What is the deal with so many people simply not in the mix, looking to find a job or even desiring work? This period is most comparable to the Reagan period when the nation was completely in the dumps. Back then the unemployment rate was higher, interest rates through the roof, and even the sitting president admitted the nation was in a malaise. What did Reagan do so differently than Obama that he saw a string of GDP reports that reached beyond 9% quarterly and right now we can't manage to crack 3%? What can be done right now to get people to simply believe? Despite the media and all the pom-poms, there is a grassroots depression that must be corrected in order to have something to truly cheer.
The labor participation rate was crashing and sitting at 63.9% on Reagan's inauguration day and at the end of two terms it was 66.5%. When President Obama was sworn in the rate was 65.7% now it's 63.7% yet this works in his favor with the general media and maybe even voters.
Talk about celebrating mediocrity, I believe the real problem is that as we lower our level of greatness, dumb down school curriculums, and think we can be number one with 1.7% annual growth, it sets us up for real failure down the road. Not in Touch
It looks like Greece will accept austerity at about 1.5% of GDP although this saga is never over until it's over, and even then it's dragged longer. Be that as it may this could be the day or week we get some (short term) resolution to the current debt hurdle, but this is a lot of good money that will be needed over and over again. The thing is Greece isn't ready intellectually to be a real player in the global economy. You can debate whether work ethic can improve or austerity can be accepted to make its future better, but for Greece and other European nations that have squandered former greatness, the biggest hurdle is whether they are smart enough.
The world of the future goes to the thinkers, especially in science and math, and the PIGS aren't ready. In the developed world there are 34 nations (OECD) and only two; Czech Republic and Turkey, rank lower in education standards among 15 year old students. Spain ranks 33 in the world in reading, Greece 32, Italy 29, and Portugal 27 (United States 17). In math and science the rankings are even lower (the US is freefalling in both as well). I guess there must be something said for being able to chill out on the beach and spend money you haven't earned because you don't even waste time on the Internet. In a connected world, Greece, Portugal, Italy, and Spain seem woefully detached.
The fact is these bailouts are going to go on for years, maybe decades, until these nations get into the game. The crazy thing is if Americans keep throwing up melancholy cheer and continue lulled into celebrating ordinary, even subpar developments, then we aren't far behind the PIGS.
Rethinking Friday's jobs numbers, I'm very concerned about the amount of people that dropped out of the work force, which coincides with the dip in consumer confidence and increase in consumer savings rates. The headline number got more juice from media cheerleaders; for the stock market that's fine, but realistically had a few more million people dropped out, the jobs market and the unemployment rate would have been zero. The folks at NBC and MSNBC will cheer, but Main Street will surely weep. I continue to think the nation has entered into a melancholy phase, and that makes it vulnerable.