Yikes: If we thought our unemployment rate was bad now

posted at 8:58 pm on August 31, 2012 by Erika Johnsen

It is bad, of course. More than three years with more than a (rather generously calculated) eight percent unemployment rate is unacceptable and egregious. But things can still stand to get a whole lot worse — and they will, if we continue to follow the proffered example of debt accumulation that Europe has laid out for us. Bloomberg reports:

Euro-area unemployment rose to a record and inflation quickened more than economists forecast as rising energy costs threaten to deepen the economic slump.

The jobless rate in the economy of the 17 nations using the euro was 11.3 percent in July, the same as in June after that month’s figure was revised higher, the European Union’s statistics office in Luxembourg said today. That’s the highest since the data series started in 1995. Inflation accelerated to 2.6 percent in August from 2.4 percent in the prior month, an initial estimate showed in a separate report. That’s faster than the 2.5 percent median forecast of 31 economists in a Bloomberg survey. …

The European Central Bank, which will publish its latest economic projections next week, said in June that the euro-area economy may shrink 0.1 percent this year, with inflation averaging 2.4 percent. The ECB aims to keep annual gains in consumer prices just below zero.

And as ZeroHedge summarizes, the youth unemployment rate — having long since shot way past alarming — continues to worsen.

When we last looked at youth unemployment in Europe, things were stabilizing a little, though at extremely lofty levels. With the release of July’s data, the situation has deteriorated rapidly; Euro-Zone youth unemployment hs now ticked back up to its euro-era record-high of 22.6% (18-year highs). … Italy was the hardest hit, back above 35% with its largest rise in youth joblessness in 5 months, Ireland rose back above 30% for its biggest rise in 11 months as France jumped to two-year highs and Spain and Greece are practically deadlocked with ~53% of their younger-generation out of work – new all-time records.

Take a good look — this is where our future is headed right now if we don’t make some sharp turns, and soon. Or not. No really, by all means, federal government: Please keep on with our monstrously unsustainable habit of spending money we don’t have on programs we don’t need — it’s not like our country’s prosperity or my generation’s level of opportunity are at stake, or anything.


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Get rid of 0bama now…

OmahaConservative on August 31, 2012 at 9:02 PM

Marginal propensity to produce matters.

TallDave on August 31, 2012 at 9:02 PM

“Youths”

That’s Euro-speak for unemployed young men and women who decide the government owes them something. And take it out on cars.

BobMbx on August 31, 2012 at 9:03 PM

“Do we want to be a country that embraces the very ideas people came here to escape?”

Rubio money line.

hillsoftx on August 31, 2012 at 9:04 PM

“A r!ot iz an ungly ting…und I tink it iss chust about time ve had vun!”

AubieJon on August 31, 2012 at 9:05 PM

Anyone watching Luntz(on Hannity) and his polling on the convention speeches?? Yowzers!

esr1951 on August 31, 2012 at 9:06 PM

What could go wrong?

forest on August 31, 2012 at 9:07 PM

Spain and Greece are practically deadlocked with ~53% of their younger-generation out of work – new all-time records.

In aeronautical terms, this would be an unrecoverable spin. Start reaching for the ejection handle.

….but HEY!, let’s be just like Europe.

Um, wait…..I can’t find any handle…..

98ZJUSMC on August 31, 2012 at 9:08 PM

And if the reports are correct, China is about to crash. Another thing that’s not going to end well.

rbj on August 31, 2012 at 9:11 PM

Don’t kid yourself……..

….the ruling class is hyping the dollar for THEIR OWN PROFIT.

Does ANYONE believe our politicians are acting in OUR best interests?

PappyD61 on August 31, 2012 at 9:12 PM

Well yeah, Erika. But its OK because the kids can live off of free health care and food stamps in the room where they spent their childhood. It’s not like they need to work.

MJBrutus on August 31, 2012 at 9:13 PM

And those poor Euro youths don’t even have a childhood room, with a faded Obama poster on the wall, to live in.

