Jun 30 2009

The ’09 Summer Of Failed Liberal Economic Policies

Published by at 6:28 pm under Measuring The Recovery

Update: Well, the ADP numbers are out and – as predicted – the job situation is worsening:

Companies in the U.S. cut more jobs than forecast in June, according to a private report today, showing the labor market will be slow to improve even as other parts of the economy indicate the recession is abating.

The 473,000 drop in the ADP Employer Services gauge followed a revised reduction of 485,000 workers in May that was smaller than previously estimated.

Job losses may mount as the bankruptcies of General Motors Corp. and Chrysler LLC ripple through manufacturing. Increased firings threaten to further restrain consumer spending at a time when the world’s largest economy is showing signs of stabilizing.

Stabilizing = hitting bottom. There is no recovery, because the liberal fantasy of a government funded stimulus is a pathetic joke. Will America reward the failures of Obama, Pelosi and Reid to fix the jobs problem with reelection? I seriously doubt it. If states like California are seeing continued job losses (as predicted through 2010) I cannot see that state remaining Democrat blue. With a filibuster proof majority, the Dems now own this economic disaster. - end update

We enter the mid year point of summer with a reminder of how badly the liberal economic fantasy policy of government funded stimulus have failed (vs the tried and true tax cut stimulus that has worked since John F Kennedy employed it). Tomorrow, as Tiernan Raye points out at Barron’s Blogs, is going to set the tone for a very bleak summer for this nation:

Preceding that report will be the ADP payroll report, tipped at a decline of 390,000 for June. And that will provide the warm-up for Thursday’s employment report for June, expected to show a drop similar to May’s 345,000 decline, and then an early exit for the holiday weekend.

Yes, ADP has an independent survey which sometimes tracks with the government numbers, but sometimes does not. But what is most important in this post is the fact that the US unemployment numbers are no longer accurate, and hide the true depth of the unemployment emergency:

“We have 6.7 million Americans on continuing claims and another 2.4 million who are still collecting, i.e., still a drag on the social system, but who are no longer counted as they are on ‘extensions,’” writes Joan McCullough of East Shore Partners. “I wonder how many millions will be unemployed and uncounted once those extensions expire.” Adds MacroMavens’ Stephanie Pomboy, some 49% of the folks losing their benefits haven’t found work.

Emphasis mine and Hat Tip to reader MerlinOS2 for the heads up on the fudged numbers coming out from the same Democrat who promised unemployment would not go over 8% and still think there is global warming after a decade of cooling temperatures. The possible dirty little secret is there may have been a plan to hide the true unemployment numbers by only counting those on the primary unemployment benefits, not those without jobs on extensions. Any surprise there was a new unemployment ‘extension’ benefit added as part of the stimulus package? By keeping these people funded on an uncounted program the government is not only rewriting history, it is rewriting reality. It is lying to us, who gave them our hard earned money to fix the problem.

We can do a quick calculation to estimate the true unemployment rate for May using the figures above. 6.7 million is around 73% of the total number of 9.1 million people out of work the government knows about. That means the 9.4% unemployment rate of May is only 73% of the actual rate, which means the real unemployment – as directly known to the federal government – is just under 12.8%!  

I can see why someone may not want to tell the complete truth here and then face us tax paying voter next year.

More details came out this week on how badly the Liberal Dems botched their stimulus efforts, which have done nothing but put this nation into massive debt. For instance, the pain of unemployment the liberals allowed to fester on this nation has now reached in all major metropolitan areas:

Layoffs tied to the troubled housing and autos industries clobbered the West and Midwest in May and helped raise unemployment rates in all the largest metropolitan areas for the fifth straight month.

All 372 metro areas saw joblessness rise in May from a year earlier, the Labor Department reported Tuesday. The highest rates — of at least 15 percent — were concentrated in metro areas in California, Michigan and Indiana.

California is such an economic wreck that it has the honor of hosting half of the hardest hit cities in the nation:

Almost half of the cities with 15 percent-plus jobless rates last month were in California, with El Centro at the top of the list with a 26.8 percent unemployment rate.

Yuba City had the second-highest jobless rate in the state at 17.7 percent, while Merced, Modesto, Fresno, Redding and Stockton also endured 15 percent-plus jobless rates, according to a federal report released Tuesday.

And much of this is due to the fact the liberals relied on the sluggish and bloated federal bureaucracy to ‘stimulate‘ economic growth. Of the 6 government entities I am monitoring, which represent 1/3rd of the stimulus jobs money and include the two departments with the lion’s share of the money (Energy and Transportation), none as actually spent even a paltry 1% of the money allocated to them (as of 6/12/09). That means 99% of that money is stuck in the constipated bureaucracy as millions of people not only are out of work, but rapidly running out of benefits.

