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We Spent $3.2 Trillion… and Haven't Put a DENT in REAL Unemployment

Phoenix Capital Research's picture




 

The financial media are gaga over the alleged great jobs numbers from last week.

 

We’ve been over this saga many times. The methodology for calculating jobs gains is not even close to accurate. The unemployment rate is now a marketing gimmick rather than an accurate economic metric.

 

Indeed, here are some staggering statistics that indicate just how messed up the US economy is right now.

 

·      The labor participation rate is the lowest since 1978.

·      There are over 90 million Americans without a job right now.

·      An incredible 20% of all American families do not have a single member who is employed.

·      There are over 47 million Americans on food stamps.

 

There is simply no way to spin these numbers. The US Federal Reserve has spent over $3.2 trillion and generated virtually no real job growth (accounting for population growth).

 

See for yourself:

 

 

When you account for how the potential labor pool has grown, the number of employed Americans has gone almost nowhere but down since the 2008 recession “ended.”

 

 

At the end of the day, spending money doesn’t create real job growth. An employer only hires someone if they believe that the person’s output will have a net benefit for the firm (meaning the money the person’s output brings in is larger than the money the firm pays them for their work).

 

That’s what creates a sustainable job. Spending money just to create some position where a person sits at work 50% of the time doing nothing is of no real long-term value to the economy, the person, or the firm.

 

In simple terms, the great attempt to prop up the US economy through spending and printing money is at an end. The world takes a long time to catch on to these changes, but the shift has already begun. It’s now just a matter of time before stocks figure it out.

 

This concludes this article, swing by www.gainspainscapital.com for a FREE investment reports Protect Your Portfolio, which outlines how to protect your portfolio from bear market collapses.

 

Best Regards

 

Phoenix Capital Research

 

 

 

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Sun, 05/04/2014 - 22:04 | 4727201 Seize Mars
Seize Mars's picture

Uh, "We Spent $3.2 Trillion… and Haven't Put a DENT in REAL Unemployment"

"We" didn't spend anything. "They" stole it from me and gave it to their friends.

Sun, 05/04/2014 - 21:17 | 4727124 Westcoastliberal
Westcoastliberal's picture

And let me add, another way to increase employment and increase decent paying jobs is to bust up all these fucking monopolies!  For Christ's sake, what benefit is there to the public to have less, not more choice?  If the Comcast/TWC merger is approved, how many 1,000's of Americans are going to lose jobs.  Who benefits?  Not the public.  Same with all the media.  When 2 companies are allowed to own/control all the decent-signal broadcast outlets in a major city, 100's lose their jobs.  Break 'em up! We need more, not less, competition.

Sun, 05/04/2014 - 18:22 | 4726753 GreatUncle
GreatUncle's picture

I like how they create 2 minimum wage jobs with minimal work when one individual working on a decent wage could do it.

Well my little central bankers this policy look and study it.

At minimum wage, means no savings for the future and means an ever increasing number of people demanding lower prices for goods etc. -->>> DRIVES THE DEFLATION FASTER BABY!

In fact as this policy increases what you get is the central banker inflation being cancelled out by the consumer deflation especially once their credit limit is maxed. Think also this is part of the central banker trick of immigration on the economy where people coming have little to no debt watering down the overall debt for a time until they get theirs?

Mainly minimum wage jobs might make the unemployment level look good but it does absolutely diddly squat for the economy going forward.

We sow today the consequences for the future.

 

 

Sun, 05/04/2014 - 17:52 | 4726664 Bemused Observer
Bemused Observer's picture

" An employer only hires someone if they believe that the person’s output will have a net benefit for the firm (meaning the money the person’s output brings in is larger than the money the firm pays them for their work"

And the rest of that sentence should read, "and only in response to a demonstrable demand in the marketplace for that output."

Which means you are going to have to get the 'spending money' into the hands of the marketplace! I'm not here to argue about HOW you do it. I don't really care if you raise wages, increase entitlements, send people stimulus checks, write off their debts, cut their taxes or have songbirds fly in and deposit cash on their pillows, you have to do SOMETHING to get spending money into the hands of your fucking customers!

