Shameful Leaders Play Chicken With The Economy Hanging In The Balance

November 9th, 2020 by Tom Lynch

Today, the Bureau of Labor Statistics announced productivity, output and earnings data for Q3, 2020. This follows its announcement three days ago that the nation’s unemployment rate in October had fallen to 6.9%, the 6th consecutive month it has dropped.

While the drop in the unemployment rate is certainly good news, the long-term unemployed (those jobless for 27 weeks or more) increased by 1.2 million to 3.6 million, accounting for 32.5 percent of the total unemployed. Further, the country has seen only half of the 22 million people who lost jobs due to the pandemic return to the workforce.

Regarding today’s announcement, while productivity and output rose 43.5% and 38.6%, respectively, real earnings, a very important number, dropped 9.1% in Q3.

Most of the relief bills passed earlier in the pandemic have expired, including the $2.2 trillion CARES Act, which provided for additional unemployment benefits of up to $600 a week for many individuals.

The Federal Reserve, led by Chairman Jerome Powell, as well as the nation’s leading economists, have been arguing for months that we need a second relief package. Powell maintains that businesses, cities and states, and the unemployed are in dire need of help. On 6 October, in a speech to the National Association for Business Economics, he said the unemployment rate would be closer to 11% were it not for misclassification of idle workers and for people leaving the workforce. He warned the group that without additional support, the economy could slip into a downward spiral “as weakness feeds on weakness.”

Powell and his colleagues at the Federal Reserve say we need a new relief package NOW, and we need it to be BIG. Personally, I am not optimistic about that. I’m no economist, but I have friends who are, and they are not optimistic, either, at least not in the short term. And, although the 74 million (and increasing) Americans who voted for Joe Biden are happy Donald Trump has been handed his walking papers, we remain a house divided now more than ever. Some of us are euphoric, some in denial, others in despair, still others angry beyond words. It will take time and a lot of compassion for healing to even begin. But time is something many of our neighbors in horrific economic difficulties through no fault of their own simply don’t have.

In the next few days and weeks we’ll discover if our elected leaders can get out of the way of their ego-driven lust for power and display enough moral fiber, presuming they have some, to help the businesses, cities, states, and millions of our fellow citizens who hang by their fingertips over the edge of an economic abyss.

 

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