Yves here. Despite his many faults, Bill Clinton at least recognized that the first responsibility of a Democratic president is to create jobs. Of course, Obama is a Democrat in name only, but until recently, just as the nobility understood its duty was to protect the peasants, the powers that be understood that providing for enough employment at at least adequate wages was one of their major responsibilities. Sadly, the idea of having responsibilities is sorely absent among today’s elites.
By Lee Adler of the Wall Street Examiner
Let’s cut to the chase: There were 1,446,000 fewer people working full time in August 2014 than in August 2008, according to the Bureau of Labor Statistics household survey (CPS).
That’s after an increase of 210,000 full-time jobs in August. That’s the actual count, not the seasonally adjusted abstraction. So we have to compare that with past Augusts to get an idea if its any good or not. August is a swing month, sometimes up, sometimes down. The average change over the prior 10 years, which included a couple of ugly years in the recession, was -63,000. So this number wasn’t bad. It was slightly better than August of last year and 2012, but come on….
It’s still 1.4 million below 2008? In 2008, the economy was in full collapse mode. The Fed has expanded its balance sheet by $3.7 trillion since August 2008 and there are fewer full-time jobs now than then? Remind me again what that $3.7 trillion has bought!
Since August 2009, near the bottom of the recession, the US economy has added 6.25 million full-time jobs, a 5.5% increase. That amounts to $588,000 in Fed QE per added full time job. But that’s ok. It’s been great for bankers, securities brokers, and hedge funds. While the number of full time jobs increased 5.5%, stock prices soared 175%. It’s all good!
Or not. I have argued for a long time that the Fed’s policies have rewarded financial engineering at the expense of job creation. The Fed has made it profitable for corporations to borrow free money to buy back the stock options that they issue to their executives rather than investing in expanding their businesses and creating jobs. The Fed’s policies have enabled corporate executives and their financial enablers to conduct a massive skimming of the US economy and wealth transfer at the expense of everybody else. By promoting this behavior, not only has Fed policy been ineffective in stimulating real growth, it has been a moral outrage, decimating the middle class and robbing the elderly of their life savings as they’re forced to consume principal.
The result has been that growth in full time jobs barely keeps pace with population growth. The ratio of full-time jobs to total population was 48.4% last month. That’s finally above the August 2009 reading of 48.2%. August 2009 was the bottom of the recession. At the bottom of the 2003 recession, before the housing bubble took off, this ratio was at 52%. In terms of a recovery in the number of jobs that might support a family, the Fed hasn’t supported recovery, it has suppressed it.
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But I’m sure the missing jobs are higher quality than they were before, or something. See? It’s all in how you look at it.
And speaking of Clintonomics, how ’bout that Nasdaq? It’ll be back at 5000 before ya know it, budget surpluses will be back and extending as far as the CBO’s eyes can see, and all you naysayers – yeah, I’m looking at you, Lee “nattering nabob of negativity” Adler – will be feasting on crow. Like the song inspired by our bignosed savior‘s near-saving-from-crucifixion goes, “Always look at the bright side of life, ta dum, dee dum…”
Obama is not one to fight for much of anything. Take any program and you will find he did little to weigh in on the outcome. Even his signature program — ObamaScare — was authored and championed by Congress. I guess working Americans have come to the same conclusion, he’s not going to chase Congress to improve employment numbers. He would rather blame them for boxing him in.
However, Obama did take a stand on attacking Syria for WMD violations. He was beside himself with rage. That is perhaps the only time we’ve witnessed the inner Obama come forth, only to be corralled by Putin.
Part of that number is retirements, part of it is people giving up and part of it is the underground economy, i.e., working off the books for cash, drug dealing, sex work, theft (the illegal kind) and so on. The important thing to know here, of course, is the rich are doing fairly well as are the most highly skilled workers and that’s what seems to be truly important for most Americans–you know the American Dream and all that.
part of it is child care, commuting costs are so high that for some (a large minority?) couples it makes more sense to have one person work full-time while the other watches the kids, cauffeurs the working spouse as they cut back to being a one-car household, DIYs the house, cooks, etc.
