10.2 % Unemployment (Some Thoughts)

The latest unemployment rate as given by our government is 10.2%. It may actually be in the neighborhood of 17.5-20.0% if you consider people who have given up trying to find jobs and part time workers et cetera. At any rate, it is a gloomy picture and the powers that be seem to be using bandaids when trauma solutions are needed. Wall Street (if we believe the media) seems to be getting fatter e.g. Goldman Sachs. Americans are discouraged by the bad economy and fed up (in many cases) with old solutions that don't help alleviate the dismal financial situation. Something has to be done, because if this goes on much longer we may not be able to come out of it for a long time.

Comments

[Rain]

I am not an economist but I think the seeds for this failure of our job market was sowed a long while back. We have sent many jobs and now whole factories overseas to countries that pay less and therefore are cheaper for the manufacturer. Because the stock market has been the main criteria for our success, companies have been cannibalized to keep their profits looking good. Eventually there had to come a reckoning. How many Americans, most of whom now also have money in 401Ks or the like, would say the stock market is not important and let companies fail? We have sold our soul, our economic ability to maintain a middle class for high stock market results and cheap products at WalMart. A lot of those jobs will never come back because the machinery for them was shipped overseas. It is a very disheartening time and if someone believes, as I do, that the middle class, was the engine that made America great, then we are headed for its demise and our decline. A lot of what the stock market does is push money around and there has to come a time where, without real products, that won't work either although for now the people making the most money in our culture (think insurance companies) make no products at all.

[Paul]

Rain I agree with much of what you say. I believe that when GREED started to take over on Wall Street et cetera we were in for trouble. History has confirmed what I expected to happen.

[Ingineer66]

Today White House press secretary Gibbs said the numbers are going to go higher before they get better. I thought Obama said we needed to pass the stimulus immediately last spring to keep the rate below 8.5% Does not seem to be helping. And I also heard today that 69% of Americans in the last year have either lost their job or have taken a pay cut. I am in that group as are many people that I know.

[Rain]

I don't think they spent most of that stimulus money. I am not sure they could have spent it given they had to borrow to do it. It was a lot of promises with a few things here and there actually done. The idea probably was that the economy is a lot emotions and create a feeling of uplift and you will get uplift. It also went into things like paying a good portion of Cobra's cost and with so many people out of work, that has been a big cost and plus. The person I know who was on Cobra had a lower premium than he will find when he switches to Medicare this year. The difference was all government surplus money. With probably nearly 20% of Americans out of work, that is a big dollar item.

[Ingineer66]

I know somebody that got the cobra benefit for his family too. It has been nice for him. But like cash for clunkers that we borrowed $28,000 from the Chinese to give people a $5,000 check to buy a car. Was it really worth it?
To me it looks more and more like if the government would have done nothing for the last year, then we would still be in about the same place and would be headed to a faster recovery. All of the spending and programs are just going to drag out the recession longer than it would have been. All the while tripling the deficit.

[Rain]

Well if a lot of it never got spent, then it's not the scapegoat for the deficit; and why would it cost $28,000 to give someone $5000 for a clunker? I hadn't heard that. From what I heard we were heading for a depression and we might be yet. If you are reading much about how much of our manufacturing has been sent overseas (and that doesn't mean in 9 months), you can see that our job market will never come back like it was. My husband is involved in small businesses and they think it has to all change here as those jobs that were lost are not returning. Without people to pay the taxes, government programs won't be lasting longer either.

[Ingineer66]

Because of the government bureaucracy that is involved in the program. I have seen different reported cost numbers. Here is the report from Edmonds on the true cost:

American taxpayers doled out $24,000 per vehicle sold under the government’s “Cash for Clunkers” auto program
…found that of the nearly 690,000 vehicles sold under the program, only 125,000 of the sales could be credited directly to the Cash-for-Clunkers program.
The rest of the sales would have happened anyway, despite the government program

I have seen reports that the cost could go as high as $42,000 per vehicle but that is from Glenn Beck and I know you would not trust that one.

This is why many of us our skeptical when Pelosi and Obama tell us that it will somehow be cheaper when the government runs our healthcare.