Reich writes: "The economy has stalled. With only 115,000 jobs in April, the hole is getting even deeper."
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
The Stall Has Arrived
06 May 12
he economy has stalled.
Friday's jobs report for April was even more disappointing than March. Employers added only 115,000 new jobs, down from March's number (the Bureau of Labor Statistics revised the March number upward to 154,000, but that's still abysmal relative to what's needed). We need well over 250,000 new jobs per month in order to begin to whittle down the vast number of jobs lost in the Great Recession. At least 125,000 new jobs are necessary each month just to keep up with an expanding population of working-age people.
With only 115,000 jobs in April, the hole is getting even deeper.
Most observers pay attention to the official rate of unemployment, which edged down to 8.1 percent in April from 8.2 percent in March. That may sound like progress, but it's not. The unemployment rate dropped because more people dropped out of the labor force, too discouraged to look for work. The household survey, from which the rate is calculated, counts as "unemployed"only people who are actively looking for work. If you stop looking because the job scene looks hopeless for you, you're no longer counted.
In the winter months - December, January, and February - hiring had seemed to pick up, averaging over 250,000 new jobs per month. Then the mini-surge stopped. The simplest explanation is that the mild winter across much of the United States gave an unusual boost to hiring then, leading to a correction by the spring.
Most of the job gains in April were in lower-wage industries - retail stores, restaurants, and temporary-help. That means average wages continue to drop, adjusted for inflation - continuing their long-term decline. Most of the new jobs that have been added to the U.S. economy during this recovery have paid less than the jobs that were lost during the downturn.
What does all this mean? Together with other recent data showing slower economic growth during the first quarter of this year, it's safe to say the economy has stalled.
This is bad news for millions of Americans.
It's also bad news for Obama and the Democrats. Voters don't pay much attention to the economy in an election year until after Labor Day, so it's not necessarily a huge help to Romney and the Republicans. But it's a bad political omen nonetheless.
No set of policies between now and Election Day are likely to expand the economy. To the contrary, government at all levels continues to contract, acting as a fiscal drag when government needs to be doing the exact reverse - boosting the economy through additional spending. In 2013, when spending major cuts are scheduled, we'll fall off a fiscal cliff.
Obama needs to push back loudly and clearly, saying he won't support additional spending cuts until the economy is showing clear signs of improvement.
But widening inequality is the underlying culprit here. As long as almost all the gains from economic growth continue to go to the top, the vast middle class doesn't have the purchasing power to boost the economy on its own. And rich Americans spend a much smaller portion of their incomes than does the vast middle class. Their marginal satisfaction from additional spending falls off. The second yacht isn't nearly as much fun as the first.
Get it? We've still got a terrible cyclical problem - we can't get out of the gravitational pull of the Great Recession.
Yet the underlying problem is structural, and it's been growing for decades. The structural problem of stagnant or declining real incomes for most people, and soaring income and wealth at the top, was masked during the boom years when the middle class could turn their homes into piggy banks and extract home-equity loans or refinance. But the mask came off in 2008 as home values plummeted.
There's no way to put the mask back on. We've got to face the truth. Obama and the Democrats have to explain to the American people why inequality isn't just unfair; it's also economically unsustainable.
Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including "Locked in the Cabinet," "Reason," "Supercapitalism," "Aftershock," and his latest e-book, "Beyond Outrage." He is also a founding editor of the American Prospect magazine and chairman of Common Cause.
|
THE NEW STREAMLINED RSN LOGIN PROCESS: Register once, then login and you are ready to comment. All you need is a Username and a Password of your choosing and you are free to comment whenever you like! Welcome to the Reader Supported News community. |













Comments
We are concerned about a recent drift towards vitriol in the RSN Reader comments section. There is a fine line between moderation and censorship. No one likes a harsh or confrontational forum atmosphere. At the same time everyone wants to be able to express themselves freely. We'll start by encouraging good judgment. If that doesn't work we'll have to ramp up the moderation.
General guidelines: Avoid personal attacks on other forum members; Avoid remarks that are ethnically derogatory; Do not advocate violence, or any illegal activity.
Remember that making the world better begins with responsible action.
- The RSN Team
Union busting is a face saving tactic to keep from having to continue pensions and perks. Hollywood, FL already legislated against further pension plans for their gov't employees and other municipalities and states are trying to follow suit. See THE SUCKER PUNCH on www.deadlyclear.com.
The only connection to Obama is that he should have propped up the states before the banks...And he should have come clean with the Wall Street debt and Federal Reserve pay-outs to the banks a long time ago. His advisors have failed him - they made the wrong call and now it's too late unless he calls a moratorium to stop foreclosures and evictions and forces Congress to seize (where necessary) and regulate the banks.
