If President Obama weren't a black Democrat you would've heard the truth about the recent unemployment numbers. If you think the recent drop to an 8.5% unemployment rate is a blessing from above think again. Since when do we praise a number that indicates we're still in a recession? And who's to say the number is real?
Let's take a trip down Macro Economic lane and define a few basic terms that US voters need to be familiar with. First, the term Labor Force is crucial because it is an estimate of the number of people employed plus the number of people out of work but looking for a job, aka the unemployed. Secondly, the term Labor Force Participation Rate is the ratio of the labor force to the population 16 years or older. Third, lets look at a term that's extremely relevant during a recession, depression, or economic downturn, that term is Discouraged-Worker effect, which is the decline in the measured unemployment rate that occurs when people who want to work but cannot find jobs become discouraged and stop looking, thereby dropping out of the unemployed and labor force. Fourthly, the term not in the labor force which seems so obvious isn't, because it doesn't mean work isn't necessarily available, but it does mean that a person isn't even looking for work because he or she does not want a job or has given up looking. Can you say there's no need to work because I'm chilin' on two years of unemployment checks syndrome? All of these terms combine to form what is the actual or real unemployment rate.
These are the distinctions that are not made in mainstream (liberal) media, and unfortunately with the exception of some conservative talk show host, conservative media barely glances over this stuff. What the media and the Obama administration are neglecting to tell you is that the real unemployment rate is significantly higher than 8.5%. In fact, the work force has shrunk by more than 2 million people in the last three years of Obama's presidency. Therefore our labor force isn't as large as it was pre-Obama. By the way this is not George W. Bush's fault. If you recall, the economy began to improve in the spring of 2009 until the president chose to take the nation even further into debt with his approximate 800 billion stimulus (ha!) plan. Thus if those two million people were counted in the new unemployment numbers we'd be closer to 11% percent unemployment rather than 8.5%.
According to the the U6 rate (includes part-timers that would rather have full-time jobs) that should be used, rather than the U3 rate that is being used unemployment is approximately 15%. Even President Obama's former Chief Economist Betsey Stevenson (who in my opinion left his administration early to reserve some credibility) agrees the numbers are not necessarily all inclusive. In fact, I'm doubtful that the numbers will remain so optimistic simply due to seasonal hiring during the Thanksgiving and Christmas season. However, Obama is well aware that no president has ever been reelected with an unemployment rate higher than 8%, therefore he and his media allies will lie as much as possible to paint a rosy picture of our economy and job market. It's up to you to do your homework.
For more detailed information on this subject check out James Pethokoukis' (American Enterprise Institute) article What the Plunging Unemployment Rate really means for Obama's Reelection at American.com.
Sunday, January 8, 2012
Thursday, January 5, 2012
Ron Paul supporter's may be shocked he placed third in the Iowa Caucus, but frankly, I'm saddened he came so close. We can all agree that Congressman Paul knows his stuff when it comes to the Federal Reserve and economics, however that's where his conservatism ends.