The Wall Street Journal Argues for Brown Weeds

Here on the Economic Populist, dueling posts of green shoots, i.e. the recession is at a bottom and recovery will happen and brown weeds, i.e. it's getting worse and is most assuredly not a recovery, has been going on for some time.

Well, the Wall Street Journal, that holy bible of finance readers everywhere has stepped in and pronounced the ground salted and barren.

In the article, WSJ points out the average length of unemployment is higher than it's been since government began tracking the data in 1948.. The article then goes through the jobs numbers and shows why the real rate is much worse than what is being reported.

So, it's about the jobs man. WSJ also points out what we have been writing about for months, the Stimulus does not focus enough funds to actually create jobs. Of course WSJ doesn't mention of the funds devoted to jobs, many are being offshore outsourced or contracts awarded to major multinationals, again not local U.S. jobs for U.S. workers guaranteed....

But I'd have to say it is refreshing to see the Bastion of Wall Street admit without jobs there is no economy. In other words, without the U.S. middle class, there is no real economic growth.

Oh yeah, btw, the deficit has hit a record AND expected to double by the fall.

Can you say bang for your buck as in they shoot horses don't they?

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Question: Are government budgets less like

households and firms that require balancing or more like balancing mechanisms to offset spending excesses or deficiencies in the rest of the economy?

A classic economic question. If government spending is needed to fill the void of other sectors then it seems that the budget deficit has to take a back seat for the time being. That doesn't mean that budget deficits don't matter - they do but there is a trade-off in times like these.

What should happen is like the saying goes "save for a rainy day"? This means that when the economy is growing - government works to pay down debt and deficit. This did not happen during the Bush years (in fact I wonder if it happened at all under Reagan and Bush I).

My point is sure the budget deficit is dangerously high but if government spending is the only game in town what do you do?

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In response to companies offshoring/outsourcing.

This type of government spending should be targeted. Strictly to public infrastructure projects. I admittedly don't know every detail about the $787 billion stimulus package but I believe some of the stimulus was in the form of grants and subsidies to corporate entities - this is a big mistake with this type of stimulus.

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We have a few items posted

on specifics with the Stimulus and I did a huge analysis when it passed (and said at that time we're in trouble). Looks like we need an update post on specifically where the money has gone.

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I think I'd like to see

Stimulus expanded to public infrastructure AND skills retention projects.

In other words, if there is anything we used to make in America that we don't make any more, and there is still demand in that market, we should be paying some college somewhere to open up an On The Job Training Factory, partially financed by selling the output of the factory.

There should be NO excuse, when the diplomatic situation calls for war, to fail to go to war because the other country makes something we need.
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Maximum jobs, not maximum profits.

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Maximum jobs, not maximum profits.