The BLS estimates 5.1 million people have been without work for 27 weeks or more, with 7.9 million working part-time because their hours have been cut back or they are unable to find full-time work. Some 2.4 million others "were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey," the BLS said.
If all those discouraged workers are included, estimates for real unemployment stand at 14.5 percent, 18 percent if all the new college graduates working at fast-food jobs are counted, Morici estimates.
I believe its even worse then this!
Read more: http://www.upi.com/Business_News/2012/05/06/Unemployment-at-81-percent-If-this-is-recovery-where-are-the-jobs/UPI-28151336291500/#ixzz1u81xvehh
JUst answer one question...Who extended the Tax breaks for the wealthy! If Obama had not extended those tax cuts there would have been a different picture relating to the deficit budget....I rest my case.
I sure wouldn't want to be graduating in a month!
a declining workforce to me means that fewer people are working...am i incorrect in my understanding of the term?
First I am glad that you understand that jobs come from companies, and I applaud you writing that!
More directly to how you get companies to hire is very simple.
1) ELIMINATE corporate income tax...ZERO!
2) RAISE taxes on dividends to 50%!
2A) Taxes on Dividends to be paid at the time they are declared and are NOT reported on individual tax returns. ( Charitable organizations and individuals with the stock in their retirement accounts can clawback 1/3 of these taxes)
2B) Money sent to parent foreign companies shall be considered a dividend!
2C) Bonuses paid out to only management shall be considered dividends, but if paid to the majority of workers ( excluding unions "they can negotiate their own terms for bonuses) they will be ordinary income!
If you did that you would flood this country with huge amounts of capital.
There would be no need to try and cheat on taxes since they are zero.
Companies would have much more money to buy things, expand business, hire more workers, etc.
No need to hire non productive accountants to search out loopholes like GE did just to avoid paying taxes.
http://securities.stanford.edu/1039/CMLTI_01/200946_r01c_081418
I posted these on DeadlyClear.com for a good reason... So the public could be informed. We all have the same problems, almost EVERY SINGLE STATE - Wall Street ran a muck and NOBODY stopped them and why do you think the Dems are not talking about it now?! We have less than 6 months to hold their feet to the fire and make them realize if they want to keep their jobs and get our votes they need to come clean or we cannot continue to put these crooks in office. When they intentionally deceive the public - they are as bad as the crooks they are trying to protect, aide and abet.
Find it and read it, you will see that the government IS doing something about the crooks. I won't bother repeating it all here. Just look down 2 comments and read it. But my original comment was about the Tbagger states laying off so many workers, let's just stick with that. My comment has nothing to do with yours.
Want the truth? Haul in those pension fund managers and agents in and grill them silly...they'll sing like canaries.
There are other states where the budget shortfall came first, and there were many causes, such as the housing crisis and private sector job losses, both of which decrease tax revenue, and the poor performance of the stock market, which hurt state pension funds. Obama and the Democrats tried to help with the stimulus, and that did save many state jobs, for a while. But it was not big enough to make a full recovery, and they couldn't pass a second one, so the jobs eventually were lost.
Private sector jobs have been increasing for quite a while. If it weren't for the public sector job losses, the unemployment rate would be much lower. I have no doubt the Republicans are deliberately stalling the recovery for political purposes. It's pretty obvious from their actions and from what they have said, such as their #1 priority is to make Obama lose in 2012.
When Wall Street crashed the economy, it flatten 2 huge tires that are needed to keep rolling. Housing and labor are completely deflated. On top of that corporations that invested in these fraudulent securities lost their pension funds and had to lay off hordes of employees to compensate for their gambling debts (these companies should never be allowed to donate to any political campaign until they are audited and can substantiate there are enough pension funds for the future).
So, instead of funneling money back into the economy, Obama (sorry lefties, sometimes the truth is painful) chose to prop up the banks. Why? Likely, because Wall Street screwed other major countries so bad that they'd likely take us over for the debt.
Problem for Obama is - the banks didn't pare down their lifestyle and Congress didn't seize and regulate them. Sheila Bair was right, tongue in cheek or not, the American homeowner got duped into defective loan products that were too good to be true and should have received $10 million each for the fraud and the damage rather than prop up the banks and the economy might still be moving.
Let's call it what it really is!
The First Great Depression of the 21st Century.
I predict many more in the coming years.
Parties and personalities do not necessarily hold the answers to our ills.
Here in Wisconsin, in the General Recall Election for Governor, I'll vote for the Democratic candidate (we'll have a name on Tuesday) but I'm not above thinking, given some education (press) and more time (same old same old); we could very well affect the outcome we need and want, on Tuesday!
Check out this "Republican" candidate, who is challenging Scotty in The Primary Election. It's educational, funny, and important!:
http://www.iartwi.com/
If Demo's continue taking big money and lying their way into office, it's time to stop supporting them.
