Please note the quotation marks I used above... long time readers will know how a series of very well followed US reports have been adjusted over the years to a more positive bias. In the corporate workplace we call this garbage in, garbage out; in government we call it official facts. So the press runs with it; economists run with it - and we all smile... never questioning the situation. Well not all of us.
Specific to our unemployment rate and how it is skewed lower officially than the way it used to be measured, please go through and read this post [May 8, 2009: Real April Unemployment Rate Reaches 12.9%] So as you read this please understand that is measured like we did in the old days (pre early 90s) we'd be the 3rd worst in Europe after Spain & Lithuania. Already. And we're not done getting worser! (sic) So until the next bubble is created (green energy) or we return to inflating homes (fun!) so we can recreate a whole subindustry of jobs dependent on house building & equity withdrawals (redux) - this jobs thing is a 'minor' issue. (but not for the stock market) And let's put in the caveat I have no idea how all the countries below skew their measurements; they might all have adopted US style policies of you can't handle the truth.
As always with these sort of articles, please read it - take this red pill, scoff at those losers on Main Street who seem to be affected by this thing that does not affect the market (i.e. the economy) and buy stock. Preferably with 2 fists and with glee while shouting We're better than Lithuania!
(click to enlarge)
Via New York Times:
- FOR many years, unemployment in the United States was lower than in Western Europe, a fact often cited by people who argued that the flexibility inherent in the American system - it is easier to both hire and fire workers than in many European countries - produced more jobs. (I love dogma)
- That is no longer the case. Unemployment in the United States has risen to European averages, and seems likely to pass them when international data for April is calculated.
- The current economic crisis, wrote John Schmitt, Hye Jin Rho and Shawn Fremstad of the Center for Economic and Policy Research, a research organization in Washington, has turned the case for the U.S. model almost entirely on its head. (except in the United States of course ...)
- In March, the American unemployment rate stood at 8.5 percent (wrong), the same as the average rate for the first 15 members of the European Union - the countries that were part of the group before it began to expand into Eastern Europe.
- Because countries calculate unemployment rates differently, the rates used in the accompanying graph are the harmonized rates calculated by Eurostat, the European Union's statistical agency. Harmonization does not change the American rate, but does affect some other rates. (only a magic formula called reality + truth would change the US rate, so it won't be changed)
- When the European figures are compiled, it seems likely that the American rate will be higher for the first time since Eurostat began compiling the numbers in 1993.
- The tables show how rates compared in various countries in March - or, in the case of some countries that are slower in compiling numbers, in the latest month available - and three years earlier, in March 2006, as the American housing boom neared a peak and economic growth was strong. (which was in fact a mirage based on easy money, housing ATMs, and shopping based on the house & easy money - but yes other than that economic growth was strong. As long as you dismiss the fact median wages were flat for the decade while wealth concentration was a its highest since the late 1920s. So I suppose strong would depend where on the now heavily skewed US bell curve you sat - and how much your house appreciated by the month) Then, the United States had an unemployment rate of 4.7 percent, lower than all but three of the 15 European Union countries - Denmark, the Netherlands and Ireland - and equal to that of a fourth, Luxembourg.
So even with our wrong rate - how did we do?
- As the graphic shows, the March rate for the United States was higher than the rates of 11 of the 15. The exceptions were Portugal, which has the same rate, and Spain, Ireland and France. Eight of the 15 European countries have rates that are lower than three years ago. (this is where those who preach dogma say European countries cannot fire their workers as quickly as American companies; but wait - that was the same excuse we used as to why European unemployment rates were higher in boom times ... )
- How did that happen during a worldwide recession? First, it appears that the safety nets in many Western European economies made it easier for people to keep their jobs as the economy declined. (dogma dictates I say this causes inflexible economies that don't rebound as well as ours) In Germany, programs allow companies to get government help in paying workers, for example, keeping them employed.
- Another factor may be the lack of an economic boom in many European countries, which has left them less vulnerable to recession-related cutbacks. (should of cut your interest rates to 1% and goad all Americans to enjoy adjustable rate mortgages, preferably of the option ARM kind - such as our central banker... this is why these socialists missed out on a great boom... great profits could be made by your CEOs in such times if you had simply had a complicit Federal Reserve. Clearly your economic systems are sorely lacking Euro folk - we call it this a dynamic economy here)
So what caused certain countries to have similar unemployment rates to us? Ah yes - they followed our dynamic ways to create false prosperity.
- Spain and Ireland, two of the highest unemployment countries in Western Europe, suffered housing booms and busts that were comparable to the cycle in the United States.
- Unemployment is also particularly high now in the Baltic states, Estonia, Latvia and Lithuania, which ran up large trade deficits during the good times and are suffering now that it is much harder for them to borrow money.
We combined the best of Spain/Ireland and the Baltic states - housing booms and large trade deficits. Because we're AAA rated, and the fallback currency for the world. Hence, we can do whatever we want with no fallout.
Now what are we doing this time to make sure we don't repeat the easy money flooding of the economy to create unnatural boom / busy cycles that only kick the can of our issues down the road?
Well enough about that... green shoots. Green shoots.