The August Unemployment Rate falls to 8.1% as the Unemployed Quit Looking for Jobs that just aren’t There

Posted by PITHOCRATES - September 9th, 2012

Week in Review

The August job numbers are out.  And they’re horrible (see Why unemployment rate fell: Fewer people seek jobs by CHRISTOPHER S RUGABER and Christopher S. Rugaber, Associated Press, posted 9/7/2012 on Yahoo! News).

The unemployment rate fell to 8.1 percent from 8.3 percent in July. But that was only because more people gave up looking for jobs. People out of work are counted as unemployed only if they’re looking for a job…

The number of people working or looking for work shrank in August by 368,000, the government said…

Here’s a milestone that’s difficult for President Barack Obama to brag about: There are 133.3 million Americans working — 261,000 short of the number when he was inaugurated in January 2009.

Democrats can talk all they want about new jobs they added each month with their policies but there has been no recovery.  Despite their exuberant cheerleading and the Recovery Summer of 2010 there are still fewer people working today than there were when President Obama began implementing his policies.  And it’s worse if you look at the U-6 unemployment rate.  Which measures people who gave up looking for work as well as those working part time because they can’t find full time work.  The August U-6 unemployment rate is 14.7%.  So the real unemployment rate is 6.6 points higher than the official rate.  Or 81.5% higher.

The Obama administration has tried just about every Keynesian tool in the Keynesian toolbox.  From stimulus spending.  To quantitative easing (i.e., printing money).  And here we are almost 4 years later with a U-6 unemployment rate of 14.7%.  Why?  Because Keynesian economics is just a way to empower government.  It does not create real economic growth.  Like policies that favor the stages of production.  Policies that create a business-friendly environment.  From resource extraction to industrial processing to manufacturing to consumer sales.

The Keynesians only focus on the last stage.  And leave in place policies that hurt the upper stages.  Which explains why their policies don’t create real economic growth.  While those who do focus on these upper stages of production have strong economic growth.  Like JFK.  And Ronald Reagan.  A couple of tax-cutters that created a business-friendly environment.  That generated the kind of economic activity that no Keynesian has ever matched.


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