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That latest job numbers are bad news for the country, and, as a result, bad news for the incumbent political party, which will inevitably feel the brunt of voter anger over the economy. The country lost 131,000 jobs in July, and there is no indication the jobs market will improve in the three months leading up to the November election. Congressional Democrats have done nothing recently that should noticeably increase employment and nothing new is expected to become law in the next month. This is a recipe for a bad midterm election for Democrats.
The correlation between economic performance leading up to an election and the success of the incumbent party is very close. Bad economic conditions heading into an election have historically meant electoral losses for the party in power, and this year looks no different
The November election is fast approaching. People’s opinions about how the economy is doing will soon jell, if they haven’t already. Even if things begin to improve in late September, that could easily be too late to actually change minds and votes. There is now almost no time left for Democrats to do anything to significantly help employment before the election. That is why this jobs report is so important
Unlike tracking polls or horserace polls, this jobs report is probably the most important piece of political news in a long time. Democrats have failed to take the action needed to reduce unemployment before the election and will pay at the polls for this failure. Pathetic and fabulous excuses about weird Senate rules and a mean Republican minority are not going to change voters’ minds or save Democrats this November.
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If you wanted to do a better job to discredit liberalism, you couldn’t do a better job than the current Dem Party. Did Tom Tomorrow or someone have a cartoon about Obama being a Republican mole?
In addition to the crappy jobs numbers, there’s also this.
Liberalism? What liberalism? How does a center-right Democratic Party discredit liberalism?
That;s the point. Low info voters think Dems are leftists. After R’s make big gains in November, Obama will “have no choice but to move right” just like the DC establishment always wanted to begin with.
Were in the Japan trap. The wealthy 2% get all the work done in China or some other third world place with low wages and no Unions and a Gov’t they can buy bribe. The U.S. is not even in the equation for Wall st. anymore. It’s work force under educated and over paid is being ditched. The result will be a Japanese style lost decade or two. The top levels of the Corporatist elite rolls between Gov’t jobs and Corp. jobs through an expanding revolving door and the working class and the small business sector are being left to rot.
So much for the $862 billion Obama stimulus legislation.
$2800 from every American and there’s still no jobs.
LOL! The center right might look like rightist to u and I, but to the tea party folks they like SOCIALISTS. It’s a joke right? Not really and the MSM plays right along boosting that narrative at every opportunity. Obama will go hard right in the late fall. The joke is on all of us who bought the DINOCRAT Hope and CHANGE BS line in 2008. We elected a moderate GOPER for President is what we did. Just like Clinton, but no jobs are coming to save this guy. No matter how much he sucks the GOP’s dick!
For those that want to look for themselves, on page three we see:
which means that another 96,000 jobs, on top of the 131,000 are now counted lost in the last two months. The 9.5 unemployment rate probably got a minor boost from people falling off the end of the extended benefits. Also
so 59,000 state and local jobs went away last month.
Fortunately they’re flush with cash on Wall Street, hiring and marrying without concern for cost.
Obama moving to the right will only speed up either the complete corportization of the country or speed up it’s eventual collapse.
The ongoing narrative, MSM and most of the right leaning econ sites, is that socialism is the same as corporatism. So long as the story is that bailing out corporations is the same as socialism the lefty spiral will continue downward. Couching corporatism in socialist rhetoric has been one of the great slight of hand tricks of all time.
It’s not a hard sell to the most ignorant and naive electorate of any “advanced” industrialized country. Of course they are also the most uneducated and most subject to manipulation. A nation of marionettes that are unable to cut the strings.
Aren’t we looking at the possibility of deflation if the present situation continues?
Slow day.
The US economy is fundamentally broken. It has been coming unglued for at least the past 30 years. The problem at hand is rebuilding it, not simply jump starting it. That approach was tried with the dotcom and housing bubbles and it didn’t work.
Deflation will occur when retailers are obliged to capitulate to bring sales numbers but not profits back. That game, because of recent infusions of corporate debt, won’t happen until consumers are completely tapped out and some of the corporations start defaulting on their bonds. Right now everyone is still kicking the can down the road hoping for things to go back to the way they were in 2005 and that includes producers of retail products – especially food.
Who don’t know that there are strings to be cut.
Obama is a neoliberal, where “neoliberal” is defined as “a neocon who wishes to take advantage of the resources of the Democratic Party.”
Thanks for the answer. Was reading the other day that retail sales are way down. Don’t see any way for this to recover until people have jobs again. It’s sorta spooky to shop now because shopping centers are just not busy and even super markets are quiet.
