Today’s U.S. Employment Situation Report was bad. The unemployment rate rose from 9.6% to 9.8% while the labor-force participation rate remained unchanged. The private sector created a meager 50,000 jobs.
The economy is seventeen months into a modest recovery but labor markets are frozen solid in recession. Policy makers in two administrations have reached some sort of consensus: throw money at the problem. We have spent trillions through fiscal policy (TARP, the ARRA, etc.) and monetary policy (QE1 and QE2) with little impact on employment. I hope that the election was a manifestation of wisdom by the electorate, the realization that government does not have all the answers and is not all powerful.
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