You obviously have not looked at Arthur Kohl-Riggs website (above).
OK: I do not believe Dem's are our best chance to return to a healthy economy. What they might "believe," and what they do, are two different things.
Obama surrounded himself with Bush's crooks concerning the financial industry; continues to give oil prospectors license to ruin and pollute; did not even have a single-payer advocate at the table; is "willing" to put social programs on the table in order to appear to be working on getting a few more bucks out of the rich; more drones; more torture; more civil rights abuses. These are our saviors?
Come on, JCM: Obama and Blue Dog Dems have sold us all down the river Styx. Even Bernie Sanders will not call himself a Democrat.
Again, listen to the interview with Kohl-Riggs! I do not care if he is running on the Pink Elephant ticket; I care about his position on issues! I walked with him and 100,000+ others against Walker a year ago; I trust him and I believe him. I do not believe Obama; most other Dems either.
Or, "Vote for every Democrat you can."
Look: You can run for office under any party name you want: run as a Fungo, for all I care. But what is your platform? What are your issues?
The Democrats are failing us everywhere. Here in Wisconsin we have "Progressives." And they are Greens, Socialists, members of The Progressive Party, etc., etc.; and now, a Republican!
Why would we confuse people by saying something like "Always Vote for the Democrat?" (Wouldn't it be better to say Always vote for the progressive, or something, but even then, why?)
Parties are for lazy advocates. We're just going to have to spell out the issues; if we're going to tell people how to vote.
"Vote for every Democrat you can" that won't make a bit of difference, and will only prolong the fraud of a democracy that no longer exists...
The Democrats have to turn a corner and come out swinging and be a booster club instead of nay sayers.
The democrats allowed the conservative judges Alito and Roberts to be approved for the high court, you and I have been over this many times, what will it take to get this through your stubbornness...
You continue to tout these false comments! Why?
http://en.wikipedia.org/wiki/Casualties_of_the_Iraq_War
There's nothing else in this comment worth responding to.
Our whole system is corrupt...the corporate media is silent...we have only each other to band together in a movement..and the only one I see other than moveon.org is the Occupy movment...we've got to, in the words of the poet.."rage rage rage against the dying of the light"..and get money out of politics.
Thank the universe April 2012 is gone, it sucked! May is 1000000000"x's better in every single aspect for me/my dealer group (again all of the dealers in the mid west are similarly reporting this change too!). Car sales are about the second most/best indication of the economy (aside from real estate) and this year is going well give for April.
To help illustrate the 180. Within two hours of the first day I was selling in May (may 1st) I happened on a deal that could have potentially (again within 2 hours the first day!) have me selling more cars than I did all April!!!
Post was too long so I'll chop it up.
(continued next post)
!
I started selling cars September 9th 2002. Over the years, especially in the few after 9/11, I have been told by multiple different older gentleman (ill be 30 this July) who have have been selling cars since the 80's/90's (kind of the "golden years" from what I can tell) that "this is the worst its ever been/never seen it this bad/etc". I believe this is due to their inability to change and adapt to a market/world that is internet driven and where consumers can find, with a quick Google search, what we paid for a specific vehicle, what a fair value of their trade in is or what our pre-owned car should be retailing for.
Now, unfortunately these aids are not the last word, are often not precise/accurat e enough and we all know that no matter what it is where talking about if its ours, its worth more than whatever we find says! :)
For some reason every April has always been my/many sales professionals worst month for myriad reasons. Specifically for me last month I had a couple come see me pick out a car, we negotiated a price both parties were happy with and they gave me a deposit that would allow me to acquire their car from another lot all was good/done. Then Monday they called me and started trying to work me even more because another dealer they talked to... Have to continue in new response.
It was just a cluster and I'm glad it's over!
Politics aren't perfect and unfortunately from time to time there must be concessions made to allow other, larger legislation to flow through unimpeeded (Yukon xl pipeline being allows by BO to be used as a chip in future/currentl y being hashed out policy/s).
But how can you get the emails from rsn with all this info and say what you have?
You cannot believe the republican/libe rtarian choices would easer innequality at all but actually increase the pockets of the über fortunate even more/(now on the libertarian front) destroy world economics and pretty much draw a roadmap for anarchy in the USA?
Please explain as I don't get your view.
It was covered up by the massive debt people took on through home equity and credit cards, to buy what that they couldn't really afford. This debt has control of so many people. I know plenty in it for $15,000+ that they will never get out of as interest rates are astronomical.
We must: get corporate money out of elections, regulate Wall St. speculating and hold the banker crooks accountable for the Great Recession. Corporations and the rich must pay their fair share of US taxes. Also close off-shore money laundering options, and help US citizens by using our tax money to our benefit by providing quality, affordable health care and not wasting it on these useless wars and defense spending. These changes would go a long way to help our country get back on track.
