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Bernanke wrings his hands on jobs. Market reacts favorably.

4:43 pm in Economy, Jobs, Unemployment by dakine01

(photo: Old Sarge/flickr)

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So. Federal Reserve chairman Ben Bernanke gave a speech this morning.:

My remarks today will focus on recent and prospective developments in the labor market. We have seen some positive signs on the jobs front recently, including a pickup in monthly payroll gains and a notable decline in the unemployment rate. That is good news. At the same time, some key questions are unresolved. For example, the better jobs numbers seem somewhat out of sync with the overall pace of economic expansion. What explains this apparent discrepancy and what implications does it have for the future course of the labor market and the economy?

Importantly, despite the recent improvement, the job market remains far from normal; for example, the number of people working and total hours worked are still significantly below pre-crisis peaks, while the unemployment rate remains well above what most economists judge to be its long-run sustainable level. Of particular concern is the large number of people who have been unemployed for more than six months. Long-term unemployment is particularly costly to those directly affected, of course. But in addition, because of its negative effects on workers’ skills and attachment to the labor force, long-term unemployment may ultimately reduce the productive capacity of our economy.

Once again, it seems to be a speech that depends on the individual perspective as to the take-away. David Dayen at FDL News titled it “The “Better But Not Good Enough” Economy Conundrum” and it follows a pattern from earlier speeches. Last June, I wrote a post after a Benbernank speech that appeared to be at least four different speeches, depending on the spin. Getting it down to only two spins is a bit better. The problem I have with Bernanke and his speeches is that while he talks about the problems of the long term un and underemployed, he never really seems to get around to doing anything about it, even while “pursuit of maximum employment” is part of the stated Federal Reserve mission.

While it appears that the folks on Wall Street and the various stock exchanges loved Bernanke’s speech, it has been obvious to anyone paying attention that Wall Street and the various stock exchanges don’t really have much of a connection to the real world economies. As Dayen notes in his post: Read the rest of this entry →

Political Posturing Versus Reality

10:32 am in Uncategorized by dakine01

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This morning (Wednesday, June 22) David Dayen at FDL News reports that the entire Senate Democratic leadership is getting behind a jobs/stimulus push:

The Senate Democratic leadership – all of them, Harry Reid, Chuck Schumer, Dick Durbin, Patty Murray, Debbie Stabenow and Mark Begich – planned a morning press conference today where they will call for job creation measures, or stimulus, to be included in any debt limit deal.

This follows a report from Politico on Sunday:

Fearing the economy may be getting worse, Democrats plan to soon unveil what they’ll call a “Jobs First” agenda — and the stakes are high. A bleak economic outlook, like the May jobs report, could cost Democrats their thin Senate majority and even the White House if they can’t make a strong case to an anxious electorate that their policies will create jobs.

Senate Democrats are now grappling with ways to gain an edge in the economic debate dominated by budget talk. For instance, in an attempt to woo Republicans, Sen. Chuck Schumer (D-N.Y.) and the White House are open to extending a payroll tax break to stimulate the economy, but that has spawned unease from Democratic senators such as Maryland’s Ben Cardin who worry that it would drive up the deficit and unnerve liberals such as Vermont’s Bernie Sanders, who are concerned it would deplete the Social Security trust fund.

While the Politico piece reinforces for me the idea of the Dems actions as just so much posturing, so does this, also from the Dayen piece:

There’s a sense that this is mainly rhetorical. Democrats have seen Republicans obstruct even the most piddling of jobs bills in the Senate. Yesterday the reauthorization of the Economic Development Administration, an old Great Society program, failed to break a filibuster.

This article from today’s Washington Post on Senate Budget Committee Chair Kent Conrad’s claim that $2 trillion in spending cuts is not enough tends to reinforce the believe that it is posturing:

The debt-reduction package emerging in talks between the White House and congressional leaders would not “fundamentally change” the alarming rate of growth in the national debt, the chairman of the Senate Budget Committee said Tuesday.

Sen. Kent Conrad (D-N.D.) said the goal of slicing more than $2 trillion from the federal budget by 2021 falls far short of the savings needed to stabilize borrowing, reenergize the economy and avert the threat of a debt crisis.

As we all know, Conrad is one of the Gang of Six Five Thieves Deficit Hawks who doesn’t quite seem to comprehend that creating jobs would go a long way to addressing those long term deficit problems through increased tax revenues across all aspects of the economy. Even Wall St Journal and Bloomberg/Business Week columnists have come out this week and stated that jobs are the most serious issue of all today. Now, I don’t know of anyone who would perceive that the folks at either of these as being “card carrying members of the professional left” yet both are pointing out the fallacies of the current political discourse.
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You Know They Really Are Insane

10:38 am in Uncategorized by dakine01

I went looking through der Google for the origin of the aphorism

The definition of insanity is doing the same thing in the same way and expecting to get different results.

Well, I found it attributed to Benjamin Franklin, Alfred Einstein and even one attribution to Rita Mae Brown.

Regardless of who first said it, we are witnessing it in operation in Washington, DC right now. We are seeing it in the current dance around another extension of Unemployment benefits (after having it killed last week). We are seeing it in the calls for fiscal integrity and "balance the budget" and the President’s Deficit Commission (aka Cat Food Commission).

In May 2010, the economy created 431K jobs but the vast majority of those jobs were temporary Census positions. Today there are reports that the private sector has added 13K jobs for June after adding only 41K of the 431K jobs added in May. Yet, the Senate (and House) just seem to want to dance their little dances. They have to be operating under the belief that to do nothing is to do something because it all works out some way or another in the end.

I really don’t know what they see when they go back to their homes and districts. Are they all in chauffer driven town cars? Or are the millions of un and underemployed just so much invisible waste? (don’t answer that, it is rhetorical). For the record, I am not eligible and have not been eligible for any of the various Unemployment Benefit extensions. But I have no problems with those who are getting it. I’ve been fighting this battle for six years now and at my age, anyone collecting benefits right now is more likely to find full time employment before I will. I do hope I’m wrong but doubt if I am.

But here we have an economy with over 15M people unemployed and most likely another 10M or so underemployed. An economy that needs to add 100K new jobs a month just to break even, adding 13K jobs. The fact is, all the un/underemployed and all the new folks entering the work force will keep falling further and further behind and the folks in DeeCee dance around providing an extension of benefits.

I don’t know how to penetrate the bubbles of our supposed leaders. Millions of us are out here, wanting to work, available to work, watching as more and more of our fellow workers wonder what they have done wrong (Nothing at all).

It is sometimes difficult to avoid visions of the apocalypse. Yet I always remember the little plaque my uncle kept on the wall of his office:

Don’t Let the Bastards Grind You Down. They’re the insane ones.

And because I can:

Cross posted from Just A Small Town Country Boy