Breaking … WSJ Discovers Lack of Demand is behind Weak U.S. Economy

Via Andrew Leonard at Salon, the Wall Street Journal today reported the results of a survey they conducted with 53 economists:

In the survey, conducted July 8-13 and released Monday, 53 economists—not all of whom answer every question—were asked the main reason employers aren’t hiring more readily. Of the 51 who responded to the question, 31 cited lack of demand (65%) and 14 (27%) cited uncertainty about government policy. The others said hiring overseas was more appealing.

Only the conservative WSJ, the President, and Congresss could be surprised by these results. I’m not sure who these 53 economists were, but I think they must have been rather conservative, because the survey found that most did not think the government should do anything more to stimulate the economy.

Despite their forecasts for slow growth and an elevated unemployment rate, the economists aren’t in favor of further action either by the Fed or the federal government. Forty-one economists in the WSJ survey said the central bank shouldn’t pursue another round of bond-buying aimed at reducing interest rates, and thirty-eight said another round of fiscal stimulus shouldn’t be a part of any deficit-reduction package.

Economists added that they hope that as conditions begin to improve, albeit slowly, consumers will become more optimistic. “For whatever reasons, in addition to discrete headwinds, I think we’ve taken a hit to animal spirits and as those headwinds fade sentiment will revive,” said Stephen Stanley of Pierpont Securities. “Optimism can be self-sustaining, but pessimism can also provide a persistent drag.”

If any of the economists the WSJ talked to mentioned the possibility that the government itself could create jobs and thus stimulate demand–as FDR did the last time things were this bad, the WSJ did not report it.

Andrew Leonard crows:

what could be more obvious, even in the absence of rigorous training in economics? In the absence of demand, businesses will refrain from ramping up production and adding staff — no matter what employers think about the future regulatory climate. To prime this pump, to rev up this engine, to get the “delicate machine” working properly, the first focus for economic policymakers should be figuring out ways to boost demand.

Wouldn’t the best way to do that be to create jobs? Even Andrew Leonard doesn’t mention that. It seems ass-backwards to me to talk about getting consumers to spend more in order to get companies to start hiring. How can consumers spend more when many of them are unemployed? Maybe Dakinikat can explain this to me.

Anyway, it’s pretty amazing that the WSJ is admitting we have a demand problem. Now if only they could convince President Obama…


Economist Heidi Shierholz: “There’s never been a pool of missing workers this large”

Economics isn’t my area of expertise, but I can read, and the top story at Huffpo right now is pretty disturbing. Author Lila Shapiro spoke to some economists, including Heidi Shierholz, about the December jobs report, which came out today.

Although the unemployment rate fell to 9.4 percent from 9.8 percent in December, bringing the total number of officially unemployed Americans to 14.5 million, only 103,000 jobs were added in December according to the Labor Department’s BLS report — a number significantly lower than expected. (The Wall Street Journal reported that many Wall Street analysts were predicting “at or above 200,000” new jobs.)

The news gets worse: less than half of the drop in unemployment rate can be attributed to new job creation — the other half came from 260,000 Americans who have dropped out of the labor force altogether.

This brings the percentage of Americans who are either employed or actively looking for work down to 64.3 percent, what economist Heidi Shierholz calls “a stunning new low for the recession.”

[….]

“We have now added jobs every single month for a year,” Schierholz said. “So you would think that there would be labor force growth, these missing workers starting to come back in. Not only is that not happening, it’s actually starting to go in the other direction. There’s never been a pool of missing workers this large. It’s not clear to me when they’ll come back.”

That can’t be good, no matter what the White House and CNN try to get us to swallow.

At the Wall Street Journal the reaction to the jobs report doesn’t make things sound much better. One headline reads: Markets Whipsawed After Jobs Report. Here’s the gist:

Investors hoped that the jobs report would confirm expectations that a robust recovery was finally filtering through to long-stagnated labor markets. But after traders positioned aggressively this week on lofty expectations of a strong payrolls figure, the disappointing data had a relatively muted impact.

[….]

The Labor Department reported that the U.S. economy created 103,000 new positions last month, far below market consensus expectations for a 150,000 gain. In November, the economy added 39,000 jobs. The unemployment rate fell sharply to 9.4% from 9.7%.

Sustainable job creation has been elusive in an economy that is still recovering from the 2008 financial crisis. As a result of the troubled job market, analysts think the Federal Reserve is likely to continue full steam ahead with its controversial $600 billion plan to reinflate the economy.

Dakinikat can give us her expert take on this, but as a layperson, I think it’s obvious that the country is on the wrong track and some one needs to light a fire under the President and his incompetent economic advisers.

HEY VILLAGERS! WE NEED JOBS!!!


Send in the Greyhound fleet! NY Times Now UNDER THE BUS!!!

