US Economy is Some 11 Million Jobs Short of Full Employment

If you don't read the newspapers you run the risk of missing something. Of course, if you do read them, you run the risk of catching something.

Not much in the financial news worthy of comment this morning...

The Dow gained $13. Gold lost $13. Nothing much to say about it...

So we will comment on something beneath comment...something so low we have to dig down to find it...something so unworthy we hardly imagine we are mentioning it...something in the newspapers...

We're talking, of course, about politics...

The love-fest with politics is heating up. The drugs have been passed around. Now, the clothes are coming off...

"France keeps steady course in economic upheaval," says a headline at the International Herald Tribune. Steady course? You bet. It kept subsidizing, bailing out, protecting, coddling and otherwise meddling in its economy - just like it did before the crisis began. Had it not done so, the story continues, France might not have been the first major economy out of the worldwide recession.

On the other hand, the French never went deeply into debt... So maybe they just didn't have so much exposure to the worldwide debt crisis in the first place.

Never mind. The papers don't know what the problem is, but they're convinced that government interference is the solution.

Over at The Financial Times, Clive Crook is breathing hard, too. He reckons that the "downturn called for a big stimulus," and that the US stimulus effort headed off a worse recession. He then explains that the feds' stimulus really didn't stimulate at all, it merely offset a decline in spending at the state level. State tax revenues fell; states spent less. State tax revenues declined $87 billion in the last 12 months, the biggest drop on record. The feds made up for it by spending big.

Meanwhile, The New York Times tells us that the whole downturn is now behind us. The economy is "surprisingly normal," it says.

The US economy is some 11 million jobs short of full employment. Nothing very normal about that. But February saw an unexpected upturn in consumer credit, reports the Times. And unemployment seems to have bottomed out, adds The Wall Street Journal.

Surprisingly normal?

Well, there's a big difference from something that looks surprisingly, reassuringly normal...and something that is actually working normally.

Which is it?

The New York Times is right; it is an economy that looks surprisingly normal...

Zombies can look surprisingly normal too. If you clean them up.

Bill Bonner
for The Daily Reckoning Australia

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