The Bureau of Labor Statistics uses U-6 as an accounting of the total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force. This is a much more accurate representation of the actual number of people who are out of work than the more commonly reported U3 number because it looks at the entire labor force, not just the active one.
The bad economic situation is even worse when we include those who don’t even get counted – illegal immigrants. Even USA Today noticed the trend:
The influx of Mexicans, which has dominated U.S. immigration patterns for four decades, began to tumble in 2006 and 2007 as the housing bust and recession created a dearth of jobs. At the same time, the number of Mexicans returning to their native country along with their U.S.-born children soared.
Stricter border enforcement, more deportations and tough state immigration laws such as the Arizona statute being challenged before the Supreme Court on Wednesday probably also contributed to the shift, says Jeffrey Passel, lead author of the report. The study analyzed data from censuses and a variety of other sources in both countries.
Of course, it is far more likely that the bad economy has more to do with illegal immigrants going back than tough enforcement laws and border actions – after you are here, why would you be afraid of what happens at the border?
Notice that the rise in unemployment did start under Bush as the financial crisis was getting into full swing. Without a doubt, Bush does own responsibility for the crisis – but that responsibility has to be shared with the Democrat controlled Congress and the “progressives” in both parties. This is not a conservative or Republican recession/depression, it is a Democrat/”progressive” recession/depression brought about by “progressive”/Marxist policies that ignored reality.
Writing in the Wall Street Journal in 2009, John Taylor, professor of economics at Stanford and a senior fellow at the Hoover Institution stated:
Many are calling for a 9/11-type commission to investigate the financial crisis. Any such investigation should not rule out government itself as a major culprit. My research shows that government actions and interventions — not any inherent failure or instability of the private economy — caused, prolonged and dramatically worsened the crisis.
The classic explanation of financial crises is that they are caused by excesses — frequently monetary excesses — which lead to a boom and an inevitable bust. This crisis was no different: A housing boom followed by a bust led to defaults, the implosion of mortgages and mortgage-related securities at financial institutions, and resulting financial turmoil.
Monetary excesses were the main cause of the boom. The Fed held its target interest rate, especially in 2003-2005, well below known monetary guidelines that say what good policy should be based on historical experience. Keeping interest rates on the track that worked well in the past two decades, rather than keeping rates so low, would have prevented the boom and the bust. Researchers at the Organization for Economic Cooperation and Development have provided corroborating evidence from other countries: The greater the degree of monetary excess in a country, the larger was the housing boom.
The effects of the boom and bust were amplified by several complicating factors including the use of subprime and adjustable-rate mortgages, which led to excessive risk taking. There is also evidence the excessive risk taking was encouraged by the excessively low interest rates. Delinquency rates and foreclosure rates are inversely related to housing price inflation. These rates declined rapidly during the years housing prices rose rapidly, likely throwing mortgage underwriting programs off track and misleading many people.
I take issue with one of Taylor’s comments, there really was no “excessive risk taking”. The risks were offset by rewards that were largely mitigated by the mandate of the federal government for Fannie and Freddie to soak up the bad loans…and what did we do when the whole Ponzi scheme collapsed? We instituted TARP to soak up even more illiquidity and place it squarely on the backs of the 53% of Americans who pay federal income tax. This is a perfect example of another insidious feature of modern Marxism, the redistribution of DEBT as a substitute for redistribution of wealth. Taking your money up front is too aggressive – you might revolt – better to take your money by assuming debt from one class, hiding it in the cost of government and then passing it on to you through the tax code.
This whole episode is analogous to a teacher bringing a school purchased bag of candy to a kindergarten class and telling the little yard apes to take all the candy they want, then when the kiddies get sick and the headmistress stops the practice, blaming it on the kids. To pay for the empty bag of candy, the headmistress increases the tuition of the whole school (of course, the 47% there on scholarship don’t have to worry about an increase).
We can look away all we want but Bush, the Democrats in Congress and the “progressives” are responsible.
The only, and I mean the ONLY, way to decrease real unemployment is to increase broad based growth in the national economy. Obama and his regime have not been able to bring unemployment down due to this unassailable fact. The reason – the continuation of the same nanny state/big government/”progressive” policies that started the issue in the first place. Now you are being asked to vote for four more years of the same disastrous policies.
I don’t care if you like Romney or not. Any vote for any non-Romney is a vote for Obama.