In July 23 Issue
We were reading World News and Reports a few days about our economy and what we can expect. It certainly looks bleak and the future could be very cloudy.
Job losses over the past 6 months have exceeded anything experienced since World War II and the number of long-term unemployed is at an all-time high.
Stop and realize that in the month of June there were 467,000 jobs lost - in one month. This put the number of unemployed at 7.2 million.
More companies are asking employees to take unpaid leave. and these people don't count on the unemployment rolls.
Full-time workers are being downgraded to part-time as businesses slash labor costs to remain above water. Factories operate at only 65 percent of capacity.
These figures are noted in Rusell as we are seeing much the same on the local level.
Many unemployed workers looking for jobs once the recovery begins will discover that jobs as good as the ones they lost are almost impossible to find because more layoffs in this recession have been permanent and not temporary.
Instead of shrinking operations some companies have closed whole business units or made sweeping structural changes in the way they conduct their business.
The report stated we could face a very low upswing in terms of the creation of new jobs, and we may be facing a much higher level of joblessness on an ongoing basis. Job losses may last well into 2010, and unemployment may peak at close to 11 percent.
In the aftermath of the 1990-1991 recession, Americans bought houses, cars and other expensive goods. This time, the combination of a weak job picture and a severe credit crunch means that people won't be able to get the financing for big expenditures, and those who can borrow will be reluctant to do so.
No wonder poll after poll shows a steady erosion of confidence in the stimulus measures. One survey showed 45% believe the limited results suggest they should simply be abandoned midway. The disappointment is understandable, but that would only make things worse.
So what kind of second-act stimulus program should we look for? This time, it should not be an excuse to pass a lot of programs that don't really have a multiplier effect on job creation and economic growth.
Given the trends, it is critical that the Obama administration not play politics but begin to prepare a second stimulus program to sidestep a major downturn. It will be possible this time to provide much more rapid government support to infrastructure spending that will maximize the creation of jobs.
We feel most all are really growing extremely tired of hearing - the Democrats voted for and the Republican votes against or the Republicans were for and the Democrats were against.
All of us are getting extremely tired of such non-sense. Politicians have totally lost their connection to reality.