Archive for October, 2012
Pronk Pops Show 89: Segment 1, Where are the jobs? Obama’s 10,000,000 Jobs Gap!–Videos
Pronk Pops Show 89: October 22, 2012
Pronk Pops Show 88: October 7, 2012
Pronk Pops Show 87: September 7, 2012
Pronk Pops Show 86: August 29, 2012
Pronk Pops Show 85: August 2, 2012
Listen To Pronk Pops Podcast or Download Shows 88-89
Listen To Pronk Pops Podcast or Download Shows 84-87
Listen To Pronk Pops Podcast or Download Shows 79-83
Listen To Pronk Pops Podcast or Download Shows 74-78
Listen To Pronk Pops Podcast or Download Shows 71-73
Listen To Pronk Pops Podcast or Download Shows 68-70
Listen To Pronk Pops Podcast or Download Shows 65-67
Listen To Pronk Pops Podcast or Download Shows 62-64
Listen To Pronk Pops Podcast or Download Shows 58-61
Listen To Pronk Pops Podcast or Download Shows 55-57
Listen To Pronk Pops Podcast or Download Shows 52-54
Listen To Pronk Pops Podcast or Download Shows 49-51
Listen To Pronk Pops Podcast or Download Shows 45-48
Listen To Pronk Pops Podcast or Download Shows 41-44
Listen To Pronk Pops Podcast or Download Shows 38-40
Listen To Pronk Pops Podcast or Download Shows 34-37
Listen To Pronk Pops Podcast or Download Shows 30-33
Listen To Pronk Pops Podcast or Download Shows 27-29
Listen To Pronk Pops Podcast or Download Shows 17-26
Listen To Pronk Pops Podcast or Download Shows 16-22
Listen To Pronk Pops Podcast or Download Shows 10-15
Listen To Pronk Pops Podcast or Download Shows 01-09
Segment 1, Where are the jobs? Obama’s 10,000,000 Jobs Gap!–Videos
More Americans are unemployed today than when President Obama took office in Jan. 2009. Millions of Americans have become “discouraged workers” and have temporarily left the labor force because they have not been able to find a job. This is reflected in the labor force participation rate which has fallen from its normal range of between 66 and 67 percent to a 39-year low of 63.6 percent. The labor force has been shrinking.
In 1984 fast-food chain Wendy’s launched a television commercial campaign featuring a grandmother, Clara Peller, asking the question, “Where’s the Beef?” Today the American people are asking Obama the question, “Where’re the jobs?” Ironically, the answer to this question for many Americans is a low paid part-time job at a fast-food restaurant.
The American people hoped for change in 2008. They voted for Barack Obama expecting that millions on new jobs would be created and the unemployment rates would decline to under 5.5 percent. Under Obama’s leadership, the Democratic controlled Congress quickly passed the American Recovery and Reinvestment Act of 2009 (ARRA) in February 2009. The primary goal of ARRA was saving and creating jobs. However, the stimulus package will also add over $833 billion to the deficit over the period 2009 through 2019, according to the latest Congressional Budget Office’s (CBO) report of Aug. 23, 2012.
The stimulus package was also supposed to keep the official U-3 unemployment rate under 8 percent and by Oct. 2012 should have reduced the unemployment rate to 5.5 percent or less. The stimulus package failed to achieve these goals. For the first 43 months of the Obama administration, the official U-3 unemployment rate published monthly by the Bureau of Labor Statistics (BLS) has been at or above 8 percent. Only this Sept. did the unemployment rate finally fall below 8 percent for the first time since Jan. 2009.
Official U-3 and Total U-6 Unemployment Rates
Credit: Department of Labor, Bureau of Labor Statistics, and shadowstats.com
When Obama began his presidency, the BLS reported that the Jan. 2009 official U-3 unemployment rate stood at 7.8 percent and the total U-6 unemployment rate was 14.2 percent. For Sept. 2012 the BLS reported that the official U-3 unemployment rate was 7.8 percent and the total U-6 unemployment rate was 14.8 percent.
In Jan. 2009 the estimated number of employed Americans was 142,187,000, the estimated number of unemployed Americans was 12,049,000, the total civilian labor force was estimated to be 154,236,000 with a labor force participation rate of 65.7 percent. In Sept. 2012 the estimated number of employed Americans was 142,974,000, the estimate number of unemployed Americans was 12,088,000, the total estimated civilian labor force was 155,063,000 with a labor force participation rate of 63.6 percent.
Just to keep up with population growth which results in new entrants into the labor force every day, the U.S. economy must create between 130,000 and 140,000 new jobs each month, according to Commissioner Keith Hall of the BLS. From February 2009 through Sept. 2012 the U.S. economy needed to create about 6 million new jobs for high school and college dropouts and graduates as they enter the labor force searching for their first job.
In addition, to reduce the unemployment rate by just .1 percent each month, the U.S. economy needed to create between 150,000 and 160,000 jobs per month. In order to reduce the unemployment rate from 7.8 percent in Jan. 2009 to 5.5 percent in Sept. 2012, the U.S. economy needed to create about 4 million new jobs. In total approximately 300,000 new jobs per month needed to be created from Jan. 2009 through Sept. 2012 to keep up with population growth and reduce the unemployment rate by .1 percent per month. In total about 10 million jobs needed to be created from the day Obama took office in Jan. 2009 until the end of Sept. 2012. Obama’s jobs gap is approximately 10 million.
Yet Obama insists that his stimulus package worked and has saved and created millions of new jobs. Under Bush the number of employed Americans peaked at 146,595,000 in Nov. 2007. The Great Recession began in Dec. 2007 and ended in June 2009, according to the National Bureau of Economic Research’s business cycle dating committee. However, the employment level did not hit bottom until Dec. 2009 when it was 137,968,000. Hence the Obama and Democratic Party claim that their economic policies are responsible for the creation of more than 5 million new jobs from the end of Dec. 2009 through the end of Sept. 2012.
Obama repeatedly blames the Bush administration’s economic policies for the Great Recession of 2007-2009. Did the so-called “Bush tax cuts” really fail? Is the Republican Party responsible for the Great Recession that Obama inherited?
In response to the terrorist attacks of Sept. 11, 2001 that put the U.S. economy into a recession in 2002, the Bush administration and Republican controlled Congress cut the marginal tax rates for nearly all Americans. The “Bush tax cuts” were passed into law by the Economic Growth and Tax Relief Reconciliation Act of 2001(EGTRRA) and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA). The “Bush tax cuts” or lower marginal tax rates are scheduled to expire on Dec. 31, 2012. Obama and the Democratic Party want to increase the marginal tax rates from 35 percent to 39.9 percent for the top 2 percent of all personal income taxpayers. Romney and the Republican Party want to make the Bush tax cuts or marginal tax rates permanent for all taxpayers. Romney points out that most small business owners file as individuals not as corporations. Furthermore, successful small business owners, that create the majority of all new jobs, are heavily represented in the top 2 of all personal income taxpayers. The last thing you should do is increase the tax rates on the job creators to pay for more government spending or to reduce the deficit.
