Bob CollinsNational Public Radio’s Yuki Noguchi had an interesting answer when Morning Edition host Renee Montagne asked her this morning whether the $790 billion economic stimulus package was having any effect on the unemployment picture, which is a disaster.
“It’s hard to say whether we’re actually seeing that now,” she said.
A better answer would have been this one: “No.”
The stimulus package was supposed to create or save 3 million jobs. Its effect was supposed to be felt by now; at least a little bit.
But it has had no significant effect and we know that because of this continuing narrative when it comes to the economy. As NPR reported:
June’s payroll reductions were deeper than the 363,000 that economists expected.
The economists missed it again. More people — about 25% more people — lost their jobs last month than these “experts” had predicted.
There was no pointing out that things are less bad than they were. They aren’t. “News that’s less bad is a poor substitute for good news,” one analyst said on CNBC this morning.
“Employment and unemployment are lagging series,” Christina Romer, chair of the President’s Council of Economic Advisers said. “So we are in for some more job losses.”
Romer pointed out that job losses are fewer than in recent months, but that’s no sale for Edward Harrison, writing on the financial site Seeking Alpha:
We have now seen 22 consecutive weeks with jobless claims over 600,000. This is unprecedented. And while these figures are larger than in previous recessions because the workforce is larger, they are declining half as slow as they have done previously.
“What we are still seeing is too many jobs lost,” President Obama said a few minutes ago in an interview with the Associated Press. You think?
Economists may not have a clue, but Wall Street knows a pig when it sees one, responding with a near 200-point drop by midday.
Even by the rhetoric of Economic Armageddon we’ve heard over the last year, today’s is frightening:
William Gross, the founder of PIMCO, pointed out the obvious problem. People can’t generate a recovery by spending if they’re out of work:
A recovery by later this year? Forget it, Gross says. Think 2012.
“We’re in the middle of a crash,” Nassim Taleb, the author of The Black Swan said. “So if I’m going to forecast something, it is that it’s going to get worse, not better.”
One reason? On American Public Media’s Marketplace program, Arizona State University economist Lee McPheters said the stimulus cash was spread evenly around the country rather than where the big problems are.
And Marketplace’s Scott Jagow notes the fact average unemployment is lasting four months is especially troubling. It’s double what it was when the recession started.
And these figures don’t include the 3,300 to 4,700 jobs jobs expected to be lost under Gov. Pawlenty’s unallotment, or the 200 jobs that were lost yesterday when a trucking firm in Duluth went toes up. Future numbers will also include 700 people at a Hibbing taconite mine, who were told today their mine will remain closed for up to a year.
Writing in the New York Times, David Leonhardt says the stimulus has helped somewhat, but the recession is too big for it to have made a difference. He says the Obama administration got a little carried away with hope.
Unfortunately, the administration’s rose-colored forecast has muddied this picture. So if at some point this year or next the White House decides that the economy needs more stimulus, skeptics will surely brandish that old forecast.
Obviously, people can use some good news. What might that be? Perhaps that someone has a Plan B.
