Steady as she goes: 9.1%
Posted by Dana Pico on 2011/10/07
From The New York Times:
Emile Wamsteker/Bloomberg News
Job seekers outside the Metropolitan Pavilion before the start of a job fair in New York this week.
By MOTOKO RICH
Published: October 7, 2011
As an increasing number of economists have warned in recent weeks of a double dip back into recession, employers added 103,000 jobs in September, staving off the bleakest forecasts for now.
The unemployment rate for September was the same as August, 9.1 percent.
With President Obama continuing to press a balky Congress to pass his jobs bill, the Labor Department’s monthly snapshot highlighted the challenges for an administration faced with an economy that has struggled to deliver significant employment growth since the recovery started more than two years ago.
September’s number came after a month in which employers added a revised 57,000 and on the heels of other disappointing data about consumer confidence and the housing market. And economists have grown increasingly concerned about a ballooning European debt crisis that could send ripples across the Atlantic.
In a news conference on Thursday, the president urged Congress to act to prevent weaker growth and more job losses. “There are too many people hurting in this country for us to do nothing,” Mr. Obama said. “And the economy is just too fragile for us to let politics get in the way of action.”
Despite all the talk of another recession, some recent economic indicators actually paint a slightly better picture of the economy. Auto sales rose close to 10 percent in September to their highest level in five months, and sales at chain stores also rose last month. But the focus of political attention remains job growth.
Economists suggested that employers still have little incentive to add many jobs. “Given the complete lack of clarity as to what the economic outlook will be and the uncertainty about what’s going on in Europe and the political paralysis in Washington,” said Bernard Baumohl, chief economist at the Economic Outlook Group, “there is not much of an economic justification for employers to suddenly ramp up hiring.”
President Obama said, “There are too many people hurting in this country for us to do nothing,” but the last paragraph I quoted notes that there’s just not a lot of reason for employers to add jobs right now: they cannot foresee a need for greater production and adding capacity. Businessmen just don’t trust our federal government, under President Obama, to be business-friendly, to not impose more and more profit-cutting regulations, and, despite the President’s cancellation of some proposed environmental regulations recently, there’s really no reason that they should. For businessmen, the best possible economic news they could get would be to arise on November 7, 2012, to the news that President Obama had been defeated in the election, and that the Republicans widened their majority in the House and took control of the Senate.
President Obama thinks that he has to do something, that we just can’t decide to “do nothing,” but the fact is that we have already done everything we could. The Fed is basically out of monetary policy weapons, and we’ve already tried a huge stimulus plan, which did not work, and actually produced worse results than the President told us we’d see if we didn’t pass it. Doing nothing would, at the very least, provide some sense of economic stability, some sense for businessmen that they could (reasonably) count on the conditions on which they have to base their business decisions today would still hold true tomorrow.
I still remember a lesson from college, a point made by the late Dr Vincent Davis at the University of Kentucky: if you have the power to do something, and you choose not to do it, that is as much of a positive decision as choosing to take the proposed action. While it’s an uncomfortable thought for political leaders, sometimes just doing nothing is the wiser choice, sometimes letting things work themselves out, without government meddling, is the better course of action.
Our economy has to adjust to current conditions; that’s just what economies do, over time. Politically, during bad times, it’s hard to be patient, hard to wait for the economy to right itself, but eventually, it will.
Cross posted on Common Sense Political Thought.
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