The November US employment numbers were just awful. The economy lost over 500,000 jobs. The US economy has lost jobs every month this year. Almost 2 million jobs disappearing since January. The grim figures even forced President Bush to admit that the US economy is now deep in recession.I get very squeamish about unemployment. It is a very nasty business, and creates untold misery to those families it touches.
Unfortunately, today's job destruction is a direct consequence of the policy mistakes of the past. The chain of events is all too clear. If it wasn't for that ridiculous housing bubble, there would have been no banking crisis. If the banks were not so compromised, a prudent and sustainable level of credit would now flow into the real economy. The economy would have kept growing, and employment levels would have been maintained.
Sadly, the same dreadful process is now underway here in the UK. Unemployment is about to explode here too. The housing bubble is about to present the bill, and we will pay dearly in terms of higher unemployment.
11 comments:
I'm sorry to say it but it is worse than you think it is.
What I find so difficult is that I (with my A level in economics, and knowledge mainly gained from the newspapers)could see the end game back in September 2007. And knew it was coming before that. The whole thing has a relentless inevitability to it. Turn off the credit that was boosting the rocket higher and higher; the rocket begins to slow imperceptably, but momentum keeps it going. People say 'its all OK we're still moving'. Then the apogee is reached and it starts to turn down, and after a while longer reaches a critical point where the trajectory turns vertically down. That is us now. How long will that continue? Will we bottom out before we hit the ground? Or will we crash spectacularly in some Mad Mad style scenario?
My reading of history says this isn't the End of Days, as all financial crashes have thought in such terms, and things turned out OK eventually. Though I do worry now about the interwoven nature of society, the level to which people are not able to feed,cloth and shelter themselves without the assistance of the network of supermarkets, energy companies, banks etc that make up the economy today. Take away that veneer of civilisation and we could be in anarchy quicker that one might think.
This is just the beginning, we have 2 years of job loses ahead of us.
Rambo
For uncensored news please bookmark:
www.wsws.org
Why do you think the police have just bought 10,000 more Tazers, Sobers ?
Dear electro-kevin,
Yes, it is pure capitalism. For more on this please go to:
http://www.wsws.org/articles/2008/nov2008/tory-n29.shtml
Rambo
Property was going measurably overpriced - with rental yields already down to only 7%-8% - in 2000-2001.
Buy a heavy safe. Put a high fence round your property - a very high fence. Enter collaborative arrangements with trusted neighbours. This is going to be bloody.
B. in C.
Property was going measurably overpriced - with rental yields already down to only 7%-8% - in 2000-2001.
Buy a heavy safe. Put a high fence round your property - a very high fence. Enter collaborative arrangements with trusted neighbours. This is going to be bloody.
B. in C.
Dear B. inC.
Are you alright, Buddy ?
Have we been watching too much of The Survivors on the BBC ?
Don't worry. Your enemies will be easy to identify according to the Beeboids, especially seeing as the only people allowed to be mad or bad in this series are white, middle-aged Englishmen.
THE APES ARE COMING!!!
RAMBO
This chart clears up one thing; the current slowdown is much steeper than the last one back in the early 2000s. It is also starting to look about as deep as the 1970s recession. It is shame that the chart didn't to back that far.
Hi Alice,
The ridiculous housing bubble is a symptom of the malaise rather than the root cause. Credit contraction, deleverage are creating the deflationary scenario impacting on asset prices and the real economy.
The tide is withdrawing and the tsunami is about to strike the beach.
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