Sun, 05/04/2014 - 18:14 | 4726725 pitz
pitz's picture

There's plenty of money out there, its just in the wrong hands.  Non-producers have enormous amounts of money, whether from welfare schemes, government employment, or the various sorts of financial scams that have been run over the years.  Producers are mostly broke and/or idled/unemployed.  There are literally millions of scientists unemployed in the USA, while the financial elites import H-1B's and other assorted foreign scab labour by the plane-load.

The key for policy makers is to actually get spending power back into the hands of those who know how to produce.  An additional Maseriti or two in an already wealthy CEO's driveway is going to do sweet fuck all for the economy.  But recapitalizing the productive and R&D sectors will create useful and lasting output. 

Sun, 05/04/2014 - 17:47 | 4726650 Clowns on Acid
Clowns on Acid's picture

Why is this a surprise ? The QE money printing was structured to bail out the banks balance sheets. The Fed buys USTs and MBS from the banks (at what price you may ask....). A less than opaque operation where the money center banks got bailed out by the US taxpayer, but the CEO's and upper mgmt conti nue to make 10's of millions in compensation.

Pure theft. This is obvious. Why doesn't the author simply point out the theft ? Perhaps Russia should point out the QE theft and subsequent drive by the Fed and IMF to create "money velocity" by starting a war in Syria (that didn't work), and now trying to bribe the Ukrainians to fight against the Russians. $5Billion from the US State Dept thus far (quote -  Victoria Nuland / Nudelman) and subsequent $15 Billion from IMF......

When the direct confrontation begins... there wil be no time to concentrate on the actual criminals.      

Sun, 05/04/2014 - 16:43 | 4726517 ms8172
ms8172's picture

When is the market going to realize this?

Sun, 05/04/2014 - 16:30 | 4726492 AdvancingTime
AdvancingTime's picture

 The issue of creating jobs is now front and center in regard to setting monetary policy. Sadly the people in Washington remain clueless in understanding how "real" jobs are created; Creating jobs in a mature market should be required to pass a certain "taste" test.

It should be pointed out that while America is creating jobs it is costing a huge amount. I'm referring to the massive government deficit which I feel is the fuel driving our still rather weak growth. Is it sustainable, and just as important are these the right kind of jobs and will they last?

When a job that falls outside the description of government worker fails to make economic sense it becomes a form of working welfare with the taxpayer picking up the tab. We as a country and as a society have paid dearly for each unsustainable job created through government incentives and partnerships, because of the nature of many of these jobs we might even call them temporary. More on this important distinction in the article below.

 http://brucewilds.blogspot.com/2014/04/creating-real-jobs-remains-proble...

Sun, 05/04/2014 - 16:20 | 4726474 AdvancingTime
AdvancingTime's picture

We should understand that demand drives investment, confidence is not the real driver. Lack of real growth is about lack of real demand. Much of the demand we see today is driven by artificially low interest rates and a mirage in the markets they distort. By this I mean the distortion and illusion that the economy is healthy tends to cause people to make poor economic choices.

It is becoming apparent to many the financial system has become dysfunctional.  People are forced to loan their savings to governments and banks with negative interest after adjusting for inflation. Today for other than student and auto loans there is scant demand even at low interest rates. We must differentiate the kinds of economic growth and understand that all growth is not created equal. If you spend money but afterwards have little to show for it you have wasted it. More on this subject in the article below.

http://brucewilds.blogspot.com/2014/01/false-demand-fuels-wrong-kind-of-...

Sun, 05/04/2014 - 16:54 | 4726542 pitz
pitz's picture

Who is forcing people to "loan their savings to governments and banks"? 

People can easily not do this, and simply buy gold and silver (amongst many other asset classes).  The decision to hold cash or to loan it to a bank or government remains the prerogative of an individual.  People need to start standing up and making individual decisions, rather than being all cry-baby and complaining about the sort of abuse that government and the "banking" system heaps upon them with the low interest rates and currency devaluation.

