A Clear Warning From the Jobs Numbers

This week’s economic news was mixed, but employment report on Friday was unmistakably weak. The economy added only 115,000 jobs in April, versus 154,000 in March and 200,000-plus in each of the three months before that. Even taking into account that unusually warm winter weather probably distorted recent results, underlying trend shows an economy that has been creating about 175,000 jobs a month, enough to keep the recovery crawling along, but too weak to appreciably raise hiring or wages. Nor is it clear where more growth will come from. Manufacturing picked up last month, but activity in the larger service sector slowed. Recent auto sales were up, and home sales have been slowly, if fitfully, improving, but home prices continue to fall. Consumer spending, in general, rose in first quarter, but it appears to be driven by people who are profiting from a rising stock market. Increased market volatility, like Friday’s 168-point drop in the Dow Jones industrial average, would make them nervous and less inclined to spend. Election-year politics are bound to further confuse the economic picture and way forward. On Friday, Mitt Romney blamed President Obama for the April jobs figures, saying that in a normal recovery “we should be seeing numbers in the 500,000 jobs created per month.” The truth is the economy has not seen job growth like that in nearly 30 years. More to the point, the policies Mr. Romney espouses, notably deregulation and tax cuts for the rich, were the favored policies under President George W. Bush, years when job growth and wage gains were, at best, anemic. And then the economy barreled into the Great Recession. More deregulation and high-end tax cuts, along with deep spending cuts Romney has endorsed in House Republican budget, would mean less economic stability, greater inequality and fewer jobs. Obama has called for sensible policies that would create more jobs, including infrastructure spending and aid to states to prevent layoffs and boost hiring among teachers and other public employees, but Congressional Republicans have blocked him at every turn. On Friday, Obama said that he would urge Congress “to take some actions on common-sense ideas” to boost jobs. There is no sign that Republicans are ready to see the light, especially when they see the weak economy as an election-year advantage. The jobless rate dropped in April, from 8.2% to 8.1%, but the decline was caused by 342,000 people dropping out of the work force. A smaller work force means even slower growth. Without further government help, especially more aggressive spending to boost demand, the economy simply does not have the momentum to heal itself any time soon. Millions of today’s unemployed and underemployed Americans will pay the price for the rest of their lives, in lost earnings, lost homes and shattered retirement hopes. This is no time for political game-playing or ideological posturing. Americans need help now. (Editorial – NYTimes – 05/05/2012) 

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Consultor Internacional

3 Responses to A Clear Warning From the Jobs Numbers

  1. Professor Uziel Nogueira says: There is no short term solution for the millions of unemployed, except a monthly government check and food stamp. US consumers are still up to their necks with debt while the net value of their houses is still negative. US based international companies are doing fine, plenty of cash and liquid. The only problem is their business model and Apple is a good example. They are expanding production and creating jobs in the growing markets of the BRICS. This trend may get momentum as the US economy continues its slow growth rate while the rest of the world accelerates.The federal government is the money generator of last resort because it can print money. The problem is the UNSUSTAINABLE public debt of $ 14 trillion, getting closer to 100% of GDP. Either the US controls its public debt or become a former super power like England. For the first time since the Great Depression, the Republican and Democrat candidates cannot deliver easy — Yes We Can! — solutions for the complex economic problems facing the US society. Obama and Romney are facing a mission impossible. On one hand, the socioeconomic system is NOT prepared to deal with a prolonged period of high unemployment. On the other hand, the American electorate -particularly the unemployed- feel the pain and demand quick solutions.


    The Onion’s caption of 2008 is ready to be reproduced in 2012: Obama/Romney Wins! Black/White Man Given Nation’s Worst Job!

    http://www.nytimes.com/2012/05/05/opinion/a-clear-warning-from-the-jobs-numbers.html

  2. Public financing of presidential elections, the greatest reform to come out of the post-Watergate era, died this year after a long illness. It was 36 years old, and was drowned by big money and starved by the disdain of politicians who should have known better. From 1976 until 2008, every major-party presidential candidate took public money for the general election, adhering to spending limits that significantly reduced the influence of money on American elections. Candidates began dropping out of public financing for primaries in 2000, and then in 2008, Barack Obama abandoned the system entirely, preferring to raise more money from small donations, and promising to fix the public program. He has made almost no attempt to fulfill that promise. This year will be the first since Richard Nixon’s day that neither major candidate will accept public financing. Both Mitt Romney and President Obama plan to raise hundreds of millions of dollars, far more than they could get from the public system. Public financing could still be resuscitated, but first, someone in power has to care about it. The Republican-led House has voted to kill the system outright. A few House Democrats have proposed a good bill to fix it, but no one in the Senate has picked up the bill. And the two major candidates are too busy grubbing for the unlimited donations that now dominate politics. The era of “super PACs” and secret donors has made public financing more urgent. A system that greatly magnified small donations with high matches would give ordinary citizens a shot at competing with corporations, unions and wealthy donors. It would allow candidates to campaign more instead of constantly begging among the rich. And it would give a challenger a chance to be competitive without the help of a super PAC (…..)

    http://www.nytimes.com/2012/05/06/opinion/sunday/an-idea-worth-saving.html?_r=2&hp

  3. Professor Uziel Nogueira says: Public financing of presidential elections is dead because the money on it cannot elect even a city council nowadays. As the NYT editorial put it ” the GREATEST reform to come out of the post-Watergate era, died this year after a long illness. It was 36 years old, and was drowned by big money and starved by the disdain of politicians.” The new system will certainly be dominated by powerful lobbying groups such as Citizens United and SuperPACs. Special interest groups can work freely and DEMAND overtly a return for their money from politicians they help to elect. This coming presidential election will be sort of political experiment lab. The country is in a 1930-style great depression and divided into two groups. The 99% losers and the 1% winners. The 99% got no extra money to spend in politics (many are unemployed) while the 1% have plenty of money to spend in their special interest cause be it Israel, business with China, military spending, relaxation of new financial regulations, etc, etc.


    Perhaps, the major challenge of the new system is the introduction of money from foreign nationals into the political process. Any country in the world will be enticed to create their own super PAC to protect their national interests. In fact, the new financing rules create a market for foreign and domestic money to compete. Foreign and domestic causes will become intertwined. The big prize is the US presidency and the congress.

    http://www.nytimes.com/2012/05/06/opinion/sunday/an-idea-worth-saving.html?_r=2&hp

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