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8.3% Unemployment Deception

The Democrats and their media friends are pointing gleefully to the January unemployment numbers as indicators that Obama’s policies are working. The official rate fell to 8.3% with 243,000 jobs added.

Yeah, right… 8.3%. This is the Democrats defining “the new normal” for socialist Euro-type unemployment where we applaud bad news.

But look closely at the overall situation and you will see the real truth – that Obama/Democrat policies are in fact devastating the economy.

First, when did hiring start to pick up?

Answer: In 2011 after the huge nationwide Republican sweep into power on the state and federal level in November 2010. Businesses breathed a sigh of relief and loosened their belts just a little because they were no longer terrified that Obama could legislate against them with impunity.

What else happened?

In December 2010 the Congress passed and Obama signed into law a two-year extension of the lower Bush-era tax rates. And the Social Security tax holiday was put into effect. These tax abatement measures alone have been playing a major role in keeping the economy afloat.

And Obama signed them because he knew that they would help the economy. Because even a leftist like Obama has to admit the truth sometimes.

But the fact is that there still are many, many very serious problems in the economy like the fact that the real unemployment rate is anywhere from 10% to 18% depending on how you calculate it. This current “official” unemployment rate of 8.3% no longer has any validity to it. Everything is different than what it used to be.

Now look at what zerohedge.com reported (with bold face by zerohedge itself):

‘A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55%. Looks like the good folks at the BLS heard us: it appears that the people not in the labor force exploded by an unprecedented record 1.2 million.  No, that’s not a typo: 1.2 million people dropped out of the labor force in one month! So as the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million. Which means that the civilian labor force tumbled to a fresh 30 year low of 63.7% as the BLS is seriously planning on eliminating nearly half of the available labor pool from the unemployment calculation. ‘

So if all those people drop out, of course the unemployment rate is going to fall. Out of sight, out of mind for 1.2 million people. With millions more coming.

Other things are happening in politics right now that are encouraging some optimism and keeping the economy afloat.

Most polls show a majority of Americans dissatisfied with Obama and prepared to vote him out of office in the coming November elections. This is lifting up business confidence. The idea that a pro-business candidate like Mitt Romney may be in the White House next year at this time is buoying hopes.

But still the numbers are terrible. Because Obama still is a dark cloud on the economic horizon.

Look at the January numbers with cnbc.com reporting:

‘The so-called real unemployment rate, which measures discouraged workers as well and is referred to as the U-6, nudged lower to 15.1 percent.’

15.1 percent… And that is even after millions have dropped out of looking for work over the last few years.

And look at where in the economy the jobs were created, according to cnbc.com:

‘True to form, services were responsible for 162,000 of the January swell, with manufacturing payrolls growing 50,000.’

But “services” – waiters, bartenders, retail etc. – are not really great jobs, do not “create” wealth and they generally pay much less than manufacturing. Only manufacturing “creates” wealth. And manufacturing still is being harmed all over America by Democrat policies like restricting resource extraction (like the Democrat war on the Keystone pipeline and enviro crusades against natural gas extraction in New York and Pennsylvania); excess taxes, mandates and regulations on all business; labor union agitation; legal harassment by Democrat trial lawyers; and extremist environmental regs.

Meanwhile a horrible public education system controlled by Democrat teacher unions is leaving tens of millions of people without the ability to hold good jobs – even if they were available.

We need to create 100,000 manufacturing jobs every single month for years to get our economy back. But the Democrats are throttling our economy as they have for decades with increasingly socialistic/enviro policies designed to thwart genuine job creation particularly in the crucial manufacturing sector. 50,000 jobs is pent-up demand after years of stasis.

We also have a housing crisis, an energy crisis and a debt crisis. These unemployment numbers do zero for all that. And Obama policies are only making things worse overall.

And here is something else to think about: It would be interesting to see exactly where the jobs are being created because the Bureau of Labor Statistics report does not say specifically. Because we know that jobs generally are being created in conservative states like North Dakota, Texas, Georgia and Florida and they are generally being lost in heavily-Democrat states like New York, California and Obama’s home state of Illinois.

Please visit my website at www.nikitas3.com  for more conservative insights. Enjoy the lively new Arts section.

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COMMENTS

  • Death_of_the_Donkey

    No, 1.2 million people did not drop out of the labor force last month. Here is a simple explanation from Calculated Risk (http://www.calculatedriskblog.com/2012/02/employment-not-in-labor-force-actually.html).

    The answer is that the BLS applied its once a decade census revision to this months data. They also conveniently provided a table in the report that showed what the December-January change would have been without that revision (it was only 75k people).

