Whose Economy???

July 14, 2009 in Barack Obama, Economy & Business, Stimulus Act

By JC

“…We’re going to see  continuing  job loss, even as the economy is beginning to stabilize.” –President Obama speaking at Macomb Community College in Warren Michigan this afternoon.

I see this as the ultimate oxymoronic statement. I daresay that for those hundreds of thousands of people who are losing their jobs this month, and the millions more unemployed by year’s end, that the economy is doing anything but “stabilizing.” Of course, maybe if you are a stockholder or employee of Goldman Sachs, and reporting record profits since 2007, things are looking pretty rosy right about now.

Maybe the stimulus is working as planned…

And nice news blurb during a break during the Sotomayor hearings. Only one person arrested so far today, as best as I can tell.

37 Replies

  1. Ryan Morton, Candidate Ward 1 - MBIA

    July 14, 2009 at 2:46 pm

    I understand why that statement seems like an oxymoron. Unfortunately, liberal economics (Keynes, etc.) is full of such phrases as “market correction,” “frictional unemployment,” and “optimization.” They cover up the realities of slumping markets, job loss, and exploitation (respectively).

    I think Obama was alluding to the stabilization of financial markets which could entail further job loss as companies restructure, close failing “shops,” and reduce overhead (all in an effort to look better to investors). It’s like the smarting of a bruise as it works to heal…

    Reply
    • Lizard

      July 14, 2009 at 5:27 pm

      ryan, you are wrong.

      Reply
    • Lizard

      July 14, 2009 at 7:28 pm

      sorry ryan, that wasn’t a very constructive comment, but i do think your attempt to justify the cognitive dissonance of the prez’s doublespeak shows you are as gullible as most of us, hoping the new prez was genuine when he talked about “change.”

      what we got instead was slick rhetoric that, intentionally or not, obscures the continuation of bush’s fiscal policy, which amounts to letting the financial sector loot us in broad daylight.

      remember toxic assets? does anyone think they just vanished? there was a chance to nationalize the banks, which some brave economists DID suggest as the ponzi scheme began unraveling, but i’m afraid that chance has come and gone.

      instead we’ve got the fed loaning/pledging over 12 TRILLION dollars to keep the scam going, which basically guarantees a japanese-style lost decade, or another great depression, or hyper-inflation in the next 5-10 years.

      so no, i don’t think It’s like the smarting of a bruise as it works to heal… because despite TRILLIONS of dollars thrown into the black hole that wall street has become, we are still hemorrhaging jobs.

      Reply
  2. Matt Singer

    July 14, 2009 at 3:30 pm

    People lose their jobs in growing economies. A stabilizing economy will also see job losses. Defining any economy in which job losses occur as a bad economy means we’ll never have a good one.

    Reply
    • Ryan Morton, Candidate Ward 1 - MBIA

      July 14, 2009 at 4:08 pm

      Good point. I do have to say, however, that economists have some of the most imaginative ways of neutralizing our awareness of bad things happening.

      For example, economists know that a certain level of unemployment is “necessary” to keep inflation down so they suggest we refer to this level as “the natural level unemployment.” Another example is that economists know that unemployment occurs as markets shift their labor needs. This is cleverly called “frictional unemployment.”

      All in all, much of the econo-speak tends to be teleological based on economists’ axiology of optimization. Somehow they make bad personal experiences (losing one’s job) sound perfectly ok in the grand scheme of things (frictional unemployment). I think that may be one reason for JC’s post. But, as per usual on this site, I could be wrong. :-)

      Reply
      • Lizard

        July 14, 2009 at 7:07 pm

        ryan, economists are not a homogenous group that use the same, disorienting language to cloak scams like derivatives and short-selling.

        Reply
        • Billy Hicks

          July 15, 2009 at 12:02 am

          Lizard… that may be true but economists are very smart. They learn how to state the obvious through the incomprehensible. Usually by using big words. Like derivatives.

          Reply
    • JC

      July 14, 2009 at 4:10 pm

      Yes, no job is permanent. But an economy that has a net job loss of over a half million jobs per month, and that will continue to do so indefinitely in the future, is not in my mind a “stabilizing” economy.

      My point here being that, is doing what is good for Wall Street necessarily good for Main Street? For Backwoods Loop? At what point do we forgo looking at the job loss and total unemployment figures, and instead focus on polit happy speak and Wall Street profit reports as determinants of a “stabilizing” economy?

      Since when did people quit mattering as much as corporations?

