conceptwizard

Mid-Cycle Meltdown: Jobless Claims for October 08, 2009

Obama reacted predictably to the recent unemployment surprise. He first pointed out that “employment is the last thing to recover from a recession,” and concluded that “…we are going to need to grind out this recovery, step by step.” Brilliant.

Not one word on measures to help out the staggering number of unemployed workers, 1.4 million of which will have their benefits dropped by the end of the year. Behind them are millions more workers who’ve been unemployed for over six months — 5.4 million and counting.

All Obama is offering is “hope” that the economy will get better, an illusion shared by most of the mainstream media. Sometimes, however, the truth sneaks into Big Media. This from the New York Times:

“…the underlying weakness of the economy will probably reassert itself, say experts. After years of borrowing against homes and cashing in stock to spend in excess of their incomes, many Americans are tapped out. Austerity and saving have replaced spending and investment in many households, constraining the economy.” (October 2, 2009)

When an economy is dependent on 70 percent consumer spending and the nation’s consumers are effectively bankrupt, recovery comes from…the government. Indeed, the economic “green shoots” that the Democrats still obsess over were real, and based on government programs such as the highly touted Cash for Clunkers, and tax credits for first time homeowners, while the financial recovery was simply banks using bailout money to gamble on Wall Street.

It is estimated that these government subsidies resulted in 700,000 car sales and potentially 400,000 home sales, having a positive ripple effect on other parts of the economy that contribute to the making and distributing of cars and houses.

Cash for Clunkers has since ended and car sales are plummeting: Ford is down 5 percent, Toyota 13 percent, Honda down 20 percent, Chrysler down 42 percent, and GM down 45 percent (Bloomberg, October 2, 2009).

The homeowner subsidy ends soon, and with it the second economic pillar will have been removed, leaving Wall Street gambling to uphold the barely-functioning economy.