annual growth versus annual changes in the unemployment rate over the past 60 years

I posted on stimulus early this morning before work...

 

Here is scatterplot via economist Paul Krugman to remind us why more money to do things like extend unemployment, patch holes in state budgets to fill in for declining revenues, and other efforts to keep the economy on life support is vital:

Free Exchange blog over at The Economist magazine chimed in on Krugman's chart Third quarter growth not nearly enough:

And consider this: the last time the unemployment rate hit its current level was during the recession of 1981-1982 (during which the unemployment rate actually peaked at 10.8% during the final quarter of the recession). Here are the quarterly growth rates for the six quarters immediately following the end of that recession: 5.1%, 9.3%, 8.1%, 8.5%, 8.0%, 7.1%. And at the end of that period, the unemployment rate was still above 7%. For the last recession, which ended in the fourth quarter of 2001, quarterly growth in the next six quarters looked like this: 3.5%, 2.1%, 2.0%, 0.1%, 1.6%, 3.2%. 

Essentially, we are looking at a situation in which, absent some significant and surprise change in the economic outlook, American unemployment will remain near 10% through the end of 2010, at least. It is difficult to predict the political fall-out from that kind of sustained level of joblessness, but I can imagine some of the probable effects, including growing anger at Wall Street and foreign exporters, particularly China. The seeds will be sown for an unpleasant populist uprising, which might well do a lot of damage to American economic policy.

It's not a happy place to be. And I don't really understand why there isn't more visible concern in Washington (or on Wall Street, for that matter) about this state of affairs.

 

Until the economy is powered by the private sector again, you're stuck with two options--do nothing ad watch things remain stagnate if not dip down again, or have government keep the economy on life support. 

 

Americans need jobs and our economy needs to get back to strong growth.  The impacts of unemployment are devastating---in the real world, where real people are facing, real struggles...  keeping revenues up and further reducing unemployment should be top priority. 

 

Talking heads might take a blase approach to the unemployment numbers and lack of strong growth--from them you get the do nothing, wait it out approach.  Generally speaking these were the same people who said that government spending wouldn't prop up the economy until the private sector could get back on its feet. 

 

Americans have gotten the short end of the stick from government over the past decade--no wonder nobody trusts they can do anything right....  8 years of Republican leadership got me to work for Democrats, Tonjia must be rolling in her grave!

 

Democrats need to do the right thing and take the lead in passing some kind of jobs bill or at the very least extends unemployment.  The job of government is to protect and empower its citizens.  We have the tools to keep the economy on life support and throw life rafts out to American families who are struggling--we need the leadership to make it happen.

--
James A. Nichols IV
cell: (770) 312-6736
www.JimN2010.com
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"Nothing in the world can take the place of Persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan 'Press On' has solved and always will solve the problems of the human race."     ---Calvin Coolidge (1872 - 1933)

"I have come to the conclusion that politics are too serious a matter to be left to the politicians."    Charles De Gaulle (1890 - 1970)

Posted via email from Jim Nichols