Why have higher unemployment rates become the new norm?

Two basic facts will tell you most of what you need to know about the political picture today.
Fact One: The unemployment rate is the most important of all leading political indicators.

Fact Two: If the August unemployment number to be announced Friday tops 9%—which seems highly likely—the jobless rate will have been above that level for 16 straight months. Already, the U.S. is mired in the longest such stretch of 9%-plus joblessness in more than a quarter of a century.

There is little mystery, then, about why Democrats are in trouble. The party in power is inevitably blamed for so much bad news on the one economic subject that most concerns average Americans.

Yet the political debate on this point, which focuses on what can be done to get Americans back to work right now, is missing a deeper and more troubling reality: The American economy hasn't been a very robust jobs-producer for quite a while. That's the broader question that needs to be discussed, even as we work on the immediate problem.

Indeed, it has been perhaps four decades since America's economy has been the kind of roaring jobs machine that average Americans, aspiring politicians and ambitious business leaders all would like to see. Consider a few historical unemployment-rate numbers—one way to gauge the economy's performance on the jobs front.

Between 1966 and 1970, the U.S. experienced a phenomenal stretch of 48 straight months in which the unemployment rate was at or below 4%—that is to say, a stretch of four straight years when the rate was less than half of what it has been for the past year.

In the three decades since 1970, the rate has fallen below 4% for exactly four months, in the final months of 2000.

Instead, the norm has become unemployment rates in the 5%-to-7% range.

What does Obama's failed stimulus have to do with Winnie?

There is gloom enough to satisfy Eeyore. The president promised the country that his massive $787 billion stimulus package and other spending would reduce the unemployment rate to 8 percent; with the loss of 131,000 jobs in July, it is stuck on 9.5 percent, and would be higher still had more than one million workers not withdrawn entirely from the work force since April. That figure rises to 16.5 percent if we count the 8.5 million workers involuntarily working part time, and 2.6 million workers “marginally attached to the labour force,” which includes 1.2 million too discouraged to continue job-hunting.

So Barack Obama flits from auto factory to auto factory, television cameras in tow, dons safety glasses and argues that he has, really has, created jobs, especially for unionized workers. Next week, voter-hungry Democrats and the odd Republican senator will vote to spend another $26 billion to reverse the tide of layoffs by state and local governments (50,000 jobs cut in July) that prefer federal government handouts to more belt-tightening.

It must be frustrating for a politician who inherited an economy bleeding 700,000 jobs per month to watch his popularity plummet even though the economy actually added 71,000 private sector jobs last month, a figure dwarfed in voters’ views by the 131,000 total jobs lost. It seems that voters are thinking that for the more than a trillion dollars spent on various programs, they should have more to show for it than continued joblessness. Economist John Makin put it succinctly and well when he noted in his monthly outlook, “We do not have liftoff.”

Eeyore, from Winnie the Pooh

Jobless rate surpasses all White House forecasts

From Gateway Pundit