Around midnight on April 15, 1912, there were a few minutes when Capt. Edward Smith of the Titanic realized his ship was going down -- six watertight compartments breached, less than two hours to float -- yet his passengers slept in happy ignorance. A historical fate hardened while most of the participants dreamed on.
The jobs report last week opened a long gash beneath the waterline of President Obama's legislative agenda. Few realize it, but a scramble for lifeboats is about to begin.
On closer inspection, the economic news, which seemed bad, is even worse. Not only did unemployment rise to 9.5 percent but wages fell, undermining the consumption needed to revive a consumption-driven economy. Unemployment increased among "breadwinners" -- married men and women who head households -- also making major family purchases more difficult. Recent increases in unemployment benefits and food stamps have helped many Americans pay for food and rent. Jobs, however, are what lead to the purchase of furniture, cars and homes. Paired with a decline in business investment, these trends make a second-half recovery less likely.
The stimulus package hasn't been very stimulating -- as many economists predicted. Pouring money into the economy through a thirsty sponge of federal programs -- the preferred method of Congress -- is slow and inefficient. In retrospect, all of the stimulus funds should have been given to individuals directly from the tap.
Link.
The idea of a "jobless recovery," which I've seen floated around, is a farce. Even if we didn't have a consumer-driven economy, the theory that you can have a solid economy in which a large percentage of the workforce is sitting idle is ludicrous on its face. Unless your vision of an ideal society is one in which the people are dependents of the state.
We wouldn't know anyone like that, would we?
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