Liddick: Economic jitters
Are we whistling past the economic graveyard? Consider…According to the Bureau of Labor Statistics, the US economy created just under 400,000 jobs in April. Even considering about 60,000 of these jobs were temporary government positions, we haven’t seen that many jobs created in a single month for two years – which may be a cause for celebration. So, woo-hoo. Unfortunately, about 440,000 newly unemployed filed for benefits in the same period. And the unemployment rate rose from 9.7 percent to 9.9 percent, largely, we are told, because people are re-entering the labor market – having become more optimistic about their chances, or having run out of benefits.Regardless of the specific mechanisms involved, there is an unavoidable message in the figures: Our country will have to create far more jobs than it did last month, over several years, just to get back to where we were in 2007. Given our economic circumstances, is this really going to happen? Time will tell, but the auguries are not good.How about housing, the economic sector that started the whole economic avalanche? The good news is, according to RealtyTrac, an organization which pays attention to these sorts of things, foreclosure filings in April are down 9 percent nationwide compared to the previous month, and down 2 percent compared to April, 2009. Again, woo-hoo.On the other hand, April foreclosures in Colorado were up 2 percent compared to March, and up 16.14 percent over April of 2009. Clearly, we haven’t seen bottom yet in our fair state – despite what our very own Christine Scanlan thinks.Speaking of which, what does our state Legislature believe the result of actions like “closing corporate tax exemptions” to pay unemployment benefits to people working part-time – among other new handouts to the petitioner class – will be? The animals and the name remains, but do not doubt, Frontier is gone. Qwest is going. Who’s next? Of course, if your goal is to grow the ranks of those seeking government favor, and therefore willing to trade support for votes … mission accomplished.More broadly, last week’s thousand-point stock market skid might have been triggered by a fat-finger keyboard error, but it would not have fallen so far, so fast had there not been broad underlying concerns about the national – and international – economy. Exhibit A in this category is Greece.When Greece – and Spain, and Portugal – were admitted to the “Eurozone,” it was considered good policy. European economists argued that doing so would allow these less-developed economies to integrate themselves into the broader European economic system, and would compel them to fiscal prudence. In actuality, it was more akin to giving a hard-core shopaholic a no-limit credit card and a map to Abercrombie & Fitch. Greece used low-rate borrowing to fund a social-welfare spending spree – with the results we now see. And the vision may be uncomfortable: while Greece’s debt-to-GDP ratio is more than 105 percent compared to our 54 percent, at the rate we’re going it won’t take long before we are them. Sweet dreams …While we’re speaking of Europe’s greased-pole statism, we ought to consider Spain’s “New Energy Economy.” It was long used as an example by those – like our very own Christine Scanlan and Boss Ritter – who argue that rushing headlong toward a “new energy” and punishing all those old, developed (and inexpensive) sources will lead to a bright and beautiful economic Utopia with well-paying jobs all around, clear air, water, puppies, butterflies … oh, and those “skyrocketing” electricity prices the president eagerly anticipates. These days, Spain is not so popular, possibly due to its stumbling economy, crippled by stratospheric energy prices, bureaucratic red tape so thick it has driven one Spanish steelmaker to the wilderness of Kentucky, and persistently high unemployment. But the US is charging down the same road, heedless of these results. With Colorado leading the way. Just wait until we are treated to endless harangues on the unlimited benefits of “Cap and Tax.” Yes, reducing per-capita carbon emissions by 83 percent might eventually make a slight difference in global temperatures, in the unlikely circumstance that other nations also engage in slow-motion economic suicide. But since it will also return us to the emissions levels of 1867, get set to deal with profound economic dislocation. Who knew the Amish were so ultramodern? Then there’s California – our own private Greece – $20 billion in the hole, with no rescue package in sight. What do you think is going to happen when the Golden Bear turns out its pockets and declares bankruptcy? And Michigan. And Ohio? And maybe, not to far in the future, Colorado …On the other hand, industrial production rose by .8 percent last month, and retail sales rose .4 percent. Evidently, people want to look good when they go to the dance on the edge of the volcano…Summit County resident Morgan Liddick pens a Tuesday column. E-mail him at email@example.com. Also, comment on this column at http://www.summitdaily.com.
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