David Dayen has a fresh cross-post ready: Walker’s Decision in Prop 8 Case Written With Kennedy in Mind
Elect Us: We Haven’t Solved Your Problems Yet!” is simply not a compelling electoral argument for the party that controls all the levers of power today. They don’t deserve to win. And they’ve constructed a narrative that allows them to blame the people who’ve asked them, politely and not so, to fucking do something about it: the Democratic base, whose lack of enthusiasm and effort will surely be the reason for their loss.
Maybe instead of tax cuts, there should have been, you know, a REAL stimulus. BTW alan 1tx, how much of that failure do you place on Republican lockstep filibustering of everything? You can’t criticize the one without acknowledging the sins of the other. Well, maybe YOU can…
You’ve got it exactly right.
Very good.
Excellent definition
Until we start pursuing an economic trade policy that is intelligent and actually protects _US_ (not corporate) interests, things will never get better. As much as the doom and gloom sayers say that protectionism is not the way to go, I don’t see any other way to stem the bleeding of jobs from the US to other countries.
You can’t have a flat world unless you accept the reality that US wages will fall to that of a rural Indian in several years. What is the incentive for jobs to remain in the US? There isn’t one.
The US has to look out for its own national interest. Unfortunately, we have corporatists running the ship and politicians who are too scared to stand up to them. They fear that the working class wouldn’t support them if they did. They’re fools. Why do you think so many are angry with Obama? If only he had done what he was meant to do.
It is a sad day.
Not only are there no jobs, there’s a tsunami of home foreclosures, new home construction is moribund, and home values are still declining.
Obama and Summers apparently couldn’t be happier about these horrific facts because they not only don’t have a plan to do anything to fix these problems, they aren’t even thinking about developing a plan.
And so goes Obama’s inexorable march to become the most hated and despised man in the United States.
He needs to resign NOW for the good of the country. He is an absolutely awful president.
I’ve noticed that too about super markets being very not busy. There are still lots of inventory but eventually that too will change.
Obama has destroyed the economy.
And the icky girl who wanted a $1.2 trillion stimulus, Christine Roemer, couldn’t even get her idea in front of her boss, the President, despite being Chair of the Council of Economic Advisors; so she’s leaving.
Obama has surprised me too (after I voted for him). Still, you’re not saying he’s worse than W are you?
You guys are forgetting, “It would have been a lot worse…” if he hadn’t enacted the half measures he was able to get away with. After all, we’re to blame the right solely for the problems we face today. Forget the fact that he always went to the table asking for half of what was necessary that then got widdled down to half of that, so we ended up with 25% of whatever was actually necessary.
He and the rest of the party has got to go. As scary as the Republicans and Tea Party are, I can not continue to support a party that has abandoned its core principles and is only concerned with corporate power and wealth.
Yes, I am.
The greatest stimulus that the US economy could get right now is the end of prohibition. That would immediately spur investment by those holding back as there would be instant need for equipment, testing laboratories and especially, personnel. The end of prohibition (EOP) will yield legal American jobs in compassionate care centers, labs, farms & manufacturing. The EOP will instantly free local, state and federal budgets of the economic burden of prohibition…Just say now.
You’re right. The old saying “it’s the economy, stupid” applies here to the dems and Obama. It is unlikely they can turn it around or convince people things are getting better no matter how many speeches Obama gives.
The post and your comment bring up the points I was going to make so I don’t think I will be writing my own diary on this.
-131,000 jobs lost in July (initial estimate)
-221,000 revised job losses in June, up from -125,000
-181,000 decline in the size of the workforce in July
+117,000 the number of jobs needed in July to keep the unemployment number where it currently is.
Wages and hours were little changed, but these are not broken down by income level so it is not clear if there are offsetting movements in them.
What to look for next month.
Will there be a big adjustment to the July figures as there was this month for June?
There should be at least another month of job losses due to the Census winding down.
Job losses at the state and local level. How much will the $26.1 billion aid package to states offset these?
Bloomberg today:
Of course past Biden statements like those last April
do tend to put trust at a premium. Better to say nothing than be proven wildly incorrect multiple times.
Kind of makes me wonder what Obama thinks the right direction is.
When the government knows the jobs numbers are really bad they like to fudge on the first go around and revise them later. This has been going on for years.
Sorry for any problems I might have created. Certainly your diary would have been more detailed though.
