Opinion

Felix Salmon

Zero. Nothing. Nilch.

By Felix Salmon
September 2, 2011

The symbolism of today’s payrolls report — ZERO — would be bad enough even if it wasn’t coming out in advance of the Labor Day weekend. There’s a pattern here: no matter how bad Wall Street thinks the employment report is going to be, it always seems to be worse, these days. It’s like GE’s earnings circa Jack Welch, but in reverse.

It’s increasingly looking as though the government is utterly incapable of creating jobs, but is actually pretty effective at destroying them. It’s doing so in a direct, literal way — there were 17,000 fewer government employees in August than there were the previous month, and local government has lost more than half a million jobs since September 2008. And it’s also doing so in an indirect way — there can’t be much doubt that a significant part of the jobs weakness is a function of the anger and uncertainty caused by the utter dysfunction of the legislative branch of government.

Hiring and firing decisions, of course, happen slowly — and they often happen after the summer. The jobs situation, which is always cyclical, now seems to be in a downturn rather than an upturn, which raises the prospect of a negative payrolls figure in September and further gruesome news over most of the 2012 election year. President Obama can speechify all he wants on Thursday, but I can’t imagine that he’s going to be able to get anything substantive through the House — not when Eric Cantor is demanding that even emergency hurricane relief be paid for with spending cuts.

You can call this a double dip, if you like, or you can view it as a kind of aftershock of the financial crisis. Either way, the economy is clearly now below its stall speed, and we don’t have access to the mechanisms necessary to get it moving again. That is going to make for poisonous politics, Washington gridlock, and untold human misery among millions of new and long-term unemployed across the land. Happy Labor Day, people.

Comments
33 comments so far | RSS Comments RSS

Felix, please. 17,000 fewer government workers in THIS environment is a tiny drop in the bucket. There have been 3+ years of terrifying numbers for private sector workers, so the money to pay local salaries (which come from property taxes) just isn’t there. What should be done?

Last night I went to back to school night. All the teachers wore tags saying “Working without a contract.” Boo hoo. You’re working aren’t you? And they’ve gotten 3-4% automatic raises every year at a time of deflation (soon to change, but not yet). There is no mechanism for public workers’ pay or benefits to change in a timely way to reflect the new realities. So many more will be fired outright.

As for the Legislative branch being broken, yeah it is. But so is the Executive. Stimulus is dead in the water because Obama gave half a billion dollars to a company that promptly DIED, leaving us with the bill. If we want to promote green industry we need to fund RESEARCH that can be shared amongst private US based companies that plan to invest in and hire in the US. Full stop.

Our leaders are pygmies. Both parties, up and down the spectrum.

Posted by LadyGodiva | Report as abusive
 

It’s neither double dip nor an aftershock, it’s the increasingly disturbing effect of Tea Party politics. You know, the people who’d cut their nose to spite their face.

Posted by FifthDecade | Report as abusive
 

Felix, this was not difficult to predict. Its just the beginning because nothing on the economy side has been solved. Meanwhile debts levels are getting higher and higher: In the US, the UK and Japan that is. The rest of the world is starting to behave. Most EU countries will be budget deficit neutral in 2012, thank you very much.

Traders are getting comfortable to the new lows and a Dow of 11600 points feels like the new high. If that US superrrcommittee doesn’t come with something breathtaking soon, there will be a new equilibrium set whenever bad news like this arrives.

Luckely a new generation of political “talent” is arriving on stage in the U.S.

Posted by FBreughel1 | Report as abusive
 

The household survey looked somewhat better; a flat unemployment rate with workers returning to the labor market. Not great, but decent.

Posted by dWj | Report as abusive
 

Haha…and what about the jobs the private sector has destroyed in 2008 and since, Felix? Without the big bad government we would have been in a depression already. Not the government or the private sector can fix this problem. Only time will fix it. Jobs get created through demand. Demand requires someone to desire a product/service as well as being able to afford it. Excess debt levels prohibits affordability of desires, inhibiting demand leading to a failure of job creation. Really simple but I guess people want to keep on drinking their cool aid. So blame Obama. Or the next Republican president. It’s always someone else’s fault, right. The truth can never be so hard, there has to be a solution. 3 years from now real estate will still be depressed and job creation will still be stagnant.

