October Unemployment

The most dramatic shift in employment picture has to be in the number of people not looking for work.  This figure has skewed the real unemployment picture all year but in October only  about 31,000  more stopped looking, according to BLS data.  The result is that the bulk of job losses appears more directly in the actual unemployment number. 

10.2%. 

The problem—and the solution—remain the same.  Businesses have to prepare for pre-Bush tax levels that will sap money that could have been invested in jobs or growth.  There is a significant threat of massive regulation and taxation from pending democrat legislation.  The growth of bureaucracy presents additional costs and challenges.  There is simply no incentive for the business community to take any risks with so many unknowns in the pipeline. 

Christmas hiring may take a slight edge off, but January looks precipitous.  And if the holiday season doesn’t deliver, 10.5-10.8% is likely. 

As for the stimulus creating or saving anything think of it more as bad policy.  Repaying it, along with all the other spending, will ultimately come on the backs of business and industry.  It can’t create anything without destroying something else in the process so a zero sum gain is the best we could ever expect.  But as we’ve seen, the stimulus is spending significantly more per job claimed no matter how many jobs they try to sell us on.  And with all the other costs on the way, unemployment will rise no matter how many jobs they think they’ve created or saved.

Government will never be able to create or save more jobs than the free market.  Ever.  Anyone who disagrees is lying or ignorant.

Comments

[Platypus Dude]

Steve,

Obama is taking America down quickly. In his brief tenure, he has nearly destroyed the economy with out of control wasteful spending.

He is following a failed path taken by FDR. As I posted yesterday, even FDR's Sec of Treasury felt massive federal spending is not the answer to a weak economy.

I can wait until 2012, Obama is the worst president since Jimmy Carter.


Platy

[Nonplussed]

You think that the increase in unemployment is because businesses are afraid that corporate taxes are going up?

Wow. Excellent analysis.

[Richard Barnes]

Steve, I was listening to an interview with a financial expert this weekend and he was saying nearly the same things you are here.

His predictions however were that we'll start to see turn around in the spring at soonest.

He did also however say that there is one way to turn things around now but the government is doing everything it can not to do it. His suggestion was to give businesses a holiday from payroll taxes. Such things were also suggested after 9-11 (http://usgovinfo.about.com/library/weekly/aa112001a.htm?iam=metaresults&terms=afghanistan+tax) and the government then did use tax credits as a way to keep the economy from tanking. We've seen similar things work and work quickly.

Of course Democrats will never break themselves from the out right disproven theory that they can tax this country into prosperity.

[Platypus Dude]

Barnes,

It will be years and years and years for the economy to fully recover. Consider, about 27.5M people are unemployed or under employed. If you take the 90s job creation rate of 1.5M or even 2M per year, do the math you'll see the mess we are in.

Platy

[Nonplussed]

US non-farm employment increased from 109 million in Jan 1993 (when Clinton became president) to 132 million 8 years later when he left office. This is an average of about 3 million per year, not 1.5 million.

After 8 years of Bush tax cuts, employment had grown to 134 million, an increase of 250,000 per year.

Do you really believe the best way to increase employment is cutting taxes? Is there any fact that would make you believe tax policy is not the solution, or is this belief totally a matter of blind faith?

[Chaz Proulx]

Nonplussed

Did you know that cutting taxes cures cancer?

[Nonplussed]

Chaz:

I am confident that this is the case. Afterall, if the mere thought that taxes might be raised someday is responsible for all the unemployment we are seeing, why there is simply no telling what cutting taxes might accomplish!

It seems to me that Obama is missing a great chance- simply by cutting taxes to zero, he would instantly restore the health of all Americans, thus eliminating all healthcare costs. Maybe this is why the insurance companies don't want to see tax cuts...hmmm.

Also, one of the side benefits of universal tax cuts is that afterwards everybody will be above average. This may sound unlikely, but I am sure Platy can find a quote from somewhere that will "prove" this is true.