      Reply
  3. Big Swede

    July 14, 2009 at 6:39 pm

    Bama lied, jobs died.

    Reply
    • lewis kelley

      July 15, 2009 at 10:56 am

      He hasn’t been in office long enough to have actually had a real impact on the economy. The job losses we are seeing now are still the lasting results of the financial turmoil that cascaded out of hand in the fall of 2008… so the policies of the Bush administration in responding to the credit crisis are much more responsible for the current situation than Obama.

      Reply
      • Big Swede

        July 15, 2009 at 12:03 pm

        OK lewis, that might fly for a few more months. But here’s the real question.

        When exactly can we blame the new adm. for doing nothing to help the economy and save jobs?

        Reply
        • lewis kelley

          July 15, 2009 at 12:17 pm

          I have no idea. And I’m going to contradict myself here by saying that any President has very little control over the economy. The Federal Reserve Chairman has a lot more power to shape our economic reality than the President does.

          In the end I think that any actions by any President regarding the economy ultimately have only a small affect on the economic reality and often have a lot of unintended consequences, as in Nixon’s price and wage controls. FDR’s economic policies aren’t what pulled the USA out of the Depression, it was WWII.

          A President’s actions take a back seat to the flow of historical events. Could Bush have done anything to head off our current situation, probably not, and if he had tried, it would have only made the situation “less bad” at best.

          Ultimately the situation we find ourselves in comes down to fuzzy math: derivitives.

          Reply
          • Anon

            July 15, 2009 at 1:17 pm

            “Ultimately the situation we find ourselves in comes down to fuzzy math: derivatives.”

            One could add that our foreign policy of empire building and trying to be the worlds policeman also is a major contributor. Trying to fight two wars that we could not afford (or justify) contributes greatly also. The Trillions spent there would have gone a *long* way towards reducing our debt and providing money for social programs like “free” health care.

          • Big Swede

            July 15, 2009 at 3:22 pm

            FDR and Nixon were pikers compared to this guy.

            Here are the past POTUS numbers, adjusted for inflation, of course.

  4. Eboy

    July 14, 2009 at 8:05 pm

    In 1944 FDR proposed an economic bill of rights. It still rings true today. It was defeated then and I doubt if it could gain any traction now.

    Imagine equal access to adequate food, clothing, health care, and housing for everyone. (I know, I know it will never happen), but what if?

    You can’t argue with the notion that capitalism has floated the largest boat for the mostest. However, it is plain to see that for many, many people, access to competition, the free market economy, and so called equal access to the political process have failed many.

    It has now gone way past individual access to resources. Families, communities, states, and nations are finding it increasingly difficult to thrive in the competitive market place.

    Reply
    • Anon

      July 15, 2009 at 7:22 am

      Are you saying all men are not created equal?

      People are given the opportunity – what they do with it is up to them. As not everyone is born with the same intelligence and desire/drive to succeed, there will be different results. That’s just the way Society has evolved.

      Your statement “Imagine equal access to adequate food, clothing, health care, and housing for everyone.” sounds like you want everyone to be equal and that, to me, sounds a lot like Communism. From each…

      Reply
      • lewis kelley

        July 15, 2009 at 10:51 am

        He live in a Nation where everybody is equal in the eyes of the law… but that is far from the truth in practice.

        And I wouldn’t say everyone has the same opportunities either… does the child of a single mother growing up in New Orleans have the same educational opportunies as a child growing up in a penthouse in NYC?

        Reply
      • JC

        July 15, 2009 at 11:06 am

        Some people are born with more opportunity than others…

        Reply
        • Anon

          July 15, 2009 at 11:23 am

          Quite true. And yet, there are people born in the “ghetto” that do quite well in life and those that are born with a silver spoon in their mouths that end up doing drugs and wasting away in prison or on welfare. Some just need to work harder than others. The point was, not everyone IS equal in either their opportunities or their intelligence and two people with identical opportunities will not turn out the same.

          But then, Liberals believe everyone should be equal and those less than equal should be brought to equality by those “more” than equal.

          Reply
          • lewis kelley

            July 15, 2009 at 11:42 am

            I would call myself liberal/Progressive and I don’t believe that eveyone should be made to be equal. You waste a lot of societal resources and create a lot of inefficiences creating a situation in which all people are economically equal.

            A better option is equal access to opportunities – including education and healthcare – so that people are given the same opportunities to succeed in their lives, at which point they can make the desicion as to how best use/not use the opportunties before them.

