Dec 13, 2009 10:13 pm


After some gentle pushing, Larry Summers agreed to join economists who predict a spring 2010 decline in US unemployment:

STEPHANOPOULOS: And Mr. Summers, let me begin with you, and let's start with just the overall economic situation right now, especially on jobs. We saw that drop in unemployment in November, but private economists predict that unemployment is likely to head back up. Mark Zandi sees it peaking at about 10.6 percent next year. Others say it could go up to 11 percent. Is that in line with your forecast?

SUMMERS: . . . Most professional forecasters are now looking for a return to job growth by spring.

STEPHANOPOULOS: Let me pin you down on that, though. You believe the economy is actually going to be creating jobs in the spring.

SUMMERS: That is the judgment of most professional forecasters. That's right, George.

STEPHANOPOULOS: So given that... SUMMERS: If you look at the employment statistics, they will show employment growth. They were showing losing 700,000 a month. Last month, they showed losing 11,000 jobs. They will bounce from month to month, but I believe that, as do most professional forecasters, that by spring, employment growth will start to be turning positive.

To understand the reason for Summer's cautious optimism, one had to switch to Meet the Press. There Alan Greenspan explains that temporary census jobs should do the trick. Asked where unemployment rate is going to be next year, he responded:

It is going to be lower. You see, we are going to get a special bonus, one that no one expects in the fact that the Bureau of Census announced that it is going to employ 792,000 by April. That is a big, it is not a huge number but it will take several tenths of a percent off unemployment rate.

Do not forget that the Census jobs are temporary. That is the reasons that Summers and Romer warned that there may be future upticks in the unemployment number.

What about the 895 billion dollar stimulus?

Nada, says Jim Cramer:

MR. JIM CRAMER: I don't think that--when I talk to CEOs, and I talk to dozens of them for my show, no one has seen it. I keep asking,"Where's the money? Have you seen any money coming from Washington?" Even companies that are involved with road building, the most elementary aspect of any sort of stimulus, are saying,"No, this is the first quarter that we may have seen a trickle." So I agree with you, David, this--the stimulus is not helping create jobs. And that's not Republican or Democrat. I just don't see anything beyond municipal and state worker compensation.

Why is no one hiring? Would a new stimulus help?

MR. GREGORY:. . . What do you say about that, what the priority ought to be?

MR. CRAMER: Well, I think the priority ought to be get rid of the agenda. I hear the agenda over and over again from business people. In other words, Congress is stalled on health care. I favor universal health care, everyone does in this country. But Washington is killing job growth, not--and then trying to stimulate it small scale? How much does it cost to bring a new employee in? We don't know. We don't know what the health care will be. We don't know what the tax scheme will be. Washington is at the root of many of the problems of why you should hire here. The CEOs I talk to, they're hiring. They're hiring in Brazil, they're hiring in Russia, China. Why are they hiring in those countries? Because it's steady, we know what to get from the government. It's a rather, it's rather quizzical that we know what the communists'll give us but we don't know what the capitalists'll give us.

MR. GREGORY: This is an interesting question about our role in the world, how the rest of the world sees us, our commitment to capitalism and, in corporate America, Dr. Greenspan, the notion of where is the certainty? Washington is a big question mark now when it comes to climate policy, healthcare policy. A lot of businesses saying,"Look, we don't know what's coming down the pike." There's no impetus to grow, to expand, to invest.

DR. GREENSPAN: That's the key problem; that is, investment occurs when you have a stable economy and when you can foresee what's going on in the future. Because, remember, you make a risky investment which may have 10 years or 15 years life to it, and unless you have some semblance of a notion as to what is out there...


DR. GREENSPAN:'re going to be reluctant to invest. And that is key. I mean, I agree with Jim in this respect. I think it's very critical that we get the uncertainties out of the system.

MR. GREGORY: Do you think additional stimulus for jobs makes sense at this stage? DR. GREENSPAN: No.

In other words, Greenspan agreed with Jim Cramer (and moi) that Obama/Congress"agenda" created uncertainty is the big current job killer. Unable to estimate the cost of hiring American employees, business hire, but they hire abroad, in Brazil. Russia, China!

We have a"bivariate type of economy" Greenspan adds.

DR. GREENSPAN: I can't break the habit. Look, there were two economies here, which is very unfortunate. The economy is being driven in a positive sense by big business and wealthy individuals. Small business, small banks and a very significant part of the unemployed are not prospering. I'm particularly concerned about where the job machine is relevant to small business...

MR. GREGORY: Mm-hmm.

DR. GREENSPAN: ...which are doing miserably. They're getting--have great difficulty financing and great difficulty in creating jobs.

Tom Friedman is right. We need to have credit flowing. If only he explained that Washington misguided policies are responsible for it's failure to flaw!

In other words, Obama and the Democrats have actually created the two Americas they unfairly accused Bush of promoting. As I have predicted, the rich are getting richer and the poor poorer. That has always been the consequence of"well intentioned" Socialist policies. All we can hope that a larger war is not in the offing.

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G. M. Roper - 12/13/2009

And when the census is over, the joblessness will rise again and it will doubtlessly be blamed on Bush!