Some “Economists” see the recession ending in 2009

Yesterday Good Morning America declared the recession was over. Good news for all of you jobless people whose houses are being sold for less than their value because you are defaulting on your credit cards, student loans and having to move in order to find a low paying job just to get by.

How do we know the recession is probably over? Bloomberg has a story in which Barry Knapp from Barclays Capital looks at some indicators and declares April may have been the end. Well at least that is one less thing to worry about.

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This morning the unemployment numbers came out showing a loss of 539,000 jobs in April. Here is the good news; it was less than last month and less than predicted. Don’t feel better? That is because you have a brain.

There are a number of indicators people use in this world that provide very interesting information about a lot of things, especially our economy. There are also sets of absolutely meaningless and asinine conclusions people formulate around these indicators.

Right now the story is that jobs lost this month are less than last month and somehow that shows the economy is getting better. Even better though a bunch of economists, almost all of whom couldn’t predict our economy would get this bad just a few months ago and a year and a half ago were already declaring we had reached a “bottom”, also couldn’t predict the exact number of jobs that would be lost. They thought it would be 620,000 but it was 539,000 instead. So now people are ready to break out the champagne! What?

Job losses are cumulative. So we now have 8.9% unemployment in this country, which is not even accurate because there are a number of other variables that make this number seem better than it really is. I won’t even get into that though. Let’s just stay with 8.9%.

So 8.9% of the country is out of work and 539,000 individual jobs were lost just this month. That means for this to be good news, next month the economy will need to generate 539,001 jobs to negate these losses while losing zero jobs. To reverse the trend June we will need to create some 650,001 more jobs and lose zero jobs, then the same for July, August, etc. until we create enough jobs for the bulk of those who lost work to be back working.

What we do NOT need is for an analyst to tell us next month we will lose 550,000 jobs and then celebrate when only 500,000 are lost.

The problem is not the actual jobless claims but the loss of jobs themselves, jobs that seem unlikely to be recreated. Our country is shedding more than a half million jobs every month and not creating replacements. Those out of work are facing an economy where they may never work again and if they don’t work they won’t be able to pay taxes to fund our nations spending or buy goods to fund business.

Any month we show job losses in any way is a bad month because we have already shed millions. If a city is flooded and it doesn’t rain one day you wouldn’t call an end to the problem and go for a swim. That is exactly what we keep doing with these indicators and economist predictions. We are ignoring common sense in favor of fuzzy math and business school logic.

We have a national crisis. Our government is spending to create jobs but cannot possibly create enough to keep up with those we have lost. Americans cannot spend enough to sustain business to keep more jobs from being lost and will soon default on their mortgages, credit cards, student loans and other forms of debt. Debt the government is starting to assume in large quantities with no reserves to actually pay for it.

Yet every time an asinine conclusion is formulated around an indicator, our media and government seem more than willing to declare that all is right in the world.

Daniel Hannan, MEP for South East England launching into Prime Minister Gordon Brown & saying almost everything one could say to Obama only with sentiment times a thousand. If only we could find people willing to stand up to the President face to face like this. Cheers!

It seems inevitable that we will watch Senate Republicans cave on the stimulus plan next week; after yesterday’s no vote by eleven Democrats and every Republican I do hold out some hope but I also have skepticism. Realistically the Senate bill should be more “bipartisan” than the House bill. Obama’s “I won” diplomacy lost yesterday and the split in the Senate is closer to fifty-fifty than it is in the House. No doubt a few trinkets will be tossed to entice Republicans and we will watch some of them give in and give up on the free market and fiscal discipline.

This “stimulus” bill is a little bit of good with a whole lot of bad. We will be handing over the wealth of taxpayers to those who don’t pay taxes. The House bill had pork for DTV, STD’s, smoking cessation & weight loss, new vehicles for the federal government, the arts and more. This funding is not “stimulus” but fatty pork, the same that Obama declared would come to an end under his leadership. Pork should be voted on separately and not cloaked in the veil of stimulus.

Bipartisanship, true bipartisanship is a two-way street. It is not a matter of tossing trinkets to your opposition to walk away with a bulging treasury chest. Obama and the Democrats believe that the opposition’s vision of the world has little or no merit. That ideology is more important than getting things done or maintaining order. They are willing to toss funding for some Republican plans for two reasons:

1) Because they don’t want sole responsibility when things collapse.
2) Spending other peoples money is so natural to Democrats that as long as it is not for something that is both productive and ideologically inconsistent they will fund it. There would be money for circus clowns and cotton candy if Republicans asked for it.

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