TXUS on August 31, 2012 at 9:13 PM

The problem with Socialism is:

It depresses and demotivates.

It’s faithless.

It’s God-less.

It doesn’t work. (except for the Politburo Elites)

listens2glenn on August 31, 2012 at 9:14 PM

Actual unemployment now under Obama is well over 20%.

http://www.shadowstats.com/alternate_data/unemployment-charts

VorDaj on August 31, 2012 at 9:14 PM

listens2glenn on August 31, 2012 at 9:14 PM

OK, that’s a bridge too far. The political system does not relate to a theological one as you would have us believe.

MJBrutus on August 31, 2012 at 9:15 PM

Yet the dems keep saying we need to be more like Europe.

/fools

AZfederalist on August 31, 2012 at 9:16 PM

Ha! We’re gonna be just fine. We’ll never run out of money.

 

We have a nearly infinite supply of ink and paper.

FlatFoot on August 31, 2012 at 9:18 PM

“Do we want to be a country that embraces the very ideas people came here to escape?”

Rubio money line.

hillsoftx on August 31, 2012 at 9:04 PM

And a theme that, if I were Team Romney, I would develop an entire ad campaign around, to play in every swing state. Whether the state has a large Hispanic population or not, this simple concept sums up the difference between Romney and Obama, but with an exclamation point.

TXUS on August 31, 2012 at 9:22 PM

….but HEY!, let’s be just like Europe.

Um, wait…..I can’t find any handle…..

98ZJUSMC on August 31, 2012 at 9:08 PM

Yet the dems keep saying we need to be more like Europe.

/fools

AZfederalist on August 31, 2012 at 9:16 PM

“Fascism should rightly be called Corporatism because it is the merger of corporate and government power.” – Benito Mussolini

What has Obama done with GM, and what was he suggesting be done with other industries just a week or so ago??

AubieJon on August 31, 2012 at 9:22 PM

TallDave on August 31, 2012 at 9:02 PM

Yes, it does.

jaime on August 31, 2012 at 9:32 PM

Things have been heading bad for a long time and polls kept turning their heads. In Bush’s last two years, 2007 and 2008, the deficit grew big time and the debt was $10T when Bush left office. The debt nearly doubled under Bush’s 8 years. Note that both houses of Congress went D in 2007. Then Obama got elected and immediately quadrupled down on the deficit increasing the debt over $5T in just 3.5 years to $16T. To say this is unsustainable is like saying the sun rises in the East.

What people seem to not understand about such a debt is that if all Gov. growth stopped today, all productivity over the bare minimum needed for survival was put toward paying down this debt, it would still take 1000′s of years to pay down this debt. But, instead of stopping Gov. growth, Gov. is expected to grow by over $200T in the next 40 years.

Have we screwed ourselves big time…absolutely. The only way to even start to correct this big of a mess would be require 1000 Bills be repealed for every new bill proposed. Same goes for regulations. You see, we got in this mess by letting Government run wild and corrupt for way too long.

aposematic on August 31, 2012 at 9:35 PM

MREs, gold, and ammo.

I’m set.

Wolfmoon on August 31, 2012 at 9:37 PM

I read that in Spain, people are taking their parents or grandparents out of nursing homes and taking care of them at home because the pension check is the last govt. check that hasn’t been canceled.

Three generations living together, in poverty, sustained by one pension is becoming common.

PattyJ on August 31, 2012 at 9:39 PM

And those poor Euro youths don’t even have a childhood room, with a faded Obama poster on the wall, to live in.

TXUS on August 31, 2012 at 9:13 PM

Heck, they can have him, I mean the real thing, not just the poster.. if he loses in Nov, the EU (assuming there will still be one) can recycle him and use him for their betterment and advacement :)…

jimver on August 31, 2012 at 9:40 PM

What are you complaining about? Get out there and campaign for Obama! Free college credits, duh!!!

txhsmom on August 31, 2012 at 9:47 PM

Heck, they can have him, I mean the real thing, not just the poster.. if he loses in Nov, the EU (assuming there will still be one) can recycle him and use him for their betterment and advacement :)…

jimver on August 31, 2012 at 9:40 PM

Heck, he’d be more at home there anyway. That’s where he should have run for office and left us to remain free.