Posted by habakak | Report as abusive
 

So which dataset do you think is better, between household survey and payrolls report? how much do you trust the “la historia official?” figuring out precisely why they were able to manufacture the number zero, a decidedly abnormal occurrence, would lead you right into the wheelhouse of undercover government. Happy weekend. take out the BBQ!

and just of curiosity, does reuters use more or less bandwidth than facebook and plus? I found these items called certificates that seem to be permission for html5 cookies? do be wary. for the article, http://online.wsj.com/article_email/SB10 001424053111903480904576508382675931492- lMyQjAxMTAxMDEwODExNDgyWj.html?mod=wsj_s hare_email. trust the NEWS to print the truth.

Posted by theinfamoush6 | Report as abusive
 

Gotta agree with LadyGodiva here. Plenty of blame to go around Washington, not the least of which being that there doesn’t seem to be any great urgency to actually hold anyone accountable for the financial mess. And yes, it’s difficult on government workers, but it’s more difficult on private sector ones, especially since much of the original stimulus went to keep government workers employed at the expense of (dare I say it) shovel-ready infrastructure projects.

Posted by Curmudgeon | Report as abusive
 

All the new politicians or the new ideas are for naught if the United States with all its people and government do not get back to basic principles. Like personal honesty and integrity in people, business, and government. I recall that we threw out a liar in the early 70s.

Posted by fred5407 | Report as abusive
 

Whoa, wait a minute. “there can’t be much doubt that a significant part of the jobs weakness is a function of the anger and uncertainty caused by the utter dysfunction of the legislative branch of government.”??????????????????
What about all the job killing regulations coming down by edict and presidential decree as executive orders and work by agencies????? What about the spector of Obamacare passed by the previous House and signed by the President. Boy, this is a political editorial and it doesn’t have its informations right.

Posted by rjdb84 | Report as abusive
 

In order to make a significant dent in the unemployment rate, we would need to create some 200,000 jobs per month. The loss of some 17,000 government jobs isn’t going to affect that much one way or the other.

This is the weakest economic recovery in my lifetime.

Here’s a chart showing how unemployment has trended in this economic “recovery”, compared with past recessions and recoveries:

http://cr4re.com/charts/chart-images/Emp loyRecessAug2011.jpg

Even as of May-June 2011, the recovery was so weak that it would have taken another 7 years (at least) to get back to full employment.

But over the summer, the recovery stalled out entirely.

Now it’s not clear when we’ll ever get back to full employment.

Posted by sinz54 | Report as abusive
 

Clearly this employment number proves once again that tax cuts kill jobs.

After more than a decade of tax cut after job killing tax cut after job killing tax cut after job killing tax cut, we have had no net job creation in more than a decade, with only weak growth coming after massive government debt fueled spending.

If only we could return to the policies of late 1982 onward when Reagan, Bush, and Clinton were signing tax hike after job creating tax hike after job creating tax hike to drive employment to the highest rate of employment ever.

Posted by mulp | Report as abusive
 

I’m certainly glad that the idea that government can create jobs is now being questioned in the MSM. Its about time. The only economic sector that creates jobs is the private sector. The fact that the House has a Republican majority is not the cause of the lack of jobs in the economy, its the uncertainty that government regulation and the demonization of the private sector by the President that’s the main cause of this spiral toward a double dip recession. If the Federal government would get out of the way, the private sector job machine would rev up.

Posted by j011254 | Report as abusive
 

@FBreughel1 who said: “Luckely a new generation of political “talent” is arriving on stage in the U.S.”

You forgot to add a sarcasm symbol.

@j011254 Government need to get out of the way? Oh please. Business and banks prove constantly that given an inch they take a mile and they surely are not interested in giving jobs to people in America.

You do sound like a lobbyist for the Chamber of Commerce saying regulations are a disincentives for investment and job creation.

If the Federal government would get out of the way, the private sector job machine would rev up, you say.

Really? They will all bring back jobs from overseas? Start manufacturing back in the USA? Not give all the profits to CEOs, bonuses and shareholders and start hiring? Not wringing profits by squeezing the employees they do have?