From Jan. 2002 through Jan. 2009 the official U-3 unemployment ranged from a low of 4.4 percent to a high of 7.8 percent and the total U-6 unemployment rate ranged from a low of 7.9 percent to a high of 14.2 percent. Contrary to Obama’s often repeated statement that the “Bush tax cuts” or economic policies failed, they manifestly did not, if you actually look at the BLS unemployment statistics.
In the 2006 Nov. election the American people voted to give the Democratic Party control of both the House of Representatives and Senate. All tax and spending bills must originate in the House. From Jan. 2007 through Jan. 2011, Congress was controlled by the Democratic Party.
Starting with the Fiscal Year 2008 budget that resulted in a deficit of $459 billion, the Democratic Party went on a spending binge resulting in massive budgets deficits. It took Bush eight years to rack up budget deficits totaling nearly $4.9 trillion which were financed by adding to the national debt. In just four years Obama and the Democratic Party have exceed all expectations with budget deficits greater than $1 trillion every year Obama has been in office. This deficit spending has added more than $5.1 trillion to the national debt. In just 12 years, two presidents and their respective political allies in Congress have spent over $10 trillion beyond the means of the American people. This burdens both today’s taxpayers as well as future generations.
Out of control federal government spending by both political parties is responsible for the persistently high unemployment rates and Obama’s jobs gap. Most new jobs are created by small businesses, especially new small businesses. Business owners dislike uncertainty regarding the cost of doing business. Today, business owners find it difficult to estimate their future tax liabilities, energy and health care insurance plan costs. Also, the U.S. economy appears to be entering into another recession as the growth in real Gross Domestic Product slowed from an annual rate of 4 percent in the fourth quarter of 2011 to an annual rate of 1.3 percent in the second quarter of 2012. This adds more uncertainty as business owners find it difficult to estimate demand for their goods and services and future sales revenue.
Romney is running a television campaign promising to create 12 million new jobs in the next four years if he is elected president. Obama claims his economic policies have resulted in the creation of more than 5 million new jobs. Unfortunately for Obama, he has failed to close his 10 million jobs gap. On Election Day, Tuesday, Nov. 6, the American people will be answering the question, “Where’re the jobs?”
Describing “Shadow Government Statistics” — John Williams
Unemployment Rate Falls to 7.8% on New Jobs Report
BREAKING: U.S. Adds 114,000 Jobs, Unemployment Rate Drops to 7.8
October 5th 2012 CNBC Stock Market Squawk Box (September Jobs Report)
Today’s report includes a surprise drop in the unemployment rate-but it is statistically questionable. Payroll numbers continued modest improvement. The unemployment rate unexpectedly dropped to 7.8 percent, following a decline to 8.1 percent in August. Payroll jobs in September gained about as expected with a modest 114,000 increase, following an rise in August of 142,000 (originally up 96,000) and an increase of 181,000 in July (previous estimate of 141,000). The net revisions for July and August were up 86,000. Market expectations were for a 113,000 boost for September.
Private payrolls advanced 104,000 in September after increasing 97,000 the month before. The consensus projected a 130,000 increase.
Wage inflation has been volatile and the latest number was on the up side. Average hourly earnings growth improved to 0.3 percent in September, following no change in August. Analysts forecast a 0.2 percent rise. The average workweek nudged up to 34.5 hours in September from 34.4 hours in August. Expectations were for 34.4 hours.
Turning to the household survey, the unemployment rate drop reflected an 873,000 spike in household employment versus a 368,000 drop in August. The labor force rebounded 418,000 after a 368,000 decrease in August. The household survey is much smaller than the payroll survey and is more volatile
September Unemployment Falls to 7.8%
Jack Welch Hardball w/Chris Matthews 10/5/12
Jack Welch, the lionized former chairman of General Electric Co, provoked cries of outrage in Washington on Friday when he appeared to accuse the White House of manipulating September job figures for political gains.
White House officials dismissed as “ludicrous” a tweet Welch sent to his more than 1.3 million followers that suggested U.S. President Barack Obama’s administration rigged the data as a way of recovering from a poor Wednesday night showing in a debate against Mitt Romney, his Republican challenger for the White House.
“Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers,” Welch said in a posting on Twitter, apparently referring to Obama, who formerly served as a senator from Illinois.
The tweet was repeated more than 2,000 times, with many mocking posts comparing Welch to New York real estate tycoon Donald Trump – who during his failed bid for the presidency loudly argued that Obama was not born in the United States – and Clint Eastwood, who gave a widely panned speech to an empty chair at the Republican National Convention in August.
Officials in Washington quickly dismissed the idea that the Labor Department report – which showed U.S. unemployment falling to a four-year low of 7.8 percent – could be rigged.
“That’s a ludicrous comment. No serious person believes that the bureau of labor statistics manipulates its statistics,” said Alan Krueger, chairman of the White House Council of Economic Advisers. “The jobs report and all of their other statistics are prepared by career employees. They use the same process every month. They use the same process for Republican and Democratic administrations.”
The tweet was by no means Welch’s first criticism of Obama on his Twitter feed, where he has regularly spoken out in favor of Romney, as well as weighing in on sports. During the presidential debate in Denver, Colorado, on Wednesday night, Welch tweeted: “HOW can anyone vote for Obama after this performance..he has demonstrated his incompetence.”
