Larry Summers is often quotable and Charlie Rose is occasionally watchable. Put ‘em together and you get the very definition of a blind sow finding an acorn.
The whole clip is interesting, but the money quote begins a hair after the 21:30 mark when Summers says something about left wing icon FDR that will undoubtedly result in fewer dinner invitations in the Hamptons this summer:
“Never forget, never forget, and I think it’s very important for Democrats especially to remember this, that if Hitler had not come along, Franklin Roosevelt would have left office in 1941 with an unemployment rate in excess of 15 percent and an economic recovery strategy that had basically failed.”
Why next thing you know Summers will be saying that Keynesian ecomomics don’t work.
We saw a poll the other day that said an increasing number of Americans think the economy will never recover. Not that it will take longer to recover than they expected. Never.
Of course, you can put a check mark next to our names on that list. Sure, there may be a tick upward and maybe even what appears to be a recovery, but we see nothing but a long term debt bomb that’s strapped to the chests of the suicide bombers in Congress and the Fed.
Check out this chart from Clusterchart. It compares percentages of job lost and recovered this recession versus every other post-World War II recession.
It’s ugly. Really ugly. And it doesn’t look like it’s going to get pretty any time soon.
As you may have noticed, no one talks about the so-called Stimulus anymore. Not even its most avid supporters. It’s as if it never happened, as if nearly a trillion dollars weren’t frittered away on mad economic schemes.
Here’s the reason. According to a new study, the Stimulus created or saved 450,000 government jobs and lost or delayed one million private sector jobs. In effect, it exacerbated the root of the problem – too many government jobs – while suffocating private hiring.
Yesterday’s Labor Department nonfarm payrolls number showed jobs increased by 216,000 in March. Not a great number, but a hell of a lot better than we’ve been getting. But just in case you might have gotten all excited when you saw that number in today’s paper, along with the 8.8% unemployment number, you might want to put it all into perspective first, and take a look at the big picture, as charted by Chart of the Day.
Today’s chart puts the latest data into perspective by comparing nonfarm payrolls following the the end of the latest economic recession (i.e. the Great Recession — solid red line) to that of the prior recession (i.e. 2001 recession — dashed gold line) to that of the average post-recession from 1954-2000 (dashed blue line). As today’s chart illustrates, the current jobs recovery is much weaker than the average jobs recovery that follows the end of a recession. Today’s chart also illustrates that the current jobs recovery is slightly stronger than what occurred following the recession of 2001 and that the trend is up.
This last recession was much deeper and the recovery is much more shallow than the average recession.
Illegal immigrants take the jobs that Americans won’t do? I’ve never believed that to be true, assuming we also stripped public assistance from able-bodied citizens. It took Maricopa County Sheriff Joe Arpaio to show this theory in action, after he raided Phoenix restaurants and arrested dozens of illegal aliens for identity theft crimes.
Ahhh, but what about the old canard that illegal aliens do jobs that Americans won’t do? “Crap,” said one woman with a Masters degree who was willing to take one of the $8 per hour jobs being offered at Phoenix’ Pei Wei Chinese restaurant.
Liberals, as always, contradict themselves when it comes to jobs and illegal aliens. On one hand they say, “There are no jobs.” On the other hand they say, “Illegal aliens do the jobs that Americans won’t do.”
Which is it? Choose one. Because you can’t have it both ways.
Union members protested a Mortgage Bankers Association Conferece, at which their target homebuilder Pulte was attending. I found this video in a story over at a site called FDL. I’d never heard of it, but it covers unions and labor issues and is written by Michael Whitney, who is a “progressive online organizer with experience in labor institutions, including the SEUI and the labor rights nonprofit American Rights at Work.” That’s enough for me to know I despise the site already.
Watch the video. In Whitney’s eyes, the unions are the heroes, and the protest is described as “awesome activism from members of the Sheetmetal Workers union (SMWIA), 200 of whom burst into a private meeting of mortgage bankers to protest layoffs by a homebuilding company that got a $900 million in federal funds intended for job creation.”
