The Jobless Recovery, So Called
Oct 19th, 2009 | By Linda Brady Traynham | Category: Featured, Morning Whiskey
Agora Financial’s Founding Father Bill Bonner, writing in his Daily Reckoning, says there are approximately 131 M jobs in the USA.
Justice Little, Editor of Taipan Daily, also out of the AF stable, says that 26 M jobs have been lost.
The Federal Government says that the unemployment rate is 9.8%. Traditional methods of accounting make the answer right at twice that much, recognizing that people are still jobless even though they have exhausted (expanded) unemployment compensation or been on the rolls more than six months.
Another source claims one million jobs were lost last month, as opposed to the government reports which will fluctuate for a while and finally show up on the back pages as 475,000 again, at a good guess.
Rocket scientists used slipsticks and Cray computers which have been replaced by fancier models, while split second “trades” are executed algorithmically on the floor of the stock exchange to garner half a cent a share, but let’s get back to good old tried and true methods which don’t even require an abacus.
If there are 130 M jobs, net, in the USA (rounding slightly to keep the arithmetic simple), and 25,000,000 have been lost (again, rounding to keep matters simple) then we can either say that the job market has shrunk on the close order of twenty per cent. (a ploy the government should have thought of but didn’t, and if we go with 26 M that is precisely 20% of 130M), or we can say that the jobless rate is approximately twenty per cent., which is exactly the same result I got when I told you in the second paragraph what the true rate probably is. Inconvenient truths do not really disappear just because someone mumbles mystical new accounting parameters.
It is possible that the wizards were trying to tell us that there are currently 131M jobs in the USA, down from a previous high of 157M. In that case, the job loss is 26/157 which is an awkward number to reduce by division while typing, so let’s multiply, instead. The figure is one-sixth, almost exactly. (6 x 26 = 120 + 36 = 156. That is definitely close enough for government work.)
By that view, 15% + 1.66% (a quick way to deduce 1/6, since multiplication is far simpler than its upside down view, division. Perhaps no one ever told you that, or that addition is only backwards subtraction.) = 15.66 % total destruction of the portion of the economy known as employment. That is even worse news than that 20% of those who need jobs can’t get them. It means that a sixth of our economy has disappeared to foreign lands or been destroyed by the fall of the stock market, banking instutions, and real estate.
Even a large factory starting up isn’t going to produce more than a few thousand jobs (and it is not guaranteed to succeed, particularly with such horrors as cap and tax, more regulation, and the guarantee of many other new taxes ahead of us), and who has the capital for such an undertaking, other than foreigners with a surfeit of falling dollars? Do we really want an economy dependent upon the good will of those chortling over the demise of the dollar as the reserve currency? I guess assorted governments in Washington this century shouldn’t have borrowed so much money from them. They did, though, and in some ways the best thing that could happen is for the whole sleazy fraud of fiat currency and the Fed to crash around their deserving ears.
It is possible to jigger figures in any number of entertaining ways, but that won’t change the facts. All it does is disguise them and lead to more palatable annual corporate reports and soothing statements from Bernanke, Geithner, and Obama. If our measure of “recovery” is getting back to the slippery ground we were on five years ago–not a pleasant place to stand, as events have revealed–then it follows that 25,000,000 jobs must be created, one or a few at a time. These cannot be temporary jobs, such as census workers or seasonal workers; that is the equivalent of putting a bandaid on a ruptured appendix and saying that time will heal it. Time is going to cause us to bleed out and die of septicemia if we don’t do some surgery, here.
Mind, all creating twenty-five million real jobs in manufacturing, construction, agriculture, and education would do is restore the status quo ante. As daunting a task as that would be, it would not solve the problem; it would merely stanch the bleeding. Until we work our way through the devastation of all the bubbles there is no way to clear the decks for rebuilding.
I don’t think it can be done. I’m feeling nautical, so let’s say that we have been hulled between wind and water. Our masts are down in a tangle of rigging, the sheets are snapped and tangled, and our lower decks are awash in blood and loose cannons rolling over the wounded. All the surgeon has in his chest is salt and rough canvas. In this case, Geithner and Bernanke are terrified of using the bone saw.
Oh, occasionally the Captain and senior officers will throw a bank overboard, but pretty much the fix is in for those who are connected. We are witnessing the greatest transfer of wealth in the last two hundred and 233 years, and it is all going to special interest groups. Other than what they dole out on luxury goods and buying more power that money is not going back into the economy to create new businesses or expand old ones which is the only way that genuine, long-lasting, productive jobs come into being.
Can there be a recovery without jobs? Of all the idiotic suppositions that only Keynesians would promulgate! Of course not, any more than those who are not employed can pay bills, eat, and provide tax recovery.
Jobs are not an intangible, save in one increasingly dangerous sense. Jobs must produce something. By its very definition, a job is labor which produces something the employer wants more than he wants or needs his money. It always seems to surprise Statists, but the purpose of business is to create profits, not to create products, and certainly not to create jobs; indeed, technology is reducing the need for human workers, to the understandable delight of entrepreneurs. Creating profits involves risk, forethought, knowledge (or hired experience), and it isn’t something just anyone can do. In particular, it is not something which can be done under shackling regulations, increased taxes and cost, insecurity over fuel availability, and capricious governments dedicated to non-science and paying off themselves and open-handed constituents.
