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It’s Tough to Put Lipstick on this Pig
President Obama could not have looked more morose in reacting to the news that the December nonfarm payroll showed a further loss of 85,000 jobs, taking the unemployment rate to 10%.
It’s really tough to put lipstick on this pig. Some 4.2 million have lost jobs on Obama’s watch, and 7.2 million since the recession began in December, 2007. Total unemployment now stands at 15.3 million, and 25 million if you used the U6 figure that includes discouraged workers. Some 661,000 dropped out of the workforce, the duration of unemployment lengthened, and what real hiring did occur, was only among temporary workers, who gained 47,000 jobs.
These are not exactly the sort of numbers that are going to send you shooting out of the blocks in the sprint towards the midterm elections. It is screamingly obvious now that while big business has stopped large scale layoffs, they are just plain not hiring. Perhaps they see the same thing as me, the deadening impact of a slowdown in government spending, or worse, a double dip recession, that would kill them if they started adding overhead now.
They have also probably figured out that starving, bankrupt consumers don’t buy much. Perversely, this means that productivity will keep soaring, as will corporate profits, which is how the stock market was able to hold its own today, despite the dismal figures.
There is no doubt that the administration will take the message home that not only was the last Keynesian inspired stimulus package too small, another one is needed immediately. But you can bet the next one will be far more jobs focused than the last, which had more pork than a Chicago slaughterhouse. How about a new interstate system? That would be nice. Conservatives will be outraged, insisting that the only way to economic salvation is to put more money in consumers’ pockets though tax cuts.
This will certainly mean bigger deficits, followed by more borrowing, and then higher taxes. It also makes the Fed’s public discussion about winding down quantitative easing a bit awkward. Expect zero interest rates to take on a new lease on life.
you cant put lipstick on it but you can slaughter it and have a bbq
O presidency = higher unemployment and higher energy and food prices. Complete bond and equity collapse to follow.
EPIC FAIL.
On another note, Madhedgefundetrader, where was your house in Tahoe? I lived on the north shore for almost 3 years.
It was too much to ask to have the last stimulus dedictated 100% to an area that would be most beneficial in the long run, infrastructure repair, and it will remain too much to ask for the next one. Pork rules our bought and paid for "representatives" in government.
If you haven't watched "The Crumbling of America" on the History Channel, you should. Our infrastructure is literally rotting away.
"unless someone quickly invents a technology to harvest heavy oil economically (eg at break even of $50) - our time is up. game over."
Actually a cheap, portable, safe reactor technology was developed in
the 60's(LFTR Thorium reactor). This passive regulated cycle without the need of
a pressure vessel, creates very little long term waste.
This compact low pressure system could
be used for a heat source to extract heavy oil.
I also remember hearing about a promising Fusion Reaction that was suppressed.
I'm not talking "Cold Fusion" either. Apparently, its better to be dependent on imported
energy and create Jobs Programs for Physicist than solve the energy crisis.
We are sitting on huge reserves in North Dakota and (rumor has it) on the North
Slope. Could it be that someone decided that Energy Independence wasn't
good for America?
Maybe Christopher Story's and other Conspiracy Theories are right.
THEY are out to get us!
HELL YES THORIUM
http://www.wired.com/magazine/2009/12/ff_new_nukes/
The US is already failed state. 30 years of 'kick the can' policy is coming home to roost and it won't be pretty. SS, Medicare & gluttonous pentagon budgets have already bankrupted us.
There is no way out. More Keynesian money drops from Time's Man of the Year will eventually lead to higher interest rates or currency implosion and austerity now will send the country into a real depression. To top that off, peak oil, the China / Russia / Middle East complex will make it all irrelevent anyway.
The only alternative to government spending at this point in the cycle is an instant hyperdeflationary depression -- which is the eventual outcome regardless of these temporary machinations.
The end of a fiat money system looks much like the beginning.....
Except for the bottomless abyss.
0.
Excellent point smokeybear which I might say is lost on most on this board. The deflationary deleveraging will continue despite the trillions being pushed out of the Fed and Treasury. I guess many on this board forget the total collapse of credit in the shadow banking system is tantamount to the wholesale destruction of money. What the fed is doing is like the little dutch boy sticking his finger in the dike and Chevy Chase in vegas vacation sticking chewing gum in the leak in Hoover dam.
Zeus
I dont know how else to say this. This administration has turned this life-long Democrat into a Republican in 10 short months.
