Posted by
Always To The Right on Friday, January 09, 2009 1:17:11 PM
Employers shed over a half-million jobs
in December as the year ended in the grips of a full-blown recession.
The total job loss for 2008 went over 2.6 million, mostly in the latter
half of the year, as prospects for growth look dim indeed. Even with
all of that truly bad news, the AP manages to add a little hyperbole
Uh, okay, thanks for the no-context context. Job losses in 1945
were catastrophic for a nation of 132 million people. We have over 300
million today, and we have increased the workforce by a much larger
factor as women have entered the workplace. Total employment in
December 1945 was 39.111 million Americans. Total employment in
December 2008 was 138.078 million Americans.
For the mathematically challenged, the difference between 2.6
million jobs lost in 1945 and in 2008 is that the former represented a
whopping increase of 6.2% in unemployment, while the latter represents
a 1.89% jump. It’s bad, but it’s not even in the same ballpark as
1945. And it’s worth noting that the US bounced back nicely in 1946,
with unemployment below 4%, and managed to do that without massive new
deficit spending by the federal government.
Furthermore, it’s hardly unprecedented. We had more than a decade from 1975 to 1986 when the average
unemployment was higher as a percentage than it is now. Three of those
twelve years had unemployment higher than 8%, and two of them (1982-3)
at almost 10%. In those years, the US had over 10 million people
unemployed, worse than now.
How did we fix that problem? Not through nationalization and
massive works projects. We pushed investments and cut taxes in order
to get capital flowing in the markets, which created jobs through
innovation. So far, Washington has proposed the kind of solution that
created the stagnation we had in the 1970s and 1980s, which is capital
confiscation, based on a panic that will eventually become a
self-fulfilling prophecy. We need to quit shrieking and start learning
about recessions and the solutions that actually worked — and failed —
in the past.