Custom Search

Friday, January 08, 2010

Unemployment Still At 10%

Department of Labor news release:

In December, both the number of unemployed persons, at 15.3 million, and theunemployment rate, at 10.0 percent, were unchanged. At the start of the re-
cession in December 2007, the number of unemployed persons was 7.7 million,
and the unemployment rate was 5.0 percent.

Quick note about the administration's position:

Christina D. Romer, chairman of President Obama’s Council of Economic Advisers, called the employment report a “setback” but said the momentum was toward job creation.

“It is important not to read too much into any one monthly report, positive or negative,” Ms. Romer said in a statement.

Funny how they say that now, but when the November report came out showing less than expected job losses, liberals were very quick to declare it meant Obama's failed stimulus plan and massive spending and bailouts, were actually working.

Three economists from the University of Chicago, Gary Becker, Steven Davis and Kevin Murphy, explain the ramifications of Obama and the liberal Democrats policies and why they are prolonging the recession and not helping bring us out of it.


We believe two factors are behind this rather tepid rebound. An obvious one is the severe financial crisis that precipitated this recession, with many major financial institutions receiving large bailouts from the federal government. The confidence of bankers and venture capitalists has been shattered, at least for a while, and it will take time for them to recover from the financial turmoil of the past couple of years. The household sector also faces a difficult period of financial retrenchment in the wake of a major collapse in home prices, overextended debt positions for many, and high unemployment.

The second factor is less obvious, but possibly also of great importance. Liberal Democrats won a major victory in the 2008 elections, winning the presidency and large majorities in both the House and Senate. They interpreted this as evidence that a large majority of Americans want major reforms in the economy, health-care and many other areas. So in addition to continuing and extending the Bush-initiated bailout of banks, AIG, General Motors, Chrysler and other companies, Congress and President Obama signaled their intentions to introduce major changes in taxes, government spending and regulations—changes that could radically transform the American economy.

The efforts to transform the economy began with a fiscal stimulus package of nearly $800 billion. While some elements served the package's stated purpose and helped to soften the recession's impact, the overall package was not well designed to foster a speedy recovery or set the stage for long-term growth. Instead, the "stimulus" was oriented to sectors that liberal Democrats believe are deserving of much greater federal help. This explains why much of the stimulus money is going toward education, health, energy conservation, and other activities that would do little to soak up unemployed resources and stimulate the economy.

Go read the whole thing, it is quite enlightening.