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There was a fantastic article written today in the Wall Street Journal written by Bradley Schiller that did a great job really qualifying the statements that our President has been making recently about the state of the economy and why we need to pass a $1T bail-out to keep us from financial demise.
DISCLAIMER: I’m a staunch fiscal conservative (with a degree in Economics) and I struggle with a bail-out program that is going to “create or save 3.5 million jobs” as I don’t believe any sane Economist will be able to provide you with any effective formula for how to measure “saved” jobs. I’m also a big fan of the WSJ as it’s about the only publication you can read any more without a blatant agenda.
Back to the article. If you’ve spent more than 5 minutes reading the news in the past year you’d truly think that the sky was falling if you didn’t have some kind of statistical baseline on which to compare what’s happened with what really occurred during the 30′s. Here are some important ones:
2008: 3.4 million jobs lost or 2.2% of the labor force
1981-2: 2.4 million jobs or 2.2% of the labor force
*No, that is not a rolling total for 1930-32, that was the number of positions lost in each year!
GDP Growth (Contraction):
Projected 2009: (-2%)
I am not even going to try to summarize these data points as simply quoting what Mr. Schiller said is much more eloquent and concise:
“President Barack Obama has turned fearmongering into an art form. He has repeatedly raised the specter of another Great Depression.
Mr. Obama’s analogies to the Great Depression are not only historically inaccurate, they’re also dangerous. Repeated warnings from the White House about a coming economic apocalypse aren’t likely to raise consumer and investor expectations for the future. In fact, they have contributed to the continuing decline in consumer confidence that is restraining a spending pickup.”
Author’s Note: one additional data point for those looking for a modern day bail-out comparison to The New Deal: from 1934-1940, government spending increased by 45%.
If you’re a history buff you’ll recognize something: in 1940 we were still in The Great Depression.
Tags: 1930's, barack obama, bradley schiller, consumer confidence, contraction, FDR, fearmongerer, fearmongering, GDP Growth, great depression, investor confidence, job loss, new deal, the great depression, unemployment, unemployment reate, wall street journal, wsj
My morning vice is reading the Drudge Report. I find that Matt Drudge’s conservative view on the economy and government is a little easier to digest than Fox News or The Huffington Post. This morning the majority of the top half of the page was on the alarming number of jobs that were shed in January and the fact that the lost jobs numbers for December and November were revised up even further. The unemployment rate now stands at 7.6% and, while there are a lot more jobs in the market today than there were in the 30′s (it’s not really fair to compare today against 70 years ago), the fact that the economy has shed somewhere between 3.5-3.7 million jobs in the past 12 months with nearly half occurring in the last 3 months, it begs the question of when it will slow down?
CNN’s Financial News network had a very compelling editorial piece yesterday that does a much better job than I could at clearly articulating the issues with the job market that no one is really talking about. The short answer: companies laying people off happens all the time but when no one else is hiring, that’s when you have serious challenges. And considering nearly every company has ratcheted back spending because of questions on how long the current climate will last, people who are unemployed today will likely face a stretch of more than 19 weeks before landing another role.
***TIPS FOR THOSE WHO ARE SEEKING JOBS***
1. Don’t read the news every day. It won’t lift your spirits.
2. Make job hunting a full time job. Putting your resume on job boards and then sitting back and waiting to be contacted doesn’t work any more (has it ever worked?)
3. If you’re fortunate enough to get an interview, NAIL IT. Be prepared, know about the people who will be interviewing you, the company you’re interviewing with and the competitive landscape (who are the biggest threats and what are their opportunities).
4. Stop spending at the same level that you did when you were employed. Seriously! Because there is no finite end in sight, be prepared to be unemployed for 6 months or longer. If you land a new job before then it will benefit your savings account. Cancel trips, reduce or eliminate eating out, cut charitable donations.
5. Get networking. Go talk to people. Pick up the phone. Start a blog. Tell anyone who will let you talk about it that you’re looking for a new role. There’s an old saying in marketing, “Doing anything without marketing or advertising is like kissing a stranger in the dark. You’re fully aware of what you’re doing but no one else has any idea.”
Here’s a few links to articles and sites that can help while job seeking:
*Misrepresenting Yourself to land a job? - http://budurl.com/ptnv
*Tool Up for a Mid-Career Hunt - http://budurl.com/l8f8
*10 Things that scream “Don’t Hire Me!” - http://budurl.com/jlxm
*Take the first job you’re offered? - http://budurl.com/n9vu
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