Obama’s speech today involved talking about a stimulus tax break leading to hiring some unemployed folks. The likelihood is that we are talking about low paying temporary jobs making signs. Hardly something to brag about unless the other examples were not as nifty. The BLS and a bunch of other agencies have been doing some wild after the fact adjustments on a regular basis now. Hardly a reason to assume that current numbers are going to be unchanged. The bad parts keep getting revised downward but surprisingly they never seem to make mistakes to the upside.
Hugh, you keep a close watch on this so my question is – how long can we go on like this without reaching a real breaking point?
Yes, I have been writing for a while now myself about how dicey the BLS numbers have become, especially the initial numbers on jobs. But also its data collection is not really set up to track a lot of what is going on in the kind of economy we have, with erosion in the size of the workforce and, as I said above, no breaking down gains and losses in a clear cut way based on income level (to get an idea of who is and is not doing well). There is some of this but not clearly laid out.
One other point is that to date and with the numbers we have, the economy has added 640,000 jobs since the beginning of the year. A minimum of 618,000 were needed to just take up those entering the workforce with no changes to the unemployment/employment rates. If we are talking about finding jobs for every new entrant over the first 7 months of the year, 683,000-686,000 jobs would have to have been created over this period. So depending on which way you wanted to look at it, we are currently either 32,000 jobs ahead for the year or 65,000-68,000 behind. Now what is important to keep in mind is that this period marks the high point of the Obama stimulus. And the best it did was to bring us back to in or around a zero point. At the same time, not all the uptick due to the Census has been worked through and we don’t know how many jobs states and local government are going to cut. Private sector hiring remains weak. So we should see worsening employment numbers for the rest of the year, barring a new and highly unlikely stimulus package. This is more or less what I predicted in a general way last year. This is an election year. Small sporadic efforts would be made to keep the economy from tanking before the election but what we are seeing is the beginning of a slide downward.
I agree. The Corporatist basically hi jacked Socialist framing and wrapped themselves inside it. I’ve tried to explain to Conserv. people I know the difference but they don’t get it. They only see the Gov’t part and the irony is many Liberals only see the Corp. part and can’t see the Gov’t side of this. The two sides have basically become the two sides of a piece of fly paper.
I think you are missing the biggest problem.
We have sold our industries to China.
It’s not going to be a “lost decade”, there will not be any economy to come back.
I only wish I knew a way out of this, but I don’t personally or societally. The people who are benefiting on the Gov’t side are in a sweet spot and the same for the Top Corp. managers and shareholders. These folks are living large. I know more then a few of them and have discussed this situation with them and they just smile at me and say “what’s the problem here?” To them everything is wonderful. I have pals worked for the Gov’t for 20 yrs. retired with pensions giving them 80% of their last paycheck and 100% platinum healthcare and their 55. I have Corp. friends that have retired at 55 as well with huge Golden parachutes , yachts, huge pensions, etc. But, most of the people I know are barely making their bills. No in between!
The probability range for a critical point began last fall. It was offset by the continuation of the Fed’s ZIRP and buying of bank crap assets. There has also been an offloading of crap on to Fannie and Freddie. Geithner took off the loss limits on these to keep them from blowing up but they are showing strains and will blow up at some point.
The European crisis could have blown things up but it has been papered over for the time being. Much the same could be said about China’s many bubbles. In our country, the calculus seems to be to get through the election. Then you have end of the year effects where profits are pumped up to justify end of the year bonuses. So it is not until the early months of 2011 before it looks like things go seriously off the rails.
This is not to say things might not blow up at any time. They could. But the period of maximum probability for the next crash is some time next year. That’s my opinion. I think the more consensus view of liberal economists is there won’t be another crash but rather a profound and prolonged muddle.
There is a dichotomy on our side. The folks that actually hire people are corporations and small businessmen that we would categorize as wealthy. They hire people when it helps their success – not when it is good for society.
And government hiring does not seem to add wealth to the society.
Yet our side seems to be opposed to corporations and business owners.
What can we do to make it worthwhile for them to hire more people?
Deflation is already old news among the serfs and small business. Of course none of this affects the monopolistic corporations Americans deal with on a daily basis.
Thanks. Muddle made me laugh but it certainly describes the situation. I asked in an earlier thread if we are possibly looking at deflation. What do you think?
You might be right on that. It’s likely though after a generation or two we will be the cheap labor pool that the now rich Chinese send the factories back to because things have now switched around. Remember, they need markets and if we have no $$ how can we buy their shit? In the short though your probably right and given they have a huge cheap labor pool it’s likely too stay that way for a very long time. Oh well, game over. Maybe the rich here will soon pass their time shooting us for sport like the new Predator movie.