    • demsaresatanic

      will just do their fair share and pay more taxes we can keep shrinking the workforce for years. I understand Romney’s automatic minimum wage increase now, we just pay a smaller workforce higher wages and they will be able to afford higher taxes. Why didn’t Reagan think of that?

  • Juggernaut

    Don’t expect the drop to last, the CBO projects 9.0% or more by years end.

    http://www.thedailyeconomist.com/2012/01/cbo-report-forecasts-unemployment-rate.html

    But here is the kicker: “Had that portion of the decline in the labor force participation rate since 2007 that is attributable to neither the aging of the baby boomers nor the downturn in the business cycle (on the basis of the experience in previous downturns) not occurred, the unemployment rate in the fourth quarter of 2011 would have been about 1? percentage points higher than the actual rate of 8.7 percent” translation: CBO just admitted that the BLS numbers are bogus and real unemployment is 10%. Thank you ? CBO

    http://www.huffingtonpost.com/2011/01/26/cbo-unemployment-rate-above-9-2016_n_814275.html

    The jobs crisis isn’t going anywhere, according to the latest forecast from the nonpartisan Congressional Budget Office, which puts the national unemployment rate above 9 percent through 2011 and 8 percent through 2012.

    Unemployment will fall to a more “natural rate” only in 2016, when CBO estimates it will reach 5.3 percent — a projection roughly in line with private-sector figures.

    • Death_of_the_Donkey

      The CBO estimate assumes pretty anemic growth too. Sure, unemployment is likely going back up if we get another year of 1% GDP, but GDP estimates are now moving up with the last jobs report and at 2.5%+ GDP growth we will likely see the unemployment continue to decline.

      Also, one cannot rely on “previous” downturns to estimate what the drop in LFPR would have been, since this wasn’t similar to previous downturns (this was a credit crisis, not a fed induced recession to stamp out inflation).

      The jobs data still isn’t great, but it is getting much better and the household survey has shown something like +2 million jobs in the last 6 months (the household typically does a better job capturing small business hiring/creation than the establishment survey).

      • Juggernaut

        for the most part. No guarantee lower numbers will help Obama. GDP can grow without increased jobs due to growth in exports as well as people no longer fearing the future. Industry is also engaging in regular hiring that has nothing to do with the stimulus plus industry has capital expenditures that won’t wait.

        • Death_of_the_Donkey

          The numbers are lower right now (8.3%) and with productivity growth slowing, more jobs will need to be created to meet new demand (unless productivity spikes up again). That is a big (and overlooked) key to all of this, productivity gains in the last number of years have really put a lid on the need for new job growth. If that slows, jobs will come.

          • Juggernaut

            are assured the recovery is firm. I’ve seen companies use overtime rather than hire because its a faster way to meet short term demand. I do expect idled demand to pick up the pace. If Obama wins all bets are off the table.

  • burke

    Republicans should stop arguing these unemployment numbers are somehow lies. Donkey, strieff, and others have argued more eloquently than I can that we don’t have any reason to think these numbers are fake. It makes us look like conspiracy theorists, or irrational folks who ignore every fact that might be inconvenient for us.

    What’s even more problematic for me is when Republicans express hope that the unemployment numbers either are really worse or will get worse. I think that’s a lot of what’s behind questioning the numbers. But Republicans don’t have to hang their hat on hoping the economy doesn’t improve or gets worse.

    First, conservative ideas are really good, and when we persuade the American people of that, we win. I don’t think it’s that hard. Americans tend to respond well to unapologetic conservatism.

    Second, I hope these numbers are a sign that the economy is improving because I would like to see more Americans at work sooner. I’m a moral human being before I’m a political animal. I don’t believe in hoping that more people stay out of work and unable to support their families just to make Obama’s reelection slightly less likely. We should make a persuasive case for our candidate, not hope for the misfortune of politically blameless Americans struggling through this economy. Obama’s failures are not their fault.

    Third, and more cynically, too much hoping for a bad economy makes us look bad to independents, and plays right into the media’s “Party of No” narrative. This also goes for rejecting the numbers. There’s no way that either of these lines of attack will have crossover appeal.

  • Juggernaut

    Thought I’d post this here since the numbers are in question. We need more productivity and for employers to feel Obama will lose so they’ll ramp up hiring. Bad news is BO has started bashing big oil and banks again while glad handing tech companies sending confusing messages to corporate leaders and board planners who don’t know what the tax base shall be till after super Tuesday.

    http://www.newsmax.com/Headline/white-house-manipulates-unemployment/2012/02/06/id/428619?s=al&promo_code=E1D2-1