After dipping last month, unemployment numbers took a jump upward today to 9.7%. Many economists believe that by the beginning of next year, the figure will be over 10% and may continue to rise for several more months. The numbers paint a gloomy picture of the economic recovery hoped for by Congress and the Obama Administration but given the government’s lack-luster plan to put people back to work, nobody should be surprised.
In a speech this week to the Brookings Institute, Vice President Joe Biden likened the administration’s approach to fixing the economy as shotgun economics. He said, "There is no silver bullet. The Recovery Act provides silver buckshot." Translasted, that means that the administration has thrown a lot of money at the country’s economic troubles and is hoping that some of it has the desired effect of sticking.
According to Biden, the apparent lack of plan IS the plan. He said, “…the fact that the Recovery Act is multifaceted doesn't reflect a lack of design ... it is the design. Our economy is so complex and so wounded that reinvigorating one segment alone or using one tool alone would never do all that needs to be done.” But the economy actually started to tank as a result of the mortgage crisis. This is an issue that still has not been successfully addressed even though the original bailout package last year was supposed to solve the problem. Is hasn’t.
The so-called stimulus measures that have passed since were supposed to create new jobs. Then the Obama administration started saying that they were going to “create or save jobs”. And the number of jobs they have committed to “creating or saving” is 3.5 million. But since the beginning of the recession, more than 7 million people have lost their jobs. That means that for every job “created or saved” two jobs have been lost. By any measure, that is not a successful track record. And the way that the government arrives at its numbers is widely viewed by economists as highly subjective and easily manipulated.
As bad as the unemployment number is, it doesn’t reflect the true picture of the state of employment in this country right now. To find that one needs look at the underemployment rate. That number now stands at 16.8%. Underemployment includes who can only find part time work, and discouraged workers who have been laid off and are no longer trying to find a job.
Both the unemployment and underemployment numbers this month were significantly higher than predicted. On September 10
th, the White House will release a report on the number of jobs “created or saved” by the stimulus bills. Regardless of what the report says, it is likely to be torn apart almost immediately by economists around the country since it is virtually impossible to show how government spending can save any individual job.
by Jim Malmberg
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