Thanks for taking the time to comment. It’s something that keeps popping up in my head
Throwing this one out to the peanut gallery: Is there any real level of awareness in the House and Senate Dem leadership and/or, most specifically, the White House, that they have REALLY screwed the pooch this time and that they have only themselves to blame?
Moreover, (reaching for the stars here) in the unlikely event that they ARE prescient enough to know who is to blame, is anyone able to admit that, at the end of the day, even though Bush was essentially a shoe-size IQ’d simian, surrounded by pathological jackals, who had less of a numerical advantage in the Congress than Obama, that because Bush had far greater strength of will and bigger cojones, he got almost everything he wanted?
They are developing their middle class. At some point they will have huge domestic market and no longer need to export everything. Much like America back before we started offshoring .
I don’t think they really care. Questions of a party winning or losing elections only matters if one still perceives the American political landscape as a competing 2 party system. Once you except that US politics is a colluding one party system, then nothing really matters to anybody anymore. Including us.
Nathan Ashbacher had a diary some time back expressing essentially this same idea. The job of these representatives is to 1) further the mythos of American fairness and goodness and then 2) once elected to do every thing they can to achieve the ends of corporate culture. If they happen to get elected again and it suits their egos then fine, they’ll hang around and continue to build up corporate chits that they cash in upon leaving the Congress. If they lose an election (as an individual or as a party) that is also fine. If they have served the puppeteers well then they take the consulting job for about 5 times what they were making as a Congressman and enjoy life.
There may have been a time when the President was high enough and egotistical enough to care about his legacy, but with Obama I think that ship has sailed too. Nobody could actually be as stupid as Obama has behaved these last 19 months. Hence, the only assessment can be that he is a well positioned corporate stooge like the rest of them.
So no, I don’t think they know or care if they screwed the pooch because as far as their values go, they didn’t.
June’s jobs lost number was also revised upward from the initial estimate of 125,000 to an even more depressing 221,000.
There are only two more jobs reports (August and September) to be released before November’s mid-term elections.
If they look even remotely like the numbers for the last three months, Congressional Democrats might as well look for a gas-pipe to suck on.
Personally…I believe this cake is already baked, folks.
Deflation is already here. We have seen it for some time in some sectors like housing prices but the economy has been below the Fed’s inflation goal which I think was about 2% so another indication of deflationary pressure.
Wouldn’t it be nice (shout-out to Brian Wilson) if the Obama Administration were smart enough to ask themselves the same question you did in wrapping up your remarks?
I suspect Jobs will increase by a little over 100,000 for each of the next few months to the election – and the UE rate will drop to 9.4% -
but it is all too late – and indeed too little even if accomplished 3 months ago.
It is locked in stone in the public’s mind that the Obama fix for the economy – tax cuts being 1/3rd of the stimulus and much of the rest the aid that kept firemen and teachers from being fired – did not put enough folks to work directly or indirectly – and that he is just a conduit for welfare checks for corporations because where can the leftist base go (my answer is already recorded by my non-vote in the Ted Kennedy Senate special election – folks can and will stay home – and Rahm – you are an idiot).
The result is that folks are free since voting Dem does not get you anything much different than voting GOP, to focus on “throw the bums out” – a tea party view if you like.
I expect the house to be GOP – and I expect that the change will not change anything as to what Obama wants or is willing to work for, or that Obama gets. The Senate will be a 50′s Senate (LBJ leader for 55-61) – nominally Dem but really controlled by the combination of GOP and blue dogs – despite a Dem 52 vote control.
That should read 43,000-46,000 behind.
That’s a good question. July 9th’s PBS Newshour framed the state problem as:
140 Billion shortfall
900,000 Potential Job Loss
Of course, that is only at the state level. Add in local government budget problems and things can only look worse.
I wonder what happens to the longterm jobless that fall out of the offical government unemployment statistics? Where do they live? How do they keep a roof over thier heads without a source of income? Do they even have foodstamps?
It all reminds me of Ghostship. The Devil tempts the passengers and crew with a pile of gold. The passengers betray and kill one another until all that’s left aboard the ship is the devil and the unclaimed pile of gold. That’s our economy. Our politicians are the crew, the public are the passengers and Wallstreet is the Devil sitting atop a pile of gold.
New song of the decade: “Brother, can you spare a dime, and maybe a 401k?”
Perhaps we should just encourage people to leave the work force to help the unemployment rate go down and take this charade to its absurd extreme.