        • goof houlihan

          July 15, 2009 at 11:27 am

          Many social justice types wanted to hunt down Harrison Bergeron. Must be interested in “equality”.

          Reply
  5. Eboy

    July 14, 2009 at 8:06 pm

    FDR>>
    “It is our duty now to begin to lay the plans and determine the strategy for the winning of a lasting peace and the establishment of an American standard of living higher than ever before known. We cannot be content, no matter how high that general standard of living may be, if some fraction of our people—whether it be one-third or one-fifth or one-tenth—is ill-fed, ill-clothed, ill-housed, and insecure.

    This Republic had its beginning, and grew to its present strength, under the protection of certain inalienable political rights—among them the right of free speech, free press, free worship, trial by jury, freedom from unreasonable searches and seizures. They were our rights to life and liberty.

    As our nation has grown in size and stature, however—as our industrial economy expanded—these political rights proved inadequate to assure us equality in the pursuit of happiness.”

    Reply
  6. jhwygirl

    July 14, 2009 at 10:05 pm

    This is what I know…maybe I’m wrong. I’m sure some’ll let me know.

    A “healthy” economy has an unemployment rate of about 3 1/2 percent. Less than that is an indicator that there aren’t enough qualified people to fill what jobs there are, and more than that means that the economy – i.e., businesses – aren’t creating jobs at a fast enough pace.

    I haven’t been watching jobs stats closely – I do recall that Montana has been increasing in unemployment slightly over the last few months. May’s unemployment here in Missoula was 6.3%, which was a 3/10th of an increase over April.

    But our rate of unemployment, while growing, isn’t as bad as California’s, which was 11.5% in May. (but remember what I said – California, like it or not, is a harbinger for what is to come in Montana.)

    I don’t think – I seriously doubt – that Montana will get that high, but Kalispell? It’s hurting. Gotta wonder what it is up that way, but it has got to be in the double digits now – it was 9.6% in May. That’s like 3 mill closings ago.

    Now, it seems that what it all is, is that increasing unemployment is a bad thing, while decreasing unemployment is a good thing – keeping in mind the parameters of what I laid out up top.

    What is becoming increasingly clear – even directly from both Obama and Biden – and Krugman, for that matter – is that the economic stimulus didn’t do enough. The WHY of that is not something I’m even qualified to take a stab at….but clearly, if something isn’t done to stop the drain of jobs, we’re going to be in one big ocean of do-do.

    Reply
    • Lizard

      July 14, 2009 at 10:45 pm

      it is my understanding that during the glorious greed train that were the reagan years the govt stopped including discouraged workers in their equation, so unemployment, nationally, is actually closer to 20%. please correct me if i’m wrong.

      and we can’t forget folks who are forced to take part-time jobs out of sheer desperation also don’t count as unemployed.

      there’s something else that occurred to me as i was mulling this over: how does stabilizing the financial sector relate to job creation? my knee-jerk response is, it doesn’t, because wall street doesn’t make anything. they just play their shell games, then transfer their losses to the taxpayer when the bubble bursts.

      remember when lehman crashed and we were told the sky was next? remember when golden hank told congress that if billions weren’t shoveled into the ravenous maw of wall street the dow would crash and martial law would follow?

      are we even capable of remembering anything, or is it just on to the next glitzy spectacle, scandal, or celebrity tragedy?

      Reply
      • goof houlihan

        July 15, 2009 at 6:26 am

        Michael Jackson is still dead, and hard times, in parts of Montana and much of the country, are still ahead. For some of Montana, hard times are the only times there are. The truth is, the Great Recession is just a wake up call for a splurging debt ridden nation. Consumers have cut back their spending but not the government and that bill is yet to be paid by an exact repeat of what we are going through now.

        The whole “shovel ready” idea was buried by the shovels of the politicians, and shovel ready projects that may have boosted the economy or resulted in better productivity were canned in favor of stored up partisan payoffs. Many projects are only in the engineering phase right now.

        And let’s face it, government isn’t efficient, and with good reason. Why did anyone buy off on the idea that government would efficiently and effectively spend their way out of the economic cycle? Government largesse is doled out by influence, not merit.

        On the other hand, we can’t have an inflated consumer economy and at the same time adopt a sustainable lifestyle; and that adoption will occur either with government intervention or economic hardship.

        Those wanting to hasten the “long emergency” apocalypse should be reveling in the economic disaster; americans ARE consuming less. This is just a glimpse of what a 90% reduction in carbon emissions really would mean to people.

