Seven Bad Things About the Latest Grim Jobs Report
The news isn’t good — and neither are the implications.
But could this just be a hiccup? Could this just be the recovery hitting a soft patch?
President Barack Obama issued this statement.
A debate will ensue about whether the recovery is truly a recovery or whether the economy is now completely stagnant or backtracking. Partisan positions (and political hopes) will color it. But there will be stand-back-and-analyze voices worth being not just heard but considered.
Just don’t expect to get the full picture on left or right ideological radio and cable talk shows which increasingly resemble partisan propaganda programs and not even entertainment anymore. (I’ll be monitoring left and right talks shows and cable shows via XM radio today as I go on a long drive to events in Los Angeles and Torrence).
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It’s almost as if obsessing over the deficit, not offering a single jobs bills, threatening to destroy the economy, refusing to close tax loopholes or effectivize the tax code, destroying public employment levels, doing everything to create uncertainty among customers that firms and corporations need to go spend, stalling all appointments in the government and going after Planned Parenthood doesn’t create jobs!
It’s almost as if the surest and most foolproof way to sabotage the economy and hurt your countrymen is to elect republicans to any kind of office whatsoever!
The only thing that surprises me, is that people are still surprised by weak numbers.
Nothing that was broken has been fixed. The government went to great pains to make sure that we didn’t suffer the consequences of fixing them. So why do people expect them to be fixed now?
But I thought removing public jobs and going full-on austerity would save everyone forever!
After all, doing the opposite of what that gauche, shrill and partisan hippie Krugman wants is a perfectly acceptable and sane approach to policy, eh Penza?
Dadurr bond vigilantes gih-hurr corporations don’t dare investerize because deficit scary derp-a-dirr-durr.
If you care more about lowering the deficit or keeping taxes as historically low as they are than creating jobs, you are a bad, intolerable person.
Sorry but what exactly is your definition of “full on austerity?”
I’m seeing the word austerity used a lot but as near as I can tell, it refers to deficits far higher than historical averages. I’m not sure why that is a sensible definition.
As to tax rates, again you are misinformed. While current tax receipts are low by historical standards, those same receipts will be at historical levels without any changes in current tax policy.
And, as far as I know, Logan hasn’t commented yet but maybe you were trying to preempt his comment and use your fine mind reading skills to know what he was about to say.
As rapper Bow-Wow says, let’s “break it down”.
Eons ago, in 2005, the unemployment problem was undeniably forecasted……..
“Mark Zandi, chief economist at Economy.com, notes that real-estate-related industries accounted for 9.7 percent of total domestic employment in the second quarter of 2005, up from 9.0 percent in the fourth quarter of 2001. And in areas with the hottest markets, housing plays an even more important role. In California, 13.4 percent of jobs in the second quarter of 2005 were housing-related, versus 12.3 percent in the fourth quarter of 2001. In Las Vegas, the figure rose to 14.6 percent from 12.9 percent; in Panama City, Fla., it rose to 15.4 percent from 11.7 percent.”
So, since TMV liberals believe George Bush caused the housing bubble, by the very same assertion, he gave an awful lot of people jobs. It stands to reason, the folks that got put out of work due to the housing and mortgage crash are not crucial to maintaining a 2-3% per annum recovery in other industries. Thats why the economy will continue to grow modestly without putting any of these folks back to work.
After two years of wasting TMV bandwidth on this topic, the 3 options remain the same as we called them back then……1) have the government pay people to dig holes in the am and fill them back up in the pm; 2) institute a massive reeducation/retraining program of the unemployed or 3) reinflate the housing bubble or create another one.
Maybe John Boehner and that famous standard bearer for the right, Rush Limbaugh, will get their wish, which was for Obama to “fail”. Anyone not hampered by partisanship has to realize that an Obama fail would also have to entail a country fail. One thing is certain, if he presides over an economy that doesn’t show a strong indication of turning around before the election (regardless of who screwed the economy up) then Obama will not be re-elected. The voting public is reactive, not analytical.
Absalon said: “But I thought removing public jobs and going full-on austerity would save everyone forever!”
