Posts tagged unemployment rate
Posts tagged unemployment rate
February 6th, 2012
In one of the most shamefully disingenuous reports we’ve seen in years, the US Labor Department released the latest employment figures on Friday showing that the headline US unemployment rate had fallen to 8.3%.
Champagne and sound bites were pre-positioned in Washington as the self-congratulatory praise flowed like the bubbly. President Obama, beaming like he’d just caught the winning touchdown pass, told the American people on Sunday that he ‘deserved’ a second term.
They call it the headline unemployment rate for a reason… it’s the only number that the papers tend to run. All weekend long, mainstream press ran headlines like:
“Unemployment rate falls to 8.3%; fifth straight monthly decline” (LA Times)
“Jobless rate drops to lowest level in almost three years” (MSNBC.com)
“Unemployment rate drops to 8.3 percent” (Christian Science Monitor)
“Hiring surges in January; jobless rate at 8.3 pct.” (Atlanta Journal Constitution)
“Jobless Rate Falls to 8.3%, Altering Face of Campaign” (New York Times)
“Unemployment report: January job gains have economists rethinking outlooks” (Washington Post)
Needless to say, few outlets with any meaningful reach covered the real story behind the employment figures– the Labor Department simply took 1.2 million Americans out of the labor force. In other words, the unemployment rate fell because the Labor Department deliberately did not count 1.2 million unemployed people.
[Note: I highly recommend that you read ZeroHedge.com, one of the only sources of undistorted economic reality on the Internet.]
It’s the same Orwellian style logic (WAR IS PEACE. DEBT IS WEALTH.) that prevailed during the Soviet Union– outright lies and deceitful reports painting a rosy picture of the economy and its glorious leaders, masking a dismal reality. It’s nothing but propaganda in the worst form.
This has been going on for years in the United States, as evidenced by the chart below:
Prior to the 1960s what is now commonly referred to as Human Resources went by the name Personnel. Then came that fateful day when employers and corporations decided to admit openly just what they actually thought about their workers . . . that they are only one rung above cattle. Today it is as though there is a conspiracy afoot to deny that the term Personnel ever existed. If you enter Personnel as a search term in Wikipedia, for example, you are brusquely transported to Human Resources without so much as an explanation, let alone an apology.
Daniel Indiviglio’s column ‘Why Are Corporate Profits High While Jobs and Wages Stagnate?’ in The Atlantic offers little new information about the economy but says much about what bankers think about workers. In response to the question: “Why aren’t corporations hiring more people or compensating workers more fairly for their higher productivity?” Indiviglio explains:
“There aren’t a lot of jobs out there, but there is a huge number of unemployed people. This is an employer’s market. People are desperate for jobs. So employers can use the situation to their advantage. In this case, they can get away with paying their current workers less in relation to their productivity than they would be able to if the labor market situation was reversed, if unemployment was low and many jobs were available.
In a good job market, a highly productive worker has leverage. The worker can move to another company doing similar work for more pay. He or she is the scarce resource. But right now, most workers have little bargaining power: their employer can find someone else to accept relatively poor pay instead; after all, there are more than 20 million Americans who have no job but want one.”
Can you tell he’s shedding croc tears for the unemployed and the forced over-productive?
Daniel Indiviglio is currently an associate editor at The Atlantic, where he writes about the intersection of business, finance, economics, and politics. In a previous incarnation he worked as an investment banker and a consultant. Need I say more?
| September 12, 2011
Not for nothing, but in my view all this talk about a double-dip recession in the U.S. is a bunch of baloney that misses the real issue …
A. The United States economy never even came out of its recession in the first place. And …
B. Our economy is already in a depression, one that’s about to get a whole lot worse.
First, the true unemployment rate in this country is at least 22%. Not the 9.1% mythical figure Washington is reporting.
Second, from its 1925 peak, the median home price in the U.S. fell 12.57% into a bottom in 1932. Compare that to the 32% decline since the property peak in 2007.
Third, in 1929, total U.S. debt as a percent of GDP stood at roughly 290%. Today, it’s approaching 1,000%, and growing. That’s equal to 10 times our country’s economic output!
Fourth, U.S. high-yield corporate bond default rates last year hit their highest level since the Great Depression.
Fifth, there are at least half a dozen more stats I can cite that are already worse than those seen in the Great Depression. From durable goods production and sales, things like autos, etc., to the number of families requiring public assistance, to the number and rate of children that are now homeless.
So no matter how I look at it, our country is not heading into another recession. It’s already in a depression. In fact …
In real terms, the U.S. economy has
already contracted more than it did
during the Great Depression.…
In today’s world of floating fiat currencies, it’s very difficult to measure changes in the value of anything without a benchmark, since the dollar itself floats in value.
That’s why I often prefer to use honest money — the price of gold — as a value-measuring yardstick, because over time, gold always holds its purchasing power.
. . . back in the 1930s — and all the way through 1971 — the U.S. monetary system was on a gold standard. In 1932, for instance, just before President Roosevelt devalued the dollar, $1 was equal to roughly 1/20 of an ounce of gold.
. . . today, one dollar is worth roughly 1/1865 an ounce of gold.
