Home > Economy, Government > The economy is fine?

The economy is fine?

Mr. President, let me be the latest to remind you of a few inconvenient truths.  The economy is not fine; not close to fine; and will never be fine as long as you remain in office because you lack the belief in capitalism and lack in the understanding of how capitalism works.  That economy that you claimed today was fine?  It’s limping along at less than 2% growth, in a recovery period that began in June 2009.  As average economic growth prior to 2008 was above 3%, that means we will never actually recover and gain back what we’ve lost these three years.  In the last 37 recoveries, after recessions, the average rate of economic growth has been greater than 4%, marking this recovery — officially — as the slowest recovery with the least economic activity out of the 37.  That isn’t fine Mr. President.

Growth won’t increase because the engine for growth starts and ends with jobs.  We are currently experiencing the lowest labor participation rate since 1982 — 30 years.  The fewest people in 30 years are actually working right now, today.  You might think otherwise because the unemployment rate had been declining in the last few months, but I assure you it is.  The official unemployment rate — the U-3 rate — doesn’t track those individuals who had previously been employed full time and now are not.  If those individuals are currently working part time, they’re still counted as employed.  Well, they are, fair enough.  But the official unemployment rate also doesn’t track those individuals who had been previously unemployed and who have given up entirely and are no longer working.  Those individuals are only tracked in another rate, called the U-6 rate, which the media never talks about.  That rate stands at 10.3% today, but I don’t need to actually tell you that.  If you’re looking for a job today my guess is you already know it innately.

If you’re looking for work today, you know the economy certainly is not fine.  President Obama?  He’s completely disconnected from reality.

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  1. Michael Johnson
    June 8, 2012 at 7:40 pm

    Actually, the private sector is gaining jobs at about the same rate as the last recovery. It’s government jobs that are declining.

    http://powerlineiswrong.wordpress.com/2012/06/08/obamas-gaffe/

    • June 8, 2012 at 9:33 pm

      Austerity? Certainly not at the federal level, which hasn’t witnessed austerity in any year in my life time. States have no choice but to balance their budgets, which is something that I wish the federal government would do! In any event, thanks for the data though I’m afraid I can’t agree with the message of your blog. Which is to say the “economy is fine”. It is not. 69k jobs added in the previous month. Less than 2% economic growth when the average growth in all prior recessions is 4%. We’re headed in the wrong direction with two months of receding employment data to point at directly.

      To put the jobs numbers in historically context, our economy has fully recovered within four years of the onset of a recession. At this point after the 2001 recession, our economy was up .5% over the pre-recession total, yet we’re still 4% below the pre-2008 mark. From the 1990-1991 recession the economy was up 4.7%. From the 1981-1982 recession the economy was up +6.8%. From the 1960-1961 recession the economy was up +6.2%. From the 1973 recession the economy was up +8.3%. From the 1970 recession the economy was up +9.6%. Etc, etc. The current recovery rate of job growth is the slowest since WWII using the BLS statistics, and there is no projection that I’m aware of that indicates the rate of job growth will increase any time soon.

      You impute the previous recovery gains to government employment, fair enough. So throw it out. Compare the current recovery to all previous recoveries since WWII then. You’ll see that we’re in a much deeper predicament than President Obama wants to admit because he’s not really concerned about economic growth and putting the country back to work. What he’s actually concerned with is winning reelection and continuing on with the “fundamental transformation” of our country he ran on in 2008. The economy is a means to an end for him, when it more rightfully should be the very bedrock of his policy decision making.

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