The horizon is not so far as we can see, but as far as we can imagine

Category: Employment and Unemployment

Destroying the Democratic Majority

By now you’ve probably heard about the Stupack amendment, which would make it illegal for any insurance offered on the exchanges set up by the health care reform bill to cover abortion services.  It is being allowed to the floor by the leadership, and indications are that there may be enough votes for it to pass.  If it were to remain in the final bill, it would strip practical access to abortion from millions of women, a number which would increase when the exchanges open to businesses.

Recently we have also seen the proposal to tie prices for procedures to Medicare +5% fail.  The Congressional Budget Office (CBO) has reported that the public option will likely only get 6 million enrollees and will cost more than private offerings because it will get more sick people than private plans since it won’t anti-select, has no auto-enrollment, and won’t have any scale advantages for bargaining since it will have so few people and not be linked to Medicare.

Meanwhile the bill itself will force people to buy insurance, provides inadequate subsidies, and falls hardest on the middle class and young people—forcing them to spend a huge chunk of their discretionary income on average, and doubtless pushing many families into bankruptcy (plenty are on the verge, it is impossible to imagine that this won’t push them over the edge).

And yet it is still supported by the same people who supported it all along.  Apparently nothing can happen which would cause them not to support it.

This is the sort of “deal at any cost” thinking which bloggers used to decry.  I find it amazing.  Absolutely amazing.  For any provision which is called “public option”, no matter how weak, folks are apparently willing to swallow hard and get over any number of deficiencies.

At this point, I’m wondering if the Democrats will even maintain control of the House in 2010.  It’s looking like a close run thing.  The jobs recovery will probably start in Spring, but it’s going to be slow, and most people who lost jobs are not going to find new ones (the recovery will probably not even keep up with population gains).  The legislative record of Congress and Obama will stink.  And they’re willing to pass a bill which falls hardest on the young (who can’t afford the cost of buying insurance) and on child-bearing age women, two extremely strong Democratic voting cohorts.  This behavior seems designed to depress turnout in 2010 and 2012.

I can only conclude that both Democratic politicians and many progressive bloggers want to be back in the opposition, since they keep being willing to swallow bad policy.  Policy so bad, in fact, that it seems designed to hurt Democratic electoral prospects.  Forget doing the right thing morally, I don’t expect that of Democratic politicians.  But apparently they are also incapable of acting in a way designed to make sure they keep their majority.

Remarkable.

216,000 Jobs Lost in August, Unemployment up .3% to 9.7%

The manufacturing sector lost 63K, the financial sector 28K and Construction lost 65. Health care added 47.4 thousand jobs.

One of the more interesting findings is that up till April government jobs were increasing, since April they have declined.  The decline isn’t huge, but it exists at all levels of government.  For some reason the postal service in particular seems to be shedding jobs.

Though the job loss is less than we’ve seen in the past it’s surprisingly uniform: except for health care and social assistance everything else is either down, or just barely increasing.  Fundamentally, every industry without pricing power is taking it on the chin, but if you’re sick, you’re sick, so the medical industry retains the ability to hire.  I suspect that the manufacturing numbers would be much worse if defense related manufacturing was removed.

The broadest measure of unemployment, which includes all discouraged workers and folks who work part time but want full time work is up .5% to 16.8%.

Men have lost jobs a lot faster than women.  The female unemployment rate has increased by 2.5% in the last year compared to an increase for males of 4.3%.

America continues to be hollowed out.  The stimulus will start hitting harder over the next few months, and we should see somewhat better numbers but my long term forecast remains the same: before the next recession, the US will not see a recovery to the same percentage of people employed as before the recession.  My forecast for the year was a technical recovery of GDP before the end of the year (it looks like we might even have one for the second quarter, which is sooner than I expected) and no job gains before next year.  Might be wrong on the second as well, but any job gains will be nominal and below the 150,000 level just required to keep up with population increases.

The job market is certainly not going to feel good this year. I expect it to remain hard to find a new job right through the end of 2010.  Since the likelihood of a new civilian stimulus bill is low, and all stimulus will have to be run through the defense department and the Afghan war, I would suggest that those who can see what they can do about getting a security clearance.  The best paid jobs with the best benefits will be in the defense industry for the time being—unless you’re able to finagle a high end job in the finance industry, and be kept afloat with trillions of dollars of Federal Reserve money, of course.  In which case, buddy, could you spare some change?

[Employment situation release from BLS (pdf)]

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