Regardless of sanguine words of optimism bubbling forth periodically from the Obama administration, the global economy is probably in steeper decline than you might think. There's been a phase-shift lag abroad, but countries such as Germany, France, China, and India are now starting to feel the brunt of the recession. EU automobile production and sales are declining, and consumer confidence is waning across Europe and elsewhere.
In the US, we're told the unemployment figures aren't quite as bad as those of the Reagan-era recession of 1983; however, independent findings, as well as the government's own figures, indicate otherwise. In June, payroll jobs fell quite a bit more than expected. According to US Labor Department statistics, 467,000 people lost their jobs in June. That's 122,000 more jobs down the drain than in May.
Those in Washington charged with laying down smokescreens cheerfully note these losses are only about half the monthly average for the past six months. "The rate of decline moderated in construction and several service-providing industries," says Bureau of Labor Statistics commissioner Keith Hall.
Government PR flaks notwithstanding, the Labor Department numbers are depressing. But, the situation may very well be much worse than officials like Hall admit. According to impartial researchers at
Shadow Government Statistics, a firm that specializes in data-alignment, June's loss probably exceeded 700,000 jobs.
The eggheads at research firm
Gluskin Sheff corroborate the numbers from SGS. Its metrics point to a fall in the number of hours worked, with a likely loss of more than 800,000 jobs.
Similarly, Northeastern University’s
Center for Labor Market Studies shows that US unemployment is actually more than 18%. That's in lockstep with SGS, whose figures provide evidence that the rate is nearly 21%.
No Benefits, No ProspectsGovernment wags point out that fewer people are collecting unemployment insurance, but it's more likely the diminishing numbers accrue to workers who are no longer collecting because their benefits have expired. It's much more realistic to assume there are millions of jobless workers with no benefits – and no job prospects. The number of workers who have been out of work for 27 weeks or more increased by 268,000 in May to almost four million.
If these metrics are correct, we're in for it. Who will buy consumer goods? What are the implications for China Inc's economy? What's to become of the US auto industry? As tax revenues decline, how will states close their budget shortfalls?
More importantly, why is the government so afraid to face the music and reveal the true nature of the decline? It's far better to be told the truth, regardless of dire consequences, than to be led down the rosy economic garden path of official deception. It's time to get real, so citizens can make decisions based on brute-force honesty and truthfulness.
Has our consume-consume-consume economy run its course? Could it be nothing more than a pathetic carryover of post-WW-II boom-time enthusiasm? Maybe the rotten economy will raise people’s consciousness, unceremoniously ushering in an era of sustainable living, based on an as yet undefined non-consumer algorithm. Or, is this simple gloom-and-doom heresy on my part?
Your comments are welcome. Please write me at
amm at en-genius dot net, or post your thoughts and observations on our blog.
