Celebrating Policy Errors And Corruption With Bogus Milestones In The Recovery™

Or Why Is Unemployment Falling Along With the Labour Participation Rate?

The pat answer from learned economists is that this is ‘the new normal,’ and ‘structural.’    It is all part of an aging population gracefully moving into their comfortable retirement.   They say this even though people are working in great numbers into older age because they have little savings and pension security, and the real median income continues to stagnate.   And while corporations and the one percent reap rich profits and increases in income from the Fed’s trickle down monetary stimulus.

So many odds things occurring.  We have a bear market in the price of gold, even while the physical supply of it is disappearing, and major benchmarks have been found to have been manipulated by the financial system.  Curiouser and curiouser.

The answer is that the government and their corporate partners are painting pictures of a recovery, and placing them along the highways and byways, in order to convince us that things are getting better.  In this Wonderland where nothing is real, perception is everything, and everything is its image.

This is why I first called this ‘The Potemkin Economy’ some time ago.

Ralph Dillon from Global Financial Data passed this along, and I thought this was interesting. The commentary is his.

If unemployment benefits were extended indefinitely would this chart look any different? Is the decline in labor participation due to the extension of federal unemployment benefits? Would we continue to see the duration of unemployment keep trending higher if it was?

This chart is amazing in many regards. First, the duration of consecutive weeks of unemployment has never been over the overall labor participation rate in 45 years of recorded statistics. Second, the parabolic increase in the duration of those unemployed is staggering starting in 2009. Third, we have never seen the two series in lock step as they currently are. 

And finally, is the decline in how long someone is unemployed correlated to the drop in those who are actually employed? Shouldn’t the participation rate go up if the duration of those unemployed is improving? What will this chart look like in say 10 years?

I continue to be fascinated with employment in this country. It seems the importance of decade’s worth important economic statistics have been turned upside down. Further, they are being looked upon differently according to what message you are trying to send.