If a 1.5T deficit is “full-on austerity”, I’d hate to think what a stimulus would look like.
It’s almost like a trillion dollar stimulus package plus giving a bunch of money to banks, auto makers and Afghanistan hasn’t worked.
“I’m seeing the word austerity used a lot but as near as I can tell, it refers to deficits far higher than historical averages.”
Austerity is generally being a moron and acting as if governments are households during a depression. It’s not investing and not spending, it’s not raising taxes and it is firing public employees and worrying about the confidence fairy. Generally, it’s being a macroeconomic tool that wastes free speech and oxygen.
“If a 1.5T deficit is “full-on austerity”, I’d hate to think what a stimulus would look like.”
The deficit is a non-problem right now, and the best way to resolve MediCare and MedicAid is through measures like the PPACA. The jobs problem is solved by taxing the entities that don’t want to invest no matter how much you coddle them, and of course with deficit spending.
Austerity is bad. Taxes and more deficit spending is good. Stop firing public employees and worrying about taxes, immediately create aggregate demand and figure out how many tax hikes you can squeeze out of our Galtian übermensch before they stop whining and really “go Galt” like those moronic libertarians are always claiming they will.
I know you feel that more taxes and deficit spending is wrong, but feelings are not thoughts and I don’t respect yours one bit.
The US is a neo-liberal dream in many aspects but the Most Holy Entrepreneurs don’t want to invest. Well, if the princess is going to whine about the pea, don’t waste mattresses on her.
Tax and spend/invest. Crush all whiners. Don’t give corporations tax cuts, give them customers. Boom. Solved. Thank me in a decade.
“It’s almost like a trillion dollar stimulus package plus giving a bunch of money to banks, auto makers ”
It wasn’t a stimulus program, but a half-tax cut program. Therefore, it wasn’t stimulating. Because morons demanded tax cuts.
Also, any non-Teeper republican would have bailed-out all over the place and that would still have been the best decision.
woohoo Axel’s back. I thought you were banned dude.
The humor quotient went back up
“The humor quotient went back up”
A guy who still believes in trickle down probably finds According to Jim funny as well, so… Ouch I guess.
Here’s another joke: You are hurting your country and countrymen. Also, I respect your concerns about the deficit as much as I respect those who worry about evolution dominating curricula.
Yes the jobs picture is bad. But corporation are flush with cash, but no jobs creations or new developments are coming. Wall Street, short term gains and CEO earnings are going fine…
Hmmm…I don’t believe in trickle down and I hate According to Jim but hey no worries.
It’s deeply depressing that you think I’m hurting my countrymen. I don’t know how I’ll sleep tonight.
The excellent news is you still post fact free which does create lots of humor for us all.
Oh yes, and I really wish my HH could run a $1.6 trillion deficit for a year. I think I’d manage to retire at that point
If deficit spending were the answer, then we should see a correlation between a growing government and a growing economy. It’s never panned out that way. Every economy that has gone over 100% GDP in debt has suffered about a 1% loss of GDP growth. The book “This time is different” lays a solid empirical (not theoretical) basis for that fact.
“The deficit is a non-problem”
Cheney would agree.
You’d think They would have learned, but the Left dives deeper than ever, and They are not assuaged yet.
Meanwhile in the real world, even those of us who knew so much better (and are so much better — EAT IT) gave the Demmies and their left-lib goaders the green light, they couldn’t even manage to get a Permitted Stimulus correct. Nobody sane trusts them again, much less when they sped us to the need for austerity now.
Prof: I’ve said many times, once the model failure of not only the entitlement programs but other government (here, federal, but also state and local government) programs can’t be denied any longer and reform can’t be postponed any longer, then politicians will retire.
It’s additionally annoying to outrageous (to better people) that some angrily and forcefully deny problems with entitlements, and entitlement reform.
The other state-local government abuses (not to mention so manh federal abuses not elevated to celebrity status) and their failure and harmful effect on global society are an after-thought.
You know I think this is Axel! Welcome back!
“I don’t believe in trickle down”
Your political choices and how you leverage support means that you act like you believe in trickle down, therefore you believe in trickle down.