Word of the Day: Unemployment (U3 and U6)
FACT CHECK: LABOR SECRETARY SOLIS MISLEADS ON JOBS REVISIONS
The AFL-CIO Reacts to the September BLS Jobs Report
Employment Level
142,974,000
Series Id: LNS12000000
Seasonally Adjusted
Series title: (Seas) Employment Level
Labor force status: Employed
Type of data: Number in thousands
Age: 16 years and over
Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Annual |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2000 | 136559(1) | 136598 | 136701 | 137270 | 136630 | 136940 | 136531 | 136662 | 136893 | 137088 | 137322 | 137614 | |
2001 | 137778 | 137612 | 137783 | 137299 | 137092 | 136873 | 137071 | 136241 | 136846 | 136392 | 136238 | 136047 | |
2002 | 135701 | 136438 | 136177 | 136126 | 136539 | 136415 | 136413 | 136705 | 137302 | 137008 | 136521 | 136426 | |
2003 | 137417(1) | 137482 | 137434 | 137633 | 137544 | 137790 | 137474 | 137549 | 137609 | 137984 | 138424 | 138411 | |
2004 | 138472(1) | 138542 | 138453 | 138680 | 138852 | 139174 | 139556 | 139573 | 139487 | 139732 | 140231 | 140125 | |
2005 | 140245(1) | 140385 | 140654 | 141254 | 141609 | 141714 | 142026 | 142434 | 142401 | 142548 | 142499 | 142752 | |
2006 | 143150(1) | 143457 | 143741 | 143761 | 144089 | 144353 | 144202 | 144625 | 144815 | 145314 | 145534 | 145970 | |
2007 | 146028(1) | 146057 | 146320 | 145586 | 145903 | 146063 | 145905 | 145682 | 146244 | 145946 | 146595 | 146273 | |
2008 | 146397(1) | 146157 | 146108 | 146130 | 145929 | 145738 | 145530 | 145196 | 145059 | 144792 | 144078 | 143328 | |
2009 | 142187(1) | 141660 | 140754 | 140654 | 140294 | 140003 | 139891 | 139458 | 138775 | 138401 | 138607 | 137968 | |
2010 | 138500(1) | 138665 | 138836 | 139306 | 139340 | 139137 | 139139 | 139338 | 139344 | 139072 | 138937 | 139220 | |
2011 | 139330(1) | 139551 | 139764 | 139628 | 139808 | 139385 | 139450 | 139754 | 140107 | 140297 | 140614 | 140790 | |
2012 | 141637(1) | 142065 | 142034 | 141865 | 142287 | 142415 | 142220 | 142101 | 142974 | ||||
1 : Data affected by changes in population controls. |
Civilian Labor Force
155,063,000
Series Id: LNS11000000
Seasonally Adjusted
Series title: (Seas) Civilian Labor Force Level
Labor force status: Civilian labor force
Type of data: Number in thousands
Age: 16 years and over
Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Annual |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2000 | 142267(1) | 142456 | 142434 | 142751 | 142388 | 142591 | 142278 | 142514 | 142518 | 142622 | 142962 | 143248 | |
2001 | 143800 | 143701 | 143924 | 143569 | 143318 | 143357 | 143654 | 143284 | 143989 | 144086 | 144240 | 144305 | |
2002 | 143883 | 144653 | 144481 | 144725 | 144938 | 144808 | 144803 | 145009 | 145552 | 145314 | 145041 | 145066 | |
2003 | 145937(1) | 146100 | 146022 | 146474 | 146500 | 147056 | 146485 | 146445 | 146530 | 146716 | 147000 | 146729 | |
2004 | 146842(1) | 146709 | 146944 | 146850 | 147065 | 147460 | 147692 | 147564 | 147415 | 147793 | 148162 | 148059 | |
2005 | 148029(1) | 148364 | 148391 | 148926 | 149261 | 149238 | 149432 | 149779 | 149954 | 150001 | 150065 | 150030 | |
2006 | 150214(1) | 150641 | 150813 | 150881 | 151069 | 151354 | 151377 | 151716 | 151662 | 152041 | 152406 | 152732 | |
2007 | 153144(1) | 152983 | 153051 | 152435 | 152670 | 153041 | 153054 | 152749 | 153414 | 153183 | 153835 | 153918 | |
2008 | 154075(1) | 153648 | 153925 | 153761 | 154325 | 154316 | 154480 | 154646 | 154559 | 154875 | 154622 | 154626 | |
2009 | 154236(1) | 154521 | 154143 | 154450 | 154800 | 154730 | 154538 | 154319 | 153786 | 153822 | 153833 | 153091 | |
2010 | 153454(1) | 153704 | 153964 | 154528 | 154216 | 153653 | 153748 | 154073 | 153918 | 153709 | 154041 | 153613 | |
2011 | 153250(1) | 153302 | 153392 | 153420 | 153700 | 153409 | 153358 | 153674 | 154004 | 154057 | 153937 | 153887 | |
2012 | 154395(1) | 154871 | 154707 | 154365 | 155007 | 155163 | 155013 | 154645 | 155063 | ||||
1 : Data affected by changes in population controls. |
Labor Force Participation Rate
63.6%
Series Id: LNS11300000
Seasonally Adjusted
Series title: (Seas) Labor Force Participation Rate
Labor force status: Civilian labor force participation rate
Type of data: Percent or rate
Age: 16 years and over
Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Annual |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2000 | 67.3 | 67.3 | 67.3 | 67.3 | 67.1 | 67.1 | 66.9 | 66.9 | 66.9 | 66.8 | 66.9 | 67.0 | |
2001 | 67.2 | 67.1 | 67.2 | 66.9 | 66.7 | 66.7 | 66.8 | 66.5 | 66.8 | 66.7 | 66.7 | 66.7 | |
2002 | 66.5 | 66.8 | 66.6 | 66.7 | 66.7 | 66.6 | 66.5 | 66.6 | 66.7 | 66.6 | 66.4 | 66.3 | |
2003 | 66.4 | 66.4 | 66.3 | 66.4 | 66.4 | 66.5 | 66.2 | 66.1 | 66.1 | 66.1 | 66.1 | 65.9 | |
2004 | 66.1 | 66.0 | 66.0 | 65.9 | 66.0 | 66.1 | 66.1 | 66.0 | 65.8 | 65.9 | 66.0 | 65.9 | |
2005 | 65.8 | 65.9 | 65.9 | 66.1 | 66.1 | 66.1 | 66.1 | 66.2 | 66.1 | 66.1 | 66.0 | 66.0 | |
2006 | 66.0 | 66.1 | 66.2 | 66.1 | 66.1 | 66.2 | 66.1 | 66.2 | 66.1 | 66.2 | 66.3 | 66.4 | |
2007 | 66.4 | 66.3 | 66.2 | 65.9 | 66.0 | 66.0 | 66.0 | 65.8 | 66.0 | 65.8 | 66.0 | 66.0 | |
2008 | 66.2 | 66.0 | 66.1 | 65.9 | 66.1 | 66.1 | 66.1 | 66.1 | 65.9 | 66.0 | 65.8 | 65.8 | |
2009 | 65.7 | 65.8 | 65.6 | 65.6 | 65.7 | 65.7 | 65.5 | 65.4 | 65.1 | 65.0 | 65.0 | 64.6 | |
2010 | 64.8 | 64.9 | 64.9 | 65.1 | 64.9 | 64.6 | 64.6 | 64.7 | 64.6 | 64.4 | 64.5 | 64.3 | |
2011 | 64.2 | 64.2 | 64.2 | 64.2 | 64.2 | 64.1 | 64.0 | 64.1 | 64.1 | 64.1 | 64.0 | 64.0 | |
2012 | 63.7 | 63.9 | 63.8 | 63.6 | 63.8 | 63.8 | 63.7 | 63.5 | 63.6 |
Unemployment Level
12,088,000
Series Id: LNS13000000
Seasonally Adjusted
Series title: (Seas) Unemployment Level
Labor force status: Unemployed
Type of data: Number in thousands
Age: 16 years and over
Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Annual |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2000 | 5708 | 5858 | 5733 | 5481 | 5758 | 5651 | 5747 | 5853 | 5625 | 5534 | 5639 | 5634 | |
2001 | 6023 | 6089 | 6141 | 6271 | 6226 | 6484 | 6583 | 7042 | 7142 | 7694 | 8003 | 8258 | |
