Remember the famous line from “The Wizard of Oz,” “pay no attention to the man behind the screen?” Thanks to little Toto, the real person manipulating the levers was exposed — and so it’s happening here in America.
We’ve shared here countless times the assessment that we’re not living in a free market/free enterprise economy, but rather one that’s artificial. We’re being told constantly that things are rosy, we’ve survived a great recession, etc. We hear incessantly that we’re living in an age of massive job growth and economic expansion — yeah, right.
Well, as reported by Bloomberg, “The number of applications for unemployment benefits unexpectedly increased last week to a six-month high, indicating tempered progress in the labor market.
Initial jobless claims climbed by 10,000 to 293,000 in the week ended Jan. 16, a report from the Labor Department showed on Thursday. Last week coincided with the period that the government surveys businesses and households to calculate payrolls and the jobless rate for January.
Plunging oil prices may encourage further cuts in the energy sector at the same time manufacturers reconsider headcounts as the global economy slows. Even so, a sustained rise in jobless claims would be needed to confirm that layoffs are on the rise and suggest a general weakening in the labor market.
“Overall, I wouldn’t be too concerned,” said Gregory Daco, head of U.S. macroeconomics at Oxford Economics USA in New York. “As long as the trend continues to be gradual, it’s not excessively worrying. We are going to see more moderate job growth as the labor market continues to tighten.”
The problem is we’ve been telling ourselves a blatant lie about the unemployment situation in America. It’s unfathomable to have a 5 percent unemployment rate when the workforce participation rate in America is at a 40-year low of 62.6 percent. What’s happening is the base is adjusted, because there are some 93 million Americans who’ve dropped out of the workforce and not looking for employment. If those Americans were added back in, which accounts for those out of work but looking, we’d see the real truth about our labor market. And if you go out on the streets, you’ll see what’s really happening in America.
And what should concern us even more — and I see it living here in Texas now – is the sector that’s been propping up the American economy during this anemic “recovery” has been the energy sector. And the main contributor been oil and gas.
We all know what’s happening — oil prices are below $30 a barrel. The Saudis opened it up, but worse, President Obama cozying up with Iran is allowing them to flood their oil onto the market, sending the energy sector into a free fall, as reflected in the recent Wall Street selloffs.
What’s going to happen over these next 3 to 6 months will be critical. Estimates are that anywhere between 30 to 40 percent of oil companies will be going bankrupt, shutting down — what does that do for our unemployment situation?
We’re already seeing the decimation of the coal industry, instead of challenging them to develop new cleaner technologies. We should be producing, consuming and exporting our energy resources and making ourselves not just energy independent, but the major energy exporter to our allies. This would be a boost to our economy, as well as a boost to undermine our adversaries, who use energy resources to keep others hostage.
But that’s not the ideological agenda of the Obama administration, which is centered on the ghosts of climate change. Sure, we can use renewables, such as solar and wind, to complement our natural gas usage for our domestic energy grid, but we shouldn’t just abandon fossil fuels of which we have abundance due to new technologies.
And never forget, the energy revolution that has powered the American economy over the past 7 to 10 years was discovered on state and private lands — the Obama administration has done everything to shut down hydraulic fracturing—“fracking” — with the aid of the limousine liberals of Hollywood.
Our GDP, which has been limping along at a tad above 2 percent, is constantly being revised downward. But you don’t hear about that because the man behind the curtain has you focused on the wizard.
This economy needs upwards of 450,000 jobs created a month — we are far from that marker. We can’t settle for the new normal, which will potentially lead us into another recession. The Federal Reserve in an attempt to build confidence in our economy, raised interest rates just 0.25 percent, with a schedule of three more raises in the future.
The markets have become too addicted to the crack cocaine of quantitative easing and other artificial manipulations to prop up our economy — such as printing money in order to monetize our national debt. All of these artificial aid measures have failed, and we now see that, but what should we do?
First of all, what should be done won’t be done by the fella behind the screen — and Obama is the facade, the “wizard,” just smoke and mirrors. The folks behind the screen will never unleash the full capacity of our free market private sector. They’ll never reform our tax code and enable small businesses to grow. They won’t eliminate capital gains, dividends, and death taxes. They won’t reform our corporate tax rate and incentivize trillions of dollars of capital to return to America for investment, innovation and ingenuity — economic growth. The folks behind the screen won’t reform the budgetary process of the federal government and curtail the spending sickness of Washington DC. They won’t find the courage to reform the mandatory spending programs (Medicare, Medicare, Social Security, net interest on the debt) that make up nearly 64 percent of our federal budget. They won’t attempt any of the simple solutions that would restore our economic engine.
Instead, the folks behind the screen will continue to distract us with the “wizard” and the mythical ruby red slippers of income equality, free college education for all, free healthcare for everyone, as we all follow the Yellow Brick Road.
Just as Dorothy awoke from her dream, we’d best awake from the facade of the artificial economy which is now beginning to unravel. We need to stop being intimidated by the flying monkeys and find the courage of the lion, the brains of the scarecrow, and the heart of the tin man to restore this Republic — we ain’t in liberal progressive socialist utopia anymore, Toto!