I only have anecdotal evidence of this trend, but I see it in my suburban Boston cohort. My wife and I are in a situation where it would make economic sense for one of us to stay home. However, we both enjoy our work (for now) and if one of us loses our position, the other is still employed.
Wealth inequality has been with us for some time, but the top issues in 2007 again 2007 before Lehman was economic related issues, not terrorism, not immigration, and not even how grumpy Vladdy Putin is.
The population willing to elect Barack HUSSEIN Obama (Lets not pretend this racist stuff started with the GOP; Americans as a whole came to it on their own) over Hillary and current world jetsetter, John McCain, was because the economy was poor and there was significant outrage over the economic policies of both parties. They were even willing to elect a black guy with a muslim sounding name.
Its not that we have 1.4 million fewer jobs than 2008. 2008 is a terrible benchmark for the health of a country.
The Marxist analysis of this phase of capitalism, financialization, poses the shift in this formlua: M-C-M’ to M-M’.
Where profits derived from the period of industrial production when we were actually manufacturing something, anything, as a commodity to be priced at profit for sale in the market, today’s profits result not from investment in plant and equipment and the hiring of labor to make the profit making commodity, but simply in money used to directly make more money with no intervening pit stop in job creator land. Go directly past job creation to profit creation with money making money, and no messing with Mr. In-Between. I believe this is called disintermediation.
The social relationships of capitalism to civil society are being destroyed in place after place. Camden NJ, Detroit and now, Atlantic City is crumbling like a castle made of sand into the sea with the Bankruptcy of Trump Entertainment Inc. with The Trump Taj Mahal and its 2800 full time 1800 seasonal jobs about to disappear, the 5th casino to die, leaving the body count of unemployed at almost 12,000!!! While Yves admirable chart serves as sort of Cubist abstract portrait of going to hell in America in 2014, you can see the first circle of hell forming with the swarming masses at the Atlantic City convention center, flailing desperately to sign up for life saving unemployment, Obamacare or Medicaid plus whatever other tender mercies that the NJ Dept of labor offers for mass tragedies such as the complete destruction of an entire industry in a matter of days before their eyes and eyes the Atlantic City Summit with the Governor strategically envisioning a new Atlantic City built on family entertainment not just gambling and buffet.
Here’s a hint for the moron who would be president: build the tunnel to NYC from the N Jersey Coast and build the housing for people who will work in NYC that do actual work, not the billionaires who will shop in the new Neiman Marcus in the Atlantic Yards development. And do this for the S Jersey people: give unreserved support to the channel deepening projects of the Delaware River to develop the ports on the NJ side of the Delaware River in order to promote the NJ alliance with NYC and Philadelphia ports to make NY/NJ/PA the international gateway for gigantic cargo container ships that will soon pass through the newly expanded Panama Canal from the Pacific Rim. That would be a good start. At least if we aren’t making things, we can handle them from the people who do make them coming through the ports.
Trump Entertainment files for bankruptcy; Taj Mahal could close in November
September 09, 2014 at 8:11 AM
http://www.nj.com/business/index.ssf/2014/09/trump_entertainment_files_for_bankruptcy_taj_mahal_could_close_in_november.html
http://6abc.com/careers/casino-closures-brings-mass-unemployment-filing/292707/
Here is a video of the scene at the Atlantic City Convention Center now hosting Unemployed-O-Rama with NEW and IMPROVED… Job Fair and the ever popular TRAINING PROGRAMS!!!! Now running through 9/10 just in time for you to participate in the mandatory 9/11 hate rallies! Kill ISIS KILL ISIS KILL ISIS oh wait, I’m out of unemployment money.
Of course, Atlantic City has always had something of a boom & bust economy based on fun-play time stuff of one sort or another. Back east visiting family last week and saw nooz about at least 3 mega casinos there going dark, including infamous Comb-Over’s yet again (can We, the People, just FIRE the Donald now, please??). Thousands of jobs lost; some people had worked at casinos for well over a decade.
Can just imagine that job fair. Go where? And get paid how much? For how many hours per week?