AZfederalist on August 31, 2012 at 9:47 PM

Obama keeps youth unemployment high so they have no choice but to campaign for him.
/theories

txhsmom on August 31, 2012 at 9:50 PM

“Youths”

That’s Euro-speak for unemployed young men and women who decide the government owes them something. And take it out on cars.

BobMbx on August 31, 2012 at 9:03 PM

….but!…CAN they poop on cop cars?
USA…USA…USA!

KOOLAID2 on August 31, 2012 at 10:07 PM

Yeah, but Romney and Ryan want to continue the socialism, even after we have run out of money. Sorry, not buying the Republican tonic anymore. Want to earn my vote, do it the old fashioned way, do the work required.

astonerii on August 31, 2012 at 10:17 PM

And if the reports are correct, China is about to crash. Another thing that’s not going to end well.

rbj on August 31, 2012 at 9:11 PM

Don’t be too quick to believe them. China has been around before Columbus’s grandfather was born; the probability of them just up and collapsing in our lifetimes is slim.

MelonCollie on August 31, 2012 at 10:19 PM

Anyone watching Luntz(on Hannity) and his polling on the convention speeches?? Yowzers!

esr1951 on August 31, 2012 at 9:06 PM

O/T but I saw it! I was stunned!

I hope everyone will watch the replay.

kakypat on August 31, 2012 at 10:30 PM

kakypat on August 31, 2012 at 10:30 PM

Plz elaborate.

txhsmom on August 31, 2012 at 10:35 PM

Imagine if the Europeans made their equivalent of U-5/U-6, or total number of people who want to work but aren’t, available.

Steve Eggleston on August 31, 2012 at 10:37 PM

Jobs, Gates, Google, Zuckerberg….
-BIZAYAM

tom daschle concerned on August 31, 2012 at 10:44 PM

@kakypat I just went to Fox and watched the segment. Wow! Paul Ryan polls better than Mitt with swing voters, but even then Mitt was over 70% with dem leaning swings. Incredible!

txhsmom on August 31, 2012 at 10:55 PM

Ahhh, the fabled green economy in action!

jukin3 on August 31, 2012 at 11:08 PM

So do the Europeans statistically slice their unemployment rates the way we do? Is 11.3% measured the same way as our U3 rate is?

I think every conservative media outlet (all 2 of them), and every conservative up for re-election should start quoting the U6 rate. Every day. Kind of like when the LSM started the body count for Iraq/Afghanistan…every day…naming names of those killed. We need to make Obama look like the job killer he really is.

OccamsRazor on August 31, 2012 at 11:47 PM

Heck, they can have him, I mean the real thing, not just the poster.. if he loses in Nov, the EU (assuming there will still be one) can recycle him and use him for their betterment and advacement :)…

jimver on August 31, 2012 at 9:40 PM

I hope Romney makes him ambassador to Antarctica.

Laura in Maryland on September 1, 2012 at 12:00 AM

The only reasons we have not yet reached those staggering levels is debt monetization and money printing by the Fed. As the worlds reserve currency we can still do those things…

But watch out…thats about to change…

PatriotRider on September 1, 2012 at 12:54 AM

I AM DYING To see how much will be cut from the budget if Romney is elected.

So far he said very little.

V-rod on September 1, 2012 at 3:10 AM

And if the reports are correct, China is about to crash. Another thing that’s not going to end well.

rbj on August 31, 2012 at 9:11 PM

Don’t be too quick to believe them. China has been around before Columbus’s grandfather was born; the probability of them just up and collapsing in our lifetimes is slim.

MelonCollie on August 31, 2012 at 10:19 PM

Don’t doubt, the Chinese have been around one hell of a lot longer than that, but there have been several governmental changes and collapses in that amount of time. The thing that’s changed is now, it will affect the entire world. And it will hurt. They can’t continue to loan out, and get just IOUs back, Communist planned economy or not.

