Is 9% Unemployment the New Norm?

Considering this:

“Nearly half of the unemployed–45.9%–have been out of work longer than six months, more than at any time since the Labor Department began keeping track in 1948…Overall, seven million Americans have been looking for work for 27 weeks or more, and most of them–4.7 million–have been out of work for a year or more.”

And this:

fredgraph.png
How do you get to this?:

“Treasury Secretary Timothy Geithner said the economy has now recovered sufficiently for government to begin to make way for private business investment.

Mr. Geithner’s comments on Sunday, which echo previous sentiments expressed by President Barack Obama, reflect a turning point in the government response to the worst economic downturn since the Great Depression, a period marked by deep federal intervention in the financial, housing, auto and other industries.

“We need to make that transition now to a recovery led by private investment,” Mr. Geithner said Sunday on NBC’s “Meet the Press.”

Led by private investment? Corporations are sitting on nearly $2 trillion of profits now and unemployment is still hovering around 10%. Just when is this private investment going to kick in and start hiring?

“A survey last month of more than 1,000 chief financial officers by Duke University and CFO magazine showed that nearly 60 percent of those executives don’t expect to bring their employment back to pre-recession levels until 2012 or later — even though they’re projecting a 12 percent rise in earnings and a 9 percent boost in capital spending over the next year.”

“2012 or later” huh? Something else is scheduled for 2012, isn’t it? Conspicuously convenient timing for the unemployment picture to start improving if you ask me.

Why aren’t corporations hiring now? The Chamber of Commerce claims it’s because of the “onerous regulations” being placed on them by the Obama administration. Now if one had a conspiratorial mind one might think that big business wants to keep the unemployment numbers high through 2012 so that they get a Republican Congress this year to be followed by a Republican president in 2012 who would cancel all those “onerous regulations.” One might think that, and one would be right, in my opinion.

Sadly, the administration seems to be willing to accept 9% or higher as the new norm:

“The White House said Friday it expects that unemployment will stay at or above 9% until 2012, but at the same time forecast that the economy will grow by at least 4% in 2011 and 2012.”

To whom it may concern at the White House:

If you seriously think that the economy has “recovered sufficiently” so that the government can get out of the way and let private investment take over on job creation; if you’re willing to accept unemployment at 9% or above through 2012; schedule the moving vans for the morning of January 20, 2013.

Comments

  1. Colin says

    I believe the corporations are (a.) firmly opposed to any agenda which threatens their interests and (b.) they are probably working with the Republican party in an effort aimed at sabotaging President Obama’s presidency. I feel fear when I reflect upon on what may come when the Republicans gain seats in November. If the Republicans do gain enough seats, or are successful at ousting the President in 2012, I fear that our country will never recover and, that, eventually there will be open conflict between the haves and the have-nots in the streets.

  2. lomamonster says

    Well, I’m glad that the economy will be growing at the same time that we all book rooms at the poor house…

  3. theone says

    nice piece desp – if you remember, the ‘regressives’ were pretty upset in the ’90s when unemployment got down to where wages crept up and people quit jobs to move for better money.
    part of the way to control this became the way health insurers quit covering pre-existing conditions, thereby holding down wages by trapping people in positions where they needed the insurance/benefits.
    the regressives have a different vision of our existence/purpose than we do – it’s the fundamental disagreement.

  4. Jim B says

    Here’s the perfect example of how the Reagan-Bush-Bush tax`cuts have decimated our economy. Yes, it took a while but the effect is here. Corporations, many off-shore to reduce their taxes, sit on billions in cash while American workers sit unemployed. These “excess” profits should be taxed heavily. The idea that this capital will be deployed, creating economic growth, and thus “trickle down” to the middle class is one of the biggest lies ever told.
    Your post proves it. This cash is sitting on the sidelines. It should be taxed heavily and spent. How? Infrastructure: bridges, transportation, water projects, and alternative energy.
    There is of course a balance, where tax rates could be considered confiscatory, but we’re no where near that point, far from it.
    Where did that that excess profit come from? Stagnant wages for workers which have remained flat for almost thirty years, even with rising productivity. This while CEO pay jumps from 30-40 times average worker pay to 400 times. We should expect corporate America to do the right thing? Hardly.

