New Jobless Claims Rise Instead of Falling

News organizations often report on the economic expectations of a "consensus" of economists. I'm never quite sure which economists the news organizations regard as forming the consensus, but the reports almost always illustrate that the consensus gets their economic forecast substantially wrong. I suspect that right now news organizations which support President Obama report on the consensus of pro-Obama economists who keep forecasting a recovery in hopes that simply by forecasting it they can make it happen, and then they can give the credit to Obama.

According to the liberal Associated Press, the consensus (in this case of "Wall Street economists" whomever they might be) expected initial claims for unemployment insurance to drop slightly. Instead of dropping, however, initial claims for unemployment insurance rose 36,000 to a seasonally-adjusted total of 482,000. Nearly half a million workers, in other words, lost their jobs last week--up 36,000 from the nearly half a million workers who lost their jobs the previous week.

It's frightening how quickly the failed Keynesian policies of the Bush and Obama administrations and the Democratic Party majority in Congress have caused the US economy to shed jobs. Instead of cutting marginal tax rates and reducing government spending to ease the deadweight losses government imposes on the economy, government has imposed Keynesian policies which have increased the deadweight losses and dragged the economy into what's now clearly the worst recession since 1946, and arguably since the Great Depression itself.

Ben Bernanke, chairman of the Federal Reserve System, has led the charge to try to trick the economy into real growth by inflating the money supply. Increasing the money supply at a rate faster than the rate at which the economy is growing causes inflation, which is a tax on every dollar that you hold. I predicted in the fall of 2007 that if he imposed inflationary Keynesian policies to try to avert a recession that he would cause the very recession he wanted to avert, and that's exactly what happened. Because Bernanke, Obama and the Democratic Congress have continued the policies that Bernanke (and his predecessor, Alan Greenspan) and Bush started, I've predicted that things will continue to get worse before they get better.

I see no sign that Obama, congressional Democrats, or Bernanke have learned their economic lessons, so alas I have to renew my prediction that things will continue to get worse before they get better. I think right now that the best hope for the economy lies in big Republican gains in the 2010 congressional elections, forcing Congress to make cut marginal income tax rates and reign in the federal government's vast multi-trillion-dollar spending binge that started when Bush and congressional Democrats got together in late 2008 to pass the so-called TARP bailout of Fannie Mae, Freddie Mac, and the private financial intuitions that they'd subsidized into making home loans to people who couldn't afford home loans. A big Republican congressional victory too might persuade Bernanke (or whoever replaces him as he's up for reappointment) to stop inflating the money supply too. Unfortunately the officials at Fannie Mae and Freddie Mac are using some of the TARP bailout (that came from your tax dollars) to pay themselves millions of dollars in bonuses. So expect things to continue to get worse before they get better.

There's not much to it, but you can read the original Associated Press (AP) story at http://www.foxnews.com/politics/2010/01/21/new-jobless-claims-rise-expected/. I'd like to point out to those who still think it's Fox News that's the biased network that here we have another example of Fox balance, as it carries the liberal AP story. Fox in fact regularly carries liberal AP stories. I'll also point out that while Fox carried the full speeches of both Republican Scott Brown, and Democrat Martha Coakley, PMSNBC and the Commie News Network carried substantially more of loser Coakley's speech than of winner Brown's. Fox too was the only network to give Hillary Clinton a fair shake against Obama during the 2008 Democrat presidential primaries.