When Alcoa reported a turnaround in profits in 2010 and a 22 percent jump in revenue, its chief financial officer, Charles D. McLane Jr., assured investors that it was not eager to recall the 37,000 workers let go since late 2008. “We have a tight focus on spending as market activity increases, operating more effectively and minimizing rehires where possible,” he said. “We’re not only holding headcount levels, but are also driving restructuring this quarter that will result in further reductions.”

That’s the reality…

Posted by hsvkitty | Report as abusive
 

“Their [Obama administration's] position throughout this recovery has been that the U.S. can have the highest corporate tax on earth, a big regulatory crackdown, and a vast expansion of labor-union power, and still expect a positive jobs story because of cash-for-clunkers and green jobs. This jobs report indicates how much damage that view has done.” Kevin Hassett, NRO. This was published at the same time as your article, Mr. Salmon, and is a much more accurate and compelling analysis.

Posted by Jjoef | Report as abusive
 

It’s neither double dip nor an aftershock, it’s the increasingly disturbing effect of Tea Party politics. You know, the people who’d cut their nose to spite their face.
Posted by FifthDecade

Blaming the Tea Party for Obamanomics is a lot like blaming the Canary for the Mine Explosion…

elected and serving a mere 8 months, they are trying their best to restrain an irresponsible executive branch from extreme spending and regulation…none of which is affordable in this environment.

but restraining spending by a mere 5 or 10% cannnot keep up with 30% spending increases, no matter how they try…and until the president is willing to propose a rational spending plan, the senate is actually willing to debate and author a budget, nothing can be accomplished by the Tea Party Congressmen.

Posted by hondodog | Report as abusive
 

Want jobs? Repeal Obamacare.

Posted by JohnDavis | Report as abusive
 

Obama has done everything wrong and made everything worse. His massive corrupt stimulous bill was just wasted. One of his pet Green Projects, a solar energy firm with 1100 employee just went Belly UP! Obama gave them $535 million, or $483,363.00 per employee. Over half a billion wasted. We would have been far better off if he’s just given each employee $483,363.00. Some of them might have started real businesses instead of Obama’s Green foolishness. Now with all of Obama extreme left wing policies failing and the nation left with massive levels of debt, we are headed back into recession while the Obama White House tries to figure out how to schedule a join session of Congress so Obama can pivot to JOBS…again, again, again! Its pretty clear we are going to be stuck in disaster mode until we can solve our problem by getting rid of Obama in Nov 2012!

Posted by valwayne | Report as abusive
 

Obama is done. Over. He is reaping what he has sown, and it now provides au unrelenting bounty of bad news. People are tuning him out; even members of his own party are distancing themselves from him. Carter 1980, Bush Sr. 1992, and now Obama 2012.

Posted by DaveMinnich | Report as abusive
 

“there can’t be much doubt that a significant part of the jobs weakness is a function of the anger and uncertainty caused by the utter dysfunction of the legislative branch of government.”

Since the current failure of the country to create jobs is caused by the passage of ObamaCare and FrankDodd, I assume this is what you mean by the “dysfunction of the legislative branch of government.”

But, since the President promoted and signed the laws you have to give hime credit for the failed economy also.

Posted by rgolds | Report as abusive
 

“It’s like GE’s earnings circa Jack Welch, but in reverse.”

Are you suggesting that the unemployment rate is illusory?

Posted by TFF | Report as abusive
 

The private sector has been adding jobs slowly since early 2010 and federal government jobs have been holding steady. Of course state and local governments have been losing jobs because a) they have little freedom to run deficits; and b) crazy Republicans have been cutting even more than necessary. There is really nothing new here – things have been going this way for about a year and a half.

Posted by ytwod3621 | Report as abusive
 

How about this idea…no member of Congress gets paid again until unemployment is under 6%.

Posted by mfw13 | Report as abusive
 

The Bamster can get no love. And that is as it should be.

Posted by TheTexan | Report as abusive
 

Negative criticism is easy and we can all do it all day whilst standing on one leg.

Felix Salmon makes no attempt whatsoever to offer his solutions.

What are Felix Salmon’s solutions?

Posted by redbourn | Report as abusive
 


“Zero. Nothing. Zilch.”

======================================== ========

Hate to disagree with you but after 3 years of being without a job, I finally found one.

