Friday, June 26, 2015

Better, It's Not

I hate to be repetitive. But sometimes I just have to be. Probably, most of my readers get it. It is still worth saying one more time. At least one more time. The economy is not improving. The job market is not improving. The GDP, which was doing an under powered slog, is now dropping. Once again, we are sitting in the muck at the bottom of an economic version of Dismal Swamp.

Yes, the stock market is up. For one thing, the stock market does not represent the economy as a whole. Second, the stock market is riding a bubble caused by the Feds policy of zero interest. So now the Fed has a tiger by the tail. Things won't improve until they move the interest rate upward. If they do take that action, the bubble will probably burst and the bottom will fall out of the market. 

Every month the administration, with great fanfare, announces how many new jobs they have created. Usually around 200,000. March was a sickly 126,000. That is not even close to enough. The only reason that the unemployment rate is not going up is that when people run out there unemployment and give up looking they disappear from the statistics. The Participation Rate, the true measure of employment, is still the worst it has been since the Carter administration.

The United States needs a 4% GDP to provide decent jobs and salaries for it's citizens. The present administration has been trying to convince the world that 2% is the new normal. It is normal only when the economy sucks. To the consternation of those that would rule us, last month they announced a GDP of negative 0.7% and were excitedly happy when they could revise that figure up to a negative 0.2%. I do not believe that this calls for a soulful rendition of "Happy Days Are Here Again".

We get periodic statements that the President's people are working hard on the economy. What they seem to be working hardest on is finding ways to jiggle the numbers to make things sound better. They are not better. The American people are sadly underemployed. 

The big problem is that all of the moves that the government has made, have made things worse. The bigger problem is that they are sure that the problem is they didn't do enough of the wrong thing. And even worse than that is that they are so arrogantly sure of themselves that they never even consider a different path out of Dismal Swamp.

No comments:

Post a Comment