2002 | 8182 | 8215 | 8304 | 8599 | 8399 | 8393 | 8390 | 8304 | 8251 | 8307 | 8520 | 8640 | |
2003 | 8520 | 8618 | 8588 | 8842 | 8957 | 9266 | 9011 | 8896 | 8921 | 8732 | 8576 | 8317 | |
2004 | 8370 | 8167 | 8491 | 8170 | 8212 | 8286 | 8136 | 7990 | 7927 | 8061 | 7932 | 7934 | |
2005 | 7784 | 7980 | 7737 | 7672 | 7651 | 7524 | 7406 | 7345 | 7553 | 7453 | 7566 | 7279 | |
2006 | 7064 | 7184 | 7072 | 7120 | 6980 | 7001 | 7175 | 7091 | 6847 | 6727 | 6872 | 6762 | |
2007 | 7116 | 6927 | 6731 | 6850 | 6766 | 6979 | 7149 | 7067 | 7170 | 7237 | 7240 | 7645 | |
2008 | 7678 | 7491 | 7816 | 7631 | 8395 | 8578 | 8950 | 9450 | 9501 | 10083 | 10544 | 11299 | |
2009 | 12049 | 12860 | 13389 | 13796 | 14505 | 14727 | 14646 | 14861 | 15012 | 15421 | 15227 | 15124 | |
2010 | 14953 | 15039 | 15128 | 15221 | 14876 | 14517 | 14609 | 14735 | 14574 | 14636 | 15104 | 14393 | |
2011 | 13919 | 13751 | 13628 | 13792 | 13892 | 14024 | 13908 | 13920 | 13897 | 13759 | 13323 | 13097 | |
2012 | 12758 | 12806 | 12673 | 12500 | 12720 | 12749 | 12794 | 12544 | 12088 |
Unemployment Rate U-3
7.8%
Series Id: LNS14000000
Seasonally Adjusted
Series title: (Seas) Unemployment Rate
Labor force status: Unemployment rate
Type of data: Percent or rate
Age: 16 years and over
Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Annual |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2000 | 4.0 | 4.1 | 4.0 | 3.8 | 4.0 | 4.0 | 4.0 | 4.1 | 3.9 | 3.9 | 3.9 | 3.9 | |
2001 | 4.2 | 4.2 | 4.3 | 4.4 | 4.3 | 4.5 | 4.6 | 4.9 | 5.0 | 5.3 | 5.5 | 5.7 | |
2002 | 5.7 | 5.7 | 5.7 | 5.9 | 5.8 | 5.8 | 5.8 | 5.7 | 5.7 | 5.7 | 5.9 | 6.0 | |
2003 | 5.8 | 5.9 | 5.9 | 6.0 | 6.1 | 6.3 | 6.2 | 6.1 | 6.1 | 6.0 | 5.8 | 5.7 | |
2004 | 5.7 | 5.6 | 5.8 | 5.6 | 5.6 | 5.6 | 5.5 | 5.4 | 5.4 | 5.5 | 5.4 | 5.4 | |
2005 | 5.3 | 5.4 | 5.2 | 5.2 | 5.1 | 5.0 | 5.0 | 4.9 | 5.0 | 5.0 | 5.0 | 4.9 | |
2006 | 4.7 | 4.8 | 4.7 | 4.7 | 4.6 | 4.6 | 4.7 | 4.7 | 4.5 | 4.4 | 4.5 | 4.4 | |
2007 | 4.6 | 4.5 | 4.4 | 4.5 | 4.4 | 4.6 | 4.7 | 4.6 | 4.7 | 4.7 | 4.7 | 5.0 | |
2008 | 5.0 | 4.9 | 5.1 | 5.0 | 5.4 | 5.6 | 5.8 | 6.1 | 6.1 | 6.5 | 6.8 | 7.3 | |
2009 | 7.8 | 8.3 | 8.7 | 8.9 | 9.4 | 9.5 | 9.5 | 9.6 | 9.8 | 10.0 | 9.9 | 9.9 | |
2010 | 9.7 | 9.8 | 9.8 | 9.9 | 9.6 | 9.4 | 9.5 | 9.6 | 9.5 | 9.5 | 9.8 | 9.4 | |
2011 | 9.1 | 9.0 | 8.9 | 9.0 | 9.0 | 9.1 | 9.1 | 9.1 | 9.0 | 8.9 | 8.7 | 8.5 | |
2012 | 8.3 | 8.3 | 8.2 | 8.1 | 8.2 | 8.2 | 8.3 | 8.1 | 7.8 |
Unemployment Rate U-6
14.7%
Series Id: LNS13327709 Seasonally Adjusted Series title: (seas) Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers Labor force status: Aggregated totals unemployed Type of data: Percent or rate Age: 16 years and over Percent/rates: Unemployed and mrg attached and pt for econ reas as percent of labor force plus marg attached
Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Annual |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2000 | 7.1 | 7.2 | 7.1 | 6.9 | 7.1 | 7.0 | 7.0 | 7.1 | 7.0 | 6.8 | 7.1 | 6.9 | |
2001 | 7.3 | 7.4 | 7.3 | 7.4 | 7.5 | 7.9 | 7.8 | 8.1 | 8.7 | 9.3 | 9.4 | 9.6 | |
2002 | 9.5 | 9.5 | 9.4 | 9.7 | 9.5 | 9.5 | 9.6 | 9.6 | 9.6 | 9.6 | 9.7 | 9.8 | |
2003 | 10.0 | 10.2 | 10.0 | 10.2 | 10.1 | 10.3 | 10.3 | 10.1 | 10.4 | 10.2 | 10.0 | 9.8 | |
2004 | 9.9 | 9.7 | 10.0 | 9.6 | 9.6 | 9.5 | 9.5 | 9.4 | 9.4 | 9.7 | 9.4 | 9.2 | |
2005 | 9.3 | 9.3 | 9.1 | 8.9 | 8.9 | 9.0 | 8.8 | 8.9 | 9.0 | 8.7 | 8.7 | 8.6 | |
2006 | 8.4 | 8.4 | 8.2 | 8.1 | 8.2 | 8.4 | 8.5 | 8.4 | 8.0 | 8.2 | 8.1 | 7.9 | |
2007 | 8.4 | 8.2 | 8.0 | 8.2 | 8.2 | 8.3 | 8.4 | 8.4 | 8.4 | 8.4 | 8.4 | 8.8 | |
2008 | 9.2 | 9.0 | 9.1 | 9.2 | 9.7 | 10.1 | 10.5 | 10.8 | 11.1 | 11.8 | 12.7 | 13.5 | |
2009 | 14.2 | 15.1 | 15.7 | 15.8 | 16.4 | 16.5 | 16.5 | 16.7 | 16.8 | 17.2 | 17.1 | 17.1 | |
2010 | 16.7 | 16.9 | 16.9 | 17.0 | 16.6 | 16.5 | 16.5 | 16.6 | 16.9 | 16.8 | 16.9 | 16.6 | |
2011 | 16.1 | 15.9 | 15.7 | 15.9 | 15.8 | 16.2 | 16.1 | 16.2 | 16.4 | 16.0 | 15.6 | 15.2 | |
2012 | 15.1 | 14.9 | 14.5 | 14.5 | 14.8 | 14.9 | 15.0 | 14.7 | 14.7 |
Background Articles and Videos
Employment Situation Summary
Transmission of material in this release is embargoed USDL-12-1981 until 8:30 a.m. (EDT) Friday, October 5, 2012 Technical information: Household data: (202) 691-6378 * cpsinfo@bls.gov * www.bls.gov/cps Establishment data: (202) 691-6555 * cesinfo@bls.gov * www.bls.gov/ces Media contact: (202) 691-5902 * PressOffice@bls.gov THE EMPLOYMENT SITUATION -- SEPTEMBER 2012 The unemployment rate decreased to 7.8 percent in September, and total nonfarm payroll employment rose by 114,000, the U.S. Bureau of Labor Statistics reported today. Employment increased in health care and in transportation and warehousing but changed little in most other major industries. Household Survey Data The unemployment rate declined by 0.3 percentage point to 7.8 percent in September. For the first 8 months of the year, the rate held within a narrow range of 8.1 and 8.3 percent. The number of unemployed persons, at 12.1 million, decreased by 456,000 in September. (See table A-1.) Among the major worker groups, the unemployment rates for adult men (7.3 percent), adult women (7.0 percent), and whites (7.0 percent) declined over the month. The unemployment rates for teenagers (23.7 percent), blacks (13.4 percent), and Hispanics (9.9 percent) were little changed. The jobless rate for Asians, at 4.8 percent (not seasonally adjusted), fell over the year. (See tables A-1, A-2, and A-3.) In September, the number of job losers and persons who completed temporary jobs decreased by 468,000 to 6.5 million. (See table A-11.) The number of persons unemployed for less than 5 weeks declined by 302,000 over the month to 2.5 million. The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 4.8 million and accounted for 40.1 percent of the unemployed. (See table A-12.) Total employment rose by 873,000 in September, following 3 months of little change. The employment-population ratio increased by 0.4 percentage point to 58.7 percent, after edging down in the prior 2 months. The overall trend in the employment-population ratio for this year has been flat. The civilian labor force rose by 418,000 to 155.1 million in September, while the labor force participation rate was little changed at 63.6 percent. (See table A-1.) The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) rose from 8.0 million in August to 8.6 million in September. