The February employment situation report from the Bureau of Labor Statistics showed a labor market steadily moving in the right direction, with the addition of 227,000 jobs and the unemployment rate holding steady at 8.3 percent. Furthermore, this release marks two full years of job growth (excluding changes in employment due to temporary workers hired to conduct the 2010 Census).There is genuine good news here, particularly that there are at least 31,000 new manufacturing jobs. Unfortunately, there is lots of bad news, still. As I've noted before, the worst news is that we are still ten million jobs away from employment levels during the George W. Bush Administration.
Strengthened Jobs Recovery
The folks crowing over this news as a good thing for President Obama's reelection potential should heed the words of Robert Reich:
The major driver of the U.S. economy over the past several months hasn’t been consumer spending. It’s been businesses rebuilding depleted inventories. Wholesalers increased their stockpiles again in February, bringing them up almost a quarter from their low in September 2009.Plus, as Reich reminds us, it will still take several years to get back to those not-so-heady days of the Bush Administration.
But businesses won’t continue to rebuild inventories unless consumers start buying again. big-time. And consumers won’t resume spending as they did before the recession until they’re far better off financially.
Yet how can they be sufficiently better off when their major asset has shrunk so much and when so few of the economic gains are going to them?
This is the central paradox at the heart of the American economy today. If it’s not resolved, the jobs recovery will stall, as it did last sprin
The Precarious Jobs Recovery
There's another reason to be concerned, and that is probably the biggest concern for Democrats wondering about their re-election chances. Matt Stoller gives us just one example of why:
The Government Accountability Office continues its subtle war on the talking point used by Treasury that “TARP made money”. Here’s the GAO, with a report out today.[See Stoller's article for supporting links.]
As of January 31, 2012, 341 institutions had exited CPP, almost half by repaying CPP with funds from other federal programs. Institutions continue to exit CPP, but the number of institutions missing scheduled dividend or interest payments has increased.Much of the government-supplied TARP funding (to small banks) was replaced by the Small Business Lending Fund passed in 2010, which Republicans called “TARP 2.0″. The larger banks, however, where much of the bank-based credit creation in the economy takes place, didn’t use this program. Instead, they got an implicit subsidy of between $6B and $300B a year from the widespread belief that the government will not let their bondholders lose money.
GAO: Almost Half of Bailed Banks Repaid the Government With Money “From Other Federal Programs”
The TARP "repayment" that the Obama Administration keeps bragging about is an illusion. As I've pointed out before, that's only a small fraction of what taxpayers are effectively on the hook for.
The banking regulations in the Dodd-Franks bill that passed last year are a joke in comparison to what was needed. The financial sector of this country, which represents roughly a third of our economy, is the same unregulated casino it was in 2007, when the house of cards finally collapsed. Sooner or later, it will collapse again.
Plus, of course, the Obama Administration have virtually guaranteed that hundreds of thousands of homeowners, possibly millions, will be screwed out of whatever they had invested in their homes.
Except for those few who might not have found work otherwise, only fools celebrate news like this. We're so far from daylight that it's hard to remember what it actually looks like.