Good luck with that. Who has money to gamble away anymore besides the top 10%? The rest can barely make the rent and put some paltry food on the table.
I think the canal in question will be the new one the Chinese are building thru the narrows of Nicaragua, no? Just another modest little project by the Chinese.
The Chinese or maybe the tycoons from Hong Kong have already invested a lot in the Bahamas.
A better (buy low) investment for them maybe to be the first to get in on Cuba…everything is cheap there. Instead of missiles, they can move their banks there. And while they wait for the normalization of relationship between Uncle Sam and the Castro family, tourism income from vacationing Europeans, Canadians and Central and South Americans should be enough to keep the show going.
It is not the Fed’s job to create money! The Fed exists for the sole purpose of insuring the Fed’s owners make money and stay solvent!
Government sat by and did nothing as the consumer was fleeced of $Trillion$ by a corrupted Financial System! This government was established to benefit the FEW! The consumer a slave to the corruption of and by government!
Monet talks as the consumer is abused and manipulated for the benefit of the Monied Elite.
We can’t be BOTH eliminating the need for people to work and creating jobs at the same time.
One of those two “goals” is BS. Which one is it?
We can’t be BOTH eliminating the need for people to work and creating jobs at the same time.
Remind me again what that $3.7 trillion has bought!
A bloated stock market yard, where shares are getting fattened from the FED feeding trough, to be slaughtered at just the right time. When is the right time? When the exit is the size of a pinhole.
What Fed policy would produce jobs now, or would have produced jobs since 2008?
The Fed can’t do Fiscal. And our ridiculous congress has abdicated all government to Finance. The Fed can only do Finance. That’s all it can do. Ergo we have plenty of money circulating – much like trickle down economix which avoided creating demand inflation by giving the money to the corporations (but the corporations had their cake and ate it too by going overseas, etc.). So that prolly wouldn’t have stopped demand inflation anyway because if the objective was to beef up production before demand forced higher prices, that would have been short lived at best. Capitalism has no sense of time. It has become so short-term-solution that it has made itself obsolete. Ha.
Congress can’t do fiscal either (this is, proper fiscal).
Fiscal, properly done, should have been enough domestically, except most of the money has gone to imperial adventures.
That wrong does not imply the next wrong – to give the government unlimited power (for money is power).
The proper thing to do is to battle and fight to retake ‘captured government’ so we can spend the same or less fiscally and yet, with more going to the needy and not bombs.
Can we please end this cultural myth that jobs are somehow inherently good? A job is a bad thing, because it implies that there’s work to do- but the goal is to REDUCE the amount of work that needs to be done. Isn’t that the point of doing a job? To bring the work closer to accomplishment? The only “good” of jobs is that they usually are accompanied by income which allows a person to temporarily pay off the landlord, bank, government, and other glorified bandits who demand tribute under threat that armed thugs will kick in your door, drag you and your family out of your house, and throw you into the street. That’s the real problem.
And so, to add to what you say, it may be worthwhile to look into non-GDP-growth, non-money-printing ways of increasing happiness, of improving general welfare.
As washunate mentions below, we look at distribution.
Yep.
But the underlying issue is the wages and working conditions of jobs that do exist, not the quantity of jobs. Single income households are far more stable, and far better for community and civic engagement, than dual income households. Not least of which because a huge number of kids, thanks to the drug war and our legal system, grow up in nontraditional families.
There’s plenty of income in this country. The challenge is the distribution of it.
You are right, washunate.
I would say, for both income and government spending, it’s distribution.
Enough income and enough government spending…just not distributed wisely.
Too much to the rich and too much for regime change.
If you meet anybody from India ask him “What Is Your Caste?” If he answers it, then you’re doomed. Because he has already injected Cancer into your Country. Caste is like Cancer. It cannot be Cured. It has to be Cut-Off.
http://www.washingtonpost.com/blogs/worldviews/wp/2013/05/15/a-fascinating-map-of-the-worlds-most-and-least-racially-tolerant-countries/
i’d take that racism study with a grain of salt as in the West, broadly speaking race = skin color (inter-racial discrimination), while in other countries, race = nationality/ethnicity (intra-racial discrimination).
