Tuesday, June 9, 2009

What happened to the three million jobs the stimulus package was supposed to create?

Greetings good citizen,

Since December 2007, the economy has shed more than seven million jobs, more than the total number created during the eight years of the Bush presidency.

Naturally, if we look underneath the numbers we’d find that the Bush administration created 5 million jobs, most of them in banking, real estate and construction, while shedding 15 million manufacturing jobs!

Bad news good citizen, we’re still shedding manufacturing jobs faster than any other category.

Understand good citizen that manufacturing is THE process where raw materials are converted into ‘wealth’. These are not only the physical items we ‘trade’ for other items we need but these items ‘back’ the strength of our currency!

The more we produce and sell, the more valuable our currency is.

But you may have noticed that mainstream economists are curiously quiet on this ‘econ 101’ fact.

What you need to understand is what the difference is between an economically ‘strong nation and a Banana Republic. The ‘strong nation’ has the capacity to produce what it needs for itself, leaving what comprises a Banana Republic somewhat ‘self-explanatory’…

Over the past thirty years we have lost tens of millions of manufacturing jobs and are very hard pressed indeed to find anything on our retailer’s shelves that is in fact US made…which makes us, well, what do you think?

But that’s only half the problem, good citizen. Over the years automation has become so efficient that, like farming, it no longer requires very many people to produce what the world consumes.

This is a ‘double bum-blast’ not only do we have too much capacity to produce what we consume but we also don’t have enough funds to buy it!

This is ‘capitalism’ turned on its head…goods should be so cheap producers would be giving them away...but that's not what’s happening.

While we tend to be a bit myopic when it comes to economic reporting, there are currently tens of millions of people unemployed world-wide.

Ironically, if we were to define ‘unemployed’ as an individual that doesn’t collect a paycheck, then there are literally billions who are in fact ‘unemployed’.

Keep that figure in mind as we consider tonight’s offering where we compare six hundred thousand to six billion.

Obama Promises Job Creation in Plan

Published: June 8, 2009

WASHINGTON — The rising unemployment rate is giving President Obama’s critics an opportunity to raise questions about the effectiveness of his recovery plan and his economic leadership. The huge budget deficit is focusing fresh concern on the national debt.

So Mr. Obama began a new effort on Monday to show that his stimulus plan was yielding concrete benefits, saying that his administration expects to save or create 600,000 more jobs this summer, as the federal government spends billions to expand care at health centers, spruce up national parks, hire teachers and improve military facilities. [Will he ‘spruce up’ National parks while they’re closed to the public because the states they’re located in can’t afford to pay park employees? While updating military facilities is all fine and well, what are his plans for the tent cities springing up around the nation…what does he expect these people to do once cold weather returns?]

At a meeting with Mr. Obama and the cabinet, Vice President Joseph R. Biden Jr. outlined 10 major initiatives that he said would “build momentum and accelerate job growth” over the next 100 days. After Mr. Biden ticked off a list of programs — including water and waste projects in rural America and rehabilitation of 98 airports and 1,500 highways — the president took aim at his critics.

“Now I know that there are some who, despite all evidence to the contrary, still don’t believe in the necessity and promise of the recovery act,” Mr. Obama said, “and I would suggest to them that they talk to the companies who, because of this plan, scrapped the idea of laying off employees and in fact decided to hire employees. [For a complete list see…nowhere] Tell that to the Americans who receive that unexpected call saying, ‘Come back to work.’ “ [This would be far more convincing if he could point to a website where such information was posted so the public could verify these claims…but he’s too busy to bother with such things, like ‘the good lord, you gotta have ‘faith’.]

A little less than four months after he signed the $787 billion American Recovery and Reinvestment Act into law, Mr. Obama is now in the position of trying to convince Americans that the stimulus measure — his signature legislative achievement thus far — is working,even as the job losses mount.

On Friday, the Department of Labor reported that unemployment was now 9.4 percent, the highest in 25 years, although the rate of monthly job losses dropped off in May. The president’s top aides spent the weekend trying to tamp down expectations that the unemployment rate would turn around anytime soon. One adviser, Austan Goolsbee, told Fox News the nation was in for “a rough patch,” a phrase often invoked by Mr. Obama’s predecessor, George W. Bush

With Mr. Obama talking up the stimulus bill, Republicans went on the offensive.

“The Obama administration is continuing to fabricate job creation numbers related to the stimulus,” Tony Fratto, a deputy press secretary in the Bush administration, said in an e-mail message to reporters. He added, “Their so-called models would not stand the light of day.”

The administration maintains that 150,000 jobs were either created or saved in the first 100 days after Mr. Obama signed the stimulus bill on Feb. 17. The 600,000 figure the president discussed Monday is not new; it was made public by Mr. Biden on May 13. It includes 125,000 part-time summer jobs for teenagers, which the administration counts as 62,500 full-time job equivalents. [Memory recall time…wasn’t the ‘stimulus package’ supposed to provide 3 million new jobs? So what’s this 600,000 BS!]