NO MORE STIMULUS!!
NO MORE SPENDING --We can't afford it!
Let these TBTF companies crumble to the ground no matter the cost. Keeping them propped up is criminal beyond words.
Obama needs to Fire his Economic team, this is the worst performance of any President by far. They've made the situation worse not better.
2 Trillion spent and he couldnt create a single Job? pathetc.
Not to sound too harsh but they decided to become the gatekeeper of the Economy so it all goes back to them.
Why fire his economic team. They have given us exactly what he campaigned on: Hope and Change. Hope to keep your job or change in your pocket because you don't have a job.
He is trying to destroy the economy so that his team can remake it as a communist economy that will supposedly work this time. Remember, all of the communist loving professors after the fall of the Berlin wall said that the Russian version didn't work but that our version would work.
What kind of a schmendrik are you, anyway? Spare us, please, the all-too-obvious Republican agit-prop. Most adults past emotional age 21 today understand that the contention of political parties in this country simply serves to mask the reality of the common interests driving them both. Obama is about as much of a Communist as Hjalmar Schacht. He and his Democratic Party entourage are simply the tool of the corporate and foreign policy interests that paid his way in the last election. Do you really think that McCain and the Republicans had they been elected would have been any different? If so, you've been asleep for eight of the last nine years. If you're going to take Obama to task - and he deserves to be taken to task - at least take off that brownshirt you're wearing. No one's conned.
Great comment except that Eisenhour warned us back before 1960. It's been a lot longer than 6 - 8 years, I fear.
So many Obama voters are just livid at his obvious obfuscation of the economic facts right now---I mean, I am still damn glad Palin didnt get near the White House, but pissed that this administration allowed themselves to be immediately BOUGHT by the banking elite... Meet the new boss, same as the old boss!
The endless speeches from the campaign trail about how we must STOP hiring the same people, doing the SAME thing, and expecting different results, was followed by him HIRING the very crooks and Goldman mafia that he should have had JAILED--and they now continue to EXTORT the taxpayer daily!
Where is the accountability??
Not sure why it is so hard for many folks to understand why there are no jobs being created, when the goal of corporate America for the last decade was to outsource the jobs and find new cheaper overseas suppliers they destroyed the infrastructure needed to create jobs, the only jobs that were kept in America were the realtors, mortgage bankers and builders that were paid for with easy money and fraudulent transactions. Most of these jobs will not be coming back. We are about to lose another 8K jobs here in the space coast of FL when the shuttle stops flying, can't wait to see what that does to housing values here.
Not sure why it is so hard to understand, when the goal of corporate America for the last decade was to outsource the jobs and find new cheaper overseas suppliers, the only jobs that were kept in America were the realtors, mortgage bankers and builders that were paid for with easy money and fraudulent transactions. Most of these jobs will not be coming back. We are about to lose another 8K jobs here in the space coast of FL when the shuttle stops flying, can't wait to see what that does to housing values here.
1. Do we kow what the effect of the massive growth in both the size and length of term of unemployment benefits? It's starting to look like a reasonable lifestyle to go on foodstamps, unemployment, other govt benefits, and quit looking for work altogether.
1. Do we kow what the effect of the massive growth in both the size and length of term of unemployment benefits? yes, more deficit spending, greater debt.
It's starting to look like a reasonable lifestyle to go on foodstamps, unemployment, other govt benefits, and quit looking for work altogether. Most Americans do NOT want this lifestyle. They would rather work.
I know a couple in NY (considered a very liberal state) and the income levels to receive food stamps are very low, somewhere around the mid 20k per year range for a couple with 2 kids. This couple was getting unemployment insurance, one at approx 200 per week, the other at the NY max of 430 and they did not qualify for food stamps and they have 2 kids. they lost unemployment for a while (before it was just restarted) and got food stamps. as soon as the unemployment benefits kicked back in, their file was reworked and they were disqualified.
I don't know all the details about Medicare in NY, but my limited understanding is you have to be pretty close to broke to qualify.
Interestingly, assets are taken into consideration for qualifying for Medicare but assets do not count for food stamps.
