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Wednesday, October 8, 2008
This video was created just before the debate, but my prediction seems to have held and for the reasons I state here.
This American Economy is in trouble. It's in bad straights for three basic reasons:
1) According to the Bureau of Labor Statistics, the Civilian Labor Force Participation Rate topped out 10 years ago and then decreased and continued to do so through to present day. What that means is that more and more people basically stopped looking for jobs and working at jobs than ever before for the first time.
2) The total rate of job growth started to increase at a rapidly smaller rate in the late 1990s and that continues today. You can see the BLS data I collected right on the video. We added about 20 million jobs each decade from the 60s to the 90s, but again in 1999, the job growth party stopped cold. We added just barely 5 million jobs in ten years, that's a drop of 75 percent over what we've produced in the past.
3) During the period of the job losses and labor force participation problems consumer credit shot to rapid rates of annual increase starting just before the turn of the 21st Century. What that means is as we were losing our capacity to produce jobs, we were relying on the credit system to essentially make up for the lack of job growth we experienced in the past.
That's why we're in trouble now. Job losses due to the increased number of competitive market economies -- not the sub-prime mortgage issue -- is the real problem and its been years in the making.
We have to fundamentally alter our economy and the current proposals and the Bailout Bill are only a start of getting at the problem -- but they don't impact this combination of forces that basically creates constant job loss and part of that is the overall International Division of Labor, where cheap workers overseas do jobs that were once located here.
There's an answer, and it's in something I call Zennie's Plan. Stay tuned.
On CNN IReport -- click here.
Labels: news, obama mccain debate, politics, the economy
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