Larry Summers, economic adviser to the White House, says that February’s bad weather may have a negative impact on jobs:
Let me say a word about the statistics. Who knows what the next number is going to be. The blizzards that affected much of the country during the last month are likely to distort the statistics. And in past blizzards, those statistics have been distorted by 100 to 200,000 jobs. So it’s going to be very important to know, very important to look past whatever the next figures are to gauge the underlying trends.
Who knows what the next number is going to be?
Chances are that Mr. Summers, his boss at the White House and our Doing-God’s-Work bankers at Goldman Sachs have a pretty good idea.
It sounds as if Mr. Summers is already spinning the upcoming jobs reports.
Will we be bouncing back above the official U-3 unemployment rate 0f 10% in the next report?
Even if we were to do that, according to Mr. Summers it’s not all that bad:
I think we’ve already made quite remarkable progress. If you look back a year ago, people thought a depression was a real possibility. There was talk of a complete meltdown in our financial system. Because we took strong actions, because the President led the way in pushing a major recovery act and injected nearly $900 billion into the economy, encouraging other nations to do similar things, because we took strong actions to force much more transparency on the banking system, to set the stage for private capital raising, it’s run to hundreds of billions of dollars, we’ve got a very different economic situation than we had a year ago.
If we’re talking specifically about the stock market, then we will not argue that the progress has been nothing short of remarkable.
If we’re looking at unemployment, government debt, increased government spending, significant contraction in credit, and a coming wave of mortgage interest rate resets, then we’d suggest that the situation is anything but remarkable.
Are we to believe that we are better off now than we were a couple of years ago when then President Bush said that he “abandoned free market principles to make sure the economy doesn’t collapse?”
The depression Mr. Summers speaks of is not only a possibility, but it’s actually happening right here, right now.
To play devil’s advocate for just a moment, what if the powers that be have failed to save the system as they have so vehemently argued they’ve done?
Would that mean that the economy will collapse, and that we will go into a depression? If we were “on the brink” then, as former Secretary of Treasury Henry Paulson has stated, then what makes anyone think that we are not still on the brink when pretty much all of the economic statistics, save GDP and stock prices, are falling apart?
Perhaps the system was saved when the government committed over $20 Trillion dollars in bailouts, stimulus and other machinations. Perhaps the system was saved by trillion dollar toxic asset purchases made by the Fed.
But in the off chance that it wasn’t, are you prepared for what President Obama, Secretaries Geithner and Paulson, Ben Bernanke, President Bush, et. al. referred to as an economic meltdown that could, as many Congressional representatives have stated was the case in 2008, lead to martial law being declared in America?