        Reply
      • Anon

        July 15, 2009 at 7:38 am

        “it is my understanding that during the glorious greed train that were the reagan years the govt stopped including discouraged workers in their equation, so unemployment, nationally, is actually closer to 20%. please correct me if i’m wrong.”

        I believe you are referring to what Clinton did in 1994 when he changed the unemployment reporting from U5 to U3. (definitions below)

        U3 = Official unemployment rate per ILO definition.
        U4 = U3 + “discouraged workers”, or those who have stopped looking for work because current economic conditions make them believe that no work is available for them.
        U5 = U4 + other “marginally attached workers”, or “loosely attached workers”, or those who “would like” and are able to work, but have not looked for work recently.
        U6 = U5 + Part time workers who want to work full time, but cannot due to economic reasons.

        Now if you wander over to ShadowStats.com (http://www.shadowstats.com/alternate_data) and take a look at U6, you will see it approaching 17%.

        So, your statement is partially correct – unemployment is closer to 20% than the “official” 9.5% but the change in reporting happened under Clinton, not Reagan :-)

        Reply
        • lewis kelley

          July 15, 2009 at 11:01 am

          Under every administration, minor tweeks are made to the methodology of economic statistics… to the point that it is actually difficult to truly compare statistics today to ones from 30 years ago.

          How the inflation rate is calculated is one of the big statistics that is continuelly tweaked. Under Nixon it was totally overhauled to the point that it was underreporting inflation by around 3-5%. Even today inflation is still underreported.

          Reply
        • Lizard

          July 15, 2009 at 11:32 am

          thanks anon

          Reply
      • JC

        July 15, 2009 at 11:11 am

        Here’s a good link to the real unemployment figures across the U.S.

        Reply
        • lewis kelley

          July 15, 2009 at 11:45 am

          Looks like Montana is doing relatively well compared to the rest of the nation. I also read somewhere – I think in the Economist – that Montana is one of few (maybe the only state) that doesn’t have a budget deficit at the state level this year.

          Reply
          • Anon

            July 15, 2009 at 1:11 pm

            This budget year is just 15 days old. Already the state government has reported that tax revenues are WAY below estimates and the trend continues to be down. The ending balance from last year that was supposed to carry over and help the “surplus” this year was not as great as estimated. I suspect the legislature will be called into special session sometime in the next 6-9 months to “adjust” the budget – and I doubt it will be upwards.

            As I recall, I believe it was ND, or maybe SD, that was the only other state with a projected surplus.

          • Lizard

            July 15, 2009 at 1:26 pm

            don’t forget wyoming.

  7. Mayor of Mayhem

    July 15, 2009 at 9:04 am

    Sounds to me like Wallstreet got a big check and the working poor got hosed.If you want your country back start buying American stuff, made by Americans in America. Ross Perot was right. the giant sucking sound of job losses increased corporate bottom lines for the last 15 years. Now the Corporations are dying because they killed their own customers buying power by exporting employment and your government is giving them big checks of your money to continue making cars in Mexico and clothes in China.
    Ayn, Do you really believe that a poor person born in Appalachia has the same opportunity as a rich person born in New York?

    Reply
    • Big Swede

      July 15, 2009 at 12:00 pm

      When these economic policies lead to a full blown depression an Appalachian can make his own whiskey.

      Reply
  8. Lizard

    July 15, 2009 at 12:10 pm

    everyone should check out democracy now today; amy goodman interviews matt taibbi about his skewering of golden sacks.

    here’s a little tidbit i caught, which i found particularly nauseating: last year golden sacks paid a paltry 14 million dollars in taxes. oh yeah, and the bonus engine is revving up again.

    then, stick around to hear how parasitic clinton operatives are getting paid to represent the backers of the honduran coup. good stuff.

    Reply
    • petetalbot

      July 16, 2009 at 10:54 am

      It should also be noted that Goldman Sachs was behind the Montana Power dereg debacle of over a decade ago. It was GS that convinced MPC CEO Bob Gannon that telecommunications would be a big money maker and it needed to divest from its energy holdings. Of course, Goldman Sachs and Gannon made all the money while ratepayers and stockholders got screwed.

      Reply
  9. Lizard

    July 18, 2009 at 11:45 am

    my new favorite person, Max Keiser why? because he’s got the right perspective regarding Goldman Sachs. they’re exhorting financial terrorists, and should be summarily incarcerated.

    Reply

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