Friday, July 2, 2010

US Economy Loses Another 125,000 Jobs in June

As another 125,000 jobs were lost in the American economy in June, questions concerning whether or not the recession has ever ended continue to grow.

The attempt to spin the fall in the unemployment rate from 9.7 percent to 9.5 percent as a positive was neglected by most, as it only signaled people quit looking for jobs, not that jobs were being created.

All this is after over a $1 trillion was thrown out their to "stimulate" the economy. That has completely failed, and the assertion it would have been worse if it hadn't been done isn't provable, and probably false.

What has really happened is it allowed things to extend longer than they should have, and so what should have been allowed to fail wasn't allowed to fail, and now we're going to have to start dealing with the real economy, which is being revealed to be as weak as ever.

One example of that is the tax credit for new home buyers, which after it ran out showed there was little real demand, and consequently sales plunged by about a third once the program ended.

This is why the government and Federal Reserve need to quit interfering and allow the markets to adjust and take care of business, as they know how to adopt strategy and adapt to the economic realities they face, and government interference only skews the market and makes it harder to analyze and work within because of the huge influx of money which shouldn't have been there in the first place.

Once it runs out, like it has now, the market can than look at the real conditions out there and respond accordingly. This is why stimulus programs have historically extended difficult economic times, as they get in the way of those that know how to respond to and handle them: business.

So when it is said that the recovery isn't as strong as expected, that's really not true. What's true is the illusion and fantasy created by distributing printed money into the marketplace has crumbled, and the real condition of the economy is being revealed.

This is why the private sector is creating very little jobs and the government is, as it's simply spending money hiring workers they don't need in able to make the economy look stronger than it is.

The problem with that of course is there are few new jobs and real wealth being created in the private sector to pay for those government jobs, which pay far above market wages as it is, even though they aren't needed in the first place.

As Margaret Thatcher wisely said years ago, the problem with socialism is eventually you run out of someone else's money.

That's what's happening now, as the Obama administration attempted to play that game in hopes the private sector would pick up in job creation. Now that it hasn't, they've created all these government jobs no one can pay for, and now face the problem of further debt because of it.

No comments: