(ThyBlackMan.com) It is not, as if the Federal Reserve Chairman Jerome Powell, and economists, at the highest levels, have not voiced concerns over our Job rates. In the recent past, they have. Yet, President Biden, the Democratic Party, and the Congressional Black Caucus, Chaired by Congressman Steven Horsford, of Nevada, persist in promoting a deplorable policy, of undercounting our Job rates, with political impunity.
As President Joe Biden, Vice President Kamala Harris, and a host of Democrats endorse the policy of undercounting our Job rates; visible to all of us, professional, blue collar, and working-class Americans everywhere, are millions of economic immigrants, flooding across our North, and South borders, seeking jobs. What is remarkably clear, and hurtful to us, economically, as Biden and Democrats, “actively do this,” we also potentially face a third Recession, in 15 years, followed by layoffs, which will also, unfortunately, be undercounted, as the Federal Reserve hikes interest rates to fight inflation.
President Biden can’t LIE away the real economy, no matter how hard he tries, saying his 3.6% Job rate, is comprehensive, of our Job Situation. The 3.6% Job rate, U-3, he announced, as his official rate of unemployment for February, taken from the Table of Alternative Measures of Labor Underutilization was never meant to be comprehensive of our Unemployment Situation, as it is narrow in scope. Economists, in 1994, during the Clinton administration, when the Job rate categories were redone, identified the U-6 category rate, as the REAL, and most comprehensive Job rate. So, our REAL unemployment rate for February, is 6.8%, U-6, and not Mr. Biden’s reduced, 3.6% rate.
Janet Yellen, President Biden’s Secretary of the Treasury, on February 18, 2021, in an interview on CNBC, commenting on the nation’s January unemployment rate said, “We have an unemployment rate that if properly measured in some sense, is really close to 10%.” The U-3 category rate, Biden’s official jobless rate, for the month of January flashed 6.3%, while the most comprehensive, and real unemployment rate, U-6 was 11.1%.
Lael Brainard, the former Vice Chair of the Federal Reserve, and President Joe Biden’s pick to be the current Director of his National Economic Council, stated in an article on February 24, 2021 in the Wall Street Journal the following: “When we take into consideration the more than 4 million workers who have left the labor force since the pandemic started, as well as misclassification, the unemployment rate is close to 10 percent currently—much higher than (Biden’s) headline unemployment rate of 6.3 percent.”
Biden’s former Chair of the Council of Economic Advisers, Dr. Cecilia Rouse, on April 2, 2021, on the White House web site, stated, she felt the March unemployment rate was around 9 %, rather than the 6% official unemployment rate Biden was touting. The real unemployment rate, the U-6 category rate, clocked in, at 10.7%.
Jerome Powell, the Chairman of the Federal Reserve at the Federal Reserve Open Market Committee news conference on January 27, 2021, said, “The real unemployment rate is close to 10 percent (for December) if you include people that have left the labor force.” At that time, the U-3 official rate was 6.7%, and the U-6 rate was 11.7%.
We really need a long-term economic plan to grow Jobs, and our economy, based on the nation’s REAL Job rate, once the Federal Reserve completes hiking interest rates. We need a well-thought-out plan, based on statistical facts. Those, and other facts can be used as a basis, for President Biden, and his administration to wisely embrace U-6, as the official unemployment rate, and grow what is, “our REAL economy,” and new Jobs. He does not need added authority to do this, just as the Clinton administration didn’t need added authority, to start undercounting our Job rates.
Dr. Larry Summers, former Director of the National Economic Council in the Obama administration, and former Treasury Secretary, in the Clinton administration said this, in a Washington Post article, on December 21, 2022.
“Fiscal policy will need to respond if and when (a) recession comes. There will not be room for massive, across-the-board efforts. But now is the time to put in place carefully targeted measures to “refund child tax credits,” strengthen unemployment insurance and be ready to pull forward federal spending on maintenance and replacement cycles to periods when overall demand is soft.”
So, Dr. Summers is anticipating an economic slowdown, if not, a full-blown Recession, due to the Federal Reserve hiking interest rates. He is calling for a reinstatement of the Consumer Tax Credit given to Families with Children, to grow the economy, and new Jobs once rate hikes end, and inflation is conquered. However, what Biden, Summers, and Democrats, called a tax credit was a direct consumer tax cut. That said, Republicans, in the past, have objected to a consumer Tax Cut going to Families with Children. What was not made clear, in their disapproval, however; were they objecting to a tax cut to that group of consumers, or were they objecting to the principle of a consumer tax cut, as a means to grow Jobs and our economy? More, about that, in a moment.
While there was growth, and job creation, due to spending during the pandemic, the tax cut to Families with Children, stood out, as being very effective. It caused a gust of growth, and job creation. Using Democrats’ figures, roughly $15 billion monthly in TAX CUTS started going out with 170 days left in 2021, as the tax cut to Families with Children programs got underway in July and ended on December 31st. It resulted in $529 million a day being given to, and spent by consumers, every day, on average. What Congress did was, front loaded money to Families with Children, based on the number of children, Internal Revenue Service records showed they had, and sent them a check, increasing their income, which they, then spent, creating Jobs, or put another way – demand for goods, and services.
1.091 million JOBS were created, in July, 483,000, in August, (in spite of the onset of the Delta variant), and 379,000 JOBS, in September during the peak of the variant, as many experts attested to the peaking, at that time. But, as I stated above, Republicans, objected to a direct tax cut going to that group of consumers, “Families with Children,” even though the principle of giving consumers “a direct tax cut,” as you can see, resulted, in consumer spending, growing our economy, and creating millions of jobs, for professional, blue collar, and working-class Americans, everywhere.
Here is, what happened. We made use of the fact, in bringing back our economy, from the pandemic, consumers make up nearly 70% of the financial activity, of our economy. If you give the 70% a tax cut, as we did, and actually experienced, we observed the 70% created a “new” burst of consumer spending, which created demand for goods, and services, which created Jobs. American workers, professional, blue collar, and working-class Americans, along with economists, and yes, politicians too, need to refine, and tweak the principle of consumer spending, to grow jobs, and our economy, on a long-term basis. We shouldn’t ignore this principle, it is akin to throwing out the baby, with the bathwater.
If it were just the “Families with Children,” they objected to, there is another consumer group, for the GOP, and Democrats to consider, when it comes to extending a potential consumer tax cut, which will have the same effect, as the tax cut to Families with Children, of pulling us out, of this Economic Downturn, which will be created, as the result of higher interest rates.
The age group, beginning at 55 plus years, are currently responsible, for approximately 40% of consumer spending, in our economy. Baby Boomers are the largest homogeneous population, within that group of consumers, and would be the logical and, idea tax cut recipients. They too, will spend the money, and not hoard it, based on their statistical track record of spending, which we see, right before our eyes.
Staff Writer; James Davis
Mr. Davis is a leading expert, in Financial Analysis, and Social Dynamics. His column is about relating facts, and truth without color, but with style. Relating the facts, and the truth, hopefully, in an understanding manner, is his goal. He is a graduate of Florida A. and M. University (FAMU), and a human rights activist. He was awarded the Governor Burns Scholarship to attend FAMU, and while at FAMU was awarded the first Martin Luther King Scholarship. James Davis is the author of three books, among them is “The Fix This Time,” Boost Your Retirement Income! Simultaneously Create Jobs and Spur Economic Growth (https://www.amazon.com/dp/B00MI3PD2M). ENJOY this book.
Mr. Davis can be reached through his blog @ https://thefixthistime.com.