In a recent edition of Newsweek, one article suggests, “Joblessness is Here to Stay,” and posits that, “flat is the new up” when it comes to employment figures. All in all, the article comes through as a manual on how to lower economic expectations.
Aside from the fact that the magazine itself may be the next venerable employer to shave jobs – as both circulation and advertising revenue continue to be in a free fall for Newsweek and its other weekly news magazine cousins – this points out a trend in economic reporting which also underlines why fewer and fewer people trust the old media for their information.
Over the last few months, bad economic news has become “unexpected,” as in “jobless claims unexpectedly increased to 500,000 for the week,” or, “wholesale prices unexpectedly jumped 4/10 of a percent, surprising analysts who expected a slight decline.” You get the picture.
It seemed like the shoe was on the other foot just a year or so ago, when the rosier economic numbers we experienced then always seemed to confound the so-called experts who expected declines. (If your local meteorologist’s weather forecasts were as poor as the performance some of these economists had put in recently, you’d be forced to keep an umbrella handy at all times just to be on the safe side.)
Newsweek could be correct in its assertion this time, though, and the high unemployment rate may be here for a number of years. The question not being asked, however, is how we got here in the first place and why was it a surprise?
Over the last few years, we have seen one bubble after another collapse in on itself, much as a house of cards falls down when one card is misplaced or disturbed. The burst of the housing bubble begat the fall of a number of banks and financial institutions, which, in turn, battered the market for consumer credit. Homeowners found themselves both under water on their mortgage based on the disappearance of the home’s equity value they had borrowed against and quite possibly out of a job as companies shed workers to maintain some semblance of a decent bottom line. Those newly jobless could no longer maintain their previous standard of living, even if they were drawing unemployment checks.
The idea of lowering expectations, though, provides cover for not properly addressing the conditions which led to the problem in the first place. President Obama’s recent “jobs summit” pointed this out quite well as the invitation list left out many in the private sector who have great ideas on how to create jobs but haven’t stood foursquare behind the idea of government intervention to jumpstart the economy.
We continually hear about how the unemployment numbers are the worst in a quarter-century, but we rarely hear about how these numbers eventually declined to the 5% rate (or less) we enjoyed as recently as May 2008.
Ronald Reagan chose to resurrect the horrible economy he inherited from Jimmy Carter through a broad-based tax cut. It’s also worth recalling that, like today, Reagan labored under a highly partisan Democratic House who refused to cut social program and entitlement spending.
But, since the only tax cuts President Obama seems to favor are those narrowly targeted for specific behaviors, it’s quite possible that Newsweek is simply making this prediction because they know the results of Obama’s policies will speak for themselves. And they’re right this time – if Obama continues on his course, don’t expect a real recovery anytime soon.
Michael Swartz is a Liberty Features Syndicated writer.
My latest LFS piece originally cleared December 17.