Oh, race is not simply a question of the Big Three (or Four or Five). Even before the advent of the Nazis, Europeans distinguished between Nordic and Mediterranean races, among others, notably Jews. After living in Japan for a while I found it pretty easy to distinguish among Japanese, Koreans, and Chinese by sight. The natives could certainly do better than I. You don’t think skin color is a race marker in India? Look at the personal ads. People ask for white skinned or light colored partners.
“In terms of a recovery in the number of jobs that might support a family, the Fed hasn’t supported recovery, it has suppressed it.”
Why yes. But isn’t that a “job well done, FED”?? After all, those at the tippy-top are RICH beyond imagining, living off the FAT of their investments, which get “taxed” at 15% or usually less. IOW, far less taxation than the lucky duckies in the 99% pay, no matter what kind of job you may happen to have (unless, of course, you are working in the “black” economy, which probably more are doing so these days mostly out of necessity).
My Q (serious): why should & how can the FED create jobs? Is that the “job” of the FED? Doesn’t look that way to me.
Ah, but that’s the monetarist version of what has happened. In the MMT version, holding federal debt is the same as holding federal currency. Applied here, this means the Fed has merely changed the form in which $3.7 trillion is held. No money was created.
So you see, monetarism says $3.7T has been created, and nothing has come of it. MMT says nothing has been created, and nothing has come of it. In fact , MMT said from the outset that QE was nothing but bookkeeping entries, and would have no effect other than the jiggles of misexpectations, which is what happened.
Score another one for MMT.
QE is used to buy lots of mortgage back securities, among other things…this is, not all federal debt (Treasury securities).
MMT would have taken the power from the Federal Reserve and the private banksters from day one and allowed Congress and the Administration, freed from extortion and the spectre of a total collapse, to make fiscal decisions and implement them. That would have been a good thing. As it is, our government is now looking to pay for all of our debt and destitution with a new war – and we can have no butter unless we have the guns to steal it.
Congress, heal thyself!
One step may be for Congress to look into non-GDP-growth, non-money-printing ways of improving general welfare.
In any case, it’s not just changing federal debt to federal currency (not 100%, in any case).
I’m curious on your thought process here. What fiscal decisions do Congress and the Administration want to make that the Fed is preventing?
Exactly. Congress refuses to do any fiscal stimulation, no jobs program, etc. They will, however, authorize any number of modern-day wars. And Congress does not have the power to save the banks by “expanding the Treasury’s balance sheet.” Only the Fed can save the banks, so that is what we get as our consolation prize for going thru some pretty serious austerity without any significant response from our elected government.
The assumption of private debt by the federal government is at the heart of the looting.
Not sure you want MMT to be held responsible for that :)
I’m certain that most people absolutely loathe their jobs, and that they would be far happier if they were able to get by without having to do them. So rather than thoughtlessly valuing “more jobs” why don’t we instead value increasing happiness and well-being? Because just having more more jobs, without radically changing the meaning of what “job” means, will only extend the misery longer than it strictly needs to go on.
What happened to full employment as national economic policy? I mean, assuring full employment other than by influencing interest rates, bailing out banks, and spending public money to counter the recession?
Somebody in Congress fell asleep when Nafta, etc were discussed and passed. Few considered that global markets wouldn’t necessarily help US workers. Was there a better way to go to a global economy than cold turkey with open markets?
So we’ve had a pretty big failure of the political and economic imagination. Few thought that jobs and wages wouldn’t be affected by globalization. The big guys in Congress didn’t plan for it – aside from funding job retraining for some.
Our mantra has been more education and up-skilling. Even kids are encouraged to learn to code – as if everyone can suddenly become a programmer. What about the guy who doesn’t want that, and there are plenty of those. We’ve left the guy or girl who tops out at high school unprotected.
It all seems pretty simple to me:
The main point of QE has been to benefit financial institutions.
What is necessary is an excuse to prolong it. That’s where the job numbers come in.
“It’s a fragile recovery, and the employment rate isn’t quite where we want it to be, so no tapering – just yet”.