  5. RockheadedMama says

    I agree. I think most Americans forget that it is they who grant corporations the right to do business. I believe state governments, who are drowning in debt and looking to the federal government for hand outs, need to use their own tools to enhance and encourage corporations to “do the right thing”. States who hold corporate charters that offshore, need to add heavy penalties or even rescind those corporate charters. Corporations who break laws (hiring illegals, disregard of safety rules and laws, lying on government forms for licenses, etc.) should have charters suspended or revoked.
    Corporations MUST lose their “personhood” exemptions. Corporations MUST be heavily taxed so that their BEST choice is REINVESTMENT. States MUST begin to govern again and start putting their citizens ABOVE their business interests.
    If all government is local, we citizens need to exert the pressure on our local state governments to perform in our best interests and not in the best interests of corporations and their managers. While we are at it, we need to institute laws that tie executives income and salaries to some reasonable level of compensation and anything over that needs to also be heavily taxed. We MUST remove the INCENTIVES for corruption and self dealing.

  6. theone says

    desp – here is more proof in hard numbers:
    http://www.washingtonpost.com/wp-dyn/content/article/2010/07/27/AR2010072704791.html?wprss=rss_opinions
    there can be no accusation of ‘ spin ‘ or ‘ slant ‘.
    the S&P 500 held record amounts of cash in their treasuries at 12/31/2009, higher at 3/31/2010 and higher yet now.
    they are manifestly profitable, have the largest cash hoards in history, and aren’t hiring or expanding – the cash will apparently be used for acquisitions, or stock buy-backs to prop up stock prices keeping management options ‘in the money’ or invoking bonuses based on larger gross revenues from acquisitions.
    unfortunately, cash on hand becomes more valuable if you can engineer a deflation.

  7. Shortstuff says

    And yet, even with all of this proof dating back THIRTY YEARS, just yesterday I had a die-hard conservative Republican (who believes Ronald Reagan is second only to God) try to tell me that Reaganomics is wonderful and that the tax cuts for the wealthy should be extended. And that businesses should be allowed to have all these profits “because it’s the wealthy who create jobs”.
    I told him that jobs are created by DEMAND. And that when people such as I have money to spend, we are willing to spend and create that demand.
    There are none so blind as those who refuse to see.

  8. theone says

    here’s one desp-
    latest opportunity for Bill White to point out what’s wrong in Austin that he and the Dems will fix:
    http://www.bloomberg.com/news/2010-07-28/duping-the-families-of-fallen-soldiers.html
    this one is stomach-turning and has to be dealt with by each of the 50 states, since there is no federal regulation of life insurance companies.
    so, let’s see, these 130 companies have held onto $28 billion in 1 million accounts that people would probably have transferred to their local banks or credit unions, increasing the deposit base and ability to loan (though some would have not transferred funds).
    and Obama is asking for – - $30 billion for local banks to loan out to small businesses since the large banks aren’t.
    hmmmm – the insurance companies have vacuumed up an extra $28 billion in principal held in their corporate accounts and the small banks need $30 billion in capital to loan out…..prob’ly just coincidence…..nothin’ to see here :(
    not very many issues come along where the Dems can be on the side of the troops, the survivors, the federal employees, the community banks, and against Austin as usual, Rick Perry and the regressives, the big insurance companies and their breath-taking greed.
    pretty much the answer to a Dem. political consultant’s prayers !

  9. msohio1 says

    What are the masses willing to accept from big business sitting on piles of cash, with no concern for families living in vans? I believe that if the Dems can sustain control in November, these buzzards will finally come down from their perches to feed people. Repubs are running their tv ads with distorted truths about when the job losses started and under whom. Here in Ohio, the Bush OMB Director Rob Portman who now wants to be Senator Portman, has twisted ads stating that the current Governor and his cabinet could not “hold on to the jobs”. Well, the former incompetent repub Gov Taft, gave them away. Do you think that people will understand these ads? Is there any place to go? NO, except to the streets and the voting booth to make sure that these clowns never get control of anything, again.

  10. says

    Please remember that the Labor Department stops counting unemployed people who have been out of work so long that they become discouraged and quit looking for work. Or those working part time who want/need full-time work. Not to mention those working at menial jobs that pay a fraction of what they used to make before being laid off.
    Reasonable economists believe the real unemployment rate is above 16% in much of the country. Some believe it’s higher.
    Here’s a good look at the issue:
    http://www.dailyfinance.com/story/careers/what-is-the-real-unemployment-rate/19556146/

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