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. (See table A-8.) In September, 2.5 million persons were marginally attached to the labor force, essentially unchanged from a year earlier. (These data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.) Among the marginally attached, there were 802,000 discouraged workers in September, a decline of 235,000 from a year earlier. (These data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.7 million persons marginally attached to the labor force in September had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities. (See table A-16.) Establishment Survey Data Total nonfarm payroll employment increased by 114,000 in September. In 2012, employment growth has averaged 146,000 per month, compared with an average monthly gain of 153,000 in 2011. In September, employment rose in health care and in transportation and warehousing. (See table B-1.) Health care added 44,000 jobs in September. Job gains continued in ambulatory health care services (+30,000) and hospitals (+8,000). Over the past year, employment in health care has risen by 295,000. In September, employment increased by 17,000 in transportation and warehousing. Within the industry, there were job gains in transit and ground passenger transportation (+9,000) and in warehousing and storage (+4,000). Employment in financial activities edged up in September (+13,000), reflecting modest job growth in credit intermediation (+6,000) and real estate (+7,000). Manufacturing employment edged down in September (-16,000). On net, manufacturing employment has been unchanged since April. In September, job losses occurred in computer and electronic products (-6,000) and in printing and related activities (-3,000). Employment in other major industries, including mining and logging, construction, wholesale trade, retail trade, information, professional and business services, leisure and hospitality, and government, showed little change over the month. The average workweek for all employees on private nonfarm payrolls edged up by 0.1 hour to 34.5 hours in September. The manufacturing workweek edged up by 0.1 hour to 40.6 hours, and factory overtime was unchanged at 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.7 hours. (See tables B-2 and B-7.) In September, average hourly earnings for all employees on private nonfarm payrolls rose by 7 cents to $23.58. Over the past 12 months, average hourly earnings have risen by 1.8 percent. In September, average hourly earnings of private-sector production and nonsupervisory employees increased by 5 cents to $19.81. (See tables B-3 and B-8.) The change in total nonfarm payroll employment for July was revised from +141,000 to +181,000, and the change for August was revised from +96,000 to +142,000. ____________ The Employment Situation for October is scheduled to be released on Friday, November 2, 2012, at 8:30 a.m. (EDT). http://www.bls.gov/news.release/empsit.nr0.htmEmployment Situation Summary Table A. Household data, seasonally adjusted
Category | Sept. 2011 | July 2012 | Aug. 2012 | Sept. 2012 | Change from: Aug. 2012- Sept. 2012 |
---|---|---|---|---|---|
Employment status | |||||
Civilian noninstitutional population | 240,071 | 243,354 | 243,566 | 243,772 | 206 |
Civilian labor force | 154,004 | 155,013 | 154,645 | 155,063 | 418 |
Participation rate | 64.1 | 63.7 | 63.5 | 63.6 | 0.1 |
Employed | 140,107 | 142,220 | 142,101 | 142,974 | 873 |
Employment-population ratio | 58.4 | 58.4 | 58.3 | 58.7 | 0.4 |
Unemployed | 13,897 | 12,794 | 12,544 | 12,088 | -456 |
Unemployment rate | 9.0 | 8.3 | 8.1 | 7.8 | -0.3 |
Not in labor force | 86,067 | 88,340 | 88,921 | 88,710 | -211 |
Unemployment rates | |||||
Total, 16 years and over | 9.0 | 8.3 | 8.1 | 7.8 | -0.3 |
Adult men (20 years and over) | 8.7 | 7.7 | 7.6 | 7.3 | -0.3 |
Adult women (20 years and over) | 8.1 | 7.5 | 7.3 | 7.0 | -0.3 |
Teenagers (16 to 19 years) | 24.5 | 23.8 | 24.6 | 23.7 | -0.9 |
White | 7.9 | 7.4 | 7.2 | 7.0 | -0.2 |
Black or African American | 15.9 | 14.1 | 14.1 | 13.4 | -0.7 |
Asian (not seasonally adjusted) | 7.8 | 6.2 | 5.9 | 4.8 | – |
Hispanic or Latino ethnicity | 11.3 | 10.3 | 10.2 | 9.9 | -0.3 |
Total, 25 years and over | 7.7 | 6.9 | 6.8 | 6.6 | -0.2 |
Less than a high school diploma | 13.9 | 12.7 | 12.0 | 11.3 | -0.7 |
High school graduates, no college | 9.6 | 8.7 | 8.8 | 8.7 | -0.1 |
Some college or associate degree | 8.4 | 7.1 | 6.6 | 6.5 | -0.1 |
Bachelor’s degree and higher | 4.2 | 4.1 | 4.1 | 4.1 | 0.0 |
Reason for unemployment | |||||
Job losers and persons who completed temporary jobs | 8,028 | 7,123 | 7,003 | 6,535 | -468 |
Job leavers | 972 | 878 | 942 | 957 | 15 |
Reentrants | 3,484 | 3,380 | 3,318 | 3,306 | -12 |
New entrants | 1,323 | 1,311 | 1,277 | 1,247 | -30 |
Duration of unemployment | |||||
Less than 5 weeks | 2,743 | 2,711 | 2,844 | 2,542 | -302 |
5 to 14 weeks | 2,902 | 3,092 | 2,868 | 2,826 | -42 |
15 to 26 weeks | 2,029 | 1,760 | 1,845 | 1,860 | 15 |
27 weeks and over | 6,197 | 5,185 | 5,033 | 4,844 | -189 |
Employed persons at work part time | |||||
Part time for economic reasons | 9,270 | 8,246 | 8,031 | 8,613 | 582 |
Slack work or business conditions | 5,900 | 5,342 | 5,217 | 5,523 | 306 |
Could only find part-time work | 2,844 | 2,576 | 2,507 | 2,572 | 65 |
Part time for noneconomic reasons | 18,329 | 18,866 | 18,996 | 18,736 | -260 |
Persons not in the labor force (not seasonally adjusted) | |||||
Marginally attached to the labor force | 2,511 | 2,529 | 2,561 | 2,517 | – |
Discouraged workers | 1,037 | 852 | 844 | 802 | – |
