Saturday, August 08, 2009

Economic Exuberance

There’s good news, and even better news on the economy; or, more properly perhaps, some not bad news and some even less bad news.

But first a piece of non-news to dispose of; that drop in the unemployment rate from 9.5% to 9.4%? Forget about it. That didn’t happen because a bunch of people got jobs, or because a bunch of jobs were created; neither one of those happened. It occurred because the “workforce contracted.” That means a lot of people had their unemployment benefits expire and, completely discouraged, quit looking for jobs. Those people are not counted an unemployed. So the 0.1% drop in unemployment is not good news.

The good news is that a mere quarter of a million jobs were lost last month. Yes, that is good news because that compares to more than a third of a million the preceding month, and more than half a million in May.

The really good news is that, if you eliminate the “cash for clunkers” program, consumer spending was down in the most recent period. Why is that good news? Because fewer jobs are being lost and that is happening without the false impetus of consumer spending. Our economy has been overdependent on consumer spending for too long and this is a sign of life for an economy that is not based on that.

So did Obama and/or his policies cause this newly exuberant economy? Damifino, but it doesn’t seem unreasonable, and if he wants to claim credit for it that’s okay with me.

For damn sure the Republicans didn’t cause it.

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