame that more of us didn’t feel it in 2004. Had we had any kind of thoughtful government with functioning financial agencies for the last four years, this might have been a different ballgame. Who knows?
But right now, sitting where we are, we can reach a few unambiguous conclusions:
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The race is over. Bush and Cheney have run the worst Administration in our history – guilt by commission and omission. We can retire the trophy.
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The distinction between Recession and Depression is totally immaterial. This is not part of the normal "business cycle." It’s a downward spiral that could become a deflationary spiral as quickly as it seems to have gotten us to here in only four months. This is that bad weather report that tells us Katrina is on the way. We may not be lucky enough for the dykes and levees to hold, but we can damn sure mobilize our emergeny response in advance as if they’re going to break. This is the Daily Intelligence Brief that tells us that an Al Qaeda attack is likely coming soon and we need to institute heroic measures if we’re going to have a chance of detecting it before it’s too late.
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While we are talking about graphs and numbers [mathematics] and the similarity to the 1930’s [history], economics comes down to our attitudes [psychology]. Are we going to freeze up, shut down, roll over? or are we going to suit up and keep on keeping on? F.D.R. said that "we have nothing to fear but fear itself." That was a perfect diagnosis, and it lead him to an effective treatment.
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Barack Obama has a hell of a task ahead of him. Our recovery is dependent on the "mood" of the country. Falling into the fear-based gloom of our parents generation in the early 1930’s is our biggest danger, and yet we’re certainly due a "bad mood." For a lot of us, what’s happened isn’t any big surprise. We’ve hated the Bush years, the Bush decisions, the Bush dishonesty, sometimes even Bush himself. But for over half of us, particularly in the heartland of non-urban America, this is a shock. Those people elected George Bush twice, and the way it has ended for them is a grand betrayal. Some of us would say, they drank the Koolaid. But that’s not how they felt. They thought they were doing the right thing, voting for family values, and God, and freedom. What they were actually voting for were the Neoconservatives and the Business Elite, but they didn’t know that. No matter how they conceptualize their present reality, they’re in a very bad mood – and scared. Barack Obama is a black, urban, intellectual who is going to have to deal with their bad mood and keep it from turning into the kind we had 80 years ago. That’s a task.
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As much as I don’t like it, I think that’s why Obama says "my instinct is to look forward, not back." I think that’s why he’s being careful to evade direct questions about how vigorously he’s going to go after the people he’s replacing. My hunch is that he’s personally going to stay out of that arena, but won’t interfere with Congress or the DoJ’s investigations. His task is to build consensus where we’ve had divisions – to be the community organizer he actually is. If others run down the insanity of the past, that doesn’t hurt him. It maybe helps him with his task.. But if he does it, he’s perpetuating the divisiveness he ran against. Pleasing the faithful by going after Bush doesn’t help him with the other side. Not choosing Rick Warren because he’s homophobic doesn’t help him either. Right now, his audience has to be the people that did not vote for him, or reluctantly voted for him, rather than his loyal supporters. The key to getting us out of this financial crisis is not the urban left. It is not the wealthy right. It’s not even his strong minority support. It’s the workers who were, for a time, George Bush’s base – the paycheck to paycheck set. And the biggest tool he has is the subject of this post – jobs. As Meteor Blades points out, Bush flunked jobs. Obama seems to know that’s the center of everything, because that’s all he ever talks about these days…
Just had to write about something I read a few minutes ago. Joe from American Blog wrote that around the same time every morning a half a block from where he lives on Conn. Ave. D.C. Cheney goes by on the way to work with 12 motorcycle cops, vans and at least 2 large black suvs. What that must do to his ego. I would like to picture him being treated the way some of the innocent prisoners have in Gitmo. If you read Jane Mayer’s book “The Dark Side” you will know what I mean. I’m sorry but I want Cheney to experience some of what his victims have. I’ve never been a eye for an eye person but Cheney is different. I’m sorry to rant but I don’t want someone like Cheney riding around as if he is king anymore. I picture him riding a police paddywagon instead. I know Obama has to move the country forward but I want some kind of justice too.
I share Joy’s feelings about Cheney. And I also think Mickey’s last paragraph shows a deep understanding of what Obama is trying to do. All of us progressives should think about it. Obama could be having a grand and glorious time right now playing to his strengths and making us all feel good about having elected him. His election is simply vindication on so many fronts and in so many ways (racial, political, honesty). And we need to celebrate them all.
But he’s also wiser than those of us who want him to ride in on a white horse and sweep out the stables and put the crooks in jail. I was particularly disappointed yesterday in his interview with George Stephanopolis that he seemed to back away from a commitment to investigating those who justified torture.
Mickey’s last paragraph suggests that he’s not against it being done so much as saying it’s not the battle he is personally going to engage. It’s true, he has already said that he will charge his AG with investigating everything to see if any laws were broken.
As Mickey says, Obama knows who he most needs to speak to to bring into his inclusive tent. This is not a time for our leader to be the divisive one. We need everyone on the same team.