What’s the $900 million about? A link in the FDL article brought me to a Daily Kooks article (please shower afterwards if you visit this wacko site):
Tucked within the Worker, Homeownership and Business Assistance Act of 2009 (WHBA) was a tax carry-back provision. It allows homebuilders to count the losses of 2008 and 2009 against taxes paid up to 5 years ago—during their peak profit years. In short, the act allowed for a big tax refund pay-off for big builders, particularly the biggest of them all, PulteGroup.
During PulteGroup’s fourth quarter 2009 earnings call, the company announced that it expected a tax refund of approximately $955 million, $917 million of which would come from the tax loss carry back . Several months later, PulteGroup received $880 million in tax refunds for 2009 thanks to the net operating loss (NOL) tax carry back provision of the Act.
The unions are seething mad that the $900 million was not used for job creation. Well, unions have never been accused of understanding economics. I can only assume the unions want Pulte to hurry up and build some houses with that money pronto, and of course, hire the most expensive subcontractors they can — union shops. Perhaps they have never heard of the Great Recession and the Housing Bust. Perhaps they didn’t know that 2012 will be the worst year in this housing depression so far, which has already equaled the drop in home prices during the Great Depression.
If I were Pulte, I’d be using that money to first off keep from going bankrupt. Secondly, I’d be looking to buy raw land for pennies on the dollar, on which, when the market comes back, I could build homes that people would actually buy. Memo to the unions: you cannot make money building new homes now, not with the competition from used homes and foreclosures in this high unemployment market. But they don’t give a crap about that.
I don’t feel sorry for unions one bit. Their selfishness that makes them believe they should live better than the rest of us is the reason cities are on the verge of bankruptcy, and a contributing factor to why a company like Pulte isn’t building homes that can’t put construction members to work. The illogic of thinking that that they can force Pulte to build homes now shows how far afield from reality, and how truly interested in just themselves, they are.
Unions and people like Michael Whitney don’t care if the homes would sell or not. They just want to get paid, even if others subsequently lose their jobs due to bad economic decisions. And not just that they want to be paid, they want to be paid better than non-union workers, and with the ability to retire younger and with more money than others, for life.
By the way, Mr. Union Man, your support of progressives and the democrat party is another reason your unions members are not finding work. There’s a little thing called the Mexican border, across which millions of illegals come to America and find work with building contractors. You can’t have your tortilla and eat it too.
While businesses across the US are closing and millions of people are unemployed and underemployed, Washington DC has managed to flourish in the recession. Federal employees have actually made more money during the recession and more jobs have actually moved to the Washington, DC area. The average federal employee made a whopping $123,000 last year, while private sector employee average just half that, $61,000.
And while politicians and the media seemed obsessively focused on lavish payouts in the financial sector, who knew that at the peak of the recession last year, federal workers in Washington had raises that averaged 4%, more than double the national average for the private sector worker. They have higher pay, more vacation, better health care, and job security, things the private sector employers can’t match. In the first year and a half of the recession private sector jobs shrank by almost 7%, however in Washington, D.C. federal civilian employment grew by almost 10%.
And it’s all thanks to our hard earned, highly taxed, wasted money.
The U.S. Unemployment Report released today was again a disappointment, not meeting expectations. However, it did manage to provide a nice headline number that the government can use to continue to fool the masses: the unemployment rate dropped from 9.8% to 9.4%.
The problem with this number is that the drop is mostly due to people leaving the unemployment lines not because they’ve gotten a job, but because they’ve given up on looking for work. CNBC has the story:
But the reason for the big drop from 9.8 percent in November is somewhat disconcerting. While the Labor Department’s volatile survey of households showed employment surging by 297,000, the labor force shrank by some 260,000.
Even though the U.S. economy added jobs in every month in 2010, hundreds of thousands of people gave up looking for work. The number of discouraged workers climbed to 1.32 million in December, from 1.28 million the month before.
