The jobs report came out today showing 240,000 jobs were lost last month, the unemployment rate is now 6.5%, its highest level in 14 years. This is very serious and the news will likely get worse before it gets better.
My criticism of the government and pundits is that they are out of touch with real people and are looking in the rearview mirror on economic data. Those of us in the real world have seen the faltering economy for over a year and have seen the effect of the credit crisis, loss of jobs and the fear of a job loss.
Rick Santelli of CNBC is one of the few pundits that seems to understand the problem and the real solution he said that “any money injected into the system has to be about jobs”. I agree whole heartedly, all the problems with credit and liquidity will pale in comparison to the issues we will face if unemployment continues its steep climb.
The good news is that I believe that Barack Obama understands this and will make smart choices. I only hope that the lame duck administration lets the incoming administration to influence policy immediately because waiting or doing nothing is not a viable option.
(As a side note, I find it interesting that the current administration was very quick to bail out the financial institutions but slow or non-responsive towards other industries – specifically autos. If GM goes bankrupt, the impact on the economy will be devastating – and I would predict far worse than the credit crunch. It is not like we have never bailed out private companies and industries before: airlines, Chrysler and recently the wall street titans. History has shown that providing loan guarantees will not transform us into a socialist economy.)
