Battle4Liberty

If you just listened to the mainstream media you’d think the U.S. economy was doing quite well. Consider the opening lines from an LA Times article on Friday entitled, ECONOMY ADDS 169,000 JOBS IN AUGUST; UNEMPLOYMENT RATE EASES TO 7.3%:

“The economy added 169,000 net new jobs last month and the unemployment rate ticked down to a near post-Great Recession low of 7.3%, its lowest level since the end of 2008, the Labor Department said Friday. The job growth in August was slightly below analyst expectations though roughly in line with the average monthly gains this year. But it came along with significant downward revisions for the previous two months, raising questions about whether economic conditions have improved enough for Federal Reserve policymakers to start reducing their stimulus efforts.”

What the LA Times and others aren’t telling you is that workforce participation actually dropped to 63.2%, its lowest level in 35 years. How can the unemployment and workforce participation rates drop at the same time? The answer is quite simple, and is one that would be more than a footnote if major news outlets weren’t seeking to influence public perception about the economy. There are some technical issues involved in calculating the participation rate, but it’s essentially the proportion of willing and able working age Americans who are either employed or actively looking for work. This percentage hovered around 66% when President Obama was elected in 2008. Had the participation rate remained unchanged since that time, the current unemployment rate–which does not count those who have given up looking for jobs–would exceed 11%. This number is even higher when you consider underemployed Americans.

Not only is the real unemployment rate constantly understated, but these numbers indicate that a higher percentage of jobless Americans EITHER don’t believe the hype and have given up looking for work OR their current situation–considering unemployment, welfare and other benefits–does not motivate them to enter the workforce. Neither of these scenarios is good for our economy. Moreover, the LA Times questions whether the “improvement” in the economy is great enough for the Fed to trim its stimulus (AKA, quantitative easing). Even with the Fed’s efforts to prop up the economy, it remains stagnant and real unemployment continues to be a serious problem, leading a rational observer to question the current path we’re on.

I’m not trying to talk down the economy, but the first step in addressing a crisis is to admit that we’re facing one, and the second step is to define it in honest and clear terms. At this point, neither the President nor the mainstream media is willing to do either.