Happy Days Aren’t Here Again

[marmar]

from truthdig:



Happy Days Aren’t Here Again

Posted on May 17, 2010
By Moshe Adler


The torrent of good news started before the first bailout dollars had even been paid. First, we were told that the bailout would prevent a significant increase in unemployment, and President George W. Bush even balked at extending unemployment benefits. Then we were told that without the bailout, the unemployment rate would reach 25 percent. Less talk about the unemployment rate followed when the story changed and we were told that the recession was actually over, since “the economy” was growing. Next we were told that we had turned the corner because the rate of unemployment was already decreasing. And finally, when the April unemployment figures were released on May 7 and showed that the rate of unemployment increased from 9.7 percent to 9.9 percent, the bad news appeared beneath headlines that announced the arrival of what was apparently the best news yet. “Economy Gains Impetus as U.S. Adds 290,000 Jobs,” read the headline in The New York Times. In the Los Angeles Times, the headline was “April Hiring Surge Largest in Four Years.”

How can higher unemployment be reported as good news? By pointing out that among the unemployed were 195,000 people who in March were classified as discouraged workers but in April joined the labor force. The growth of employment—290,000 jobs after all were added—caused the rate of unemployment to increase, because it drew the discouraged workers into the labor force. But this argument is misleading.

In fact, the number of the unemployed in April increased by 255,000 workers. This means that in addition to the discouraged workers, 60,000 workers who lost their jobs had also joined the ranks of the unemployed. While some discouraged workers did start seeking work, more of them stopped: In April the number of discouraged workers actually increased by 203,000 people. As a result, the rate of unemployed job seekers and discouraged workers together increased even more than the official rate of unemployment, from 10.3 percent to 10.6 percent. It is clear that in April things were really bad no matter how you count, provided that your count is complete.

But to fully appreciate just how misleading April’s “good news” has been, it is useful to examine the trajectory of the unemployment rate since April 2008, when the unemployment rate stood at 5 percent. The following May, the rate increased to 5.4 percent, which, according to today’s logic, should have been interpreted as fantastically good news, because the number of formerly discouraged workers among the unemployed increased by 357,000 workers in that month. Nevertheless, the rate of unemployment increased steadily, month after month, from April 2008 until October 2009, when it reached 10.1 percent, and it has been hovering close to 10 percent since. ..........(more)

The complete piece is at: http://www.truthdig.com/report/item/happy_days_arent_here_again_20100517/

[truedelphi]

1. Economic recovery is a buzzword for the Big Spin that

This new Great Depression must have. Can't have people understanding the enormous truth of the matter.

Check out Doug Henwood, and his interview with first Scott, and then Taibbi, during the month of April 2010.
http://leftbusinessobserver.com/Radio.html#100405

My further comment - People who were scared away from hiring and from spending on consumer goods earlier are feeling more confident... however since there will not be a long term stabilization of the nation in terms of real jobs, we will continue our economic slide, except that those in the Upper elite may miss being so much as dinged.

And this glob of oil killing at least one major sea and perhaps part of thw Atlantic will further cripple any ability we might have to recover.

[Tutankhamun]

2. Truthdig.com has a lot of insightful and important writing lately, I've noticed.

[Citizen Worker]

3. Unemployment numbers and calculations

Over 20 years ago a friend wrote his master's thesis on the methodology of calculating unemployment numbers. His conclusion, multiply the official government stat by 2.1. Of course, that was before Clinton rewickered the formula in the 90s so no doubt the multiplier is higher. Suffice it to say it is far worse than we're being told.