The biggest problem I see is not fiat money (which is collapsing from its own lack of substance), or the purported “global” economy, which is composed of numerous countries none of whom are doing well. (Prosperity in China? Oh, my, tell me another one.) The big problem, which is being exacerbated, is that something like 40% of all “jobs” are in government. Yup. Four out of every ten “workers” are paid lavishly (in general, twice what counterparts in business make for similar tasks) are engaged primarily in the business of making our lives more difficult, our businesses less profitable, and our ability to plan for the future almost impossible. This country has grown bureaucracy and chased manufacturing jobs off shore. It has increased regulation and deleterious “services” at the expense of freedom and capital to create real business which include real jobs and genuine products which can be sold instead of buying shoddy merchandise from China. We’ve seen the cycle…from Taiwan to Japan to Sri Lanka, and now to China. We have sent our money overseas for many decades rather than fight to reduce regulation, reduce taxes, and reduce costs. A fork lift operator simply isn’t worth $86,000 a year, even if he works for the ci devant “Big Three.” Not many of them do any more, and it serves them right. Greed at all levels of the unions made American products too expensive to buy. Manufacturers–whom, I will remind you again, are not in business to employ “workers,” but to make profits–picked up their blueprints and went elsewhere. We cannot blame them. We would do the same if we were able.
No, friends, there will be no “jobless” recovery. There will be no recovery at all until we are so much farther down that October of 2009 looks like “the good old days.” The “green shoots” are the slime growing up the North wall of government, the bacteria of corruption, and of parasites such as governmental Spanish Moss and Pharma and Agribiz mistletoe.
What is to be done? You’ve got your choice. Destroy Carthage, or opt out. Pull back into your own perimeter. Produce nothing that can be taxed or regulated.
That’s what we have come to. State revenues are down 17%, which looks like a pretty close correlation of 1:1 for enterprise destruction and joblessness both. Every job destroyed is another blow at the Nanny State which cannot survive without continuous economic growth, because such as they never curtail their own spending and urge to shackle and harry those who produce the funds upon which Statists thrive. Perhaps you are not in a position to do so, but if you are…just quit. This isn’t new advice; Ayn Rand gave it to you sixty years ago. Do not lend credence to your oppressors and do not support them…and do not look for any genuine green shoots representing real growth any time soon.
Regards,
Linda Brady Traynham
October 19, 2009
[...] This post was mentioned on Twitter by Ron Simon, Whiskey Gunpowder. Whiskey Gunpowder said: The Jobless Recovery, So Called: Agora Financial’s Founding Father Bill Bonner, writing in his Daily Recko.. http://bit.ly/4D9URL [...]
[...] http://whiskeyandgunpowder.com.....-called/It means that a sixth of our economy has disappeared to foreign lands or been destroyed by the fall of the stock market, banking instutions, and real estate. Even a large factory starting up isn’t going to produce more than a few thousand … By its very definition, a job is labor which produces something the employer wants more than he wants or needs his money. It always seems to surprise Statists, but the purpose of business is to create profits, not to create products … [...]
[...] http://whiskeyandgunpowder.com.....-called/It means that a sixth of our economy has disappeared to foreign lands or been destroyed by the fall of the stock market, banking instutions, and real estate. Even a large factory starting up isn’t going to produce more than a few thousand … By its very definition, a job is labor which produces something the employer wants more than he wants or needs his money. It always seems to surprise Statists, but the purpose of business is to create profits, not to create products … [...]
Hey, Linda-
Glad to see you on WG again- I’ve missed your down home missives. Unfortunately, simply quitting and not producing anything which can be taxed or regulated is nearly impossible with so many hyperactive busybodies on the nanny state’s payroll, and with full spectrum electronic surveillance. I believe the inevitable fate of decent Americans is the same as the fate of Jefferson and Houston. The bad guys can’t afford to let their slaves quit or leave the plantation.
Your nautical description is surely right on, though. The only thing you didn’t describe perfectly is the senior officers lavishly provisioning the lifeboat and guarding it against the crew.
Best-
EP
Dear Ernie: Did you hear my delighted chuckle? We have an unexpected overnight guest, and the simple thing is to go turn from a steely-eyed analyst into a hostess and take him to a terrific steakhouse nearby IMMEDIATELY. When I come back I’ll discuss Horatio Hornblower, Alan Lewrie, and why I think some of us CAN have an effect by “dropping out.” The RIng, which is a brainchild Gary and I had, is nowhere near gone from W&G and I admit cheerfully that I am a great trial to Gary because I can–and usually do!–turn out an article a day. Oh, I wish I had the luxury of taking off across country right now writing because you really inspired me with your comment about Jefferson and Houston, and don’t forget what they did to Bobby Lee. BIG, rib-squeaking hug, because a compliment such as yours warms my heart and makes my eyes light up. DO go check out http://www.thetexasring.com. You’ll find more of me, more of Tony De Maio’s Fabulous Fables, two superb articles by Tex Norton, some from Richard Marmo, and we have treats you aren’t going to believe planned, including stories suitable for children and grandchildren… Linda
I am still wondering what in the hell is a jobless recovery, if not a bunch of meaningless nonsense. The politicians have a nice name for everything they try to get you to swallow. After my husband lost his tech job to cheaper imported labor so his company CEOs could cash out big in the stock market, I published a satirical novel called Jobless Recovery. Sadly many of the things I wrote about in the book have now come to pass, including mass joblessness and foreclosures.