BillH on September 1, 2012 at 3:17 AM

It isn’t so much that we spend too much money on things we don’t need as that we spend too much money we don’t even have. If you waste all the money you have, you are back to even. But if you have to borrow money to waste it, you are in the hole.

If only there were someone who had been very successful at taking failing operations and turning them around . . . but where would we find such a man?

Adjoran on September 1, 2012 at 4:27 AM

I’m from one of the aforementioned countries.
To a few commenters:
-The problem isn’t “faithlessness” in these countries. Italy, Spain, Ireland all staunchly catholic countries.
-The problem is central planning, not faith. Faith is for the most part completely irrelevant to Europe’s situation.
-Though the French and the Greeks are spoilt brats who like to set neighbourhoods on fire for being asked to work until the ripe old age of 50, this is far from the case in most of the other countries.

This is a subject that affects me directly, you see I myself have both a law degree and postgraduate degree in law and I’m working in a call-centre. I worked very hard to get both, and achieved very good grades, but the situation here is just plain hopeless.
Luckily, I was born in America so I hope to take the New York Bar in the coming Spring.
But man, am I afraid that the US is about to go the same direction.
And then what?

NotoriousFin on September 1, 2012 at 5:33 AM

And if the reports are correct, China is about to crash. Another thing that’s not going to end well.

rbj on August 31, 2012 at 9:11 PM

Been hearing the same thing.

I’m guessing here, but maybe the following are reasons?

1. Collapsing bond/derivatives market.
2. A poor population that can’t afford nonessential consumer goods and services.
3. A poor population that can’t invest much.
4. A centralized economy that stifles true free enterprise.
5. Americans are buying less of their stuff.

It amazes me also what’s happened to Japan, and well before the tsunami. Back in the ’80s Japan’s economy was touted as the best thing since sliced bread. For the last 10 to 20 years I’ve heard hardly any mention of them.

Dr. ZhivBlago on September 1, 2012 at 6:10 AM

Black unemployment in the US is already in European unemployment territory rates – you see any blacks protesting or rioting?
And yet blacks will vote in mass 98% for Obama.
Why – Obama keeps them placated with non-work requirement welfare payments and liberal use of food stamps and other subsidies.

albill on September 1, 2012 at 7:24 AM

And if the reports are correct, China is about to crash. Another thing that’s not going to end well.

rbj on August 31, 2012 at 9:11 PM

I do remember the quote that: China ended the 19th century as the second largest economy of the world, ended the 20th century as the second largest economy in the world and will most likely continue to be the second largest economy of the world at the end of the 21st.”

Unfortunately that was old China before the Maoist ’1 child policy’ took hold in a big way. The end of the 20th century had seen a large shift of people from agrarian areas to urban/industrial areas… but there is no large wave of people to replace that generation and the previous. That means not enough people to farm, not enough people to do productive work in factories, and a destabilized system in which the older workforce, once gone, leaves a vacuum behind it.

China has tried to continue rolling over late ’90s debt and is now facing the problem of not just that old debt to the outside, but internal debt problems that make our housing example pitiful. Consider that China did with manufacturing, commercial and residential markets what we did only to the housing markets… you see McMansions going empty or being sold at a fraction of their cost when they can be sold, at all, here. In China they built entire CITIES on this premise. Then they doubled down on Japan’s lost decade strategy of over-prioritizing government infrastructure spending. All of this going on while companies went bankrupt, paid nothing on their debt and, due to cronyism, were able to get new loans to set up shop again. A few years ago I read that the conservative estimate of China’s economy built on bad internal debt (not the external debt to bond holders) was 30% and a more realistic estimate was 60%. In the US that was about 8% with the housing market, and that is being generous.

