Let’s have some fun with not-so-funny employment numbers.
President Obama claims that the $85 billion in federal budget cuts that began on March 1 will cost our country 750,000 jobs. Ben Bernanke used the same figure when testifying before Congress recently.
I don’t know if that figure is accurate, but that is what both men claimed.
So if the figure is correct, how many jobs would be lost if the country really tightened its belt and got back to just $200 billion to $300 billion annual deficits — which were the unacceptable norm before the financial crisis?
Well, we’d need approximately 10 times the $85 billion in budget cuts (or tax increases) to get the current deficit down to pre-recession levels. If you do the math, that would presumably mean 10 times the 750,000 job losses, or a total of 7.5 million.
There have been 6.2 million jobs created since 2010, but we’re still 4.7 million jobs shy of the peak in 2007.
If we did cut $850 billion (10 times the $85 billion), this country would lose all the jobs created since 2010 — and then some.
I wrote a column Saturday with some thoughts on the February employment report, including the political problems it creates for the White House and Bernanke. Here are some additional fun facts.
The consensus among experts was that the 236,000 new jobs in February were a game changer and irrefutable good news. I hate to bring down the mood, but these are probably the same people who cheered the 310,000 jobs created in January 2012 — which turned out to be a seasonal-adjustment fluke.
We all now know that job growth was miserable the rest of 2012.
So what don’t you know about last Friday’s figures?
For one thing, that 236,000 gain (compared with the 160,000 uptick that was expected) was tempered by a 15,000 downward correction in the number of jobs created in December and January. In fact, job growth in January alone was lowered by 38,000.
That probably means the February figure that came out last Friday will probably also be revised downward in the months ahead.
What about the impressive drop in the unemployment rate to 7.7 percent from 7.9 percent? That was mostly due to people who stopped looking for work and, as far as the Labor Department is concerned, left the work force.
If the real-life job market were picking up, people would be entering — not leaving — the work force, and the unemployment rate would be rising.
Cheer the most recent employment numbers if you want. But keep it restrained until we see a lot more evidence that job growth is picking up — especially as the $85 billion in federal budget cuts take hold.
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A few weeks ago, a reader wrote to my Dear John Sunday column to complain that someone had a page called Open Chat on Facebook that was showing kiddie porn.
I called Facebook. The company’s enforcement group took a look and removed the page immediately.
In fact, Mark Zuckerberg’s social-networking giant — which has gotten a lot more vigilant against this sort of thing of late — also took down a second page posted by the same people.
The people posting the page weren’t happy. “We are currently working with Facebook to resolve this issue as quickly as possible. We had to re-write alot [sic] of the code over the last 24 hours to make the chat work as a non-app,” they posted online.
And then they moved their sleaze to Amazon.
Yes, Amazon! The company from which we all buy a lot of products owns Amazon Web Services, and it is now hosting Open Chat. I thought that fact might interest Amazon customers.
Why am I mentioning this? Because I called Amazon twice last week, relayed these facts — and have been ignored since.
And I don’t like to be ignored.
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Ben Bernanke made it sound so easy earlier this month.
When he was testifying before Congress, the chairman of the Federal Reserve was asked how he was going to unwind his dangerous quantitative easing program when the time comes. Under QE, the Fed has purchased trillions of dollars of government bonds that nobody else wanted.
The Fed paid for the bonds by printing money.
Bernanke contended that the unwind wouldn’t be a problem. The Fed never has to sell the bonds, he explained. All it had to do is let the bonds mature peacefully and . . .
After the “and” is the important part. When a bond matures, normally the entity that issued the security will have to turn over the face value of the bond in cash to the person who owns it.
So as government bonds held by the Fed mature, the US Treasury will have to exchange them for trillions of dollars in cash. The problem: the Treasury doesn’t have those trillions in cash to give to the Fed. And with deficits continuing into the distant future, the trillions aren’t likely to just appear.
The Fed, I guess, could forgive the loan it gave to Treasury (and that’s what bonds are — loans). But if bonds could be made to just evaporate, anyone else who owns any government bond would be worried about its value.
It’s not as easy as Bernanke thinks.