Dear Mrs. Evans:
Is your book still available? Tell us more about what you foresaw? Did your husband find a better thing to do with his skills, I hope?
The only ones I see “recovering” are those getting an influx of fiat currency from their cronies, and that is good only the first couple of times it changes hands. If you would like to discuss these things one-on-one, leave me a message over on http://www.thetexasring.com and I’ll get back to you promptly. I hope to hear from you further.
Linda
Gotta love that “Just quit!” of Ayn Rand. And all this time, I thought I was following Timothy Leary’s advice!
Gee, Steverino, I’d forgotten about Timothy Leary, dearie. If y’all knew how my eyes light up when I have mail I’ll bet I’d be buried in the stuff!
Tonight we feasted on Eggs Benedict, and everything came from the ranch except the English muffins– and we could have made those, too, if we’d had a mind to, as we say in our quaint native patois. That makes three days in a row five people ate lavishly and all we had that was “store boughten” was the muffins and black olives.
It’s hard on the bottom line and lower-end jobs, but if we all just went on a binge of “If I don’t need it or I can make it myself,” there could be some real excitement. Tax revenues are already down 17% and it will be quite interesting to see what a desperate government will do… Truly, thank you very much for writing Steverino. I know I’m not “hollerin’ down a well,” but it is so GOOD to get responses. Have you checked out http://www.thetexasring.com, yet? W&G quality stuff, y’know, but Gary does have just a few others who write for him!
Cordially, Linda
The great danger in “hollerin’ down a well”?…..Fallin’ in!!
Yep! In my neck of the Panhandle, we, too, eat well at home between trips to the steakhouse!
Not needing stuff that isn’t needed is economic disaster–except for… home economics!
Gotta go: big pocket pair!!!
Steverino:
Y’all up around Abilene or Amarillo? Texas was last into the “recession,” and has been hit the most lightly by it. Unemployment is running about two-thirds of the national average, which doesn’t mean things are great, just not as bad as elsewhere.
I have a basic rule: if I can’t eat it, repair something with it, read it, or protect myself in one of many ways with it, I don’t buy it. True wealth is having what you want and not being obliged to do things you do not want to do. I’m fortunate because MDC and I do NOT want what so many think are indispensible. We don’t own a Blackberry, an iPod, or a country club membership. We don’t eat fast food–although we can really recommend Sodalak’s Beef Master steak house in Bryan, and the Piano Bar in tiny Rockdale. We do not lead lives devoted to consumerism. Our lives revolve around each other, the ranch, the good Lord, and reading and writing. Our idea of really big fun is thinking of a project and being able to do it ourselves, usually with materials we have on hand. We can’t imagine anything dumber than purchasing a new pickup that costs thirty or forty thousand dollars when Texas is full of great old trucks for $1500 to $2000. Shucks, we’ve got half a dozen of the things, only two of which ever leave the place. The others all have specific uses, including the repo truck and the bucket truck which paid for itself completely getting the tree that fell on the house of the roof. That’s part of what you were getting at, being able to solve our problems ourselves. When Ike hit us last year we used that as our preparedness test, and we’re very proud of the results. Ike took off the roof of the wellhouse and a bunch from the automotive/carpentry/weldiing shop, and knocked out the power lines to those and the barn…and managed to drown one exceptionally dumb chicken who kept gawking at the sky. (You don’t want to know what the goats said about being put in a maritime shipping container. It wasn’t at all civil! They thought they should have been allowed in the house.) Charles is an electrical engineer and he had all the wiring replaced (and upgraded) in less than 24 hours and he and the Foreman had the roofs repaired. We didn’t stand around waiting for a government to declare us a disaster and come help! I had candles in every room, made five gallons of tea, filled the bathtubs and additional jugs, and all the sensible precautions, and we had a generator in a sheltered spot ready to go. THAT is what amuses us: silly me! We should have put a generator by the well, too. THAT was what we lost power to. In retrospect it was obvious. We had plenty of everything including firewood in the house and a cheery fire…but the important part is to be prepared for everything short of nuclear war.
It sounds as though you have the same sort of ideas, and hurrah for you. Everybody knows I’m a Doom & Gloom type, and when catastrophe strikes more and more it is going to be up to individuals to keep themselves safe and clean up the messes.
Hope you won.
Linda
The chicken may well have thought the sky was falling!
And the little boy cried “Wolf!”