Putting lipstick on a pig to make it look like it can fly? Do we understand the GRAVITY of the situation?
if i remember correctly, tyler had a post indicating the potential for this jobs number to be positive, possibly big positive, based on the seasonal adjustment factors and other technical stuff, as opposed to actual job creation, with the months following winding down and into negative territory again based on same. does this mean the numbers are slated to be even worse in the coming months (again ex the actual job creation/loss)?
ponzi
Maximal productivity is achieved by slavery. Not a desirable condition for the country or the economy (since slaves barely consume). Higher productivity is positive for the supply side insofar as input costs, but a longer term negative for demand by reducing total workforce and deflating wages (hence becomes a viscious deflationary cycle)
Businesses and individuals have also no doubt figured out that at some point someone is going to have to PAY for all the stimulus, and guess who that is going to be?
Nothing kills economic incentives more than a high federal debt that promises to impose more and higher taxes in the future, regardless of the tax burden today.
We can't afford stimulus 2, we couldn't afford stimulus 1. I think this time the public outcry will be deafening and if it actually passes will be the dealth knell for many congressional positions.
Delacroix,
The military need not launch a recruiting drive; it's not a bad gig during a Depression. FYI I am a former Army officer.
It's not a recession, it's a depression.
DavidC
Meanwhile Japan's (yes Japan's) savings rate has now declined from a whopping 20% to 2.7%. 20 years and they are still racing with us to the bottom !!
President Obama pivots to jobs as key theme
East Room announcement at 2:40 p.m. ET about stimulus dollars going to clean-tech jobs.
Obama's just paying off his union buddies. So far Obama's stimulus has been nothing but a slush fund. Hilary's pollster got 6m in stimulus and it goes on and on and on.............. Extended unemployment for the little people. Just poverty by default. If Obama cared even a little bit about Jobs he would not have wasted a whole year on communist health care. And mark my words he will waste the rest of this year on cap and trade. Him and his buddies are the originators of the Chicago Climate Exchange.
UNEMPLOYMENT Is why nobody is buying or borrowing.
It's the cause of all the foreclosures, credit defaults and bankruptcy.
Banks are not lending because of all of the above.
This is the 1930's all over again. It's called a deflationary depression.
Obama throwing a few Green-Tech jobs to Acorn and the SEIU and hiring a bunch of census temps amounts to pissing up a rope. It's just dick waving so he can get back to Communist health care and his and Algore's cap and trade scam.
1800 layoffs @ ups, what does he consider large scale layoffs. and more at berkshire hathaway.unemployment, is as close to a bottom, as real estate. obama's jobs program, will probably include a massive recruiting drive, for the military.job security, until a bomb or a bullet ruins your day.the benefits, always sound better going in.
isn't this a bit like worrying that there arn't enough schools in the 60's in that it is the very same cohort, the Baby Boomers? We only just began retiring last last September. Give it a little more time while we switch from taxpayers in our prime to Domestic Creditors in our golden years. I know I'm looking forward to my very well-earned Social Security benefits.
Agree with your take madhedgefundtrader except for the part about a new interstate highway system. That would actually add productive capacity. Stimulus is about 1) paying off benefactors, 2) adding debt, 3) raising taxes, and 4) extending the recession.
Stimulus 3 will be like stimulus 2, used to subsidize states and buy cheese for the ever-growing ranks of shelters.
It's all about power. Never waste a good crisis.
Stimulus works when done properly.. e.g. WW2
Regards,
Zeus
It works for the politically connected that is.
Even WWII did not end TGD 1.0. It largely was our intact productive capacity afterward, and giving up on failed programs to artificially prop up prices in a deflationary environment.
Do we need a massive war effort first is the question.
WW2 was mainly about securing oil supplies. Make no mistake.
With oil surging, dollar declining, new emerging power threatening US dominance.. you do the math.
What many people on this board dont understand is WW2 was the greatest stimulus program of all time. We didnt pay as we go. We simply put people to work to build tanks, ammo, planes, energy production, infrastructure, food etc which in the end increased aggregate demand tremendously: Yes fiat money created out of thin air actually increased production capacity with a resultant increase in demand/consumption. All you people that rail agains "government spending" dont understand that the private sector doesnt create money. It creates the innovation & ideas that soaks up the "fiat" money created out of thin air by the government. Many on this board would be well advised to study the concepts of modern money systems so at least we can frame the arguments correctly such as what would be more effective in terms of economic benefit? Infrastructure spend? Tax breaks for business? Trillion dollar support of wall street? Sincerely, ZEUS
WW2 was a great stimulus, no doubt, since the entire product of industry here was used to blow up the rest of the then-developed world's industrial capacity, leaving the US standing without competition when the dust settled. Oh, and we imported no energy then. And we were a creditor nation, even going in, not the largest debtor.
