December Jobs Report

There is a frontpage story today by Catherine Rampell detailing yesterday's job report.  One-hundred-fifty-five-thousand jobs were added in December which kept the unemployment rate steady at 7.8%. "But it was not enough to reduce the backlog of 12.2 million jobless workers, underscoring the challenge facing Washington politicians as they continue to wrestle over how to address the budget deficit."

It has been over four years since the bankruptcy of Lehman Brothers pushed the Dow into freefall, and still high unemployment persists. I'm a reader of the Monthly Review, a small socialist magazine, and to me their perspective is persuasive. Advanced capitalist economies like the United States, Western Europe and Japan have difficulty posting high annual GDP growth.  This leads to financialization or casino capitalism -- the resort to legerdemain in the form of complex investment devices like derivatives to juke the growth numbers.  This paradigm is bust and another bubble has yet to come along to replace it.  The class war raging in D.C. between Republicans and Democrats is in many ways about the nature of the next bubble. Democrats like Obama are meekly, tepidly pointing the way to a green economy. Republicans are energetically -- look at all the money super PACs raised during the election -- attempting to re-inflate the go-go days of the Wall Street through the repeal of Dodd-Frank, slashing the top tax brackets, voucherizing Medicare, privatizing Social Security. What is so bizarre about the Republican point of view is how anti-majoritarian it is; it clearly benefits only a tiny elite -- the 1% -- yet it dominates one (if not both) of the major political parties.  It speaks to the power of capital and the electronic forms of communication at its command.

One-hundred-fifty-five-thousand jobs for the month absorbs those entering the work force due to population increase but not much more.  At the current rate of job creation it will take, according to Rampell, "seven years to reduce the unemployment rate to its prerecession level."

Given the uncertainty over what Congress will do, estimates of the unemployment rate’s path this year vary wildly. The more optimistic forecasts for the end of 2013 predict that unemployment will fall to just above 7 percent, which would be considerably below its most recent peak of 10 percent in October 2009, but still higher than its prerecession level of 5 percent.

Rampell, who from watching her on New York Times webcasts has a slightly arrogant manner, ends her story with a description of what the extension of emergency unemployment benefits (as part of the fiscal cliff deal) actually means for laid off workers.  It's compelling.