Sun, 05/04/2014 - 16:19 | 4726470 NoWayJose
NoWayJose's picture

Back when the current Fed governors were in college, lower interest rates did help the economy and employment. US corporations and entrepreneurs would borrow from banks and build factories in the US. The Fed has never made the change to a global economy where US corporations borrow on the cheap and buy back stock, build factories in Asia, or speculate in housing, stocks or commodities -- none of which create jobs for Americans -- and some of these actually encourage corporations to close US factories and open others overseas. We would have been better off if the Fed did nothing, but even if the Fed felt it had to do something it should have tried to refinance more of the national debt for 30 years at the current low rates.

Sun, 05/04/2014 - 15:58 | 4726419 Duc888
Duc888's picture

 

 

We just need to hire 20M or so Fed werkerbeez for DHS and the rest of the alphabet agencies.

 

Geez, problem solved, that was too easy.  I should be POTUS, I could fix this unemployment problem in two weeks.

Sun, 05/04/2014 - 15:07 | 4726315 Rising Sun
Rising Sun's picture

You put a fucking socialist in the white house and you get modern day "1984".

 

The fucking spin and utter bullshit being pumped is beyond - and it's coming from goobermint and media alike.

 

Bagholders unite and BTFATH - buy the fucking all time high for all you bagholders who didn't get the acronym.

 

Sun, 05/04/2014 - 15:57 | 4726416 kchrisc
kchrisc's picture

I am always amused when I speak to a sheeple and they still insist on calling Obama a socialist/communist.

Even Gump, using his momma’s wisdom, could would have figured Obama out by now--"Fascist is, fascist does."

Sun, 05/04/2014 - 18:06 | 4726704 Seasmoke
Seasmoke's picture

Correct. Obama is Mussolini' s long lost son. 

Sun, 05/04/2014 - 14:53 | 4726283 Grouchy Marx
Grouchy Marx's picture

Just think how the economy would have roared if the working class had been given that $3.2T rather than the bankers.

Sun, 05/04/2014 - 15:02 | 4726303 pitz
pitz's picture

Its not even so much a matter of giving the working class money, but rather, not giving the oppressors even more power than they already have.  Bankers were a big part of the problem in the economy.  The events of 2008/2009 should have flushed them out.  But instead, their power was re-inforced.  And the government bureaucracy has further grown dramatically. 

 

Sun, 05/04/2014 - 14:53 | 4726280 pitz
pitz's picture

Time to abolish the H-1B visa and deport H-1B visa holders, especially in the tech industry.  They are not necessary when many of the tech firms like Google and Yahoo, that use them, are receiving literally millions of resumes per year from qualified Americans. 

Sun, 05/04/2014 - 17:25 | 4726612 paulbain
paulbain's picture

 

 

 

 

 

 

 

Pitz wrote:

Time to abolish the H-1B visa and deport H-1B visa holders, especially in the tech industry.  They are not necessary when many of the tech firms like Google and Yahoo, that use them, are receiving literally millions of resumes per year from qualified Americans.

 

Right, but we also need to deport those holding these additional visas: L-1, TN-1, B-1, etc.  Folks, for every H-1b in the USA, there are at least half-a-dozen L-1 visa holders!  Freaking unbelievable.  Right now, the USA is experiencing essentially unrestricted, LEGAL immigration.  Even if you put aside the illegals, the legal immigration is completely out of control.

-- Paul D. Bain

PaulBain@PObox.com

 

 

 

 

 

Sun, 05/04/2014 - 17:42 | 4726634 pitz
pitz's picture

I agree on the L-1 and the B-1, heavily abused.  As for TN-1, a bilateral arrangement with Canada under NAFTA, Canada and the USA have relative parity in terms of wages, working conditions, and share a common border and mostly a common domestic economy.  A recent Zerohedge article even implied that Canadians may have to take pay cuts merely to be part of the US middle class.

In short, Canadians don't go to the USA under-cutting US wages, nor do Americans come to Canada to undercut Canadian wages.  Its a symbiotic, rather than a parasitic relationship that is seen with the L-1/B-1/H-1B abuse.

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