We are being told that the current recession is going to last at least another year. President Obama informs us it could be as long as two years, and that things wonâ€™t be the same in any event. It is very distressing to list all the things in our lives that have been affected, but perhaps the most discouraging is the employment picture.
Officially, there are some 11 million folks who are listed as unemployed. That figure is very misleading. Those 11 million do not include people who went from full time to part time employment. The figure does not include those who have given up and are no longer looking for work. Add all these people to the mix, and the true number of those without sufficient income or no income at all is around 24 million.
And if one looks beneath the surface it gets worse. Because of fear and anxiety, many people are accepting jobs for which they are overqualified. As a result, workers who ordinarily would be in these lesser positions are pushed aside by more capable applicants.
New York Times columnist Bob Herbert says that among the hardest hit are the younger workers. Older men and women who might have retired by now are holding onto their jobs, many because their retirement savings have been decimated. So younger job seekers – either unemployed for long periods or taking positions which underutilize their skills – are, writes Herbert, â€œlosing the experience and training they would have gained by working in a position more suitable to their education and qualifications.â€ Young college graduates, the article concludes, are holding jobs in occupations that do not require much schooling beyond high school.
Obviously, if individuals are unemployed or underemployed, he or she will put the brakes on spending, making the recession even more pernicious. A recent TV feature story on NBC News revealed that supermarket shoppers are not merely cutting back on what they spend on groceries, they are eschewing well-known brand names and opting for brand B. The Associated Press reports that consumers have slashed spending by the most in 28 years. Items still unsold on the shelves include clothes, appliances, electronic equipment and software.
The housing market, as we well know, is in a state of confusion and disarray. The AP report calls the current crisis â€œa self-perpetuating vicious cycle.â€ The recovery package being advanced by President Obama, for all the zeros behind the numerals, still might not be enough. It remains to be seen whether industries will stop the mass firings and begin hiring again. Job cuts are often in the tens of thousands for major businesses. An example is JPMorgan Chase & Company which announced last week that as it absorbs Washington Mutual, a failed savings and loan, it will also ax around 12,000 jobs. Even the National Football League, awash in money from sold-out season tickets, is nevertheless cutting 169 jobs.
Americans in the depressed labor market can be excused for being a little skeptical about the promises made by Obama before a recent joint session of Congress. The agenda the president laid out included national health care coverage, resurrecting the auto industry, increasing the size of the military plus pay raises and increased benefits for servicemen, and no new taxes for people who earn less than $250,000 a year. He even promised a cure for cancer.
These are just a few of the promises made by the president – promises that will cost trillions in the years ahead. The question on everyoneâ€™s lips is â€œwhoâ€™s going to pay for all this?â€ It is well known that the attention span of most Americans can be measured in minutes, not hours. Obamaâ€™s job approval rating stands around 60%. Thus, given the impatient mind set of the general public, Obama was wise to adjust the pitch and tone of Americans by presenting sweeping reforms, government activism, and a galvanizing (for fellow Democrats) agenda.
When the huzzas die down and the confetti has been swept away, it will soon register that the proposals made by Obama can best be described as heavy handed. There has not been such a massive government intervention in the lives of Americans since the administrations of Lyndon Johnson and Franklin D. Roosevelt. Writing in The Wall Street Journal, Pete Du Pont depicted the proposed measures as â€œexpanding the role of the federal government across the breadth of American business, health care, energy and welfare policy.â€
The title of Du Pontâ€™s opinion piece was â€œNext Stop, France,â€ with the premise that America is moving toward becoming a modern European state, and that America â€œwill become even more French.â€ Du Pont then summarizes: â€œAll these ideas together and we see a president who is doing what he said he would do if elected, and a president who is determined to make America a socialist, welfare-state government that would be a very different America than any of us have seen in 70 years.â€