– Over-the-month changes are not displayed for not seasonally adjusted data. NOTE: Persons whose ethnicity is identified as Hispanic or Latino may be of any race. Detail for the seasonally adjusted data shown in this table will not necessarily add to totals because of the independent seasonal adjustment of the various series. Updated population controls are introduced annually with the release of January data. |
Employment Situation Summary Table B. Establishment data, seasonally adjusted
Category | Sept. 2011 | July 2012 | Aug. 2012(p) | Sept. 2012(p) |
---|---|---|---|---|
EMPLOYMENT BY SELECTED INDUSTRY (Over-the-month change, in thousands) | ||||
Total nonfarm | 202 | 181 | 142 | 114 |
Total private | 216 | 163 | 97 | 104 |
Goods-producing | 33 | 20 | -22 | -10 |
Mining and logging | 6 | -1 | -1 | 1 |
Construction | 30 | 3 | 1 | 5 |
Manufacturing | -3 | 18 | -22 | -16 |
Durable goods(1) | 4 | 18 | -20 | -13 |
Motor vehicles and parts | 2.9 | 12.8 | -6.9 | -3.4 |
Nondurable goods | -7 | 0 | -2 | -3 |
Private service-providing(1) | 183 | 143 | 119 | 114 |
Wholesale trade | -3.0 | 8.8 | 7.0 | -1.6 |
Retail trade | 14.2 | 3.2 | 8.3 | 9.4 |
Transportation and warehousing | 1.8 | 14.2 | 7.7 | 17.1 |
Information | 34 | 8 | 1 | -6 |
Financial activities | -6 | 1 | 7 | 13 |
Professional and business services(1) | 59 | 41 | 19 | 13 |
Temporary help services | 23.7 | 13.0 | 0.1 | -2.0 |
Education and health services(1) | 58 | 40 | 25 | 49 |
Health care and social assistance | 47.5 | 27.7 | 22.2 | 44.5 |
Leisure and hospitality | 20 | 24 | 38 | 11 |
Other services | 3 | 9 | -2 | 9 |
Government | -14 | 18 | 45 | 10 |
WOMEN AND PRODUCTION AND NONSUPERVISORY EMPLOYEES(2) AS A PERCENT OF ALL EMPLOYEES | ||||
Total nonfarm women employees | 49.4 | 49.3 | 49.3 | 49.3 |
Total private women employees | 47.9 | 47.8 | 47.8 | 47.8 |
Total private production and nonsupervisory employees | 82.5 | 82.6 | 82.6 | 82.6 |
HOURS AND EARNINGS ALL EMPLOYEES | ||||
Total private | ||||
Average weekly hours | 34.4 | 34.4 | 34.4 | 34.5 |
Average hourly earnings | $23.16 | $23.52 | $23.51 | $23.58 |
Average weekly earnings | $796.70 | $809.09 | $808.74 | $813.51 |
Index of aggregate weekly hours (2007=100)(3) | 94.5 | 95.9 | 96.0 | 96.4 |
Over-the-month percent change | 0.4 | -0.2 | 0.1 | 0.4 |
Index of aggregate weekly payrolls (2007=100)(4) | 104.4 | 107.6 | 107.7 | 108.4 |
Over-the-month percent change | 0.7 | -0.1 | 0.1 | 0.6 |
HOURS AND EARNINGS PRODUCTION AND NONSUPERVISORY EMPLOYEES | ||||
Total private | ||||
Average weekly hours | 33.6 | 33.7 | 33.7 | 33.7 |
Average hourly earnings | $19.53 | $19.77 | $19.76 | $19.81 |
Average weekly earnings | $656.21 | $666.25 | $665.91 | $667.60 |
Index of aggregate weekly hours (2002=100)(3) | 101.5 | 103.5 | 103.6 | 103.7 |
Over-the-month percent change | 0.2 | 0.1 | 0.1 | 0.1 |
Index of aggregate weekly payrolls (2002=100)(4) | 132.5 | 136.7 | 136.8 | 137.3 |
Over-the-month percent change | 0.4 | 0.3 | 0.1 | 0.4 |
DIFFUSION INDEX(5) (Over 1-month span) | ||||
Total private (266 industries) | 57.9 | 54.9 | 51.3 | 52.8 |
Manufacturing (81 industries) | 53.7 | 48.8 | 38.9 | 39.5 |
Footnotes (1) Includes other industries, not shown separately. (2) Data relate to production employees in mining and logging and manufacturing, construction employees in construction, and nonsupervisory employees in the service-providing industries. (3) The indexes of aggregate weekly hours are calculated by dividing the current month’s estimates of aggregate hours by the corresponding annual average aggregate hours. (4) The indexes of aggregate weekly payrolls are calculated by dividing the current month’s estimates of aggregate weekly payrolls by the corresponding annual average aggregate weekly payrolls. (5) Figures are the percent of industries with employment increasing plus one-half of the industries with unchanged employment, where 50 percent indicates an equal balance between industries with increasing and decreasing employment. (p) Preliminary | ||||
NOTE: Data in this table have been corrected. For more information see http://www.bls.gov/bls/ceswomen_usps_correction.htm. |
Pronk Pops Show 88, Segment 3: Ben Bernanke Creates More Digital Electronic Money (DEM) with Quantitative Easing 3–The Crime of The Century Continues Against The American People–The Not So Hidden Inflation Tax–Videos
Pronk Pops Show 88: October 7, 2012
Pronk Pops Show 87: September 7, 2012
Pronk Pops Show 86: August 29, 2012
Pronk Pops Show 85: August 2, 2012
Pronk Pops Show 84: July 25, 2012
Pronk Pops Show 83: July 18, 2012
Pronk Pops Show 82: July 11, 2012
Pronk Pops Show 81: July 8, 2012
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Segment 3: Ben Bernanke Creates More Digital Electronic Money (DEM) with Quantitative Easing 3–The Crime of The Century Continues Against The American People–The Not So Hidden Inflation Tax–Videos
Fed Launches Third Attempt to Stimulate Economy
Marc Faber on Hedging the Bernanke Put and QE3 with Gold, Land and Equities!
Ben Bernanke / Federal Reserve Announces QE3 – How Will Printing Fiat Money Improve The Economy?
QE3 Warfare Against The Dollar, Its People and U.S. Sovereignty
Fed risks political fallout from QE3
By Robin Harding and James Politi in Washington
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The US Federal Reserve was always going to catch a few political bullets if it launched an aggressive new easing only eight weeks before a presidential election.
Mitt Romney, the Republican candidate, duly opened fire on Friday after the Fed began an open-ended third round of quantitative easing (QE3), under which it will buy $40bn of mortgage-backed securities a month.
In some of the most aggressive comments he has made on the Fed, Mr Romney said QE3 was nothing but a “sugar high”, and would fail to get the economy moving.
“Recognise that, as the Federal Reserve keeps on trying to stimulate the economy by printing more money, that there’s a cost to that,” said Mr Romney in remarks at a fundraiser.