That you state the "private sector doesnt create money" indicates you don't understand fractional reserve banking and how it has worked for the past few hundred years. Banks - private sector banks - create money every time they fund a loan and created far more money than government during that time. Creating money is what banks do. See "M3" ...
It has been proven that there is a fairly strict Law of Diminishing Returns in regards to stimulating the economy. Once most of that infrastructure has been built (i.e., gun factories and tank factories...), it takes more stimulus to stimulate per basis point of GDP due to sheer enormity.
Kind of like a drug addict has to have more each time to catch a buzz, it is the same with fiscal stimulus.
There is no WWIII that can possibly get us out of this mess without billions of people being killed and destruction the likes of which have never been seen.
Either option won't work. The only thing that will get us out of this mess is retiring this deadwood overhang, allowing well-connected banks to fail and bringing equilibrium to the housing market by allowing prices to fall to a natural level.
That is going to be painful enough.
President Obama pivots to jobs as key theme
East Room announcement at 2:40 p.m. ET about stimulus dollars going to clean-tech jobs.
Obama's just paying off his union buddies. So far Obama's stimulus has been nothing but a slush fund. Hilary's pollster got 6m in stimulus and it goes on and on and on.............. Extended unemployment for the little people. Just poverty by default. If Obama cared even a little bit about Jobs he would not have wasted a whole year on communist health care. And mark my words he will waste the rest of this year on cap and trade. Him and his buddies are the originators of the Chicago Climate Exchange.
this is indeed kafkaesque....if corporate profits
are so "growthy" and frothy - enough to justify wildly exuberant p/e multiples, why would companies be afraid to hire?
everyone knows that profits are surging so the logical thing to do is to develop new markets and business....
if declining government spending is a concern - but wild growth is on the horizon - one simply needs to remember the obama commitment to deficits as far as the eye can see. and yet green shoots suggest organic growth - especially from such engines of world commerce as india and china and brazil....
besides, we are in a recovery which means that employment growth is needed to capture opportunity - unless existing workers are so efficient that they can take on the 15-30% gdp growth expected to justify p/e ratios. but i have never heard of worker productivity growing 15-30% in one year. must be a lot of slack but then again we are in recovery so it doesn't make sense....
A new Interstate Highway System?
How about some support of enhanced interstate passenger rail service, spur lines and turning those stupid bike paths that were laid down on rights of way back into track? Establishment of local / regional rail freight warehousing, so when JIT warehousing on wheels falls apart with $10/g diesel we can keep some products moving? How about felling the millions and millions and millions of standing-dead beetle-killed lodgepole pines covering the Rocky Mountain west - now that would take some people off the UI rolls - so we can chip the dead wood while it still has some energy content, then gasify and burn it - carbon neutrally - in coal fired power plants?
How about let's stop bullsh!ting ourselves about global oil production rates and if we're going to blow the Treasury, spend a little money and time getting civilization ready for life with less fundamental liquid energy input?
It is you Bill.
How is GF doing these days?
I left there a year ago to teach solar technology at CMC. GF went offline as an operating division on 8/1/09, though fortunately, the parent firm's satcom distribution business is still breaking records - Via Satellite has a great interview with Fred in this month's issue!
that is right.
peak oil is fo shizzle. and not in "the future." now. mexico will soon be a failed state.
oil is going to $300 before (the mother of all) demand destruction brings it back down to (2010) $50.
too much capital and "money" juicing the markets was red-lining the POO in early 2008.
they had to engineer a deflationary collapse to buy more time.
unless someone quickly invents a technology to harvest heavy oil economically (eg at break even of $50) - our time is up.
game over.
Fucking THORIUM, baby.
http://www.wired.com/magazine/2009/12/ff_new_nukes/
Dear sepmeir,
I am afraid your advanced thinking will not play well with the wingnuts on this forum.. Somehow the lovely if not mentally challenged former governor of Alaska convinced America that Drill Baby Drill is the answer to oil depletion and the looming spector of Peak Oil. Great Post
End of the year... load up (or account shift) more unemployment into December and use the excess to declare future victories well into the new year!
Bingo!
What a moron. It's exactly government spending that took capital away and prevented the private sectors from creating productive jobs.
You would think someone would figure that out by now.
Keynesianism is a real mental disease, isn't it?