The term jobless recovery was used mostly as a pejorative when it came into circulation in the 1990s. But in the wake of last year’s meltdown, it has taken on a new sense: If you give it time, economic growth will come. That has been the mantra throughout 2009.
Yet Friday’s headline unemployment number was worse than economists expected, and it wasn’t the only bad news. The average workweek remains short by historical standards — suggesting many employed people are working fewer hours than they’d like. People are staying unemployed longer and losing their benefits, in spite of recent government action to extend them.
A short work week isn’t just a sign of distress for cash-strapped workers. It also says it will be some time before employers start hiring again.
“Particularly with future uncertainty as high as it is, firms are more likely to increase the hours of underemployed workers before hiring unemployed workers,” wrote Janney Montgomery Scott economist Guy LeBas in a note to clients Friday.
While the alleged growth (which I bet will be revised significantly downwards in the coming months) of the third quarter has officially put us out of recession (and, liberals, made this Obamanomics from now own), the real facts are that the economy isn’t growing at all – in fact, stats to the contrary, its still a shirking, de-leveraging, de-inflating economy. All we’ve got right now is a bit of government-funded smoke and mirrors (and the funding is borrowed, in to the bargain). We’ve lost a lot of wealth, good people, and we won’t get back to low unemployment until we replace the lost wealth – and we won’t do that until we start making, mining and growing more of our own stuff.
Do keep in mind that tax breaks for home and car purchases, while nice for those who can use them, don’t do the trick – all you do with that is move up purchases a little bit for those who are not in financial dire straights. Everyone who is in such straights are helped, at best, only a tiny bit by such money moving. Wealth creation, that is what we need.
So, how do we create wealth? We clear away regulations which inhibit the start up or expansion of new factories, farms and mines. We ease the tax burden on small and medium sized business. We go through de-facto bankruptcy reorganization of our housing industry – from builder to owner to lender, everything has to be re-adjusted to fit current reality, and thus relieve a terrible burden on banks and the people. We need to encourage and nurture wealth-creation – and then get the heck out of the way.
Until we do this, we’ll remain mired in this economic depression – and likely make it deeper and more prolonged by current policies.
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