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The US Federal Reserve was always going to catch a few political bullets if it launched an aggressive new easing only eight weeks before a presidential election.
Mitt Romney, the Republican candidate, duly opened fire on Friday after the Fed began an open-ended third round of quantitative easing (QE3), under which it will buy $40bn of mortgage-backed securities a month.
In some of the most aggressive comments he has made on the Fed, Mr Romney said QE3 was nothing but a “sugar high”, and would fail to get the economy moving.
“Recognise that, as the Federal Reserve keeps on trying to stimulate the economy by printing more money, that there’s a cost to that,” said Mr Romney in remarks at a fundraiser.
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Some conservative economists think the Fed is over-interpreting the employment side of the dual mandate – and by lowering interest rates and making it easier for the US to finance debt in the bond markets, this removes the pressure from Congress to strike a deal on deficit reduction.
The most visible effort to clip the Fed’s wings is a bill introduced in the House of Representatives by Kevin Brady, a Republican from Texas, who is vice-chair of the Joint Economic Committee of Congress. His bill would limit the central bank’s mandate to inflation, not employment, and restrict its monetary policy operations to short-term Treasury securities.
Were his bill now law, Mr Brady told the Financial Times, “the Fed would not be able to embark on this third round of quantitative easing”. He said the bill had taken off faster than he had hoped and already had 48 co-sponsors in Congress. “Everyone, whether they agree or not, believes it is the right time to have this discussion.”
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But while Mr Romney has criticised QE3, it would be a huge leap to eliminate the employment mandate once in office. “I think you can do a lot without changes to the Federal Reserve Act,” says Prof Swagel. “Romney will probably look to appoint the next Fed chair as someone who is aligned with his views.”
That is the most realistic political consequence of the Fed’s actions: that when Mr Bernanke’s term expires at the end of January 2014, a new chairman is appointed who opposes them.
Once settled in the White House, however, even Mr Romney would have to consider whether a tight monetary policy was actually in his interest, given that re-election would probably depend on delivering strong economic growth.
Whether QE3 has any lasting political consequences for the Fed will probably depend on how well it works. “It puts critics of the Fed in a difficult position,” said John Makin, a resident scholar at the American Enterprise Institute in Washington, who called the programme of open-ended easing a “bold experiment”.
The Fed is trying to bring down high unemployment and, while the experiment is in progress, critics will struggle to make headway. If the experiment fails, however, and inflation rises sharply before unemployment comes down, the Fed may find itself hard-pressed to resist the proposals of Mr Brady and his colleagues. …”
http://www.ft.com/cms/s/0/b7de9070-fe77-11e1-8028-00144feabdc0.html#axzz26f3NWTyR
Marc Faber: If I Were Bernanke, I Would Resign
“…Central bankers are “counterfeit money printers” and Federal Reserve Chairman Ben Bernanke should resign for messing up the U.S. economy so badly, Marc Faber, author of the Gloom, Doom and Boom, told CNBC on Friday.
He said Bernanke was one of the main proponents of an ultra-expansionist economic monetary policy that was to blame for the latest financial crisis.
“If I had messed up as badly as Bernanke I would for sure resign. The mandate of the Fed to boost asset prices and thereby create wealth is ludicrous — it doesn’t work that way. It’s a temporary boost followed by a crash,” Faber said.
Faber, who rose to prominence after predicting the 1987 financial crash report and dubbed “Dr Doom” for his negative predictions, said: “This unlimited QE (quantitative easing) , buying mortgage-backed securities (MBS) and continuing operation twist has the implication of simply having asset prices go up and the money flows down to the Mayfair economy,” Faber said.
A Mayfair economy is one which benefits the wealthier and better off in society. Faber said this latest round of QE would not help the “man on the street”.
“QE helps rich people whose asset prices go up and whose net worth then increases but it doesn’t flow to the man on the street who is faced with higher costs of living with price rises. You just have a small economy that is booming but the majority of the economy is damaged by QE,” he said.
Bernanke announced on Thursday that the Fed would buy $40 billion a month in MBS, giving the impression that this time around there would be no time limit to the program, which would only stop once a sustained uptick in employment is visible.
“The money printers are responsible for this crisis. If we continue with this expansionist monetary policy we won’t be facing a fiscal cliff it will be a fiscal grand canyon,” he added.
Mike Konczal, fellow at the Roosevelt Institute disagreed claiming that this latest round of QE — aggressive as it was — would expand the scope of Federal Reserve policy and was “great for main street”. Crucially, he said, it tackles the issue of employment which would underpin future wealth.
“If anything, monetary policy has been too tight in recent years. We’ve seen a collapse in GDP growth, no wage growth and huge rises in unemployment. Wealth is collapsing because of a collapse in the housing market and prolonged, mass unemployment ,” Konczal said.
Faber poured scorn on the notion that QE helps the economy, declaring that commentators like Konczal would have said the same in 2001 when low interest rates led to the biggest housing bubble in the United States. That in turn led to the financial crisis of 2008.
“If we have an economic crisis in the Western world it’s because the government makes up 50 percent or more of the economy. This is a cancer that is taking away people’s freedom,” he said.
http://www.cnbc.com/id/49029923
Helicopter Bernanke’s economy influx of money will rescue Obama, not you, here’s why
by Jim Picht
“…Federal Reserve Chairman Ben Bernanke’s decision to engage in a third round of “quantitative easing” (QE3) drew immediate celebration from Wall Street, but it was also met by a reduction in America’s credit rating. Ratings firm Egan-Jones reduced its rating of U.S. government debt from “AA” to “AA-,” claiming that the $40 billion-per-month money infusion announced by the Fed will badly hurt the economy.
Bernanke got his nickname, “Helicopter Ben,” for comments like this: “The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost.”
He goes on to argue, in the words of Milton Friedman before him, that a “helicopter drop” of money might be made into the economy to avoid deflation.
That is, during a recession when there’s a threat of deflation, the government should just drop bales of money on the population to help prevent a depression.
The primary threat facing the economy right now isn’t deflation, and quantitative easing isn’t exactly a helicopter drop, but it is, in the words of critics, a sugar rush.
If the problem with our economy were simply insufficient aggregate demand, sugar would be nutritious food, but it’s not. Short term interest rates are already low, and the Fed risks pushing long-term rates low enough that people will simply start keeping their money under the mattress. Not only is the Fed’s monetization likely to be ineffective, it’s likely to result in economic stagnation.
The Fed is not producing “as many U.S. dollars as it wishes at no cost.” There is a very real cost. Our fiscal situation is a disaster, inflation is pressing onto the economy, and business costs are set to rise. This will have a negative impact on jobs, and real wages will decline. This open-ended quantitative easing will make the situation worse and worse.
If the Fed were to drop millions of carats of diamonds from helicopters, diamond rings would be found in cereal boxes, not jewelry stores. If the streets were paved with gold, gold would be as cheap as asphalt. If we continue to dump massive amounts of money into the economy, money will be worth less than the paper (or electrons) it’s printed on.
The stock market responded to QE3 with enthusiasm. A big reason for that is that this signals Bernanke’s determination to keep interest rates low (close to zero). With bond returns in the basement, investors have no place to go but stocks.
