While we are told that 4,000 jobs were lost in August, much higher than the expected 110,000 gain which still would not have met the 150,000 jobs needed to keep up with population growth, it is not mentioned on the news wires that job loss was actually 600,000 over the summer. At least the AP didn't keep with the original PR release from the Bureau of Labor Statistics:
Nonfarm payroll employment was essentially unchanged in August (-4,000), and the unemployment rate held at 4.6 percent.Total employment is now 145,794,000 - the number of people not in the work force has gone up by two million in the last year. The labor force participation rate of 65.8% appears to be the lowest since the Great Depression. With the number of people not looking for work the highest ever this is why officially the employment rate is one of the best ever - 4.6%.
In other economic news, none of it good, U.S. Home Foreclosures, Delinquencies at Record High.
Senate Banking Committee Chairman Christopher Dodd unveiled legislation yesterday to strengthen protection for mortgage borrowers, including banning lenders from steering borrowers into subprime loans when they qualify for prime loans.The other item is that with our economy in bad shape the dollar is falling. In this case Bloomberg reported that the dollar value against the euro was "the lowest in a month" when they could have said the lowest since the euro was created. Buried in the article was
"People are losing their homes because of the lending practices that are out there that are indefensible in my view," Dodd said today in a conference call with reporters.
About half of U.S. banks have raised their standards for subprime borrowers and 14 percent have made it more difficult for the most credit-worthy customers to get financing, the Federal Reserve said in July.
The U.S. dollar index comparing the currency with its six primary peers fell to as low as 79.841 yesterday, the weakest in 15 years, from 80.791 on Aug. 31.What is the Republican solution to this? Why more tax cuts, of course. That is their solution to everything. The reason is that while tax cuts harm the majority of American taxpayers, as Jason Furman testified to Congress about recently, they further enrich the richest and many Republicans believe the fact the rich aren't richer is deeply immoral to repeat Matthew Yglesias's observation.
Furman's testimony (PDF) was that you either have to cut services or later raise taxes to pay for tax cuts and the economic models of the impact by income bracket show the top 1% receiving benefits while other income classes not benefiting. If you cut services to pay for tax cuts 99% of the top 1% income bracket benefit and if you later raise taxes to pay for the previous tax cuts still 43% of them benefit.
It has been pointed out there are three ways for speculative bubbles to end - a crash, a slow decline, or a slow decline followed by a crash. Most of the time it is the third. This housing and credit bubble seems header for the third.