Independent experts say those figures — estimates based on macroeconomic models and projections — are plausible, although they say it is very difficult to measure the number of jobs created. But Republicans say the teenage jobs estimate proves that there is less than meets the eye to the stimulus package.

“The administration looks dramatically out of touch as they highlight the creation of temporary summer employment in the face of job losses unseen in decades, record unemployment and massive deficits,” said Representative Eric Cantor of Virginia, the House Republican whip. [At the time when the president elect announced a rather disappointing creation figure of ‘2-3 million jobs’, the economy had already shed 5 million jobs…]

In preparing his report to the president, Mr. Biden said he had asked cabinet secretaries to give him a list of projects “that they were absolutely certain of they could get up and running in the second hundred days.”

The Department of Health and Human Services, the White House said, will either build or expand 1,129 health centers to provide service to approximately 300,000 additional patients across the country. The Justice Department will hire or keep approximately 5,000 law enforcement officers on the job. The Department of Veterans Affairs will begin improvements at 90 veterans medical centers across 38 states.

By spotlighting specific projects that he expects will get under way this summer, Mr. Obama may be trying to use his presidential platform to prod states into spending the federal dollars at a critical period, when the weather is more conducive to construction projects in the Northeast and teenagers are free to work, giving a temporary boost to the job market, said Mark Zandi, chief economist at Moody’s Economy.com. [Seriously good citizen, construction NEVER STOPS up here in the Greater Boston area, those poor workers are out there in all kinds of weather, usually at night. Hell, they paved the entire Southeast Expressway in the dead of winter last year!]

“The economy is at a very key juncture,” Mr. Zandi said. “We are right at a turning point from recession to recovery. If they can juice things up just even a bit, that may make a big difference.” [He is an economist thus does he ‘have his own version of the truth’, it’s ‘axiomatic’.]

But complicating Mr. Obama’s efforts are the predictions of two of his own economic advisers: Jared Bernstein, the top economist for the vice president, and Christina D. Romer, the chairwoman of the White House Council of Economic Advisers. In January, 10 days before Mr. Obama was inaugurated, they released a report forecasting that the unemployment rate would remain at 8 percent or below in 2009 if the plan were enacted. [Guess that didn’t work out too well…]

“When they passed this spending plan, Democrats said it would immediately create jobs,” said Representative John A. Boehner of Ohio, the House Republican leader, “yet nearly four months later, unemployment has continued to climb and none of their rosy predictions have come true.”

Mr. Bernstein, addressing reporters on Monday at a contentious White House briefing, conceded that his forecast had been “clearly too optimistic.” He said it had not taken into account figures from the fourth quarter of last year, because those numbers were not available at the time. But he said unemployment would be higher were it not for the economic recovery package. [This is doubtlessly true.]

“Job losses would have been deeper,” Mr. Bernstein said. “The unemployment rate would have been — by our estimate, by the end of next year would have been between one and a half and two points higher than it otherwise will be.”

What it looks like is what it is. More ‘weasel words’ and waffling. What the hell happened to the (originally 2 million) and then 3 million jobs the stimulus program was supposed to create? We’re talking nearly 800 billion with a B bucks here!

I’m guessing he wouldn’t have gotten that much if he had said up front the was going to dump most of it into the worthless banks…

In light of the seven million jobs lost to date. 600,000 is just a piss hole in the snow, especially for nearly 800 billion invested.

Worse, most of the jobs provided in the example are ‘saved’, not ‘new’…while the economy gushes billions from our overall payroll.

Understand, the ‘Economic Recovery Act’ is in full swing up here in Boston, there isn’t a single major roadway within thirty miles of town that isn’t being resurfaced, worse, they’re all being done at the same time so traffic is FUBAR.

Oh, PS by the way, all of these projects are being worked on by ‘the usual suspects’ as most of us don’t have the capital (or political pull) to buy a hundred 18 wheel dump trucks, a pavement shredder and a half a dozen steam rollers.

For more ‘business as usual’ There are more state troopers than construction workers at any one of these work sites.

Due to the ‘capital intensive nature’ of these road projects, there wasn’t much of a chance that any ‘new’ jobs would be created. Sure, some of the guys got their kids summer jobs but that would have happened anyway…what will be interesting to see is what happens next year, when neither the states nor the Fed has the funds to ‘do it again’.

The failure to restore job growth will inevitably result in greater tax shortfalls…which could potentially cause the start of a cascading systemic failure.

The States will cut benefits, which cause the needy to resort to using much more expensive ‘emergency services’, defeating the purpose of cutting benefits in the first place.

As I have said before, there is no way out of this crisis, the problem is insoluble using the system as it is currently configured.

The only question remaining is which will be worse, the eventual collapse of society or the poisonous cure the elite will force upon the survivors.

Thanks for letting me inside your head,


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