Both Parties want to remove citizens rights and create a service industry of slavery designed to increase the income for the top 1% while decreasing the 'cost' of the working classes.
Republicans are much closer to Communists than they have any idea!
Well I'm sure you have guessed and I wouldn't have posted this if it did not come to completion. We got the funds Friday!
Take that April and from where I'm sitting, May 2012 will not only make up for April flaccidness but be the best month since 01!
Several decades ago, Margaret Thatcher claimed: "There is no alternative". She was referring to capitalism. Today, this negative attitude still persists.
I would like to offer an alternative to capitalism for the American people to consider. Please click on the following link. It will take you to an essay titled: "Home of the Brave?" which was published by the Athenaeum Library of Philosophy:
http://evans-experientialism.freewebspace.com/steinsvold.htm
John Steinsvold
“Insanity is doing the same thing over and over and expecting a different result."~ Albert Einstein
The incentive to 'do-better' is what progress is all about, and if you take the profit motive out of the equation then work just becomes total drudgery.
The best way to motivate people is to allow them to do the work they love to do. One of the goals of a way of life without money is to provide everyone with the opportunity to find a match between their abilities and the opportunity to serve society. If training is necessary, a free education is provided. Every effort will be made for each individual to find the work they love doing. There will be no pressure. I believe everyone has an ability or talent they want to use for the benefit of society.
Yes, if everyone is free to do their "thing", how can we satisfy the labor needs of our country particularly if shortages exist in various occupations? However, it takes only a small percentage of our work force to provide the necessities and luxuries for the now over 300 million Americans and that percentage is constantly decreasing due to automation and advances in technology.
As I envision a way of life, the people who do the menial tasks will be treated like royalty. Not only will they be economically equal to CEOs; they will also be given the highest priority when it comes to seating at sporting events, shows, operas, etc. They will also receive the highest priority in determining who gets the scarcer luxury items, the choicest vacations, etc. Therefore, I don’t believe there will be a problem in getting people to do the more menial tasks.
John Steinsvold
Every time I get fired up, I dream of becoming a politician and setting the system straight. But everything I end at the same impasse...
To even run for a seat in a moderately populated area it cost massive sums of money (forget POTUS for a moment). Unless you are a CEO/very highly paid employee of a 'green' or other mostly right minded corp how can ANYONE finance a candidacy with out contributions? Even if you ARE a wealthy exec, who in their right mind would run a campaign with their own money when there is a good chance they will NOT win? I wouldnt that's for sure.
So by the time you get to mayor, governor or even congress even the most well meaning citizen would be in the pockets of so many who DON'T have the 'people' in mind when it comes to things they want done. If an official renigs on agreements made with above parties, funding is cut. If they bring the corruption to light they at best will serve time or at worst, well who knows???
Complete finance reform you say?!?? Well that's great but again, who but the already wealthy could run with their self interest to impose? Oh but a rich clear thinking progressive/tru e democrat? How many of those are there with the bucks to run till the end?
So in the end what can we do? Unless we happen upon indipendant wealth we must rely on donors and that is unfortunately the way it always has and will be in America.
"Alexis Goldstein, a former net developer and business analyst at three large Wall Street firms, echoed that sentiment. “In January,” she told the crown. “President Obama appointed a financial fraud task force co-chaired by five people to investigate mortgage fraud. He touted it proudly in the State of the Union. But since the task force was created, we’ve seen zero prosecutions brought against the banks who committed securities fraud, conducted robo-signing, and illegally foreclosed on homes. We’ve seen no one thrown in jail following the biggest financial crisis since the Great Depression.”"
Their 'modus operandi' is to tout fical conservatism i.e. to claim that they are the best at cutting government spending and limiting government growth, when the facts seem to prove the opposite! However, with the right TV shows and news media to promote the idea it is accepted by most Republicans as the truth, even though investigation shows that the Democrats are better at balancing the budget and shrinking government.
So we had Reagan and HW Bush who left us with a huge debt. In comes the Democrat (Clinton) who does a magnificent job of saving the economy so that when GW arrives he has plenty of money to spend on Republican government growth. Once that money is all gone they lose, but realize that the Democrats will have to spend all their time trying to fill the coffers again and if they refuse to allow anything Democratic to pass, the end result will be that when the Dems lose (which will happen eventually) they will get back in the game at the same place where they left off, but with money to spend again, due to the diligence of the Democrats! Brilliant!
This means that no matter what the Dems do, they cannot win.
Organize people with card tables at public places and register people to vote.It's the one tool we have that is free.The republicans cannot buy your vote. They will smear the president two weeks before the election (swiftboat) but they can't prevent you from voting. Lets change this crap once and for all.
RSS feed for comments to this post