Aaron Blake and Chris Cillizza write in The Fix that President Obama almost granted me one of my wishes last evening. "There was a word missing from President Obama's jobs speech Thursday night: 'stimulus.'" Their statement reminded me of something I wrote in December 2008 when asked about the ideal stimulus package by the Economix blog:
If I had my druthers, the word ’stimulus’ would be expunged from public discussion, along with ‘bailout’ and ‘rescue.’ These words convey the idea that, because we have so mismanaged our economic and financial affairs, we are somehow able or entitled to conjure up additional funds out of thin air to fix our problems. There are two problems with this idea.
Let's stipulate right up front: it's silly to infer much from one month of job-creation numbers. The numbers bounce erratically, they are often revised dramatically one month later and they routinely defy the consenus forecasts by a wide margin.
Last month, forecasters were surprised and the media were elated when the Labor Department reported that job losses dwindled to just 11,000 in November -- much lower than expected (and revised today to a net gain of 4,000). The newly exhuberant forecasters were surprised again on Friday, when the estimated job losses in December jumped back up to 85,000.
"U.S. Job Losses Dim Hopes for Quick Upswing," declared a headline in The New York Times. I'm not sure how much hope there was for a quick upswing, but I'm even less convinced that the new job numbers change the picture all that much.
But here's what's interesting: the Fed's policy under Ben Bernanke seems intentionally geared to high unemployment for the next several years.
It was a scene at the end of The Matrix Revolutions -- the third in the series -- when Neo defeats the machines and Link, the character played by Harold Perrineau, shouts to the people of Zion, "It's over. The war is over."
CNBC today did the financial equivalent of what Link did when it shouted to its viewers that the recession is over. Take a look for yourself below.
Is everyone else having to make as many changes to their address/phone list as I'm doing these days?
Between layoffs and job moves, I now seem to have to set aside a hour or two a month just to keep my Contacts up-to-date. As you might imagine for someone who deals with the media, these days the biggest number of changes is to my list of reporters.
Maybe this is a new business opportunity: create an economic statistic that measures the relative number of changes per monrth.
We'll call it the "Contacts Index," get someone to sponsor the survey, and move the markets when it's reported on CNBC on the third Tuesday of every month.
I'm sure we can get Santelli to rant about it.
Every morning this week the Fed has announced another action to bolster financial markets. At 7 a.m. this morning, the Fed and six other central banks announced a coordinated 50 basis point (half a percentage point) interest rate cut. That's the first global economic policy change ever.