EXTRA!  WALL STREET JOURNAL SAYS:

Bush’s Third Term

July 2, 2008; Page A12

“We’re beginning to understand why Barack Obama keeps protesting so vigorously against the prospect of “George Bush’s third term.” Maybe he’s worried that someone will notice that he’s the candidate who’s running for it.

Most Presidential candidates adapt their message after they win their party nomination, but Mr. Obama isn’t merely “running to the center.” He’s fleeing from many of his primary positions so markedly and so rapidly that he’s embracing a sizable chunk of President Bush’s policy. Who would have thought that a Democrat would rehabilitate the much-maligned Bush agenda?

[Bush's Third Term]
Getty Images

Take the surveillance of foreign terrorists. Last October, while running with the Democratic pack, the Illinois Senator vowed to “support a filibuster of any bill that includes retroactive immunity for telecommunications companies” that assisted in such eavesdropping after 9/11. As recently as February, still running as the liberal favorite against Hillary Clinton, he was one of 29 Democrats who voted against allowing a bipartisan Senate Intelligence Committee reform of surveillance rules even to come to the floor.

Two weeks ago, however, the House passed a bill that is essentially the same as that Senate version, and Mr. Obama now says he supports it. Apparently legal immunity for the telcos is vital for U.S. national security, just as Mr. Bush has claimed. Apparently, too, the legislation isn’t an attempt by Dick Cheney to gut the Constitution. Perhaps it is dawning on Mr. Obama that, if he does become President, he’ll be responsible for preventing any new terrorist attack. So now he’s happy to throw the New York Times under the bus.

Next up for Mr. Obama’s political blessing will be Mr. Bush’s Iraq policy. Only weeks ago, the Democrat was calling for an immediate and rapid U.S. withdrawal. When General David Petraeus first testified about the surge in September 2007, Mr. Obama was dismissive and skeptical. But with the surge having worked wonders in Iraq, this week Mr. Obama went out of his way to defend General Petraeus against MoveOn.org’s attacks in 2007 that he was “General Betray Us.” Perhaps he had a late epiphany.

Look for Mr. Obama to use his forthcoming visit to Iraq as an excuse to drop those withdrawal plans faster than he can say Jeremiah Wright “was not the person that I met 20 years ago.” The Senator will learn – as John McCain has been saying – that withdrawal would squander the gains from the surge, set back Iraqi political progress, and weaken America’s strategic position against Iran. Our guess is that he’ll spin this switcheroo as some kind of conditional commitment, saying he’ll stay in Iraq as long as Iraqis are making progress on political reconciliation, and so on. As things improve in Iraq, this would be Mr. Bush’s policy too.

Mr. Obama has also made ostentatious leaps toward Mr. Bush on domestic issues. While he once bid for labor support by pledging a unilateral rewrite of Nafta, the Democrat now says he favors free trade as long as it works for “everybody.” His economic aide, Austan Goolsbee, has been liberated from the five-month purdah he endured for telling Canadians that Mr. Obama’s protectionism was merely campaign rhetoric. Now that Mr. Obama is in a general election, he can’t scare the business community too much.

Back in the day, the first-term Senator also voted against the Supreme Court nominations of John Roberts and Samuel Alito. But last week he agreed with their majority opinion in the Heller gun rights case, and with their dissent against the liberal majority’s ruling to ban the death penalty for rape. Mr. Obama seems to appreciate that getting pegged as a cultural lefty is deadly for national Democrats – at least until November.

This week the great Democratic hope even endorsed spending more money on faith-based charities. Apparently, this core plank of Mr. Bush’s “compassionate conservatism” is not the assault on church-state separation that the ACLU and liberals have long claimed. And yesterday, Mr. Obama’s campaign unveiled an ad asserting his support for welfare reform that “slashed the rolls by 80 percent.” Never mind that Mr. Obama has declared multiple times that he opposed the landmark 1996 welfare reform.

* * *

All of which prompts a couple of thoughts. The first is that Mr. Obama doesn’t seem to think American political sentiment has moved as far left as most of the media claim. Another is that the next President, whether Democrat or Republican, is going to embrace much of Mr. Bush’s foreign and antiterror policy whether he admits it or not. Think Eisenhower endorsing Truman’s Cold War architecture.

Most important is the matter of Mr. Obama’s political character – and how honest he is being about what he truly believes. His voting record in the Senate and in Illinois, as well as his primary positions, would make him the most liberal Presidential candidate since George McGovern in 1972. But he clearly doesn’t want voters to believe that in November. He’s still the Obama Americans don’t know.”

It’s getting surreal out there folks!!! Let’s just disinter Salvador Dali and let him explain it to us!!!

Source:  source:  http://online.wsj.com/article/SB121495450490321133.html