Friday, 6 November 2009 by bbbeard.

The August unemployment numbers are out. Unemployment, as defined by the Bureau of Labor Statistics, is up again, to 9.7%, the highest of the Obama Presidency.

Politically: a very bad result for Mr. Obama. Despite job losses, the unemployment rate had actually fallen slightly in July (because enough people had been discouraged from looking for work that the labor force shrank). But the August rate is even higher. The numbers are bad enough to support headlines like “Unemployment rate rises to 26-year high“.

But the “other shoe” that is waiting to drop is the crossing of the 10% threshold. It’s a psychological threshold, to be sure. But you can also be sure that financial journalists have already written their columns, obituary-style, for the sad day when we cross that line. Once we cross the threshold, a jump from 10.1% to 10.3% won’t be nearly as dramatic.

But in the meantime, “highest in 26 years” instead of “gradually falling” means that it will be hard for Mr. Obama to win the battles he will be fighting over health insurance and energy this fall. Convincing the American people we are on the right path will be difficult, and as many in Congress learned this August, those people are getting angry with their representatives’ incompetence. If he loses those battles, it would forestall the economic damage his takeovers would inflict — so in a way, this slight uptick in an ambiguous parameter may actually be good news.

Still, unemployment is a lagging indicator of economic growth. We are past the six-month point after the grand inauguration, so in some sense Obama now, or shortly, will “own” the unemployment situation. (”How’s that stimulus working out for you?”) When we look back to the Reagan administration, the last time unemployment was this high, it was several years into his Presidency before his economic policies finally reversed the malaise of the Carter years. Of course, Reagan’s policy was to cut taxes, to slow the growth of spending, and to deregulate. Obama’s policy is to raise taxes, accumulate massive debt obligations, and to nationalize major industries. We shall see whether these Bizarro-Reagan policies reverse the trend in unemployment — or magnify it.

By the way, here is Innocent Bystander’s update.

UPDATE: September numbers are out. 9.8%. Labor force shrinking. Still waiting.

UPDATE: October: 10.2%. Still rising, even with shrinking labor force.

Posted in General | Print | 5 Comments »

Wednesday, 4 November 2009 by bbbeard.

Do I detect a sense of panic at the ABC News website tonight?

Just keep saying that to yourself.

Posted in Politics & Society | Print | 1 Comment »