(ThyBlackMan.com) You might ask and it would not be out of line what the heck is going on?!
Well, for one thing this ailing economy as previously predicted is not being properly managed by the Obama administration (https://thyblackman.com/2014/01/14/tough-economic-times-aheadand-not-just-for-blacks/). Right now the economy looks like a patient who has gotten better since the 2008 downturn, but can’t yet get out of bed and walk on its own. The national unemployment rate reached as high as 25 per cent during the Great Depression, while the national unemployment rate during the 2008 downturn peaked in October of 2009 at 10.1 per cent. The national rate of unemployment was 6.3 per cent in May, unchanged from April, according to the Bureau of Labor Statistics (BLS). The economy needs to create at least 250,000 to 300,000 jobs each month. That average provides jobs for new workers entering the national labor force and at the same time keeps current workers employed. When you put the months of April and May job creation numbers together, the number of jobs created comes to 505,000.
Thus the economy achieved on the low side the average number of jobs needed for those two months. However, when you look under the hood at previous months, in March, only 192,000 jobs were created and in February 197,000. With the actual May number clocking in at 217,000 jobs created, it is an open guess as to what June’s number will be. If the June national job creation number is the same as the May number or below, the economy will be seen as stalling or stagnating, which of course is not good news for workers generally, but especially for blacks because blacks have highest rate of unemployment of any worker group. Additionally blacks have thus far endured six continuous years of their unemployment numbers being in double digits.
It has been an uphill slog to bring the national unemployment rate below 4 per cent or 5 per cent. Rates of 4 per cent and 5 per cent nationally have not been seen since the Clinton administration. The result of Clinton’s economic initiatives according to Wikipedia, the Free Online Encyclopedia, “Was a period of considerable economic growth and expansion during his tenure. In particular, real GDP per capita increased
from about $38,000 in 1994 to about $45,000 in 2001 (in real 2011 dollars). The U.S. national debt as a percent of GDP also declined from about 66 per cent to about 56 per cent during Clinton’s government.”
When you look back, there is ample evidence to indicate, the tax increases on the very wealthy, cuts in spending, and incentives the Clinton administration offered businesses were major contributors to moving the economy forward. The national unemployment rate during the Clinton administration in December, 1999 stood at a low 4.1 per cent according to the press release issued by the Clinton administration on January 7, 2000.
This rate compares well when put up beside the unemployment rate during the Bush administration in June, 1992 which was 7.8 per cent. Additionally, the unemployment rate for blacks dropped from 14.2 per cent in 1992 to 8.0 per cent in 1999, which was the lowest rate on record. The most recent official national rate of unemployment for blacks in May was 11.5 per cent, according to the BLS. However, there is no confidence among experts who follow these numbers closely that 11.5 per cent is even close to the real rate of unemployment for black workers. Ebony magazine in its May edition in an article on the “State of the Black Family” established the rate to be 20 per cent.
Some of you may ask why not apply Clinton era policies to this economy? If it worked during his time in office, could it work again? Well, this downturn is much different than the one the nation went through during Clinton’s administration. Nevertheless policies used during the Clinton administration have been tried. How do we know this? Mr. Obama and his administration used Clinton era measures in the American Recovery and Reinvestment Act (ARRA) which was signed into law on February 17, 2009. It was a stimulus program. The Act produced a stimulus package totaling $830 billion dollars. The Recovery Act and subsequent fiscal measures provided $689 billion dollars in the form of tax cuts—mostly directed at families.
The remainder went to investments in critical areas such as rebuilding bridges and roads, supporting teacher jobs, and providing temporary help for those who found themselves unemployed or in need of assistance because of the Great Recession. Here in part is what Mr. Obama said when he signed ARRA:
“Today I have signed into law H.R. 1, the “American Recovery and Reinvestment Act of 2009.” The Act provides a direct fiscal boost to help lift our Nation from the greatest economic crisis in our lifetimes and lay the foundation for further growth. This recovery plan will help to save or create as many as three to four million jobs by the end of 2010, the vast majority of them in the private sector. It will make the most significant investment in America’s roads, bridges, mass transit, and other infrastructure since the construction of the Interstate Highway System.
It will make investments to foster reform in education, double renewable energy while fostering efficiency in the use of our energy, and improve quality while bringing down costs in healthcare. Middle class families will get tax cuts and the most vulnerable will get the largest increase in assistance in decades…”
The reason the unemployment rate remains stubbornly high after six years maybe explained by looking at the primary driver of our economy. It’s you and I and other consumers like us. Ten million of us are still unemployed (that’s the official number – it could easily be closer to 12 million or more). The federal government through it various stimulus programs found ways to bail out corporations figuring if the balances sheets of these companies were stabilized, they would create jobs.
Well it has not happened. It just did not work. Many knowledgeable people, myself included point to what corporations have done during six years of the lowest interest rates in history to explain why we are not getting the job creation numbers we need. Corporations used the period to shore up their balance sheets and buy back stock (less stock in the market means higher priced stock) rather than invest in new equipment and hiring. Thus, many corporations are in good shape, while the American worker has been left out in the cold.
Where do we go from here? The stock market will continue to race higher with cheap money as its fuel. Low interest rated money drives speculative bets on securities. The unemployment rate will continue to stagnate until the federal government or the people of this great nation push the federal government to support a recovery program that creates jobs through consumer demand, http://www.Jobcreationnow.com. And so it goes…
Staff Writer; James Davis
More information about JD and his Deficit Neutral Stimulus Plan Can be founded at http://www.sslumpsum.com.
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