Friday, August 7, 2009

A View from the Left and the Right on Today's Unemployment Numbers

Where is the rejoicing that less jobs were lost than originally anticipated? Robert Reich former Clinton Secretary of Labor has a rather grim assessment of the meaning of today's unemployment figures:
The economy is getting worse more slowly. That's just about the only clear reading that's coming from the economic reports, including this morning's important one on employment.
Rubin goes on to explain that almost all segments of the economy were contracting but was now doing so at a slower pace thanks to the stimulus. Rubin does not makes any attempt to show how this has been accomplished through the stimulus though. He does make the point that the job losses are greater than the contraction, a fact that has defied traditional rules and resulted in the greatest job loss since the Depression. He ends on this cheerful note:
So let's be grateful that the economy is getting worse more slowly than it was. But don't be lured into thinking we're ever going back to where we were. Most of the jobs that have been lost are never coming back. New ones will replace some of them, eventually, but hardly all of them. The structure of the American economy is changing. We will emerge from all this with an economy that looks strikingly different from the one we had in 2007. More on this to come.

job losses continue to outpace that contraction. In other words, employers are using this downdraft to lay off more workers, proportionately, than they have since the Great Depression.

Jennifer Rubin in Commentary Magazine gives a view from the right. Ummm, not much better but Rubin agrees it is a sign the overall contraction is slowing but...

Meanwhile, the president’s agenda remains disconnected from the central issue of our time: the ailing economy. He’s immersed in a battle over health care where the question is just how many people and businesses will be taxed and what sort of mandates will be placed on employers. This is jaw-dropping, really. What burdens can we place on employers and investors before we reach an economic recovery? That’s what’s embroiling the administration. The gap between their goals—achieving a liberal dream of nationalized health care—and the greatest domestic problem of our time is startling.

Reich gives a dismal assessment of our current economic situation and hints worse may be coming. I have read several economists' forecasts that are as gloomy as Reich's outlook on the future. Still Rubin makes the overall point, rather than concentrate on preventing whatever the "new normal" may be Obama is focused on a universal health care coverage out of vanity rather than anything close to the "bending down" of costs he professes is necessary to reform health care. Overall, I agree with him that costs must be contained to stave off economic disaster whether that be in the near or long run. Deficit neutral is hardly enough, salaries are being driven down because health care coverage is eating up the growth and has been for some time.

I still believe in American ingenuity and work ethic, we have the power to overcome any obstacle if we deal with it honestly and stop catering to the agendas of special interests. President Obama likes to shout the sky is falling, yet his actions don't match his rhetorical alarm bells. It is time for him to get serious about legitimate reform or get off the proverbial bed pan.


  1. Yes. I agree that there will be a new normal. I see this in the legal industry. Firms are really having to scramble for business. Most corporations are getting rid of their old counsel, probably because the amount of fees is astronomical.

    I'm kind if wondering will most companies create legal departments rather than outsource. It will be interesting to see what happens.

  2. I think especially in a time of economic turmoil you will see corporations cutting back on expenses to preserve the bottom line. You have a finger on the pulse of the legal world so I am sure you have a sense of how they are scaling back on legal fees. It may well be that in house legal counsel is a better strategy for corporations today and perhaps in the future.

    I just don't like the inevitability which seems present in a lot of the economic discussions that America will no longer have the growth and economic prosperity it once had.


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