Who Do You Trust?


by Richard H. Frank

Today the Labor Department reported the unemployment rate in the U.S. dropped to 8.3% due to the creation of 240,000 jobs during the month of January.  The talking heads on television are ecstatic about this development and Obama’s policies finally resulting in job creation.  I just don’t understand the math when the same Government agency has reported over 350,000 first-time claims for unemployment each week over the same time period.  If my multiplication skills are correct, the first-time claims equal 1,400,000 job losses over the same period.  In order for the private sector to have had a net gain of 240,000 jobs in January, a total of 1,640,000 jobs would have to have been generated during the month. That rate equates to more than 19 million jobs per year outpacing the record set during the Reagan administration. Not likely!

There also seems to be some sleight of hand present when it comes to calculations for the unemployment rate.  When the trend is unfavorable to Obama politically, the base number for the workforce is adjusted downward making the percentage look better.  However, as people re-enter the workforce there appears to be no adjustment to the base again making the percentage look better, and a trend line favoring Obama’s policies.

The real measures for recovery are quite different from the Government manipulated numbers.  The economy can hardly be touted as being on the rebound when:

  • The annual growth in GDP is less than 2%.  Historical recovery growth ranges between 5 and 7% annually.
  • The annual budget deficit is running at a rate of $1 trillion/year with the debt ceiling now set at $16.2 trillion.
  • Unemployment benefits of 99 weeks are about to expire and a further extension is expected.

Even the Congressional Budget Office has a more realistic view of the recovery over the long term and is forecasting tepid growth in the GDP of around 2% per year and unemployment increasing to between 9 and 10% by 2013.

So long as the Obama Administration stubbornly clings to its anti-oil policy and anti-coal policy and pushes for redistribution of wealth in America we will see our standard of living continue to erode and see America  join Europe as a nation in decline.

Look around your community and ask yourself where the growth is and who do you know that has been hired in a good-paying  job with the prospect of long-term employment.  Ask yourself “Have my personal finances improved or am I paying more today for gasoline, energy, food and health care?”

Lastly, and more importantly, are you better off today than before the Obama presidency and what is the future prospect for your children achieving a better standard of living.

Trust yourself and not those having a political agenda and the answer will become quite clear.

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