Real Unemployment Rate: 20 Percent American Households Have No Job
Real Unemployment Rate: 20 Percent American Households Have No Job
original article written by Net Advisor™
WASHINGTON, DC. I’ve been discussing the jobs and unemployment situation since February 2010 where reports tell a stunning picture about the jobs situation in America:
The number of people not working is significantly higher than previously thought.
“…in 2013, 9.6 percent of families included an unemployed person, down from 10.5% in 2012.” Then the BLS said, “Of the nation’s 80.4 million families, 80.0 percent had at least one employed member in 2013.”
— Source: U.S. Bureau of Labor Statistics (PDF)
When you reverse engineer the math on this last sentence, “80.0 percent had at least one employed member in 2013;” this means that 20 percent of all American households didn’t have a single person in the home with a job. Does any of this math sounds like an “economic recovery” to you?
U.S. Economy Facts
The facts are, many people are not working and apparently need money to even eat? Over the last 6 years, the U.S. is looking a lot like a third-world country. With 92 Million people NOT in the U.S. labor force, about 47 million on food stamps, and roughly 1 in people 6 in poverty, the true picture of the U.S. economy seems to be much greater of a concern that is being discussed or addressed.
- U.S. Poverty Rate Statistically Unchanged from 2011 to 2012 (p1).
- Actual Number of Americans in Poverty: 46.5 Million (p13).
- Poverty Rate for USA Children (under 18): 21.8% (or about 1 in 5) (p13)(Map).
- Poverty Rate for USA Adults (age 18-64): 13.7% (p13).
- Poverty Rate for USA Adults (age 65+): 9.1% (p13).
- Blacks (27.2%) and Hispanics (25.6%) have the highest poverty rates (p14).
- The U.S. Poverty Rate Was Higher Under Obama’s (“Recovery”) 2012, than under Bush’s 2007 (Recession) (p13).
— Source: U.S. Census Bureau (2012 Report) (PDF 88pps)
Free Market or Government Market?
Part of the reason why we have not seen a collapse of the U.S. economy (yet) is because the stock market is up. I have spent most of my career working in the world of Wall Street.
I would argue that the actions by the Obama Administration have encouraged the FED to artificially inflate (prop up) the stock market by buying U.S. Treasury bonds (U.S. Debt). This result can help keep interest rates down, and stocks up.
The FED is also propping up the housing market by buying mortgages (that the U.S. government holds from Fannie Mae, Freddie Mac). The purpose to all this is to keep Wall Street content while the rest of the economy slowly tanks, pushing the U.S. into a 2-class society.
As long as the stock market is going up or not crashing, most media outlets are not likely to give much attention to the true economic picture. As a result, we don’t have a true, free or open market. We have an artificial market, and one day this will reverse itself.
Throughout history, all artificial moves (including market bubbles) eventually implode and revert back to the historical mean or average. Typically the bubble bursts, the trend tends to fall well below the historic trend-line first, before moving back to the historical mean.
Many people will try and pick the bottom prices in markets, and pretty much 99.9% are wrong. It’s always entertaining after the stock market falls 2 to 5 percent, or even a fraction of a percent. At that point some in the business media will say, ‘is it time to buy stocks,’ or ‘is it time to add to your portfolio.’ History suggests that most people buy at market tops, and sell at market bottoms. This has been true with stocks, real estate, and even tulips (1636-1637).
When most people don’t expect it, a “Black Swan Event” can move markets quickly. This creates an initial shock, but most people don’t panic yet. The “bottom” in a market doesn’t happen until there is massive hysteria and panic selling. This can take a year or longer to pan out as it did in the “2008-2009” recession. In my view, the FED ignited that fire (beginning in spring 2004), and then added fuel to the fire (by increasing the FED Funds Rate 425% from 2004-2006). By 2006 there were early signs of the sub-prime mortgage market beginning to fail.
We also have what I call mini-bubbles where specific sectors are inflated and crash. We have seen this in recent years with gasoline (oil prices), and gold prices. Energy prices have managed to soar again, mostly due to the massive environmental regulations, refusal to allow safer drilling on public lands, including blocking the Keystone Pipeline. All together this has resulted in higher energy prices for consumers.
“During the first three years of the Obama Administration, 106 new major federal regulations added more than $46 billion per year in new costs for Americans. This is almost four times the number—and more than five times the cost—of the major regulations issued by George W. Bush during his first three years.”
— Source: Heritage.org, Mar. 13, 2012
President Obama just released new proposed regulations which would highly likely drive consumer energy prices even higher, and kill jobs in the process. The Minor’s Labor Union alone said the proposed regulations would shutdown coal plants and cost 160,000 union jobs. This move won’t help the already lackluster job market.
The Obama Administration has pushed for greener and alternative energies which sounds like a good idea, so far this has costs tax payers billions in losses and companies going bankrupt.
Economic Red Flag: Watch Interest Rate Hikes
One of the things I watch is interest rates. Rapidly increasing interest rates (by the FED) busted the dot com market by March 2000, and killed the real estate market beginning in 2006. The FED didn’t do all of this by themselves, but its intervention to inflate an artificial market eventually gave way.
In 2011, the FED has changed the way they do their accounting so in the event of a financial disaster, the FED’s balance sheet won’t appear to be taking any losses.
Economic Approach: ‘It’s the Economy Stupid‘
All these efforts to artificially inflate the economy for five years and continuing even after the “recession” officially “ended” has not produced the desired results as the U.S. Census economic data above has shown.
Since tightening regulations, spending trillions of dollars and artificially propping up the stock market hasn’t produced a recovering economy based on historic standards, maybe it’s time we try the near opposite. Since one extreme didn’t work, maybe making policies more friendly where business can thrive will create jobs Americans’ want and need. Using our own domestic energy is a good place start. Unfortunately the current Administration is bent on destroying this industry.
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