In order to be counted as unemployed, people must be actively looking for work, so the rise in the ranks of discouraged workers has the somewhat perverse effect of helping to bring down the jobless rate.
The economy lost almost 8.4 million jobs from December 2007 to December 2009. It added 1.1 million jobs in 2010. At December’s pace, just replacing the rest of those lost jobs would take 70 more months — roughly six years, taking us to November 2016. That would be almost nine years from the start of the recession for U.S. payrolls to return to where they peaked before the downturn.
But the economy also needs to add 100,000 to 125,000 jobs a month just to keep pace with growth in the labor force. That means the gap created since the recession started was closer to 12 million jobs (leaving 11 million after the gains in 2010). The U.S. unemployment rate is unlikely to move much lower if job gains continue only at December’s pace. Even employment gains close to October’s pace (210,000 jobs) would take us into the next decade before seeing the unemployment rate back near 5%.
I’m watching CNBC as I’m writing this post and Ben Bernanke is giving his testimony. He just commented on this same subject, saying that it could take 4-5 years to get back to “normal unemployment.” The CNBC hosts followed up saying that normal unemployment is 5.7%, using the average rate for all years on record.
Add in a little European sovereign debt crisis, U.S. municipal and state insolvency problems and a worse than expected housing situation, and these predictions might look a bit rosy.
Just how bad are the job losses in this Great Recession? Let’s put it this way: compare the losses against the previous recessions we’ve had since World War II, and you’ll come away wondering why our current recession (oops, sorry, I forgot the recession is over) is even called just a recession.
Just how bad is unemployment now? We always think in terms of the unemployment rate, but this graph shows the median duration of unemployment payments per recipient. You can see that the number now is roughly double previous recession peaks since 1967, the earliest date available from the U.S. Dept of Labor.
Just how bad is the Great Recession, in terms of job losses. With unemployment now at 9.8% and with the disappointingly dismal numbers we received in yesterday’s jobs report, you already know it’s very, very bad. But this chart really puts it in perspective by comparing our current recession (perhaps more appropriately, near-depression) with all the recessions since World War II. We think you’ll agree, it’s not a pretty picture.
It shows job losses in percentage terms, from the start of the employment recession. The dotted line on the current recession shows payroll employment excluding temporary Census workers.
(Click to enlarge)
Thank God our president and congress have been focusing these last two years on all the things that really matter in terms of producing jobs: the destruction of health care, cap-and-trade, increasing regulations, fighting non-existent global warming climate change, paying back unions through the so-called stimulus package, threatening talk radio, postponing 2011 tax policy discussions, and fine-tuning his skills on the celebrity talk show circuit. Yes, he’s been a real help. And now the lame duck congress is doing their part but putting first things first: gays in the military, deluding ourselves that Russia will disarm along with us, and Mrs. Obama’s control of your child’s diet.
No wonder were doing so well. But as those defending all the actions of this administration say, hell, it would have been worse without all these actions. Uh huh.
Ron Paul wants to strip the “atrocious organization,” known as the Federal Reserve, of it’s ability to do central economic planning, specifically, its mandate to keep unemployment low. This mandate is in its charter, but Paul says it is not in the constitution.
As he says, “All they know how to do is print money, and it doesn’t do any good. That’s what these last two years have proven.”
I had a meeting with one of my community bankers yesterday, to discuss renewing some business lines of credit. If you thought I was unhappy about the lending situation I find myself in, you should have seen my banker. Depression, helplessness and exhaustion showed on his face. The FDIC, he says, is doing everything they can to drive community banks out of business.
FDIC Chairman Sheila Bair explains to community banks that they just don't have the Wall Street cred required to skirt playing by the rules.
After surviving the “audit from hell” two years ago, and then trying to comply with FDIC rules, he finds that every six months they change the rules on him again. The rules changes, it seems, forces him to put more decades-long borrowers in good standing with performing loans out of business or into bankruptcy. Many people who have never missed a payment on their loans are not being renewed for a variety of technical reasons, few of which it seems are based upon the borrower’s ability to continue paying the loan.