Demographics, bad debt that isn’t being paid off, crony capitalism… now a little sea coast town can stop expropriation of their property, fight off the police sent in by the government and force the government to the negotiating table. Islamist problems in the far west of China go hushed up, as well as the Uighar problem. Eastwards just a bit you have provinces where The Little Red Book has reappeared as well as Mao worship… gotta wonder how they see the corruptocrats in Beijing…

How bad is it? Foxconn, the company that has run virtual labor camps with dorms in factories, and 8+ people to a dorm room that looks like a closet to most westerners, that company, ever so crony, is shutting down factories and moving to Vietnam because labor costs are too high in China. And that in a country where $50/week is considered a princely sum to a common laborer and $6/week is more the norm.

Sure China has bought up a lot of gold. If you were facing a catastrophe and had to get out of China quickly, there is nothing like a ton of gold or more to open up the doors, now, isn’t there? Sure the ‘common man’ can buy gold there… can’t afford it, but can buy it… the apparatchiks, party sycophants, cronies in industry/finance/banking/land speculation they can buy it.

What happens when the Chinese dust bowl lacks the labor to bring in a meager harvest? Or the cost of food has people eating tasty cardboard? And no one skilled in agriculture to actually do the work of keeping the food flowing?

We are about to find out and sooner, rather than later is what I’m expecting. Hope you like seeing ‘Made in Vietnam’ on stickers in the near future. Maybe they can wise up and not do the Asian squander bit of Japan and China… no bets on that, though.

ajacksonian on September 1, 2012 at 8:57 AM

I would look at the various European countries, to see how they categorize their populations, and what happens to unemployed people who run out of benefits. Are they just ignored, as in the US?

disa on September 1, 2012 at 8:58 AM

Imagine if the Europeans made their equivalent of U-5/U-6, or total number of people who want to work but aren’t, available.

Steve Eggleston on August 31, 2012 at 10:37 PM

They also have a high percentage who don’t want to work. 12 months of vaca being so much better than 1 month.

Dasher on September 1, 2012 at 9:02 AM

It doesn’t work. (except for the Politburo Elites)
listens2glenn on August 31, 2012 at 9:14 PM

That’s the point, isn’t it.
Progressives always mean the opposite of what they say. “Spread the wealth” actually means concentrate the wealth in fewer. Everyone else is just a useful idiot. It is interesting to watch those who know jockey for favor in the hopes of gaining a position in the ruling class, or at least held close enough to grab a few scraps fall off the table (Chris Matthews).

tdarrington on September 1, 2012 at 9:30 AM

Barry’s solution is to make everyone a government worker. “Unemployment” solved! Now that pesky problem of having to PAY them! Hey! Raise taxes on the RICH! They have all the money, Barry’s friends told him so.

GarandFan on September 1, 2012 at 9:33 AM

OK, that’s a bridge too far. The political system does not relate to a theological one as you would have us believe.

MJBrutus on August 31, 2012 at 9:15 PM

Actually it really does.

Europeans traded their belief in God for faith in the Socialist monster state.

Even an atheist can see that that has had terrible consequences.

CorporatePiggy on September 1, 2012 at 10:28 AM

But does their number include all unemployed, or do they not count those who’ve quit looking, as we do? Hard to compare statistics when the different sides are posting their own numbers.

PantsDailyon on September 1, 2012 at 11:00 AM

Huh? So the point of this post is Huge debts mean lots of unemployment? Let’s look at some figures:

Unemployment rate:

Euro area: 11.3% (July 2012)
USA: 8.3% (July 2012)
Japan: 4.3% (July 2012)

Ratio Debt to GDP:

Euro area: 88.2% (Q1 2012)
USA: 101% (Q1 2012)
Japan: 208-229% (2011)

Fail.

NewtRomney on September 1, 2012 at 2:46 PM

The last two years Bush was in office we had a majority of democrats in Congress, and I hold Congress at fault with both parties with the mess we are in now. Forget the toilets and lightbulbs and Greek yogurt and do something about the condition of the Country. With the ten thousand, yes it’s ten thousand staff in Congress makes me wonder what’s going on. My source: http://www.cato-at-liberty.org/the-number-of-congressional-staff-is-the-real-problem/

mixplix on September 2, 2012 at 5:29 AM