Sugar rushes always end in a crash. Everyone knows that QE3 is a stop-gap measure. Bernanke considers it necessary because President Obama’s economic policies aren’t working to break us out of a sluggish jobs market and the slowest recovery in memory.
But neither did QE1 and QE2. QE3 will fail.
Its purpose is to put money into the hands of lenders, then small businesses, but business owners realize that the bill on our current economic policies will be coming due sooner rather than later, and they’re not likely to run out and borrow money with the uncertainties of the Affordable Care Act, the debt ceiling, and tax hikes (only for the wealthy, but that, oddly enough, includes a lot of small businesses) looming ahead.
Eventually Bernanke or his successor will have to change course. The money supply will have to be reduced, interest rates will rise, and investors will flee from stocks into bonds. As the stock market declines, the fizzy, buoyant feeling from the wealth effect created by the rising market will go as flat as last week’s champagne. As you and other Americans see your wealth decline, you’ll cut back on major purchases, and the economy will take another body blow.
Bernanke is a very, very smart man, and he knows better than most of us what’s at stake here. Why, then, this economic bandaid? Cynics argue that he’s caved to pressure from Democrats like Senator Charles Schumer (D-NY) to give Obama enough breathing room for reelection.
Stagnation is fine in six months, but not before November.
That explanation is too dismissive of Bernanke, whose history gives plenty of evidence that he’s both honest and is reacting in a way he sees as correct. More likely, he sees economic disaster ahead, and he’s simply run out of tools he can use to stop it. Like anyone else in serious trouble and without options, he’s kicking the can down the road, hoping against hope that a miracle will come along before disaster strikes.
That this might help Obama and the Democrats is just a side effect, not the goal of the policy. Anyway, given the lack of success of QE1 and QE2, the policy may not give the Democrats as large a boost as they expect.
The truth is that both Obama and Bernanke are running out of options. A $16 trillion debt has left the federal government with no fiscal flexibility at all, and the Fed’s usual tools to manipulate money through interest rates are useless with those rates close to zero. QE3 isn’t a new hope for the economy; it’s a clear sign of desperation.
After the sugar rush wears off, then what? Bernanke will be left with nothing. That thought should give everyone in Washington pause. If they were rational, it might even prompt some serious thinking outside the current stimulus-QE-bailout box before that box turns into a prison, but the odds on that look worse by the day.
Read more: Helicopter Bernanke’s economy influx of money will rescue Obama, not you, here’s why | Washington Times Communities Follow us: @wtcommunities on Twitter
Peter Schiff’s take on QE3: Operation Screw! The Fed goes All-In! (Got Operation Weimar FreeFall?)
The geniuses at the Federal Reserve have concocted a bold new plan to revive the U.S. economy — print a bunch of money, loan it to Americans at super low interest rates so they can speculate on rising real estate prices, extract the appreciated equity and spend it on consumer goods. In other words, build an economy of real estate, by real estate, and for real estate. The only problem is we’ve been there and done that. The last time it almost destroyed the U.S.economy. I guess almost isn’t quite good enough for the Fed, so now it’s determined to finish the job.
These actions will destroy Americans’ savings and hurt people on fixed incomes. To protect yourself, I recommend a strategy of foreign equities, commodities, and gold and silver. To buy gold and silver, contact my company Euro Pacific Precious Metals at 888-GOLD-160, or visit http://www.europacmetals.com. For your stock portfolio, contact my brokerage firm Euro Pacific Capital at 888-727-7922, or visit http://www.europac.net. …”
Background Articles and Videos
Quantitative Easing Explained
Ben Bernanke Press Conference and Comments on QE3
Money, Banking & The Federal Reserve
The Creature From Jekyll Island (by G. Edward Griffin)
97% Owned – Monetary Reform documentary – Directors Cut
The Money Masters ~ Full Movie
“…The powers of financial capitalism had a far-reaching plan, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole…Their secret is that they have annexed from governments, monarchies, and republics the power to create the world’s money…” THE MONEY MASTERS is a 3 1/2 hour non-fiction, historical documentary that traces the origins of the political power structure that rules our nation and the world today. The modern political power structure has its roots in the hidden manipulation and accumulation of gold and other forms of money. The development of fractional reserve banking practices in the 17th century brought to a cunning sophistication the secret techniques initially used by goldsmiths fraudulently to accumulate wealth. With the formation of the privately-owned Bank of England in 1694, the yoke of economic slavery to a privately-owned “central” bank was first forced upon the backs of an entire nation, not removed but only made heavier with the passing of the three centuries to our day. Nation after nation, including America, has fallen prey to this cabal of international central bankers. Segments: The Problem; The Money Changers; Roman Empire; The Goldsmiths of Medieval England; Tally Sticks; The Bank of England; The Rise of the Rothschilds; The American Revolution; The Bank of North America; The Constitutional Convention; First Bank of the U.S.; Napoleon’s Rise to Power; Death of the First Bank of the U.S. / War of 1812; Waterloo; Second Bank of the U.S.; Andrew Jackson; Fort Knox; World Central Bank …”
The Secret of Oz – Winner, Best Docu of 2010 v.1.09.11
This version finally cuts several bogus quotes which have festered in the monetary reform literature for decades.
The world economy is doomed to spiral downwards until we do 2 things: outlaw government borrowing; 2. outlaw fractional reserve lending. Banks should only be allowed to lend out money they actually have and nations do not have to run up a “National Debt”. Remember: It’s not what backs the money, it’s who controls its quantity.
The Ascent of Money: A Financial History of The World by Niall Ferguson Epsd. 1-5 (Full Documentary)
Bread, cash, dosh, dough, loot, lucre, moolah, readies, the wherewithal: Call it what you like, it matters. To Christians, love of it is the root of all evil. To generals, it’s the sinews of war. To revolutionaries, it’s the chains of labor. But in The Ascent of Money, Niall Ferguson shows that finance is in fact the foundation of human progress. What’s more, he reveals financial history as the essential backstory behind all history.
Through Ferguson’s expert lens familiar historical landmarks appear in a new and sharper financial focus. Suddenly, the civilization of the Renaissance looks very different: a boom in the market for art and architecture made possible when Italian bankers adopted Arabic mathematics. The rise of the Dutch republic is reinterpreted as the triumph of the world’s first modern bond market over insolvent Habsburg absolutism. And the origins of the French Revolution are traced back to a stock market bubble caused by a convicted Scot murderer.
With the clarity and verve for which he is known, Ferguson elucidates key financial institutions and concepts by showing where they came from. What is money? What do banks do? What’s the difference between a stock and a bond? Why buy insurance or real estate? And what exactly does a hedge fund do?
This is history for the present. Ferguson travels to post-Katrina New Orleans to ask why the free market can’t provide adequate protection against catastrophe. He delves into the origins of the subprime mortgage crisis.
Perhaps most important, The Ascent of Money documents how a new financial revolution is propelling the world’s biggest countries, India and China, from poverty to wealth in the space of a single generation—an economic transformation unprecedented in human history.
Yet the central lesson of the financial history is that sooner or later every bubble bursts—sooner or later the bearish sellers outnumber the bullish buyers, sooner or later greed flips into fear. And that’s why, whether you’re scraping by or rolling in it, there’s never been a better time to understand the ascent of money.
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