Jun 06 2009
As if the situation could not look any bleaker on the economic and job front than what I posted yesterday, a found disturbing chart on a left leaning blog site, amid a lot of concern the job situation is going to be a real political albatross for Obama and the Dems. Here’s the chart comparing this recession to others over the last 30 years (click to enlarge):
(H/T Mathew Yglesias) The crashing red line is the current situation, which was promised to be avoided by the dems when they passed their risky, liberal, economic stimulus experiment back in February.
There are some things to note on the graph. The current recession is far worse than any before – which makes it worse than the Carter years and the disastrous liberal economic experiments they tried back then. It is deeper than any in the last 30 years and will be longer than any other because it has not yet really bottomed out jobs-wise.Â
Here are some of the concerns voiced in the accompanying article:
Widespread job losses continued in May, pushing the economy toward a number of dubious achievements. Long-term unemployment is now at an all-time high, jobs have declined for a record number of consecutive months, work hours are the shortest since the Bureau of Labor Statistics began tracking the data, and many other indicators of labor market distress are at or near historic levels.
It is good news that the rate of job growth has slowed, but you would need rose-colored glasses to claim that the labor market is anything but grim and the economy isnâ€™t mired in recession. The American Recovery and Reinvestment Act is beginning to pump money into the economyâ€”$43.7 billionÂ has already been spentâ€”but job growth will take more time.
Unlike the sugar coated ‘all is well again!’ BS from the naive news media, this is a brutally honest assessment. It is becoming crystal clear the liberal experiment of using the government to stimulate economic growth is an abysmal failure.
If job losses continue next month, which is quite likely, the economy will set another all-time mark for months of consecutive job losses. Nearly two-thirds of the unemployedâ€”65.4 percentâ€”are out of work because they lost a job, a number higher than at any point since the BLS began tracking that data.
And once people lose their job, they are having a very hard time finding a new one and are likely to remain unemployed for a long time. Nearly 4 million people have been unemployed for more than 27 weeksâ€”another record. And the percentage of unemployed people who have been without out a job for over six months is also near record levels at 27.0 percent, despite the fact that employers have been shedding jobs at a record rate over the past few months.Â
Coming from a left wing site this crashing realization is a good indicator that America may finally be awakening from its fantasy day dream that was the return of the Democrats to power. The key issue is jobs and the economy – and the Democrats have failed to do anything but make things much worse.
As I noted in the previous post there is a great graph out showing the Democrats’ promise verses the reality of jobs losses since the stimulus bill was passed:
Can it be any clearer? The democrat social experiment is a huge failure. It did not perform as promised.
And why is that, some might ask? Simple. The Dems relied on the federal procurement process, as slow and sluggish as it is, to ‘stimulate’ the economy. The left had fantasies of another FDR moment, were they were creating make-work federal jobs and becoming the saviors of the American worker.
The problem is they forgot that this is not FDRs federal government from before World War II. This is the bloated and constipated liberal bureaucracy that grew like a cancer after World War II. It is today a slow, ponderous and lethargic beast – not the slim young pup of the 1930’s.
It will take many months or more for the money allocated in February to start hitting the streets in any significant amounts. Most people who know the bloated beast that is the federal government don’t see any real money flowing until after September. Especially now that we are heading into summer and all the bureaucrats are going to go on their long summer vacations!
I have been tracking the stimulus money as it flows through 5 departments and one agency. As of 6/2/09 (I updated the graph since the previous post, though it is hard to tell since no money is moving out into the economy) the situation on the ‘shovel ready’ jobs is this: the government is still not ready!
The far left columns show the amount of stimulus money budgeted for these 6 government entities – that is the stimulus money meant to create jobs. The center columns represent the amount assigned to specific projects or programs; this is where the bloated bureaucracy has finally determined where and how to spend the money. The last set of columns on the right (which are basically flat lined) is the money heading out of the bureaucracy and being spent to create jobs.
The totals and percentages for the money budgeted, obligated and dispersed as of 6/2/09 are as follows:
- $105,335,650,000 budgeted (~1/3rd total stimulus ‘jobs’ package)
- $19.9 billionÂ obligated (19% of the budgeted total)
- ~$201 millionÂ dispersed to actual work (0.2%).
As of today over 99% of the job creating stimulus money in these organizations has not been spent! This is why tax cuts are the only way toÂ stimulateÂ economic growth and job creation – the money is in the economy to start with, tax cuts leave it there to do its magic.
The liberal fantasy of recreating the 1930’s liberal programs is a failure (as it was back in 1930 for the most part). A $787 billion dollar stimulus package was passed, and it did nothing but create more national debt.
Assuming 300 million men, women and children live in this country it would have been quicker to hand each $2,623 instead of the democrats risky and failed experiment. Another way to look at it is by US households, which currently number around 117 million according to the US Census Bureau. If the $787 billion had just been dispersed to each household it would equal $6,726 paid to each! But no, the Democrats had to buck history and avoid the tax cut path. They had to prove they could use the government to direct the nation’s economy.
It was a foolish experiment and they knew the results would not be as advertised. They know how slow their government beastie really was, which is probably why they made a third of the ‘stimulus’ bill assistance to people out of work and in need. They knew they could never get the money out in time to make a difference this spring or this summer. What they did not expect was things would be so bad it would be well into next year before any serious signs of recovery will show up – definitely not this fall as they promised!
Yes, it will be well into the 2010 federal election cycle before this economy could start to turn back up. And by that time, if their opponents can stay focused and reasonable, the Democrats will have been tarred with the abysmal failure of their social experiment as they face the voters.
Update: I was alerted by reader Steve55X1 that under the early Clinton era definitions of unemployment (which included those not looking for work any more) today’s unemployment is more like 20%. That would make the above chart comparing recessions under a common unemployment formula 2-3 times worse.