So your headline should have been “One. One. Only One job.”

Posted by TheEnforcer | Report as abusive
 

Surel, this writer is in error. I’ll make the correction so it the column makes a little more sense.

“…there can’t be much doubt that a significant part of the jobs weakness is a function of the anger and uncertainty caused by the utter dysfunction of the executive branch of government.”

Posted by brianinslc | Report as abusive
 

What Felix got right: “…the government is utterly incapable of creating jobs…” BINGO! Been saying this all along. Oh, sure. The gov’t can create gov’t jobs, but that won’t keep up with the demand. Only the private sector can do that. But since Obama has never held a private sector job, he doesn’t understand.

What Felix got terribly wrong: “…there can’t be much doubt that a significant part of the jobs weakness is a function of the anger and uncertainty caused by the utter dysfunction of the legislative branch of government.” OH PLEASE! The jobs picture dried up when the legislative branch and the executive branch were in perfect harmony. Remember? Pelosi, Reid and Obama gave us ObamaCare. Private business is still choking on that bitter pill. We the people decided gridlock would be a better option – until 2012. For now it’s the best we can do.

Posted by jonereb | Report as abusive
 

“What are Felix Salmon’s solutions?”

I thought he was advocating massive government spending, earlier? Maybe am confusing him with others.

My solution? Patience. We’re at best half way through the deleveraging process. It is very hard to imagine a real recovery until that completes. We could speed it up, but am not sure the economy could withstand a blow like that.

Posted by TFF | Report as abusive
 

Solution: Uneployment = u pu the trash bitch ..

Posted by Woltmann | Report as abusive
 

Nothing will change on Earth until the plantation owners are cornered in their lairs. It’s going to be a bloody and brutal affair, which will begin to unfold in the coming years, as the ancient impulses of a primitive humankind come to full flower in a new age of fascist technocracy.

The sooner the American people take to the streets in acts of peaceful conscious civil disobedience, the sooner this bleak picture may be amended.

I’m not holding my breath.

Posted by kapie | Report as abusive
 

The reason for the lack of jobs is rather simple – there is no demand for goods and services and hence no demand for jobs. why is there no demand for goods or services – again the answer is simple – people are still trying to pay back the loans they have (credit cards, house, car, etc) which they took up in the earlier ‘good’ (if you want to call them that) years. the crisis has made people realise that high debt levels are no sustainable and now there is a rush towards paying that debt. this is the same debt that used to earlier fuel consumption. so now you have a double whammy – people are not using debt to fuel consumption anymore and people are also using their cash to pay back the earlier debt. there is little point in blaming the government in all of this. the responsibility directly rests with the people who took up unsustainable levels of debt to fund their lifestyle. we only have ourselves to blame and not the government.

Posted by mrpr | Report as abusive
 

Not everybody is in debt, remember, somebody’s debt is somebody else’s income. The problem is the paradox of thrift, everybody scared and saving at the same time, the mirror image of the “irrational exuberance” during the boom times. Typical of capitalist business cycles. Financial crises precipitated by uncontrolled speculative behavior by the private sector is as old as Adam Smith and without government intervention, will continue ad eternum. The question is how long are we willing to let the recession go on and how many lives will be sacrificed in the process. The commentaries regarding the inherent positive aspects of private sector intervention versus the
self-defeating public sector have been proven wrong over and over the past 100 plus years. Those ideologues always focus on the fallen brown leaf and forget the rest of the tree.

Posted by Soiza | Report as abusive
 

Not everybody is in debt, remember, somebody’s debt is somebody else’s income. The problem is the paradox of thrift, everybody scared and saving at the same time, the mirror image of the “irrational exuberance” during the boom times. Typical of capitalist business cycles. Financial crises precipitated by uncontrolled speculative behavior by the private sector is as old as Adam Smith and without government intervention, will continue ad eternum. The question is how long are we willing to let the recession go on and how many lives will be sacrificed in the process. The commentaries regarding the inherent positive aspects of private sector intervention versus the
self-defeating public sector have been proven wrong over and over the past 100 plus years. Those ideologues always focus on the fallen brown leaf and forget the rest of the tree.

Posted by Soiza | Report as abusive
 

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