In addition, I heard many stories of shenanigans that have been pulled by bigger banks to force borrowers to technically default and lose their pledged collateral. The big boys see bargains to be had are using every trick in the book to get their hands on them.
So my good and decent community banker, who has worked with local folks for decades in our county, one who truly cares for his customers, finds he must curtail business with small businessmen and women, in order to attempt to comply with the ever-changing, noose-like regulations and ratios that the big banks we bailed out get a pass on. And what happens if the FDIC decides that this bank is not in compliance for too long a time? It will be shut down, and a faceless, bigger bank will swallow up the assets. One less small bank, and more power to the chosen few of Wall Street.
Community banks are the life-blood of small business, and small business employment is the life-blood of our economy. By showing such favoritism to large banks, our government is in essence undermining our fragile economy. 8,000 community banks serve 10,000,000 small businesses. What if each one hired one employee on average? Do the math.
Is this transfer from small banks to big, TARP banks done purposefully? Well, knowing the big banks we bailed out essentially wrote the rules for this administration’s FDIC, you can come up with the answer yourself.
Note: we’d love to hear from any community bankers with their horror stories, and also from small businesspersons, and real estate developers and investors. Leave your comments below, or use the contact form to send in a guest article.
worn: No Lauren, it is you who sounds uninformed. After reading your reply, I am wondering if you are aware that the worst natural disaster in U.S. history was the Galveston hurricane of 1900. Yes, that’s the hurricane in which 6,000-12,000 people died due to a storm surge on the Texas...
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James: After a seriously obese person has had fat removal procedures, his/her flesh sags where excess fat used to be. World population should never have risen this high. It will be reduced. Through lower birth rates; or by more traditional means: war, disease, famine, cannabalism. I’m not a...
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Lisa Davidson: If any bank president or bank management is willing to talk about what happened to their community bank (i.e. FDIC forcing them out of business) – anyone who CAN talk about this – making a documentary and have reputable news outlets interested. This story needs to get...
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Kim: Marcy, Rep. Alan Grayson said in the attached youtube video in 2010 that Fannie Mae and Freddie Mac both own stock in MERS. How much stock and when did they own it? Would this explain their current actions? Did they move loans out of MERS and into Fannie Mae for the tax payers to bail out?...
bon: How silly you folks do not realize that it’s the “in thing” to hate Americans now. I’m poor. I’m poor because of greed and graft in light of my honesty in addition to self-serving and selfish Americans who continue to deplete their brains of the genuine cause of...
ru4real: The new deal also created FDIC insurance. Im sure you would like to go back to the days when your bank money wasnt guaranteed. Before the New Deal, some churches offered assistance, but most offered VERY little assistance. Even today, many churches cannot offer assistance unless they...
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R. Arthur Beckles: Barack Obama is President of all Americans, not just of African-Americans! It’s difficult for all working class Americans – black, white, brown, etc. African-Americans who don’t want to vote for Obama, can feel free to do so. But do they think that their lot...
EriktheRed: I like how it’s “fortunate that the crisis is confined to the E.U.”- what’s unemployment in the U.S. right now? How about the millions of foreclosures you’ve had already? Tent cities, anyone? Deficit spending at $3.5 bn a DAY? HMM!
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JoAnn: I have a real problem with Obama borrowing money to send to Greece when so many people in this country who have lost long term jobs,lost homes,living on the street, little or no food. I vote to take Obama and his family if they want to go and DROP them on a desert island some where just so...
Arkansas Slim: Update. Oil hit 105 per barrel yesterday, 2 20 12. Gas US Avg => 3.50 per gallon. Cloward Piven Theory of Economics: Tipping point of US Electorate => 51%. Nevada odds for Obama RE Election 6/10 on thier sport boards. EU/Greece set to collapse, dominos arranged. Socialistic...
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Rider I: How the US has historically used mineral rushes to get it out of Deficits and stop foreign economic take over. In the US’s historical past the Druids have used and impressed upon the US leadership to use mineral resources to stop economic warfare, along with military take over....