“Oh yes, and I really wish my HH could run a $1.6 trillion deficit for a year.”
You honestly think the deficit demands action right now, don’t you? This is completely incomprehensible. It’s a problem for the future, but right now addressing it in the way the modern right wants is penny wisdom that will make addressing the future problems impossible. It’s just so pathetic, petty and metaphysical.
Raise taxes as much as is possible without hurting the recovery. Only metaphysics and petty feelings stand in the way of that solution.
“If deficit spending were the answer, then we should see a correlation between a growing government and a growing economy.”
Yes, because if you raise taxes then you might as well raise rates to 100 %, and if you cut welfare spending then you might as well cut it entirely and let people die in the streets and turn to private contractors for services. Or maybe we stop thinking in polar extremes and stop wasting everybody’s time maybe yes?
Deficit spending isn’t The Answer the way the freaks think tax cuts is The Answer. But right now it does more good than harm. The interest rates on bonds are not going anywhere, so all of this deficit-worrying is simply fashion; all the privileged, boring, unintelligent, comfy, Very Serious Men looking for excuses to vote for even the most right-wing republican is seeing that the herd thinks the deficit is scawwy, so they have to say the deficit is scawwy and will kill us in our sleep.
But the situation does not call for tightening belts, tax cuts or deficit-addressing bills. It calls for heretical solutions like more spending, tax hikes, investment and jobs bills.
Anything else is effectively an attack on the US and its population.
ROFL. Glad to see your mind reading skills are still intact.
Silly boy. If cutting spending hurts the economy so does raising taxes. But then again, an interest rate increase of 100 basis points (a metaphysical certitude if the deficit is not addressed) pulls about $140 billion out of the economy to no end whatsoever.
You must have skipped that day in math class.
But it is good to see you haven’t changed, either your silly positions or your style of arguing.
Try not to get banned again.
Can KK, be far behind? Will it be a biblical reference (Lot’s partner) or mythology (Sisyphus or Icarus)?
“But corporation are flush with cash, but no jobs creations or new developments are coming. Wall Street, short term gains and CEO earnings are going fine”
And that is the problem…the money is there for job growth, but corps are either holding their cash or creating jobs in foreign markets.
“And that is the problem…the money is there for job growth, but corps are either holding their cash or creating jobs in foreign markets.”
This is because no one cares about the customers. The fact that their wages are stagnant due to the vendetta against unions and the fact that they need a big buffer in case they get sick and insurance providers shaft them is a non-issue to the neo-liberal scum.
Corporations have everything except demand. This is because some of you are morons who put republicans in congress.
“But then again, an interest rate increase of 100 basis points (a metaphysical certitude if the deficit is not addressed)”
The problem in the eyes of the entities you fear is not that the US has a deficit. It is that these entities are realizing millions of you are idiots who put mongrels, extremists and people whose brains have rotted from religion into congress. Everything was on the right track until the boomers betrayed the country yet again in 2010.
See I knew math was still beyond you.
Good to have you back.
OK. I’ve decided I’m tired of the “money sitting on the sidelines” discussion so I want to provide one fact that has gone undiscussed so far. I’d ask everyone to take a look at this article.
http://www2.standardandpoors.com/spf/pdf/index/20090915_500-Buyback-PR.pdf
And focus on the following quote:
“According to Standard & Poor’s Index Services, preliminary results show that S&P 500 issues spent $24.2 billion on stock repurchases during the second quarter of 2009, representing a 72% decline from the $87.9 billion spent during the second quarter of 2008, and an 86% decline from the record $172.0 billion spent on stock buybacks during the third quarter of 2007.”
Now maybe this is a bit too arcane corporate finance but the facts are that rather than buying back stock, companies are holding cash on their balance sheets. While liberals, including most on this site, decry this practice, it is actually much better for the economy than what they were doing historically.
Let’s do a thought experiment, suppose, instead of leaving the cash on the balance sheet, companies bought more of their own stock instead. What happens…the cash they use to buy the stock is transfered to existing holders of the stock, largely institutions like pension funds, hedge funds, and insurance companies. Holding it on the balance sheet makes it available for future investment. Using it to buy back stock makes it unavailable for the same purpose.
