Headlines trumpet the "best economic growth in 20 years," hearkening back to the Reagan recovery well before there is any actual sign of improvements for ordinary Americans. Just as the press wants to be patriotic during a war, they tend to be parochial about the economy. Thus, you get statements like "The U.S. economy, hitting on all cylinders for the first time in several years..." from the Washington Post when there is absolutely no sign of employment improvements, setting the stage for a dismal Christmas retail season as consumers save for hard times (less job security) and the profits generated by the recent wave of tax refunds is absorbed and spirited away to the bank accounts of the richest one percent of the nation.
If you look at the chart the Post provides, you can see that there are two factors that account for the spurts of jobless growth in recent years -- every quarter in which a tax refund was delivered to Americans (Q4, 2001, Q3 2002 and last quarter, Q3 2003), they spent more; otherwise, if you look at the quarters after the invasion of Afghanistan and Iraq (Q1 2002 and Q2 2003, when we had to build and buy more bullets, uniforms, bombs and missiles), defense spending pumped things up. But the purpose of the tax cuts was to stimulate job growth, which still hasn't materialized and I'll take economy's slower growth without the expense of American lives any day.
But the really painful medicine in the "stellar" economy reports is that every time we've had a great quarter, the following unstimulated quarter--that is, when money wasn't being pumped directly into the economy in the forms of checks from Treasury or the DoD--growth has fallen back to a dismal 1.3 percent to 1.4 percent.
Secretary of Commerce Don Evans took the occasion of today's economic numbers to reiterate the promise that "We're growing the American economy and soon we'll be growing more jobs." We won't be seeing any new jobs if, as the market seems to think, stocks are currently priced for perfection and that the Fed will soon have to raise rates, which will choke off consumer spending built in recent years on the extraction of equity from homes. This is not an environment of renewed investment, but one of economic sleight of hand, trading current spending for massive federal deficits, not to mention ever-growing consumer debt. Much of the current job "growth"--which is still 250,000 jobs lower each month than promised by the Bush Administration--is in pre-holiday temporary hiring. It happens every year, so the gain of 57,000 jobs in September should be discounted more aggressively to account for seasonal jobs. The key sentence in that employment report was: "Since November 2001, the proportion of long-term unemployed has increased by about 9 percentage points."
The problem with tracking unemployment on the Department of Commerce site is that they replace the previous month's current unemployment with the previous month's report without changing the URL, making it hard to create comparisons between months. But, these charts clearly show the lack of progress in the economy:
One hopes that Republican voters hold the President and his administration to the promise they keep repeating but on which they never deliver.Posted by Mitch Ratcliffe at October 30, 2003 10:23 AM | TrackBack