What’s making me very frightened this holiday season? Predictions that the US economy will be losing ONE MILLION JOBS per month next year.
London-based GFC Economics is making a frightening prediction: By spring 2009, the United States could be facing more than 1 million layoffs every successive month.
Expenses related to corporate debt, and muddy credit markets consumed by fear, are driving a fast-approaching “hard landing,” claims a Sunday report in UK’s Guardian.
Even in a country with 300 million people, that’s a lot of folks who will suddenly lose their incomes, their health insurance, and quite likely their homes by the end of 2009. And with our nation’s negative savings rate, there aren’t any nest eggs for most of them to fall back on. Those who do have anything left in their 401k plans or IRA’s will likely be forced to dip into them early despite the onerous tax consequences. Which means we can expect the stock market to go much, much lower in the months ahead. This isn’t a hard landing, this is a crash landing the likes of which we haven’t seen — ever.
That better be one helluva stimulus package Congress passes as soon as Obama takes over from Bush, or we are likely headed for Depression era soup lines at warp speed.
What the article doesn’t make very clear is a definition of “every successive month.” How many months will see a loss of 1 million jobs?
It’s a private company so the report is available only to subscribers. What Raw Story posted was essentially the entire Guardian story as well.
However, I can only assume they mean every month for the indefinite future.
Thanks Steven. i think we all need to make plans to survive this storm. Maybe another BT Series?
Steven, this is a very depressing article, no pun intended. I think we have to have leaders who can think outside the box cuz the problems we have, specifically, those toxic derivatives, appear almost intractable to conventional economic thinking.
Paulson seems to have become unglued and Bush is worse than useless in this economic crisis. Despite the active involvement of the Federal Reserve System, banks still will not loan money to each other. What do they know that we don’t? The economy is entering a state of paralysis and the people are becoming scared.
Perforce, we need to know the dimensions of our derivative crisis. We need transparency of these dark, obscure monsters of debt at once. Closing our eyes and hoping that this problem will go away is merely whistling by the grave yard. It’s time to compel the wizards of Wall Street to reveal what their real financial status is.
We can’t fight what we can’t see. That is, just the road to fear and financial panic.
I read Jonathan Alter’s The Defining Moment last week. It is a good overview of FDR’s administration with a focus on the “first hundred days”.
One of the striking things is his review of the start of the CCC. The program was put together by leveraging military logistics and a visionary focus on the environment and conservation (limited by the vision of the time). It was labor-intensive, which mean that income was distributed very broadly. It put to work people who were unemployed and who voluntarily saw it as an opportunity. And it was put together in record time.
A similar mass program to repair buildings in the National Parks, maintain trails, repair buffers on rivers and streams, clean up Superfund sites, and so on would provide widespread employment and would dramatically push forward a progressive environmental agenda. The military need not be involved in logistics; there are many other agencies now in the federal, state, and local government that can do this. In most cases, the plans have been drawn up and are sitting on the shelf. All that is needed is to mobilize the workforce and materials, distribute funds the appropriate federal agencies, state governments, and local governments, and begin work.
The US Job Service could process the applications, some of the mothballed commercial aircraft could be brought back into services to transport those who need transport (the projects this time are more widely dispersed, and don’t require the amount of transportation involved in the CCC.) Materials acquisition will put many industries back to work; the planners should work with those industries to expedite deliveries. and so on.
The key point are tasks that can be specified quickly and can get people to work quickly on a massive scale.
that’s not new. As noted by the credible John Williams, We lost 873,000 jobs in November Net of Concurrent Seasonal Factor Bias – not the 533,000 ‘officially’ reported
Hey, One in 10 American homeowners fell behind on mortgage payments or were in foreclosure during the third quarter as the world’s largest economy shed jobs and real estate prices tumbled.
And California is paying with I.O.Us.
2009 will be brutal.
re: the guardian article, situations like this sit-in chicago will become everyday occurrences. as noted:
as the rude one puts it:
and while the big 3 are busy cutting themselves a nice slice of the bailout pie; this from the sunday LAT:
General Motors’ strength is overseas:
off-shored, shell corporations, which, in all liklihood have never paid a ¢ of u.s. taxes on their income, but controlled, and for the profits/benefits of, the fat
assescats in detroit, as the details are being worked out in DC as we speak. btw,and that isn’t even including the Media conglomerate Tribune Co.’s bankruptcy filing today…$13 billion short…and more… btw, so far the NYSE rallied:up 363 pts. on the news.
oh boy.