BTW – that $105 trillion dollars I am tracking represents 1 million jobs at $105,000 for a year. If this was doled out in tax cuts, businesses could have used that money to create 2-3 million high paying jobs (maybe more). And that is only one third of our hard earned tax money sitting in the government, being chewed up slowly by bureaucrats. Tax cuts would be working for 5 months now. Instead we got the reality gut check for the Obama-Reid-Pelosi liberal fantasy of government funded recoveries.

As we see above, once you run out of unemployment benefits you no longer are counted as ‘unemployed’. The 50% of those  who went on unemployment back when this began and who cannot find work will soon be dropping of the roles. Broke and forgotten, and not even counted as a victim by our own government. 

How pathetic is that for Hope & Change?

Als0, don’t hold your breath that forces outside this country will be coming to our rescue. When we get a cold, the world economies get pneumonia.

Update: What we need is a measure of the “hidden unemployment rate” – also known as the real unemployment rate. No more faked and fudged data from those clowns in DC>

11 responses so far

11 Responses to “The ’09 Summer Of Failed Liberal Economic Policies”

  1. Woofguy says:

    I couldn’t agree more. We are on the very slippery slope economically. I love watching the CNBC folks trying to prop up the economy in the morning.

    Even the ridiculous Yahoo had a banner this morning that was – ‘home prices fall 18% in June – Great News!, the slide is lessening.’

  2. WWS says:

    What is mind-boggling is that they actually believe that if they can successfully fudge the numbers, everything will be OK. Obama, Axelrod and Emmanuel simply do not think that these numbers on the screen are related to any meaningful physical reality. For them, perception truly is everything – they believe that if they can successfully manipulate the perception of things, they will be able to control the reality of things.

    It is magical, irrational thinking writ large. They are going to find out that although perception may be a very useful tool for influencing people politically, it has absolutely nothing to do with reality. And reality is going to smack them (and us) upside the head real, real hard.

    It always does – and they’re never going to see it coming, because they don’t believe it can happen.

  3. Mike M. says:

    I disagree. The Left figures that the Propaganda Press will cover for them. If they actually admitted an unemployment rate of 12+ percent, six months after President Bush left office with the “staggering” unemployment rate of 7.6%, it would go very hard for them.

    This reeks of France in 1788. An arrogant, out-of-touch, largely inherited elite has run the nation into bankruptcy while living in luxury themselves. Their answer? tax the middle class, especially the upper middle class.

    A year later, the Bastille fell.

  4. Terrye says:

    I think WWS has a point. In the early 30s people knew things were crappy, no amount of good press was going to change their minds.

    If this gets as bad as I fear it might, it will not matter what Obama and his minions say.

  5. kathie says:

    So the next time Obama or Robert Gibbs says that the Republicans have nothing to offer but the old ideology of tax cuts, at least the Republicans can say, how is the old ideology of spend, spend spend doing for you. Or when they say that Republicans say that offering tax rebates or write offs is the same old story, for medical insurance, we can say how is hope and change doing for bringing back the economy. And it is going to get worse because people either don’t have money to spend or they are too afraid to spend it because they have no idea what Obama will do next.

  6. crosspatch says:

    Kathie, I saw a guy hoping for change just today down on Market Street. Somehow I don’t that the kind of change he was hoping for was what the rest of the country had in mind last election day.

  7. garrettc says:

    The government unemployement numbers also does not include those who have taken early retirement at age 62 because they were layed off and have been unable to find new work. Now they are on SS at least 3 if not seven years ahead of schedule. a further drain.

  8. kathie says:

    Obama said the stimulus is working, teachers, fire fighters and policemen are on state payrolls, with out the stimulus they would have had to be fired. Holy Cow, he thinks like a community organized, small potatoes, does he have any idea how big this economy is? He keeps telling everybody, our Country is too rich to have people suffer. Not any more buddy, you took care of that!

  9. kathie says:

    Obama said the stimulus is working, teachers, fire fighters and policemen are on state payrolls, with out the stimulus they would have had to be fired. Holy Cow, he thinks like a community organized, small potatoes, does he have any idea how big this economy is? He keeps telling everybody, our Country is too rich to have people suffer. Not any more buddy, you took care of that!

  10. [...] on the primary unemployment benefits, those on extended unemployment benefits are not counted (as we noted here). Is it any surprise the job losses jumped 100,000 (33%) in one month? And as I have said many [...]