So now, let’s take a look at our country’s GDP in terms of the amount of gold it can buy.
In 1932, our country’s GDP was worth 2.8 billion ounces of gold.
In 1971, it was worth 27.74 billion ounces of gold. Put another way, our country’s GDP was almost 10 times what it was in 1932. So over that 39-year period, the purchasing power equivalent of our country’s GDP grew almost 1,000%.
In 2000, the purchasing power of our country’s GDP continued to appreciate and would purchase 34.54 billion ounces of gold, a 24.5% increase.
But at year-end 2007, it was worth only 16.87 billion ounces of gold. A whopping 51% CONTRACTION in the purchasing power of our country’s GDP!
Think that’s bad? As of July 31, 2011 — latest GDP data — our country’s GDP would purchase a mere 7.72 billion ounces of gold.
That’s a 54.2% decline since the peak of the housing bubble in 2007 …
And a whopping 77.65% decline in GDP since the end of the year 2000.
If that’s not a contraction, if that’s not a depression in real honest money terms, I don’t know what is.
Of course, almost everyone will argue with me about the above analysis, the main objection being that I’m viewing the economy in terms of gold only, and that the contraction I speak of is merely because the price of gold has gone through the roof.
[But] if 5,000 years of gold holding its purchasing power doesn’t give it the right to be a measuring tool, then what tool would you use? Paper money?
Folks, the U.S. economy is already in a depression. Deep in a depression. Problem is, almost no one realizes it.
Read more here.
WRITTEN BY CHARLES SCALIGER THURSDAY, 18 AUGUST 2011
It is strangely apt that the stockmarket this week has been experiencing turbulence, in the wake of Standard & Poor’s downgrade of U.S credit and fears of a double-dip recession. After all, this week marks the 40th anniversary of Nixon’s removal of the United States from the last vestiges of the gold standard, an action that ushered in 40 years of fiat monetary instability. For four decades we’ve been in a state of almost constant financial crisis, from the stagflationary ‘70s through the savings and loan debacle and stock market crash of the ‘80s to the more recent dot-com and real estate bubbles and their messy aftermaths.
And now this. After 40 years of a “new normal,” the nations of the West are exhausted and bankrupt. Debt in Europe and the United States is spiraling out of control while economies stagnate, and all central bankers can think of is what they’ve been doing since the Nixon years (and, in truth, a lot longer than that): print more money.
No less an authority than Forbes magazine has passed verdict on our 40-year experiment with fiat money and undiluted inflationism, calling it Nixon’s “colossal error.” Noting that Nixon promised that emancipation from the gold standard would allow policymakers at the Fed to enhance America’s prosperity and economic growth by manipulating the money supply, Forbes expended considerable ink looking at the Fed’s 40-year track record:
Since Nixon killed the gold standard, the unemployment rate has averaged over 6% and we have suffered the three worst recessions since the end of World War II. The unemployment rate averaged 8.5% in 1975, almost 10% in 1982, and has been above 8.8% for more than two years, with little evidence of any improvement ahead.
This performance is horrendous compared to the post World War II gold standard era, which lasted from 1947 to 1970. During those 21 years of economic ups and downs, unemployment averaged less than 5% and never rose above 7%.
Growth, too, has slowed. Since able men and women were given the power to manipulate the quantity and value of the dollar, real economic growth has averaged 2.9% a year — more than a full percentage point slower than the 4% growth rate during the post World War II gold standard era.
A 1% difference may not seem like much, but in reality it is the difference between prosperity and austerity. A growth rate of 3% creates just enough jobs for all new workers. A growth rate of 4% yields higher employment and a decline in the unemployment rate.
In addition, when compounded over 40 years, 1% slower growth under the paper dollar system has had a mind-boggling impact on all things that depend on the overall size of the U.S. economy. At 3% growth, the U.S. economy is about $8 trillion smaller than it would have been had we continued to experience the average growth rate prior to Nixon severing the link between dollar and gold. That implies that median family income today would be about $70,000, or nearly 50% higher than it is today.
Moreover, Forbes noted that the dollar has fallen more than 70 percent relative to the Japanese yen and the German mark/euro, and 1971’s modest trade surplus has turned into a more than $400 billion trade deficit.
Nixon and his cronies promised at the time that the dollar’s valuation of 1/35 of an ounce of gold would be maintained; had that happened, Forbes pointed out, a barrel of crude oil today would sell for less than $2.50.
The inflationary dollar has placed America on a footing of permanent financial crisis, which Americans have come to accept as normal after two generations. But the record is sobering:
Since Nixon killed the gold standard, the world has suffered from 12 financial crises, beginning with the oil shock of 1973 and culminating in the financial crisis of 2008-09 and now the debt crisis in Europe, and the growing deficit crisis in the U.S. Conversely, between 1947 and 1967, there was only one currency crisis, involving the British pound, and no major bank failures or Wall Street and corporate bailouts in the U.S.
The evidence is in. The great experiment of a paper dollar managed by able men and women has failed and failed miserably to keep any of its promises.
Admirably, Forbes calls for a restoration of the gold standard as a long-past-due panacea for at least some of our economic woes.
Read more: Time to Re-open the Gold Window