Friday, September 02, 2011

No New Jobs For A New Recession

Fans of "The Simpsons" TV cartoon know about the fat kid who laughs "ha ha" whenever Bart or another main character do something embarrassing.  I wish I could find an audio file of that laugh that would play here.  Verbiage will have to suffice.  It's time for me to laugh "ha ha" at all of the idiotic commentators, zombie analysts, and dilettante economists who have claimed for the past year that the U.S. economy is out of recession.  Today's U.S. Bureau of Labor Statistics report on non-farm payroll employment reveals that no new jobs were created in August.  I wonder how advocates of stimulus will claim that unemployment holding at 9.1% is a measure of its effectiveness.  The stock market certainly appreciates the new reality of structural unemployment. 

I can't say that all economists are dumb.  A bunch of them hanging out in Italy, including Dr. Nouriel Roubini, know all too well just how weak the world economy is going to be for a while.  It's good that they're speaking in probabilities and not certainties.  No one can know for certain how severe or lengthy this renewed weak period will be.  Nor can anyone know whether the Fed is going to recreate its "Operation Twist" strategy from the 1960s that is supposed to push down long-term interest rates.  Selling any short-duration instruments will push up short-term rates in the face of increasingly nervous European banks unwilling to lend to each other.  Operation Twist is fraught with the risk of locking up overnight lending and relaunching the credit crunch. 

Ha ha!