Indeed, had stock buybacks continued at the pace of 2007. The “trillion dollars” in cash on balance sheets would be gone, stock prices would (in aggregate) be higher and stock holders in 2007 would be richer. Is this a better outcome from your point of view?
I don’t mind them having cash on the sidelines. I mind idiots wanting to protect them from tax cuts when there needs to be more spending and investment.
Corporations don’t want to invest because they don’t have customers, so we have to take in more revenue and help aggregate demand. The deficit is a non-problem and the fact that some don’t want to pay more in taxes is something I will never sympathize with.
I talk about corporations having lots of cash because I want to show that the sensitive snowflake corporations are not hurting one bit and their profits should be taxed more. Let’s see them make good on their blubbery promises to go Galt.
What investment does government not have the wherewithal to make?
Be specific if you can.
State governments are a problem all of their own, but there is like two trillion on infrastructure backlog, not to mention little sponsoring of education on anyone. There needs to be revenue unless you are interested in ridiculous seignorage.
It’s a collective action problem. If one small business hires people that won’t have much effect on their sales, but there will be higher costs. So if they don’t see any reason why their sales will improve speedily enough they won’t want to invest or hire people. But if a bunch of businesses hired people then that would increase demand across the board, which would create an investment incentive.
Traditionally government is the go-to entity for collective action problems, but you have DEGENERATE MANIACS that treats the government scary as an axiom, so you are screwed. Same thing with the climate problem BTW.
You are all so petty and worried about your own pocket-books and not being able to buy bourgeois, tacky crap for your tacky kids and tacky homes that you’ve forgotten about solidarity. Well, it’s all penny-wisdom, just hurting yourself in the long run because of the obsession with paying little in taxes and punishing those lazy welfare-receivers.
Not to mention all the mayonnaise-eaters that live in the ozarks and whine about gasoline prices (AND mileage standards – those are for San Fran fascists!) and the gubbyment even though it was taxes and Washington that made it possible to live so spread-out in the first place.
If there was a way to exclusively stop spending welfare on red-state or rural teepers and neo-liberals, I’d be all over that. Their societies, their states, their spread-out, care-dependent way of life and even their representation is subsidized. Yet they whine, those endlessly self-compassionate fools.
Excellent answer.
Education spending is up massively.
Transportation spending is up (slightly less massively) and given that government is spending $6 trillion a year, one imagines you could fund $2 trillion over a decade or so, if there’s actually $2 trillion in genuine need, which I rather doubt.
But then again, I didn’t expect a direct response or facts.
The personal attacks on commenters in this thread are unnecessary, uncalled for, and quite telling.
Wonder why the self proclaimed “TMV money pro” limited his data re: share buybacks to 2009?
Well, wonder no more, had he gone beyond 2009 he would have defeated his own misleading argument.
Yes that’s $90 billion shares IN THE FIRST QUARTER of 2011 and a 2011 SIX MONTH total of $263 BILLION.
2010 total was $164 BILLION.
Oh dear Steve K, you didn’t use the google machine correctly.
http://www2.standardandpoors.com/spf/pdf/index/040708_SP500_BUYBACK_PR.pdf
Share buybacks in 2007 were $589 billion. And of course, balance sheets are built up over a few years so there we have the trillion dollars or so built up over the last 3 years.
Oops
Oh dear SteveinCH,
You poor thing you, I do use “the google machine correctly” my reply, and comment, was to your comment:
… not your link.
If your quote misrepresented your link in order to say something altogether different… I’m not in the least bit surprised. Maybe next time you’ll try to post a comment more in line with the short, out of context quotes you use.
Oh and maybe next time you’ll drop your condescending tone… It’s been popping up more and more lately and I’ve decided I’m tired of it.
And it turns out that your comment was wrong. I guess you’ll have to get over it.
And back on topic, why don’t you explain why share repurchases are a better use of corporate cash than holding the cash on the balance sheet, from a macroeconomic growth perspective?
Or is that too condescending?