The jobs report for August was predictably dismal but seems to have shocked official Washington in ways that suggest we really are ruled by morons. 14 million unemployed and another 8.8 million desperately underemployed gives us a U3 of, drum roll please!, precisely the same as it has been stalled at for months at 9.1 per cent. The long-term unemployed—those out of work from more than 27 weeks—made up a whopping 6 million, or nearly 43% of the jobless. Let’s be honest and call these folks “the never to be employed again.” The sub-category rates with 8.9 per cent for adult men, 8.0 per cent for adult women, 8.0 per cent for “whites” and 16.7 per cent (!) for “blacks” (18.0 per cent for black males). U6, which is the best representation for how “slack” the labor market is (because it records the under-employed and discouraged job-seekers) is an abysmal 16.2%. The employment population ratio, still the best measure in my view of actual unemployment, rose on a rounding era to 58.2 per cent. The second quarter, in other words, saw almost no significant increase in jobs (an average of 50 k per month). World markets tumbled this Labor Day on the news that there ain’t a whole lot of laboring going on.
I say the report was predictable because everywhere else where “austerity” has been practiced, it has led to economic slowdown and increased unemployment. I put “austerity” in quotes because, of course, it is not austerity for all. By all sorts of measures—open and secret—governments have been supporting powerful interests, such as the financial sector and military, while slashing spending to provide social support and public goods to average citizens. The Federal Reserve, after all, handed out 16 trillion (with a “T”) dollars worth of low-interest or no interest loans to a small coterie of well-connected banks. Bank of America alone—the most obvious of the shambling, walking-dead, “zombie banks”—was given 1.3 trillion dollars. Any guesses how many schools could have been rebuilt or high-speed rail lines constructed with 1.3 trillion? I myself don’t know, but I’m guessing a lot. Still, this pseudo-austerity is very real austerity to regular people and the example of the other “austerian” measures, most especially in Europe, is not good. In fact, if the United States caused the last Great Recession with its housing bubble, it will almost certainly be the case that the next (which is fast approaching) will be caused by the European Central Bank’s insane policy of raising rates and insisting on slashing budgets in the face of non-existent inflation. Europe is now precisely on the brink of economic disaster that these policies were somehow, magically, supposed to avoid.
But then again, these predictable results of neo-Hooverism were not overlooked, but fervently hoped for by the policy’s architects. The table below makes it quite clear that economic stagnation and a continuing jobs crisis is a deliberate political outcome foisted on the administration by the saboteurs in Congress (h/t Jed Lewison at Dailykos)
The GOP has openly proclaimed its main goal to be running this president out of office, not improving the economy and said administration inexplicably connives at its own destruction by embracing the “deficit-cutting mantra.” The economists out there might object that the budget cuts have really not bitten yet and the crashing employment market is more likely driven by the tailing off of the weak stimulus passed in 2009. Well, yeah. The budget cuts were designed to make it politically impossible for any meaningful economic stimulus to be passed in the year and a half before the election. The Republicans want high unemployment, especially unemployment which savages the Democratic base voters (African-American male unemployment is now at a shameful 18 per cent, teen unemployment approaching 25 per cent and we’re talking U3), which works much better than all their crypto-Jim Crow disenfranchisement laws to suppress the vote. The geniuses in the White House who think the “optics” of them agreeing to Hooverite Republican policies are good, that they seem like the “only adults in the room” are epically wrong. Independents have turned on this president en masse in the wake of his “principled compromises” while his own committed voters, self-designated Democrats, are now turning on him as well (he’s lost 12 points in approval ratings by independents since May and 10 points among Democrats). The nation’s overall disgust at the neo-Hooverite policies embraced by this administration is clear. Only about a third of the country approves of the President’s handling of economic issues. That is a stinging rebuke. Even Democratic lawmakers in tight election fights are distancing themselves from Obama. Basically, everybody thinks his neo-liberalism sucks (well, not everyone but who are those one-third who approve his handling of the economy? Cloistered liberals of the professional classes?).
But neo-Hooverite deficit-cutting is tanking the economy in a much more direct way (and no, I don’t mean some farcical ratings downgrade by a corrupt organization too incompetent to add figures properly). The collapse of weak consumer confidence over the last two months has been appalling as the number sank from a downwardly revised 59.2 in July to 44.5 in August. These are terrible numbers, not since the depths of the Great Recession’s freefall, in April 2009, has the number been so low. In an economy where nearly three-fourths of economic activity is driven by consumer demand, these numbers presage not simply recession but depression. The government’s own figures predict unemployment at over 9.0 per cent through 2012. Meanwhile, Mr. Obama gives nice speeches saying he likes Labor but has done nothing, not a damned thing, to stand up to the greatest assault on working people in generations.
His vapidity is particularly on parade with craptastic phrases like:
“You ask somebody here if times are tough, they’ll say, ‘Yeah, it’s tough, but we’re tougher,’” he said. “Yes, times are tough. But we’ve been through tough times before. I don’t know about you, but I’m not scared of tough times. I’m not scared of tough times because I know we’re going to be all marching together and walking together and working together and rebuilding together and I know we don’t quit. I know we don’t give up our dreams and settle for something less.”
Really, he’s not scared of “tough times,” eh? Well, his audience might be tough but any guy who says Detroit has been “to heck and back” needs to graduate to Middle School. No, Mr. President, Detroit, where the unemployment rate has increased from 17.4 per cent in 2008 to nearly 25 per cent today, has not been to some spinster church lady’s “heck,” it’s been through fucking hell. Weenie. And Michigan, home of one of the proudest union traditions in the country has lost 627,000 union jobs in the last ten years. Just so everybody focuses on the cost, the real cost, of unemployment, low-wages and the destruction of the American working class, there’s a not so heart-warming story from a down the road. An unemployed 24-year old father of one, Kyle Willis, died from a tooth infection because he couldn’t afford the antibiotic. The jobless, in Mr. Obama’s America, die from toothaches. Predictably this story is being spun by the media on the need to take care of oral health, but the real import here is that almost nowhere else in the developed world would this needless tragedy occur. But here in America, it certainly does happen—by design. This is what neo-Hooverite “austerity” policies give you. Needless suffering and tragedy. You can say it, Mr. President. C’mon. It is hell, not “heck,” and it is a hell of your own making.
UPDATE: Somehow I managed to miss this very good column by Harold Meyerson. In it he reports on the key to understanding all this neo-Hooverism. He cites a study by Michael Greenstone and Adam Looney of the Hamilton Project at the thrice-damned Brookings Institute, of all places, that shows the median earnings of men aged 25 to 64, i.e., prime working age, fell 28 per cent from 1969 to 2009. Not coincidentally this was the historical epoch of “de-industrialization” and “globalization.” The median earnings of those who finish high school but not college fell a whooping 47 per cent while those with college degrees fell a less precipitous 12 per cent. Not since the early decades of the industrial revolution has there been such a sustained collapse of male wages. Meyerson deliberately refuses to get the point of this and blames de-industrialization for this impoverishment and calls for neo-industrialization. But a neo-industrial state will be built as a “right-to-work” state with low-wages and no skills. Why? Because this isn’t about industrial policy, it is about expropriation. Workers have so little share of the nation’s wealth because the nation’s wealthy like it that way.